Welfare vs Minimum Wage, Who Makes More?

Welfare vs Minimum Wage, Who Makes More?

More people are relying on government welfare because the minimum wage has not kept up with inflation.
"Budgeting is a big thing in our household. Without budgeting and without planning, we would be just so lost." - Chastity Irby, mother of two
 

Despite inflation, the minimum wage in Indiana has remained at the federal requirement of $7.25 an hour for the past four years. Three out of four neighboring states to Indiana are paying more than the federal requirement. So how does this affect the nearly 93,000 working Hoosiers who make minimum wage?

A recent study revealed that people receiving government aid make more than the minimum wage offered in many states including Indiana and Ohio. Chastity Irby, a mother of two, makes her living off tips because her paycheck is barely enough to cover gas money.

"Budgeting is a big thing in our household. Without budgeting and without planning, we would be just so lost," said Irby who works as a server.

The minimum wage is, minimal. Irby lives on a guaranteed wage of lower than $7.25.

"Well I do make $2.13 an hour so that can be rough when it comes to my paycheck. Usually my paycheck is no more than $30 or $40," she said.

A guaranteed $30-$40 every other week isn’t enough to feed her nine and ten year old boys.... but she still manages to make ends meet.

"I say budgeting tips, working long hours, six, seven days a week...It helps," she added.

In March of this year, the Indiana House rejected a wage increase.

"If you take a look at the federal minimum wage and adjust it to inflation it has actually declined by 20%," said Ellen Cutter, the Director of Community Research for IPFW.

"It’s an important imperative in terms of our economic development within the region to pay attention to that to make sure that we are creating good jobs and that we are paying wages that make us competitive for talent,” said Cutter.

Cutter says wages have not kept up with inflation and the last time it has, was in the 1960's.

Over the decades, thousands of more American’s have relied on welfare and other government aid.

A map compiled by the New York Times shows the growing dependence on government resources since the late 1960's. The darker the area, the more aid-from food stamps to Medicare.

The harsh reality is that according to the recent study, those collecting medical assistance, help with food and housing are bringing home more than $7.25 an hour and as much as $26 an hour in Hawaii.

"It’s not fair," said Irby.

Research shows that people receiving benefits from all of the following have an income higher than an entry level school teacher.

-TANF (cash program)

-SNAP (food stamps)

-WIC (women, infants and children)

-Section 8 (housing assistance)

-Medicaid

-Utility assistance

-Free commodities like, milk eggs and cheese

The take home rate in Indiana, for someone receiving the full benefit package breaks down to $11.01 per hour. In Ohio, that rate increases to $12.60 an hour. That means for a family working 40 hours a week with no vacation on minimum wage, the Hoosier family will bring in $290 a week versus $440 a week. The Buckeye family working minimum wage will bring in $314 each week versus $504 if they were to follow the welfare route.

Irby says she has two Associate Degrees in medical studies and has not been able to find work in her field. She is also working on balancing work and caring for her family so she can eventually pursue her Bachelor’s Degree in health administration.

 http://www.nytimes.com/interactive/2012/02/12/us/entitlement-map.html

http://www.cato.org/publications/white-paper/work-versus-welfare-trade

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