On the comparison of apples and oranges, case # 372: I just went and dug out the 9/28 Wall Street Journal Op-Ed piece "Why Welfare Pays," reported to the net just awhile ago by Mike Meeropol. Seems there's one little bitty problem with the calculation of "wage rate equivalents" reported in the article, at least if the methodology of the Cato Institute study by Tanner and Moore is reported accurately. The whole point of the article is that when you add in in-kind benefits to the total welfare package, given that welfare benefits aren't taxed, you get a relatively high effective wage rate, given that wage income is taxed at all levels of government. To make this comparison to "effective wage rates" legitimate, though, you'd have to *add in* the value of nonpecuniary benefits of the average job, in addition to *subtracting out* federal, state and local taxes. Seems that the study methodology involves doing the latter (which inflates the "real wage equivalent" of total welfare) but omitting the former (ditto). So somehow, in-kind benefits count as income when you're on welfare, but not if you are on payroll. [ Those Cato folks, they're such cards.] I realize these benefits are steadily declining, but they are still significant. They include: medical insurance; life insurance; present value of pension; present value of social security (hey, they subtract FICA taxes; why not add in the benefit that these pay for?); etc. Another thing. The study suggests that people on welfare are discouraged from seeking work because total welfare benefits are so high. One could as easily say that people on welfare are discouraged from seeking work because wages from entry-level, low-skill jobs are so awfully low. Add in the fact that the US in its wisdom is virtually alone among developed countries in not guaranteeing day care for employees, and one gets a very different picture: it's not that being on welfare is so great, it's that being a low-income wage earner in this country is so bloody awful. On the latter point note that the pool of full-time workers in the US who fall below the poverty line has increased by half over the last 10 to 15 years. Gil Skillman
