Adam Smith Institute

The broken welfare systems in the United States and throughout Europe have kept the poorest citizens poor while wasting huge amounts of taxpayer money. Rachel Swarns wrote this week in The New York Times that many states now give cash handouts to those who move from welfare to low-wage work.

Arkansas, for example, offers $204 a month for up to two years, while Oregon and Virginia offer $150 and $50 respectively for up to one year. Massachusetts offers $7 a month, Michigan gives $10 for six months, and Utah offers $474 for two months and $237 for the third.

How will these plans work? Fortunately the programs are varied enough that empirical research should shed light on which plans are most effective. Although a cash handout for workers is better than welfare, it leaves the fundamental questions of poverty unanswered.

Swarns highlighted two women who are currently receiving cash handouts. One is a 24 year-old mother of two and the other is a 33 year-old mother of four and grandmother of one. Both women are single, and neither graduated from college. With no disrespect to them, financial success is always going to be difficult under these circumstances. Education is strongly correlated to low poverty, low teen-birth rates, and a host of other factors. Perhaps reforming education and giving the poor access to better education, rather than the moribund state-financed schools in many urban communities, would be a better cure.

Still, at least many states are moving away from detrimental welfare policies and toward programs that encourage productivity.
 

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