by Georgia Center for Opportunity | Aug 31, 2016
Computational model exposes severe problems with the welfare system
Previously, it was shown how a single mom with two kids in Gwinnett County could lose welfare program benefits by earning more money. This explained why $9 + $1 can equal negative $6,000.
The Gwinnett county example showed only two wage levels. However, the computer model provides results for a large range of wage levels and family structure. This enables policymakers, administrators and interested citizens to see a more complete picture of the challenges facing a family in poverty.
The computer model can generate scenarios in any of the other 158 counties in the state of Georgia.
No matter the county welfare cliffs (that unintended consequence of the current welfare system whereby an individual or family loses by earning more) can be found – essentially trapping families into a level of income.
These cliffs can be clearly seen on the chart below. Wherever there is a drop in a line, there is a loss in benefits that exceed the gain in earned income.
Also clearly seen, the benefit levels are very high and the severity of the cliffs significant. More surprisingly, there is not just one cliff but a series of cliffs that cascade down.
The chart shows that when government benefits are taken into account, it is financially better for a single mom to earn an hourly wage of $9 than an hourly wage three times as much, or $27 per hour.
Of course, it is important to point out that the severity of the cliffs and the income levels where they drop off change depending on the county, the characteristics of the family, and other factors.
These findings underscore the need to undertake fundamental welfare reform beyond the various reforms already being implemented. The system needs to become more rational so not to punish families who try to get ahead by earning more money.
A forthcoming study will highlight other examples.
Chart showing welfare cliff for typical family in Gwinnett County:
How to read the chart: The chart above illustrates the scenario highlighted in this and the prior posts , that is, a single mom with two children in Gwinnett county. The horizontal axis is gross earned income, and the vertical axis is the sum of net earned income plus the various welfare assistance benefits. The first line on the bottom is net earnings. The next line above is net earnings plus refundable tax credits. Each line stacked above adds another government benefit in the following order: TANF Cash, food benefits (Food stamps, free school meals and WIC food packages), housing (Section 8 Housing Choice Vouchers), subsidized child care (the CAPS subsidized childcare program), medical assistance (Medicaid and PeachCare), and Affordable Care Act subsidies.
by Georgia Center for Opportunity | Aug 25, 2016
Computational model exposes severe problems with the welfare system
Pop quiz: When does $9 + $1 equal –$6,000?
This may look like new math, but it is not.
This seemingly nonsensical equation illustrates the challenges faced by families who receive assistance from means-tested welfare programs.
In fact, these exact numbers come from a computer model I designed, which was sponsored by the Georgia Center for Opportunity. It evaluates financial incentives, or more precisely, disincentives embedded in our nation’s welfare system.
This computer modeling examined the potential case of a single mom with two children in Gwinnett County, Georgia. Using 2015 data, if she were offered the opportunity to earn $10 per hour instead of earning $9 per hour, she would lose nearly $6,000 in welfare benefits within a year’s time.
The reason for the loss is not due to her earned income. By increasing her earnings from $9 per hour to $10, she nets an additional $1,820 a year. The reason for the loss has to do with the way the welfare system is designed, or more accurately, the way it has been haphazardly put together over the past fifty years. At $9 per hour, the single mom would be eligible for the following means-tested programs:
the earned income tax credit ($5,419),
additional child tax credit ($2,000),
food stamps ($2,772),
free or reduced-cost school meals ($502),
WIC food packages ($480),
Section 8 housing choice voucher ($9,805),
subsidized childcare ($8,918), and
Medicaid ($4,570).
When added together, this single mom has a benefits package—courtesy of the taxpayers—estimated at $34,467. So instead of bringing home $17,266, her estimated income is actually $51,733 after government subsidies are included. To state it differently, for every $1 she earns in net income, she is eligible for nearly $2 in welfare benefits.
Now consider the case if she would earn $10 per hour. She would still receive means-tested benefits, but the benefit amounts will change as follows:
earned income tax credit ($4,977),
additional child tax credit ($2,000),
food stamps ($2,352),
free or reduced-cost school meals ($502),
WIC food packages ($480),
subsidized childcare ($8,658),
Medicaid ($4,570), and
Affordable Care Act credits and subsidies ($3,152).
In summary, her benefits drop to an estimated value of $28,938. When combined with her take-home pay, she is worse off by nearly $6,000 from earning $10 per hour than earning $9 per hour.
What this example demonstrates is the infamous welfare cliff, that unintended consequence of the current welfare system whereby an individual or family loses by earning more.
Unfortunately, this example is not an isolated incident. It represents what’s happening everywhere.
by Georgia Center for Opportunity | Aug 8, 2016
A new report released by The Institute for Family Studies finds that 69 percent of 18-45 year olds in Peachtree Corners and Norcross think single parents can raise children just as well as two parents. Furthermore, 63 percent approve of divorce when married people realize they no longer love each other.
Permissive attitudes towards divorce and unrealistic expectations for single parents, however, do not make for human flourishing. The report cites sociologist Sara McLanahan and economist Isabel Sawhill, who write, “Most scholars now agree that children raised by two biological parents in a stable marriage do better than children in other family forms.” Additionally, economist Raj Chetty found that the foremost indicator of upward mobility among poor children is the percentage of children with single parents.
Still, the study does present positive findings. 71 percent of surveyed residents agree that it is important to wait until marriage to have kids. Overall, marriage continues to enjoy high interest in the area: 47 percent of 18-45 year old residents in Norcross and Peachtree Corners are married, and another 46 percent would like to be married.
Our Healthy Families Initiative (HFI) hopes for more clear thinking on family formation. We want to equip fathers and mothers in Peachtree Corners and Norcross, so they can give what children need: a permanent, stable, and loving home environment. To this end, HFI offers workshops to local residents regarding fatherhood, dating, and relationship building within marriage. Registration for workshops is open for local residents, married and unmarried.
by Georgia Center for Opportunity | Apr 27, 2016
Healthy families are the bedrock of a healthy, prosperous society. They are the place where children develop the values, skills, and habits that largely determine the kind of adults they will become.
Georgia Center for Opportunity’s Healthy Families Initiative (HFI) launch on Thursday, April 7th was a great success. The goal of the event was to bring together community leaders, certified trainers, pastors, businesses, and GCO supporters for a day of focusing on families and to provide them with news about this new initiative and the work being done in Norcross and Peachtree Corners.
Joyce Whitted, HFI Program Manager, shared detailed information about the five focus areas of the initiative, including:
1. Launching a PR campaign saturating the community with positive messaging about family.
2. Providing relationship education and enrichment courses.
3. Working with local churches and other religious organization to provide mentoring to adolescents and young couples
4. Improving vocational education and apprenticeship opportunities in the area
5. Working with leaders to ensure state laws encourage family formation
Community partners like the A.Worley Boys & Girls Club, Norcross Human Services Center, Robert D. Fowler YMCA, Single Parent Alliance Resource Center, and Community Based Mentoring were in attendance to lend their support for the program. Guest speakers Bishop Garland Hunt of The Father’s House, Greg Griffin, a Christian counselor, and Shay Marlowe, Goodwill Career Services and a HFI Certified Trainer in 24/7 Dad all echoed the importance of healthy families and how it impacts everyone in Georgia.
Beverly Washington, a resident of Norcross, stated that her greatest take-a-ways were “Networking and seeing so many passionate individuals focused on helping our community.”
The certified trainers who have been on the ground helping to educate individuals and families on healthy relationship skills were also on-hand to give personal accounts of their interactions with participants in the programs being offered through the HFI Initiative.
The event was a success because those in attendance expressed their passion to be part of the positive focus on healthy families and, ultimately, to see the negative trends plaguing families in Georgia reversed.
For more information about how to get involved with the Healthy Families Initiative visit www.hfigeorgia@opportunity.org or call 877-814-0535.
by Georgia Center for Opportunity | Mar 3, 2016
The Healthy Families Initiative kicked off earlier this year with the purpose of providing tools to couples and individuals in order to encourage healthy relationships.
Over the past few months, as part of the Healthy Families Initiative, well-known relationship experts trained and certified 19 passionate, community leaders within the Norcross and Peachtree Corners areas in five premium relationship curriculums.
This program is very important to me and my family, because prior to our moving to Georgia 10 years ago, my husband and I would constantly enroll in similar classes and read materials devoted to strengthening our relationship as a married couple, and as parents. We wanted to make sure we equipped ourselves with the tools and resources for a strong marriage and family.
You see, with our move the dynamics of our family changed dramatically. My husband and I had two biological children (ages 8 and 13) and obtained guardianship of two teenage children (ages 13 and 16). As a blended family situated in a new environment, we needed to find support for our new family structure.
I began to research, and I came across Georgia Family Council, today known as Georgia Center for Opportunity. This organization provided healthy relationship skills classes for couples and individuals on marriage and family. With great enthusiasm, my husband and I attended one of their classes, became certified trainers, utilized the information for our family, and were able to facilitate classes in our local community. With the help of these classes, our family is now thriving, and we were able to give back to our community – closing the gap to relationship success for some and breaking unhealthy cycles for others. A win-win for our family and our community.
My husband and I have made it a priority to equip our marriage and family with relationship education resources. We continue to enroll in classes and read materials that strengthen and promote healthy family formation. We have experienced and seen the impact it has on our family and our community.
I encourage you to take this opportunity and make it a “win-win” for you, your family, and your community by reserving your seat in one of the healthy relationship education classes offered through the Healthy Families Initiative.
The classes are free and meals are provided at each class meeting.
Individuals and families have the opportunity to sign up for the following classes:
How to Avoid Falling for a Jerk or Jerkette
Boot Camp for New Dads
PREP
Strengthening Families Program (10-14)
24/7
For more information on the classes offered visit www.hfigeorgia.org or call us at (877) 814-0535.
by Georgia Center for Opportunity | Feb 8, 2016
I may be dating myself, but there used to be a radio show that I enjoyed entitled “Calling all Cars.” The title of the show was based on a saying used in the show that was merely an order given to all available units that there was something wrong – like a crime in progress – and help was needed immediately. There were two reasons that I liked that show. First, the episodes were based on real-life stories. Secondly, and most importantly, I liked the idea of having a mantra or a call to action that brought people together to help others.
Today there are a lot of families who need help because they are struggling – to form, to remain healthy, or stay together. And the causes for the struggles families face are many – lack of education, unstable employment, communication problems, or misplaced government assistance. Georgia Center of Opportunity is currently working with community partners through the Healthy Families Initiative to remove many of these barriers with the goal of helping all Georgians enjoy a healthy family life.
The Healthy Families Initiative kicked off this month in the Norcross and Peachtree Corners communities as a means to combat the issues in life that keep families from forming and thriving. Through the initiative, we are providing tools to individuals, couples, and partner organizations that will allow them champion and experience healthy relationships and strong marriages.
The collaboration of the community is extremely vital to this program. The community can engage in fostering the growth of this program in a number of ways, including by offering prayer for this initiative, as well as prayer for those teaching and participating in the classes. When this program is successful, the entire community will reap the rewards of more children being born to their married parents, growing up in homes characterized by healthy relationships, and living lives free of poverty and deprivation.
We’re asking for prayer teams to become our partners in prayer for one month. If we can have a church every month praying for those in the Norcross and Peachtree Corners area, think of how many families that can be helped! We really need your prayers, and can provide a detailed prayer list. If you or your organization would like to find out more, please email me at joyce.whitted@georgiaopportunity.org or call @ 770-242-0001 x707. We really need your help!
