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 Eric Cochling | Jul 18, 2016
Something happened in College Park Wednesday night that hasn’t really garnered much attention but should be front-page news. Thanks to the College Republicans at Morehouse College, I was able to participate in a panel* focused on how to constructively respond to recent police shootings of black males and the violence and protests that have followed.
Diego Aponte, President of the Morehouse College Republicans, said it best when he said that, while protests are necessary at times to raise awareness of a problem that’s going unaddressed, the real question is whether we know what can and should be done to solve the problem.
While much of the discussion centered around ways the public can hold police officers accountable for their actions and how police can more effectively engage with the communities they serve – through things like actually living in the community or regularly interacting with community members – a significant amount of time focused on the systemic problems that are limiting opportunities for young African-American males.
Because of our work at GCO, the topics that kept coming up were not new to us – lack of a quality educational options, limited access to employment, and epidemic levels of family instability. Each problem, in its own way, chips away at the ability of an individual to succeed in life. Together, they can virtually insure that a person experiences poverty and all of the social pathologies – including crime – that come with it.
After a discussion that continued for the better part of three hours, a group of us agreed to come together again, but this time for the express purpose of plotting out the concrete actions we must take to change the status quo in Georgia on these issues.
Like a lot of the people I talk to, I am very worried for our country on many fronts. That said, the discussion that took place last night gives me hope that we still have what it takes – the intelligence, the candor, the faith, and the goodwill – to turn things around.
Many thanks to Leo Smith for the invitation to take part.
*Other panelists included Douglas County Solicitor General, Matthew Krull; Georgia GOP Director of Minority Engagement, Leo Smith; GAGOP First Vice Chairman and former Police Officer, Michael McNeely; Douglas County Police Chief Gary Spark; Retired Law Enforcement Trainer Darrin Bell; Conservative Talk Show Host and Political Commentators, Shelley Wynter and Attorney Robert Pattillo; Morehouse College Republicans Chairman, Diego Aponte; Spelman College student leaders, and Pastor Joel L. Trout.
by Eric Cochling | May 10, 2016
On April 27th, Governor Deal signed into law the most recent round of criminal justice reforms in Georgia. Senate Bill 367 enacts many of the recommendations of the state’s Council on Criminal Justice Reform.
Among the reforms are a number that will improve the ability of returning citizens to obtain employment, a key to reducing recidivism, including:
– Allowing first-time offenders to meaningfully shield their criminal record under the state’s First Offender Act,
– Providing greater access to occupational licensing, provided that the offense was not reasonably related to the license being sought,
– Reinstating driver’s licenses for those convicted of drug-related offenses that did not involve a motor vehicle,
– Expanding funding for Parental Accountability Courts that are problem-solving courts designed to reduce incarceration and constructively encourage parents to support their children. See our 2015 report on PACs here.
GCO is pleased that the reforms included recommendations we first made in 2013.
by Georgia Center for Opportunity | May 4, 2016
Now is an especially good time to support GCO financially. Thanks to the generosity of a key supporter and GCO’s Board, every donation given between now and May 31st – up to $87,000 – will be matched dollar-for-dollar. This means if we reach our goal, GCO will have an additional $174,000 that can be put to use immediately to increase job opportunities, expand access to a quality education, and promote healthy family formation so that all Georgians have a real chance to prosper.
This matching gift challenge was issued by individuals who believe in GCO’s mission and want to see others join in these efforts. Not only do your donations help us financially, they send a message that there are people who care about this work and want to see improvement in our state and more importantly the lives of individual Georgians who are ready to succeed – through hard work and determination – when given a chance.
We’re so grateful to all of GCO’s donors, volunteers, and advocates! As a non-profit organization our work would not be possible without the individuals who support us.
If you would like to make a tax deductible donation and have your gift doubled, visit GeorgiaOpportunity.org/Donate or mail a check to Kelly McGonigal, Georgia Center for Opportunity, 333 Research Court, Suite 210, Norcross, GA 30092.
by Georgia Center for Opportunity | Dec 11, 2015
Earlier this month, GCO hosted a lunch and learn with Dr. Brad Wilcox, one of the nation’s leading sociologists. Dr. Wilcox has devoted his work to understanding family formation and the effect it has on our social structure and economy. His new report, “Strong families, prosperous states: Do healthy families affect the wealth of states?” takes a deep dive into the shifts in marriage and family structures – highlighting the factors which influence the national and states’ economic performance.
Georgia is in the bottom ten states for children living with married parents and at the bottom for college educated individuals. These statistics have a defining negative effect on the state’s economy and correlate with a higher number of Georgians on welfare programs and in the state’s penitentiary system.
At GCO, we understand that strong and healthy marriages have been proven to be better for all family members and lead to increased economic stability. That is why we are working to strengthen families and marriages, through relationship training so that individuals have skills they need to have healthy relationships and a public campaign to increase the value our culture places on marriage.
As Randy Hicks, President of GCO, states “When we’re successful, fewer Georgians will be living in a condition of dependence, a higher percentage will be enjoying earned success and the fruits of their labor, more children will be ready for college and a career, and more families will have the economic and relational resources to thrive.”
For more information about our Family and Community Initiative, visit: https://foropportunity.org/initiatives/family-community/
