The Welfare Trap: Mapping Benefits and Income

A report from the Illinois Policy Institute shows why people are trapped on welfare. The graph below shows what happens to a typical welfare recipient in Cook County with two children as she's tempted to earn more money. This person optimizes her income by earning between $8.25 and $12/hour ($16,500 to $24,000 per year). Why would anyone seek a better job paying, say, $20/hour, when it results in less income?

As a final insult, politicians in places like Seattle are enacting $15/hour minimum wage laws, which actually decrease the income of the very people they purport to care about. All of this underlines Drum's Rule 1: Politicians who claim to be "solving a problem" by meddling with market forces, inevitably make the problem worse.