It pays not to work: Hawaii residents receive highest welfare benefits in US

HONOLULU — In Hawaii, it pays not to work.

A new report by Cato Institute, which examines the state-by-state value of welfare for a mother of two, said benefits in Hawaii average $49,175 — tops in the nation.

Michael Tanner, co-author of the Cato study, said that since welfare isn’t taxed, a person would have to earn $60,590 in Hawaii to take home the same $49,175 a person on welfare would.

“To be clear: There is no evidence that people on welfare are lazy. Indeed, surveys of them consistently show their desire for a job. But they’re also not stupid. If you pay them more not to work than they can earn by working, many will choose not to work,” Tanner said in a summary of his report.

Senate Minority Leader Sam Slom, a member of the Senate Human Services and Ways and Means committees, said the study’s results are “not surprising” to those who have followed the geometric increases in total welfare benefits and expenditures.

“I said in a public hearing several years ago that within a few years, our human services welfare costs would surpass public education in Hawaii. This came to pass late in 2012,” Slom said. “It is a shame that Hawaii has such huge governmental costs and tax burden, which in turn creates more of a welfare class and the growing inability of a middle class to sustain themselves, let alone to privately assist the less fortunate. We have been promised hope and change in this state. There is no change, only hope.”

Suzie Chun Oakland, the chair of the Senate Human Services Committee, was traveling and could not be reached for comment. The vice chair of the committee, Josh Green, did not return an email inquiry about the study.

State Department of Human Services‘s director Pat McManaman refused comment on the Cato study, saying she hasn’t had time to review it. But the department did provide statistics on Hawaii’s welfare recipients including that supplemental nutrition benefits (SNAP) were provided to 176,676 people in FY 2012; General Assistance was distributed to 5537 individual per month in 2012, the Homeless Programs Office and its contracted agencies provided assistance to more than 14,380 individuals in 2012, the BESSD Child Care Connection Program assisted 20,234 families and MQD oversaw health care benefits for more than 287,000 eligible residents in FY 2012.

Kalbert Young, director of the state Department of Budget and Finance, said that over the next two fiscal years Hawaii is appropriating $2.75 billion and $2.83 billion —or about 20 percent of the state general fund budget — for operating expenses of “social services,” which includes funding for child protective services, community youth programs, adult community care services, general assistance payments, public housing, health care payments such as Medicaid and the Temporary Assistance for Needy Families program. Slightly more than half of those funds come from Washington, D.C.

Tanner said there are 126 separate welfare programs funded by the federal government, 72 of which provide either cash or in-kind benefits to individuals. That’s on top of state and local program to help those with lower incomes.

“Of course, no individual or family gets benefits from all 72 programs, but many do get aid from a number of them at any point in time,” Tanner said.While it may make sense for people to accept welfare in the short term, Tanner said it may actually hurt them over the long term.

“One of the most important steps toward avoiding or getting out of poverty is a job. Only 2.6 percent of full-time workers are poor, versus 23.9 percent of adults who don’t work. And, while many anti-poverty activists decry low-wage jobs, even starting at a minimum-wage job can be a springboard out of poverty. Thus, by providing such generous welfare payments, we may actually not be helping recipients,” Tanner said.

Tanner suggests governments can do more.

“If Congress and state legislatures are serious about reducing welfare dependence and rewarding work, they should consider strengthening work requirements in welfare programs, removing exemptions and narrowing the definition of work,” Tanner said.

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