Working More to Earn Less | Why the Poor Stay Poor | Learn Liberty

Working More to Earn Less | Why the Poor Stay Poor | Learn Liberty


What if I told you that the government effectively
punishes poor people for working? Sound too sad to be true? Let me tell you a story. I once had a student
who interned at Florida’s welfare program for low-income families. One day, a distraught
mother and her teenage son came into the office. Their benefits had been cut. And they were
unable to pay their bills. And she didn’t know why. My student searched and searched to figure
out why this was the case. And he made an unsettling discovery. It turns out that the
teenage son had worked additional hours at his part-time job. He had been doing good
work. And his boss extended the number of hours. And this allowed the teenage son to
bring home more income to the family. But that little bit of extra money reduced
the public assistance that the family was eligible for. In fact, the cut was so deep
that those extra hours worked actually lowered the total income the family had to live on. This is a horrible situation, one faced by
millions of families. Instead of experiencing a gradual decline in benefits as their earnings
increase, the government abruptly strips the benefits away. It punishes them for working. Now imagine if you and your family were struggling
financially. And you had the opportunity to work additional hours or take a job. But in
doing so you would actually make your family worse off. How would you respond to these perverse incentives?
You’d likely scale back on the number of hours worked or not take the job. While individual
programs attempt to reduce benefits gradually, they often do so at the same time. And this
can result in a large, abrupt reduction in benefits. At times, individual programs also
have abrupt, sudden declines in benefits. Take, for example, the federal food stamp
program, SNAP. For a parent with two children, the benefits are gradually reduced as earnings
approach $30,000. But once the parent earns over $30,000, the benefits suddenly drop. This is crazy, whatever you think about public
assistance for the poor. We can all agree that this is the wrong way to do it. People
should be rewarded, not punished, when they work. The welfare system is so poorly designed
that it is trapping many people that it was created to help. My name is Sean Mulholland, professor of economics.
And I believe there are ways to fix the system. If you’d like to learn more about these issues
and explore potential alternatives, please join me for a free online program at Learn
Liberty Academy. Please click here to register. I hope to see you there.

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44 thoughts on “Working More to Earn Less | Why the Poor Stay Poor | Learn Liberty”

  • Easy solution. Where there is an income drop caused by rollback of government benefits have the Koch brothers make up the difference to that family. Seeing as helping the poor is their only motive in producing these videos I'm sure they will oblige …

  • As an immigrant became an American, If no phiscal address, and no kids or wives, great, it means your money is extra enough for you so bring all the rest of money!!!! what great!! isn't that person needs money to make a new family???? Many great but still there're mistakes in Capitalism. I don't want immigrates like me get allot money that way no more aliens bother USA

  • we should lean them off the system over time to force them to go back to work. all of you are saying that its wrong to lower their benefits as they make more. isn't that the same thing with taxes? as you earn more, more taxes get taken out. so end of day we need to get people off the system and support themselves.

  • Tell your intern to visit the person's home, my bet is there is at least 1 big screen TV, top brand cloths, and state of the art electronics. We live in a country where people are checking their food stamp balance on their 800 dollar smart phone.

  • well in all fairness SNAP is often supplemented by food banks. My wife used to be a SNAP coordinator yes peoples benefits were slowly taken away as they gained more income but they would only go hungry if they chose to.

  • my aunt almost became a manager at her job, but she'd lose her benefits if she did. She'd make a little more, but only like $30 more a week. with welfare, she had a shorter week by two days.

  • How about Income tax for those earning 100K or less? Isn't that an incentive to not want to work? Why tax income in the first place?

  • I'm always struggling me my mom and my brother we barely have food clothes we live with rats and roches we dont have no money we poor

  • Getting rid of the virulent and greedy jews who have taken over all national institutions concerning the welfare of its citizens is a start.

  • The wages for teenagers are not factored in to your welfare benefits as long as the child is in school. When you get a job you are eligible for transitional food stamps for 5 months, which is your current food stamp amount without your new income being counted.

  • So true… Over Thanksgiving, my cousin shared this same story with his recently divorced daughter that went to work and lost benefits; the worst loss was health care cuts, a visit to the doctor now has her $2000 in medical debt. If it wasn't for his ex-wife able to babysit kids while she works, it would even be worse.

  • You have hit the nail right on the head! I live around people on food stamps, many of witch want to work hard and get off of welfare. This is something that neither Democrats nor Republican party's really understand. Mostly because neither of these politicians have ever had to be on food stamps. If you want to know witch party represents the poor the best. The answer is : NONE OF THEM!!!!!!

    They just tell voters what they want to hear by giving into their preconceived notions and prejudices. That is how you get elected.

  • Even the tax system… other than tax on tax on tax as a product moves through the system. I think if we actually knew how much tax and duties are paid on everyday items we would be very angry. Then income tax… where once you reach a certain income you can set up structures to reduce the tax you pay and get away with paying a much less percentage than people on much lower wages. None of it is fair especially to those that can't afford to take advantage of the tax breaks. Didn't the Romans tax based on your total assets? That seems a fair share: if you do well you will need to pay more.

  • It does the same to every working person who gets a raise knocking them into the next tax bracket. Lets eliminate those as well. The kid had a job, who knows whether he could get another, hes young. Punish the non working as much as we punish the guy whos had a full time job for a decade. And maybe more.

  • The wealthy retarded sucks society we elect to govern us, are nothing more than leeches sucking Liberty’s tits dry at the expense of our stupidity.
    A government overflowing with the finest stupidity elite money can elect.
    The biggest waste of money, is our government and 95% of the country’s problems are created and caused by the selfish sucks sitting within that government.
    The wealthy retarded governing is always a guaranteed recipe for disaster that has brought nothing, but collapse, war, and destruction to civilization throughout human history.
    This is a lesson mankind needs to learn because America can only endure, so much before it collapses under the weight of wealthy retardations greed and stupidity.
    Just like every great empire that came before us, who were all ruled by the wealthy retarded, or some version of it.
    These people, are man made unnatural disasters and history has proven them to be country killers many times over.

  • sadly this is true i know people that if they stop working there net income will rise by 20%

  • Here is a real story my family is considered disabled and poor and my little brother is nearly impossible to take care of without training. Anyway I am legally considered disabled so I get a disability check 750 a month but if I work more then 20 hours a week I lose it which means if I work minimum wage (like the broken college student I am) I would actually be losing money by working full time rather then 20 hours and take the check about 150 less a month for my old job actually

    It’s to the point if my mom works we all lose benefits resulting in her being the only one bring in income which she would need to pay a baby sitter which already cuts out stuff it’s almost impossible for me to move out because if I do they won’t make enough money to survive. This is going on right now and it sucks I’m 21 yes I’m autistic yes I am considered disabled due to other things but I can function like any other person if I have help but I am unable to move out due to our tight situation because the government gives more money for laziness then to trying to improve

  • You have to work and earn money period, what's fucked up is in too many minority communities people simply don't have the knowledge or were raised with the work ethic to grind hard, its sad

  • This is not uncommon. I had a friend with a brain injury from a car accident. Though she was still quite young, she couldn't handle working full time. Then, if she worked one hour too many, they would yank her social security. And twice a year she would be paid three times per month (every two weeks), so she would have to cut her hours during those pay periods to avoid losing her social security. It was a complete nightmare and, because of her cognitive limitations, she had a great deal of trouble managing it.

  • Great teaser with no MEAT. Don't tell us what we already know and say there are ways to fix it. Give your better options without hiding them.

  • The welfare system wasn’t poorly designed or meant to help poor people. The welfare system was created to keep poor people as salves for the government. First the government decreases the value of the poor people’s money so they get even more poor. Then the government (which created the problem) stick their hand in to “help” them receive benefits. But if they start to work, they will receive less money. And if they ever manage to get off that trap. The government will steal their money to pay for other people living on welfare, oh sorry I mean “keeping poor people in figurative cages”.

  • I own a corporation. I have added up how much I can get on welfare if Bernie Sanders hands out free college and free healthcare I will be closing my company and going on welfare. It is the only thing that makes sense.

  • If I get a raise at work by working harder I'll be paying about 50% tax on that money while working 20% more hours… mediocrity is the result of socialism

  • what I did was get a college loan, 6k. anyone can get one. I bought an old minivan and lived in it for 3 years, on 5k a year, not long ago. I got 3k per year from selling my plasma, the rest came from day labor and odd jobs. I put 30k into the bank. I found an agreeable, trustworthy vet, who had no job and made it look like he made enough money to get his VA home loan. Such men are all over the VA hospital. The employment office there will send dozens of them to you. He got paid a real deal $100 a week. After we bought the big old house (in OK) for 50k (no money down because it was a VA home loan) he got a free room. I lived in one of the 9 other rooms and rented out the 8 other rooms for $125 a week each. I effectively cleared 30k a year, since my 5k of housing costs, utilities and wifi blended into the biz expenses. After a year, I got another such place and he became the live in tenant manager. He gets the 6k a year that 'my" old room brings in. All he has to do is watch over the place and handle the day to day stuff, calling me if it's a bigger deal. It cost me 15k to get things going. I spent as much more getting an Asian dentist here, but she pays me a tax free $600 a week. She'll either divorce me or at least, stop paying me after she becomes a citizen (3-4 years) but i wont care. Everything is in the name of a NV corporation that she can't even find out about. Anyone can do the same thing. Once you've got 2-3 such boarding houses, you can afford to pay a property management company and CPA to ride herd on your live-in (veterns) tenant managers. Then you wont be stuck in OK any more. You an live in a small RV, or even move to the third world, with your clear 40-60k of income. You are NOT stuck working for others and you do NOT need a fancy education. 2 years of college makes you a registered nurse. If you'll travel , move to the top paying area, and work overtime, an RN can clear 65k a year, grossing 100k a year. So it doesn't take long at all to be successfully retired, folks, starting with nothing. Just a bit of knowlege, grit, williingness to suffer for a couple of years.

  • Living proof! I went through family law while I was earning about about $55k a year. Low income is classified as under $50k here. Legal aid is offered only to low income. So, being $5k/year over the low income threshold, I did not qualify. My total cost for legal fees was over $20k that year. Thus, I ended up taking home $35k, while paying tax on $55k, and not qualifying for any of the assistance programs for low income that others who earned $15k a year more were getting. In effect, big brother made me poorer than low income earners by means of their programs and incentives. Had I choice, I easily would have dropped my income down $5k a year.