Paying Americans Not to Work

 Executive Summary In a previous study in 2021 we estimated that with supplemental unemployment benefits of up to $600 a month, food stamp expansions, child tax credit payments, and other special Covid-related benefits to families without anyone working could exceed $120,000 in many states. Those extra benefits had a highly negative effect on employment, particularly in the states with the highest benefits. Those temporary benefits have expired but this study finds that even with existing unemployment benefits and the dramatic recent expansion of ObamaCare subsidies, a spouse would have to earn more than $80,000 a year from a 40 hour a week job to have the same after-tax income as certain families with two unemployed spouses receiving government benefits. In these states, working 40 hours a week and earning $20 an hour would mean a slight REDUCTION in income compared to two parents receiving unemployment benefits and health care subsidies. This study also finds:

 • In 24 states, unemployment benefits and ACA subsidies for a family of four with both parents not working are the annualized equivalent of at least the national median household income. 

• In 5 states, those two programs provide the same family with both parents not working the annualized equivalent of at least the national median household income and benefits. 

• In 14 states, unemployment benefits and ACA subsidies are the equivalent to a head of household earning $80,000 in salary, plus health insurance benefits. 

• This is a higher wage than is earned by the national median secondary school teacher, electrician, trucker, machinist, and many other jobs. 

• In more than half the states, unemployment benefits and ACA subsidies exceed the value of the salary and benefits of the average firefighter, truck driver, machinist, or retail associate in those states. 

• In a dozen states, unemployment benefits and ACA subsidies exceed the value of the salary and benefits of the average teacher, construction worker, or electrician in those states.

 • A family of four with income over $227,000 qualifies for ACA subsidies in all states and families earning over $300,000 a year still qualify for ACA subsidies in 40 states and DC. 

Fig. 1: Highest Benefit States for Not Working and National Median Income Plus Benefits for Selected Occupations State/Occupation Earned Income Equivalent 

Washington $122,653

 Massachusetts $117,063

 New Jersey $108,857 

Minnesota $98,915 

Montana $95,265 

Hawaii $91,757 

Colorado $91,281 

Oregon $86,454 

Rhode Island $85,605 

Utah $84,751 

North Dakota $83,537 

Pennsylvania $82,888 

Connecticut $82,809 

Kentucky $80,979 

Wyoming $79,294 

Illinois $79,199

Texas $73,977 

Kansas $73,665 

Iowa $73,455 

West Virginia $73,031 

Oklahoma $72,936 

South Dakota $72,095 

Maine $71,757 

California $71,063 

Median Household $92,814 

Median Secondary School Teacher $81,060 

Median Construction & Building Inspector $80,824 

Median Electrician $78,726 

Median Firefighter $66,479 

Median Heavy Haul Trucker $63,345 

Median Machinist $62,860 

Median Retail Associate $38,262

Casey Mulligan is a Professor of Economics at the University of Chicago, who served as Chief Economist at the White House Council of Economic Advisors. EJ Antoni is a Research Fellow for Regional Economics in The Heritage Foundation’s Center for Data Analysis. Both are Senior Fellows at the Committee to Unleash Prosperity.

https://assets.realclear.com/files/2022/12/2104_paying.pdf