Unintended consequences of a possible increase in the min. wage.

[Hamlette]

A morality play in three parts.

Welfare reform, 1996. Many liberals think it was awful but it was not. This liberal has worked with the law since it was passed and it helped many families, primarily because it allowed states some latitude in deciding how to serve people and it provided more child care for the working poor and people transitioning to work. Yeah, a few fell off but on balance, it helped many more than it hurt nationwide. About this time, DOL decided welfare recipients must be paid minimum wage when they are performing work in exchange for benefits.

Welfare reauthorization, 2006. The "christians" in Congress decide people on welfare need to work more but do not increase child care and impose restrictions on states' ability to find solutions to poverty: everyone has to work 30 hours per week. This results in at least two states having to increase the monthly welfare payment to families to meet minimum wage. Most of the rest of the states are right on the bubble.

Dems increase minimum wage, 2007 (dreaming/hoping here). This results in most states having to increase welfare to meet work requirements at minimum wage.

The mean spirited GOP Congress of 2006 caused an increase in welfare benefits to the poor by increasing the work requirement. An unintended but good consequence (IMHO) (Remember here, in my state a family of 3 gets about $650 a month in welfare and food stamps combined...not so much to raise a family on.)

You gotta love it! I actually can't wait to go to my very red state legislature next year and tell them they have to pay the poor more money or lose millions in federal funding. And I also can't wait to tell them its because the feds (GOP) increased the work requirement to an unreasonable level in 2006.

[sandnsea]

1. These folks are also 'employed'

For unemployment numbers purposes - these folks are also now counted as employed, instead of on welfare, would that be correct?? Could that account for enough points to explain the low unemployment numbers despite the fact that there aren't any jobs unless the govt is paying the salaries.

[Hamlette]

2. no, they are not counted as "employed" for UI (unemployment)

I remember reading in 2001 that Bush changed the formula for how he counts unemployment numbers but I've since forgotten. You know they are cooking the books though when you compare # of new jobs created to unemployment.

If I remember or can find it, I'll let you know...maybe someone else remembers.

[sandnsea]

3. It's a survey

So when they call a random house and ask if the person is working, the person working at McDonalds on a welfare-to-work program is going to say they're working. Unless we know that they specifically ask the person more than just basic work questions, I don't think we do know whether these folks are counted in unemployment numbers or not. It would be very interesting to get this nailed down because I know they've got to be twisting these numbers somehow. Probably a combination of things.