Here we go again and again.  Yesterday, I received this email entitled “Death Spiral,” which proclaims that a number of states, 11 to be exact, “now have more people on welfare, than they have who are employed.”  This chain email has been circulating the internet since late 2012.

Now the question that you should be asking…is this email truthful or just a ball faced lie?
The “death spiral” phrase and the 11 highlighted states listed are Alabama, California, Hawaii, Illinois, Kentucky, Maine, Mississippi, New Mexico, New York, Ohio and South Carolina.  This article first appeared in a Nov. 25, 2012, in Forbes Magazine and the map appeared, onscreen, during a Nov. 29 Fox Business “Varney and Co.” report.

But the criteria used to identify Forbes’ “death spiral” states were not as simple as welfare and employment.  The article was written by Bill Baldwin who is an investment strategist editor for Forbes Magazine.  In the article, he claims that there are many people, who he calls “takers”, who receive money from the government and that this is in direct conflict with those people, who he calls “makers”, who work in the private sector.  He goes on to claim that only people who work in the private sector are preventing the country from financial ruin and collapse and that these 11 states were “at high risk of a fiscal tailspin” due to people on the dole.

For this purpose, he wrote, “a taker is someone who draws money from the government, as an employee, pensioner or welfare recipient.  A maker is someone gainfully employed in the private sector.” Then he factored in an index that downgrades states for “large debts, an uncompetitive business climate, weak home prices and bad trends in employment.”  The results, he said, showed states that were “danger spots for investors.”

By Baldwin own definition, a taker is someone on welfare; anyone employed by the government which is federal, state, or local governments including all military members; and finally, any pensioner, including all persons currently on social security.  I, myself, would not describe myself as a takers and I do not feel that social security is a welfare program because I paid into it for all my years of employment.

It depends on what you call welfare. Most people are often referring to Temporary Assistance to Needy Families, a cash assistance program created in 1996 to replace an older welfare system.

TANF goes only to families with children or to children directly, and other programs that provide cash aid to help with basic needs could reasonably be called welfare including the federal program, Supplemental Security Income, which gives money to elderly and disabled people.

Case in point, 74 percent of TANF recipients in 2011 were children. Averages for the calendar year showed 4.6 million recipients nationwide, of which 3.4 million were children.  Children cannot work…so how can you use their numbers in your calculation?

Also, if you exclude children, nowhere in any of the 50 states did  TANF adults equal more than 3 percent of the employed workers.  The highest percentage was in Maine, where 13,821 adults on TANF equaled 2.1 percent of the 643,000 employed workers.  In fact, in most states, TANF adults were equal to less than 1 percent of the number of people with jobs.

A broader definition of welfare involves 79 federal programs, which includes farm subsidies, heat assistance, weatherization housing programs, the school lunch program, cash, food, housing, medical care, social services, training and certain education aid which aids the elderly, the disabled, and primarily children, to name a few.  It is not just food stamps and SSI.

Even if you count everybody on any “assistance” from the government, you will still have three employed people for every two “welfare” recipients.

So, before you start to yell “fire,” get your facts straight.  Anyone who has ever taken a class in statistics knows that your final assessment or outcome is based solely on what numbers you are looking at.  So, before you condemn “welfare” remember that you are taking about people…and not numbers.

So, Baldwin may be right about his conclusion listing 11 states where it is ill-advised to invest money, but to say that there are more people on welfare than working in the private sector is not only a lie, but it also sends the wrong message.

 

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