Where the Welfare Millions Go in Appalachia

by Lewis Loflin

In an article entitled "Where Do All the Welfare Billions Go?" (Human Events, February 6, 1982) M. Stanton Evans points out:

One has to wonder how it is possible to spend these hundreds of billions to alleviate poverty and still have the same number of poor people that we had, say, in 1968...It prompts the more suspicious among us to ask: What happened to the money?...[A] tremendous chunk of these domestic outlays goes to pay the salaries of people who work for and with the federal (and I'll add state/local) government - including well-paid civil servants and an array of contractors and "consultants," many of whom have gotten rich from housing programs, "poverty" studies, energy research grants, and the like...

Almost 20% E. Tennessee of residents get food stamps

(Dec 8 2008) In October 2008 76,706 people received food stamps in Carter, Grainger, Greene, Hamblen, Hawkins, Sullivan, Unicoi and Washington counties Tennessee. This varies from 18% of residents Hawkins County to a low of 13.2% of Sullivan County. Sullivan County (includes Bristol TN and Kingsport) averaged about $1.8 million a month from January - October 2008 with a big spike beginning in October. This is the wealthiest county in the region.
"It's a little-known fact that roughly 20 percent of the children in Southwest Virginia live below the poverty line and go hungry every night."

Kevin Crutchfield, President Alpha Natural Resources, January 15, 2009 in Abingdon, VA.

How does this go on year after year?

Having failed to produce real private sector jobs, education, or any real services to help residents become self-sufficient, the government welfare industry supports legions of well-paid government workers. These jobs have real middle class pay and benefits, something absent from the private sector. To quote,

Employer costs for employee compensation for civilian workers averaged $28.87 per hour worked in September 2008, the U.S. Department of Labor's Bureau of Labor Statistics reported today. (Dec. 10, 2008)...Employer costs averaged $2.42 for insurance benefits (life, health, and disability insurance) or 8.4 percent of total compensation.

In addition to insurance, the other benefit categories were: legally required benefits, including Social Security, Medicare, unemployment insurance, and worker's compensation, which averaged $2.27 (7.9 percent of total compensation); paid leave benefits (vacations, holidays, sick leave, and personal leave), which averaged $2.03 (7.0 percent); retirement and savings, which averaged $1.28 per hour (4.4 percent of total compensation); and supplemental pay (overtime and premium, shift differentials, and non production bonuses), which averaged 75 cents per hour worked (2.6 percent).

State and local government employers spent an average of $13.41 for benefits for every hour worked in September 2008, which accounted for 34.2 percent of total compensation. Private industry employers averaged $7.93 for benefits or 29.3 percent of total compensation. State and local government employer costs for health benefits were higher ($4.21) than private industry ($1.93). Retirement and savings costs, which includes both defined benefit and defined contribution plans, were also higher for state and local government employers ($3.09) than private employers ($0.97).

Private industry

In September 2008, private industry employer compensation costs averaged $27.07 per hour worked. Private industry employer wages and salaries averaged $19.14 per hour (70.7 percent), while benefits averaged $7.93 (29.3 percent). Private industry employer costs for paid leave averaged $1.81 per hour worked (6.7 percent), supplemental pay averaged 82 cents (3.0 percent), insurance benefits averaged $2.07 (7.7 percent), retirement and savings averaged 97 cents (3.6 percent), and legally required benefits averaged $2.26 (8.3 percent) per hour worked.

Ref. There are factors this study forgot to mention. For many government workers, benefits and pay are far higher and are real benefits that can be felt. But even low-wage employers pay a lot too, but to the government, not the worker. An $8 an hour job (not enough by itself to live on in Bristol) will cost an employer $12-$14 dollars or more.

Many of these employers can't afford or won't pay for health care or the employee pays most of it. (Companies are lured here on the promise of low pay and lax labor law enforcement.) What many often and are doing in Bristol is bringing in illegal aliens. Even if they claim they pay as much as any legal worker, they escape the extra $5 an hour or more in government fees, plus the worker doesn't dare go to a labor relations board over abuse.

Progressives, liberals, or whatever they call themselves see this as diversity, and diversity for its own sake is good. They often work professional jobs here, which in nearly all cases is government funded jobs directly or indirectly. (Government contracting is a big industry too!) They are often insulated from the negative impact this illegal labor has on the working poor. Businesses makes big money, the so-called "Progressives" with the money get cheap products and services, etc.

The working poor that live around them, they don't give damn about. But the "Progressives" are really concerned about so-called "sustainable development" and global warming and whales and polar bears and kids in Africa and on and on. This must ease their conscience. Why would they change a system they benefit from?

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