Is Welfare Fair?

Talking to a friend last night, he said something that captures what most regular Americans are really upset about. All of the talk of politics - the Dems vs. the GOP, the liberals vs. conservatives, the Hayek vs. Keynes - all of it boils down to what people think is "fair" at a visceral level.

And this slight paraphrase is what really bothers most average people: "We're where we are because of those people who don't want to work collecting their welfare check every month."

My friend stopped short of saying who "those people" were, so I won't speculate who he meant. But when you talk about welfare, chances are you're referring to what most would think of as "poor people." At the same time, though, most of us seem unaware of the widespread corporate welfare that goes on.

You may have seen the Guide to Corporate Freeloaders that has been circling the liberal blogosphere; it's a list of the Top Ten American corporations that either paid no federal taxes, received a tax refund, and/or received bailout money from the Federal government. I thought about what my friend had said, and decided to try to figure out who is taking more from the Feds and, by extension, the rest of us.

It wasn't easy.

First, let's figure out who we're talking about, and how to compare them. I needed to figure out a) how many people were "on welfare" and b) how much they got. I got some numbers for 2009 from a USA Today article dated January 2010. They broke out three different numbers:

* 4 million on welfare (TANF)
* 37 million on food stamps (SNAP)
* 9.1 million on unemployment

It's fairly easy to look up the budgets for Temporary Assistance for Needy Families (HHS), Supplemental Nutrition Assistance Program (USDA), and Unemployment Insurance administered by the Department of Labor using my favorite tax/budget site, WhatWePayFor.com - it's a little trickier to figure out where there might be overlap between people who fall into more than one of the three. And for me, it's always hard just doing arithmetic! The first two were pretty straightforward:

Taking the amount for TANF ($17.1B)/number of people on TANF (4M): $4,275 per person for 2009

Taking the amount of SNAP for 2009 ($59.1B)/number of people on SNAP (37M): $1,597 per person for 2009

Unemployment Insurance (Dept of Labor) is harder to pin down. There are a lot of numbers involved (all numbers for 2009; M = "Mandatory" spending, D = "Discretionary" for those tracking that happy meme):

M - Unemployment Trust fund - 116.8B
M - Payments to the Unemployment Trust Fund - $17.2B
M - Federal Additional Unemployment Compensation Program, Recovery - $6.7B
D - Unemployment Trust Fund - $3.5B
M - Federal Unemployment Benefits and Allowances - $273M
D - Unemployment Trust Fund - $1.5B
M - Federal Unemployment Benefits and Allowances - $686M

So - taking the Total amount from the above 2009 numbers for Unemployment related expenses ($146.659B)/number of people on unemployment (9.1M): $16,116 per person for 2009.

That's just the poor/unemployed/etc. - the unfortunate, or the lazy depending on your bias. I'll leave it to your own determination whether they "deserve" any of that money, or whether the Government should be involved in judging them worthy or propping them up. MY task is to figure out how to compare what these people are getting to what our Corporate Freeloaders are getting.

I wanted to try to compare on a per person basis. I decided just to look at the Top Ten from Sen. Sanders's chart, because trying to figure out how many companies there are doing business in America and how much each one does/doesn't pay in taxes is too hard. I found some Census data from 2000, but couldn't think of a quick or trustworthy way to compare it to what I know from 2009. (You're free to try!)

It's important to note that even among this Top Ten list, there are companies that are paying taxes, just like you and me. There are thousands of companies doing business here, and if they're all *better* than these, I have to feel a twinge of guilt for perpetuating the "freeloaders" meme; it's probably no more accurate to assume ALL U.S. companies are as bad as this any more than it is to assume that everyone taking welfare is a freeloader who "doesn't want to work." So don't read too much into these comparisons - just recognize that we don't just pay welfare to the unemployed.

Regardless, here's what I learned from looking at the numbers I got from that Top Ten Freeloaders chart and Wikipedia (for number of employees).

Not counting the bailouts some companies received, the IRS paid a total of $6.76B to the Top Ten companies - who employed a combined 1,264,113 people in 2010. That works out to an average of $5347.62 per employee. That's a little more than what the 4 million TANF welfare recipients got. ($4,275 per person)

Here's a breakdown of each of the "Top Ten Corporate Freeloaders" - how much we taxpayers paid them per person in 2010:

Exxon - received $156M refund; Employees: 83,600 = $1866 per employee

Bank of America - received $1.9B refund; Employees: 288,000 = $6597 per employee
(remember, we're NOT counting their $1T bailout)

General Electric - received $4.1B; Employees: 287,000 = $14285 per employee

Chevron - received $19M; Employees: 62,000 = $306 per employee

Boeing - $124M refund; Employees: 160,500 = $772 per employee

Valero Energy - $157M refund; Employees: 20,313 = $7729 per employee

Goldman Sachs - paid ~$25.3M (1.1% of reported profit); Employees: 35,700 = PAID $708 per employee
(again, we're not counting the fact that they recieved an $800B bailout)

Citigroup - paid $0; Employees: 260,000 = $0 per employee
(received $2.5 Trillion bailout)

ConocoPhillips - received $451M in tax breaks; Employees: 29,700 = $15185 per employee

Carnival Cruise Lines - paid $121M (1.1% of reported profit); Employees: 37300 (3,800 - Shoreside, 33,500 - Shipboard) = PAID $3244 per employee

All things considered, I would rather see people paid to work than see them paid NOT to work; but that is hardly fair to say when people actually can't find jobs. I would rather see companies keep their jobs here than send them overseas - but it's hardly fair to claim to support a free market and then cut off competition. And it's hardly fair to talk about cutting off welfare for the unemployed when we could easily recoup these comparable amounts from the give-aways being paid to these companies - many of which were so poorly managed that we ALSO had to pay trillions in bailouts to keep them off the TANF, SNAP, and UI books.

I just wonder, is it useful to compare all of the "freeloaders" this way? Is it accurate to describe them this way? I don't know, really; I just know that everyone has a prejudice - and everyone feels like someone else is getting more of a break than they are.