The opportunity cost of working ?

Question

i'm a single mother of a new baby. i earn $2,050 / month BEFORE taxes. what is the point of working when i lose out on free medicaid ( $350 savings on health insurnace premiums), pracitcally free day care ( a $500 savings) and FREE formula from the WIC program ( a $300 value). so if im going to save $1250 a month in free stuff for quitting my job, and I only earn $1500 anyways, then why would i work?? so isnt the opportunity cost so great, that any sensible person would quit the job?

and when i say sensible person im talking about the basic principal of doing something that is in my own best interest.

The $1,500 is my take home pay. notice under the working option i dont have enough for rent, utilties, car insurance or food.

Answer 1

How would you pay your rent and provide for other living expenses. Welfare now requires you work if possible, and you would have a hard time making the case you cant if you just quit a job that paid over $24,000 a year.
Day care is only provided to working mothers so it adds income for working, and is not available to stay home mothers. It effectively increases your income for working by $500 a month, plus you get EITC which would supplement your income if you work. You can get low cost or free health insurance for your baby from http://www.insurekidsnow.gov/ even if you work, and get a bare bones health insurance for yourself under $80 a month if you are healthy. The government subsidies would increase your income if you work nearly $10,000 a year which would put your income close to the median for 1 earner households. Living on the street with nutritional supplements from WIC for food and free medical care does not seem like a better alternative,

Answer 2

Of course not, which is why so few percentage wise use all those programs.

Basically, if someone were thinking of having a baby, then obviously a life on welfare is just not a great way to earn a living. Everything about it sucks, there are time limits for various programs, they intrude on your privacy, and can cut you off or reduce your benefits at anytime. The health care is suboptimal, and you are doing nothing to increase your future wealth.

However, once you have the baby, you may have a point in the short run. Many jobs have such poor pay that it makes no sense to work. But obviously the way out of poverty is to improve your education or productivity so you can get a decent job.

Answer 3

In economic terms, the opportunities forgone in the choice of one expenditure over others. For a consumer with a fixed income, the opportunity cost of buying a new dishwasher might be the value of a vacation trip never taken or several suits of clothes unbought. The concept of opportunity cost allows economists to examine the relative monetary values of various goods and services.

Answer 4

Tough Question to answer with honesty, the cost of working is an often overlooked aspect to the equation. You left a few details shy, emotionally would you be more content working or at home? Socially would it have an effect on your life and could you deal with those changes adequately both Socially and as a personal issue?

I should think that dropping a pebble in the pond here and looking at all things that not working the job could effect and seek solutions with the full picture might provide for a happier solution for you.

Whatever your decision be, you should come out of it with your dignity, self respect and self esteem in tact if you choose wisely. Don't you agree?

Answer 5

Some people would keep their jobs, believe it or not. However, you know enough to not work. And, realize, your care for your child is probably much better than any others. So, actually, you're making out in the situation. A consumer surplus is what I would call it! In your situation, the government probably would pay to put you through school and pay for day care services. I would look into that. Otherwise, just take care of your kids at home.

Answer 6

Quit your job. Find an under-the-table source of income. You'll be glad you did.