Tens of Millions of Families with Low-Wage Workers Fall Into Gap Left by Employers and Government


Nearly 41 million people in working families cannot afford basics like health care, housing, or child care, even with public work supports.

Contact: Alan Barber, CEPR, 202-293-5380 x115

 

Washington, DC: Low wages, inadequate benefits, and limited work supports leave one-in-five people (nearly 41 million) in working families struggling to make ends meet. According to a study released today by the Center for Economic and Policy Research in Washington, DC, and the Center for Social Policy at the University of Massachusetts in Boston.

According to the report, many workers are in jobs that do not provide health insurance or enough earnings to cover basic expenditures but earn too much to qualify for work supports such as Medicaid and Food Stamps.

While common to higher-wage workers, employment-based benefits, like health insurance, retirement plans, and paid time off, are not available to most low- and many moderate-wage workers. Public work supports, however, can help fill in these gaps.

“We no longer live in a world where having a job means you’re automatically able to make ends meet,” according to Heather Boushey, co-author of the report. “Our work support policies need to be updated to support the millions of families with earners in bad jobs.”

After examining federal and state policies across nine states and the District of Columbia, the researchers found that families who were able to take advantage of government-provided work supports were able to close nearly half (44 percent) of the gap between their earnings and a safe and decent standard of living.

Across the same states, however, more than one-in-five of those living in low-income, but working families, were not eligible for any government-provided work supports.

The findings come from an in-depth examination of eligibility for six work supports–child care assistance, Earned Income Tax Credit, Food Stamps, housing assistance (public housing and Section 8), Medicaid/State Children’s Health Insurance Program (SCHIP), and Temporary Assistance to Needy Families—and who uses them.

The study analyzed federal and state policies in Illinois, Iowa, Massachusetts, Minnesota, New York, North Carolina, Ohio, Texas, Washington, and the District of Columbia. A low-income family has income below a basic family budget, which is equal to the cost of purchasing a safe and decent standard of living at market prices within the family’s locality. The family types included are households comprised of one or two adults and zero to three children under the age of 13. These family types make up approximately 75 percent of the US population.

This new data is being released as Congress tries to expand SCHIP to families with income above 200% of the poverty threshold. The data released today show that the current eligibility rules leave over half of low-income families ineligible for this work support.

“These findings suggest that universal heath care reform would make a significant impact in the budgets of millions of Americans,” said Randy Albelda, co-author of the report.” And given the recent focus on health care by the 2008 presidential candidates, there is a great opportunity to help bridge the gaps for these families.”

 

The study, Bridging the Gaps: A Picture of How Work Supports Work for Working Families, was co-authored by the Center for Economic and Policy Research and the Center for Social Policy at the University of Massachusetts Boston in collaboration with partners in ten states.

 

The Center for Economic and Policy Research (CEPR) was established in 1999 to promote democratic debate on the most important economic and social issues that affect people’s lives.

The Center for Social Policy (CSP) is an applied research and technical assistance center within the John W. McCormack Graduate School of Policy Studies at the University of Massachusetts Boston.

The research was funded by the Annie E. Casey Foundation, the Ford Foundation, the Joyce Foundation, the McKnight Foundation, the Meyer Foundation , the Moriah Fund and the Stoneman Family Foundation.