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Title: Balancing paychecks and public assistance How higher wages would strengthen what government can do

Citation Type: Working Paper

Publication Year: 2016

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Abstract: Millions of Americans rely upon public assistance programs to help meet their basic needs. These programs provide a vital lifeline for individuals and families struggling to get by. Indeed, given rising costs of necessities such as child care, housing, and health care, many families’ ability to achieve a modest but adequate standard of living requires resources earned on the job and assistance from government programs.1 However, for many workers in certain sectors, wages are so low that even those who work full time must rely heavily on government assistance to make ends meet. This suggests that low pay by many employers—facilitated by weakened or inadequate labor standards, such as a low minimum wage and outdated overtime regulations—is placing unwarranted demands on public resources. As corporations achieve extraordinarily high profit levels and executive pay reaches new heights, it is appropriate to question whether employers are effectively passing off a portion of their societal responsibilities on to taxpayers. This report examines the utilization of public assistance among low-wage workers and their families. After a brief review of previous research, it presents data on program participation and transfer income receipt by working individuals’ annual hours of work, hourly wage level, major industry of employment, and state. Then it examines how higher wages among workers at various wage levels affect utilization rates and benefit dollars received. Finally, it discusses policies that would raise wages and the effect these policies would have on public assistance utilization and overall program spending. It concludes that higher hourly wages for low- and middle-wage workers, achievable through a variety of labor-market policies, would unambiguously generate savings in government safety-net and income-support programs—savings that could be used to strengthen and expand anti-poverty programs or make critical public investments to boost productivity and grow the economy.

Url: http://leaguelafayette.org/files/balancing_paychecks_and_public_assistance2016.pdf

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Authors: COOPER, DAVID

Series Title: EPI Briefing Paper

Publication Number: 418

Institution: Economic Policy Institute

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Data Collections: IPUMS USA

Topics: Other

Countries: United States