Most of the public assistance in America goes to families that work, according to a new report.
Nearly 56 percent of the $227 billion in federal spending on a handful of assistance programs now goes to working families, according to the report from the University of California, Berkeley’s Center for Labor Research and Education. Of the more than $48 billion that states spend, nearly 52 percent goes to such families, defined as those in which at least one member works 10 hours a week for 27 weeks a year.
“The solution isn’t cutting back—these programs provide really a vital safety net to American lower-income families, including lower-income working families,” says Ken Jacobs, co-author of the report and chairman of the center. He blames low wages and years of reluctant wage growth for the large share of working families relying on aid.
“The issue here is how do we raise the wage floor so that workers don’t need to rely on public assistance programs in order to make ends meet and then allow those dollars to be more effectively targeted,” he said.
Indeed, states spent $25 billion annually between 2009 and 2011 on welfare and health insurance for poor adults and children in working families.
As the map above shows, 65 percent of state spending in New Hampshire on Medicaid, Children’s Health Insurance Program and Temporary Assistance for Needy Families—also known as welfare—went to working families, a larger share than in any other state. Texas was next, at 64 percent, followed by Oklahoma at 62 percent. Working families account for the smallest share in D.C. and West Virginia, at 38 percent each. Alaska and Michigan were next, at 43 percent and 44 percent, respectively.
Variation among states may exist for any number of reasons, including more- or less-stringent eligibility requirements for assistance, or variable number of low-wage jobs.
Nationally, working families received an annual $127.8 billion in federal public assistance, the authors estimated. Texas led all other states, with 67 percent of federal assistance on Medicaid, CHIP, TANF,Earned Income Tax Credits and Supplemental Nutrition Assistance Programs— often called food stamps—going to working families. That share was 66 percent in Utah and 65 percent in Idaho. The share was smallest in D.C., at 41 percent, followed by Alaska, at 44 percent.
Nationally, working families receive 81 percent of spending on Earned Income Tax Credits; 55 percent of spending on health coverage for poor adults and children; 38 percent of spending on food stamps; and 27 percent of spending on welfare, according to the report from the University of California, Berkeley’s Center for Labor Research and Education.
Some industries are particularly over-represented in the share of their workers who collect public assistance. More than half of fast-food workers, for instance, rely on government aid.
The estimates come from Labor Department data and administrative data from the public assistance programs in question. The data, of course, does not account for the radical expansion of Medicaid under the president’s health-care law as that information is not yet available.
The estimates are also low, Jacobs says, because they fail to account for child care, reduced-price lunches, low-income housing, heating and cooling assistance and other state and local programs.