Nicole Beth Wallenbrock has a PhD in French literature and a part-time job teaching at the City University of New York, but her wages barely cover the cost of living for her and her son. She has been on food stamps for six months, she told PBS in February, and relies on help from her family and public assistance programs to get by.
“I have to accept whatever I can get,” she said. “It’s depressing. It makes me feel like a failure in a lot of ways.”
Wallenbrock is among millions of working Americans whose low wages are supplemented by government support. Families in which at least one member is working now make up the vast majority of those enrolled in major public-assistance programs like Medicaid and food stamps, according to a new study. It’s a “hidden cost” of low-wage work, researchers say, and it costs taxpayers about $153 billion a year.
According to researchers, this is the first time anyone has calculated how much is spent providing assistance to workers whose wages don’t cover their families’ expenses. The study, from the University of California at Berkeley’s Center for Labor Research and Education, found that most spending on public assistance goes not to the unemployed but to members of working families.
“When companies pay too little for workers to provide for their families, workers rely on public assistance programs to meet their basic needs,” Ken Jacobs, chair of the Labor Center and co-author of the report, said in a statement.
Jacobs blames low wages, which he says are increasingly insufficient to meet the cost of living. According to the report, wages for the bottom 10 percent of workers are 5 percent lower than they were in 1979, once adjusted for inflation. Between 2003 and 2013, inflation-adjusted wages haven’t increased for anyone in the bottom 70 percent of earners. The decline in employer-provided health insurance, which fell about 10 percent in that period, adds to low-income workers’ expenses.
Working families — defined as a family in which at least one member works 10 or more hours per week for more than half the weeks out of the year — make up 61 percent of Medicaid enrollment and 74 percent of Earned Income Tax Credit recipients (it’s worth noting that the EITC is aimed specifically at low-income workers). They also represent a sizable chunk of people on food stamps (36 percent) and those who receive cash welfare through the Temporary Aid to Needy Families program (32 percent).
Many of those who rely on government support to bridge the gap between what they’re paid and what they need to live are in service industries, according to the study. About half of people working in fast food, child care and home care receive public assistance. Few in these professions seem happy with the status quo: Organizers in all three fields have issued major calls for higher wages in the past few months. Fast-food workers are organizing a national “day of action” for Tuesday, and in the District, home health workers are calling for a $15 per hour wage. Part-time college professors — a quarter of whom rely on public assistance, according to the report — have likewise organized a day of action for April 15.
And some states are also taking note of the disparity. In Connecticut, legislators are considering a proposal to fine large companies that pay less than $15 per hour. Proponents of the “revenue bill,” like SEIU 1199 New England President David Pickus, are using Jacobs’s argument to promote the policy.
“We’re subsidizing the profits of Wal-Mart,” Pickus, whose union represents health care workers, told the Hartford Courant. “They’ve lived this way as if this is the way things are. It’s an amazing sense of corporate welfare.”
But opponents of minimum wage increases say that the policy could end up hurting business, eliminating jobs rather than making them more profitable.