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REPORT: Half of Nation’s Low-Wage Workers Require Public Assistance

April 15, 2015

Roughly half of home care workers and other workers who earn poverty-level wages must rely on one or more public-assistance program to make ends meet, a report shows.

The High Public Cost of Low Wages, produced by the University of California, Berkeley Center for Labor Research and Education, shows that 48 percent of home care workers lived in households that received at least one of the following:

  • food stamps,
  • Temporary Assistance for Needy Families,
  • the Earned Income Tax Credit, and/or
  • Medicaid.

Meanwhile, 46 percent of child care workers and 52 percent of fast food workers lived in households receiving one or more of those programs, the researchers found.

“Let that sink in,” Ken Jacobs, a co-author of the report, wrote in the Washington Post on April 15. “American taxpayers are subsidizing people who work — most of them full-time (in some case more than full-time) because businesses do not pay a living wage.”

A February 2015 PHI report, Paying the Price: How Poverty Wages Undermine Home Care in America, reported that the average hourly wage for a home care worker in 2013 was just $9.61 an hour.

Wages for child care and fast food workers are similarly low, the UC Berkeley report shows.

And these wages have not been keeping pace with inflation. In fact, the report shows that, for the bottom 70 percent of Americans in terms of wage distribution, wages were stagnant between 2003 and 2013 — or in some cases, actually declined.

“Like many other workers in our nation’s fastest-growing occupations, home care workers have seen their real wages (i.e., wages adjusted for inflation) decline — 5 percent over the past decade,” Paying the Price says.

An April 12 New York Times article highlighting the UC Berkeley study noted that with so many low-wage Americans in increasingly precarious economic situations, a movement dedicated to achieving higher wages has emerged, with a nationwide wave of protests scheduled for April 15.

As the UC Berkeley report makes clear, low wages aren’t just a strain on the people who earn them.

“Stagnating wages and decreased benefits are a problem not only for low-wage workers who increasingly cannot make ends meet,” the UC Berkeley report says, “but also for the federal government as well as the 50 state governments that finance the public assistance programs many of these workers and their families turn to.”

— by Matthew Ozga

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