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REPORT: Public Money Funds Millions of Low-Wage Jobs

May 23, 2013

Nearly 2 million low-wage private-sector jobs — including hundreds of thousands of direct-care jobs — are funded by public money, a report from the public policy organization Demos found.

In the report, entitled Underwriting Bad Jobs: How Our Tax Dollars Are Funding Low-Wage Work and Fueling Inequality, Demos defined “low-wage jobs” as those paying $12 an hour or less. A full-time employee earning $12 an hour would make a yearly salary of just $24,000.

Demos Senior Policy Analyst Amy Traub, the study’s author, told the Washington Post, “We know that growing inequality and these larger, dead-end jobs are a national problem.”

The report found that nearly 400,000 low-wage jobs in the home health care services sector are underwritten with federal dollars, mostly from Medicare and Medicaid.

Hospitals, nursing homes, and other eldercare facilities employ at least 785,000 low-wage workers whose wages are paid with federal money, the report added. Those workers include nursing attendants and health aides as well as medical assistants and hospital orderlies.

Congressional Hearing

House Minority Leader Nancy Pelosi (D-CA) led a May 21 hearing on the use of federal money to underwrite low-quality jobs.

One category of low-wage job that was not included in the Demos report was personal care aides (PCAs).

As PHI President Jodi Sturgeon pointed out in a May 13 letter published in the Washington Post, the report excludes an estimated 350,000 PCAs, earning a median wage of less than $10 an hour, in the eldercare/disabilities sector, and an additional 800,000 PCAs who are earning Medicaid-funded wages (pdf) but are employed directly by consumers.

An organization called Good Jobs Nation is calling on the Obama administration to “to stop being America’s leading poverty job creator.”

— by Matthew Ozga

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