(AP Photo/J. Scott Applewhite)
On any given day, you're likely to interact with a lot of people who work in the low-wage labor market. They're the laborers you pass on the street, the retail clerks in a shop you frequent, the cooks or wait staff at a restaurant you like. They might be your family, friends, and coworkers. Maybe you yourself work in one of these occupations—after all, many millions of Americans do.
While conservatives might paint adults who receive Supplemental Nutrition Assistance Program (SNAP, commonly called food stamps) benefits and Medicaid as idle people who don't want to work, the data don't validate that assumption. Adults who rely on SNAP and Medicaid for help paying for their groceries and health care are often those same low-wage workers. But their work is largely volatile and unstable, and it comes without such key work supports as paid sick and family leave and affordable child care.
That's why the recent policy push to institute harsh work requirements in both SNAP and Medicaid is concerning.
Recent reports from the Center on Budget and Policy Priorities (CBPP) and the Economic Policy Institute (EPI) lay out the realities of low-wage work. The reports complement each other: The CBPP report, by economists Diane Whitmore Schanzenbach and Kristen Butcher, looks at the typical person who will be affected by policies that aim to strip people of benefits and what their jobs are like, and the EPI report, by Josh Bivens, director of research at EPI and Shawn Fremstad, senior fellow at the Center for American Progress, further explains the likely outcomes of the work requirement proposals given the current labor market.
Most people who use SNAP and Medicaid are children, the elderly, or people with disabilities, and they aren't expected to work. But some are adults without (diagnosed) disabilities, whom conservatives are quick to denigrate. “Able-bodied folks, we want them in the labor force,” said Republican Representative Dave Brat of Virginia on Fox & Friends Wednesday, mentioning how much money SNAP work requirements would save the government.
The House version of the farm bill aims to introduce a punitive SNAP work requirement for most adults without diagnosed disabilities who aren’t caring for children over the age of six (note that SNAP already has general work requirements).
If recipients fail the requirement, which is 20 hours of work per week, they'll be denied benefits for a year. Should they fail the requirement a second time, they'll be denied food stamps for three years.
(The two versions of the farm bill will soon be going to conference; the Senate’s, which passed that body by an overwhelming majority, had no provisions that altered requirements for food stamps).
As for Medicaid, the Trump administration has allowed states to elect to institute work requirements for the Medicaid expansion population. They’re generally similar to the SNAP requirements, though specifics depend on the state.
The goal of the work requirement plan, Brat said on the president's favorite cable news show, “isn't to keep people on government dependency—the goal is to get them into this thriving economy.”
But that economy is not thriving for everyone, particularly for the low-income people who the work requirements target.
Most are already working, but they're working for low wages in unstable jobs with volatile hours and limited leave options. They use SNAP and Medicaid as work supports, to help them stay afloat while they're working in those jobs or are in between jobs. And the very nature of this low-wage work is what will make meeting rigid reporting requirements difficult.
According to Bivens, co-author of the EPI report, work requirement policies “reflect this idea that what keeps low-wage workers from finding steady work is their own motivation—rather than failures in the labor market and economy around them.” Indeed, Whitmore Schanzenbach, co-author of the CBPP report, says that the issue “is not really the limitations of the people [affected by work requirements]. It's the type of jobs that they're in.”
The CBPP report analyzed what the labor market is like for people who are most likely to use SNAP and Medicaid. This includes workers with limited formal education, especially women, and workers in specific occupations.
For this group, wages have been stagnant for decades. Job tenure is unstable, and unemployment rates are higher. Nonetheless, nearly all had worked in the previous year for at least 20 weeks.
Though overall median income in the United States has risen slightly since 2002, for workers with limited formal schooling, income has either stayed flat or declined. The report shows that the average inflation-adjusted wage for a worker with a high school degree or less was $31,000 in 2017. Adjusted for inflation, that wage was higher 15 years earlier: $31,700 in 2002. Women, of course, earn even less. The average inflation-adjusted wage for a woman with a high school degree or less was $27,300 in 2017, barely up from $26,400 in 2002.
The report also finds that nearly a fifth of Medicaid recipients and more than a quarter of SNAP recipients who worked at least 30 hours per week for at least 20 weeks in 2017 still lived below the federal poverty line—$20,420 for a family of three.
According to the CBPP report, some of the occupations most common among people who use SNAP or Medicaid are nursing aides and orderlies, cashiers, drivers, retail and sales workers, janitors, laborers (besides construction), food service workers, and housekeepers. About a third of beneficiaries fall into one of these occupations. Median annual earnings for the most common occupations was $22,000 per year. Note that these are also occupations where wages have stagnated and where unemployment rates tend to be higher.
Whitmore Schanzenbach says that knowing the most common occupations among benefit recipients not only “humanizes them—[but] it lets you really sink your teeth into how many people have these jobs.”
CBPP estimates that two million people could have their benefits eliminated or reduced if the House work requirement plan becomes law. And while Medicaid work requirements are being slowly implemented in a handful of states across the country, such requirements are already roaring ahead in Arkansas, where more than 7,000 recipients failed to meet the reporting requirements in June.
Another striking finding from the CBPP report is that, while one might expect that a person who works a lot in one year would still have stable employment and maybe earn even more in the following year, such upward mobility was often not the case. Because of the volatility of low-wage work, when the researchers looked at adjacent years of employment for such workers, better employment outcomes were often followed by a worse employment year, with reduced income, hours, and wages. Instead of a happy narrative of economic mobility, what is more likely to occur is what economists call “regression to the mean”—where a less-likely outcome (a year of better-than-typical income and work hours) will be followed by an outcome closer to the average.
“One wants to believe these sorts of ‘America' stories,” says Whitmore Schanzenbach, about how opportunity is out there for everybody if one just works hard enough. But, she says, “that's not what the data are showing.”
The EPI report examines the likely outcomes of the work requirement policies, which, the authors write, “seem designed to maximize failure rather than help working-class people succeed.”
One way EPI's Bivens explains the nature of the low-wage labor market is by pointing to the divide between middle-class and working-class jobs. “It's not that low-wage workers' jobs are just like mine except they pay a bit less,” he says. Besides the decline in wages that working-class people have seen over the past decades, they have also faced a decline in employer-provided benefits, which helps explain some of the volatility and instability of the low-wage labor market. The EPI report details that more than half of private-sector workers in the bottom quarter of the wage distribution don't have access to paid sick leave, two-thirds don't have access to employer-provided health-care benefits, and almost all of them don't have paid family leave.
In addition, the report argues that low minimum wages, barriers to unionization, and weakened labor standards also contribute to the volatility of low-wage work. Previous studies have found that decreasing unionization partly contributed to economic inequality.
According to Bivens, the harsh characteristics of low-wage work are not only due to policy failures, but also result from the increasing grip of employer power in the Unites States. Since there are so many low-wage workers, he says, “employers don't feel they have to do much to keep hold of them. [Employers] just assume that if someone has to go home to take care of a sick kid, [the employers can] just fire them, and there will be a ready replacement.”
The data that the Trump administration have provided to defend these policy changes are not reassuring.
For example, to support Medicaid work requirements, the administration touted studies that show that employment is correlated with better health—and hence, the administration contends, forcing Medicaid recipients to meet a work requirement will improve their health.
You don't have to be an economist to know that correlation doesn't prove causation.
The idea of a work requirement making someone healthier “strikes me as the crudest, most opportunistic reading of that literature linking unemployment and health,” says Bivens. “There are a lot of people for whom jobs are real source of stress, and I think that's probably particularly true for the low-wage labor market,” he says, given the volatility, the instability, and the limited benefits.
Even though these policies are targeted at adults, they'll hurt kids too. Whitmore Schanzenbach explains that SNAP is designed so that families share their resources. Fewer benefits for parents means less food for the entire family. The possible increase in child hunger will have a “long-term spillover” effect, she says. “If we invest less in [kids],” she adds, “they learn less in school, they'll be less healthy … [and] we'll be paying for that for generations.”
The characteristics of low-wage work—volatile hours and scheduling—will make it extremely difficult for SNAP and Medicaid recipients to meet monthly requirements and keep their benefits. Just reporting their ever-shifting work hours will place a burden on affected people.
I asked Bivens if he would say these policies are based on assumptions about individuals and their “work ethic,” rather than hard data.
“That's right,” he said. “And also, a politics of selfishness.”
Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives' age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren't made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.
