Nearly one in four workers in the United States work at jobs that pay less than $10 an hour, which coincides closely to the number of workers who live in poverty. Even when both parents work full-time, these low-wage jobs do not provide enough resources for families to meet even the most basic of needs. In addition, low-paying jobs often don’t offer health insurance or other benefits, leaving workers to pay for goods and services that other better paying jobs would cover. Child care, which annually costs nearly as much as college tuition, creates an even larger gap between wages and expenses. Every month, low-income families are forced into making difficult decisions to make ends meet, often foregoing health insurance and child care or skimping on the food budget.
Work support programs such as Medicaid, SNAP, Energy Assistance, School Meal, and WIC were created to help low-wage workers meet their basic needs because there was a recognition on the part of federal and state legislators that low-wage jobs did not provide enough to make ends meet. Tax policies that placed less liability on lower income workers were enacted for similar reasons.
Work support programs are often lumped into the category of welfare programs; however, they are uniquely different than traditional cash assistance programs that are aimed at helping those with no income. Work support programs were created to encourage workers to take low-wage jobs rather than rely on welfare or cash programs. In fact, the United States has long relied on government policies to provide incentives for low income households to build assets, achieve economic security and move into the middle class. Since colonial times, government has enacted tax policies and programs to influence citizen behavior such as land grants, homestead acts, farm credits, college loans, subsidized retirement accounts, home mortgage deductions, the G.I. Bill, and Social Security just to name a few. With proper administration, these programs have been successful in encouraging behavior that have led great numbers of the U.S. population to develop assets that move them into middle class economic security. Likewise, current work support programs such as those on this site have the ability to provide economic stability for low-income families. However, because of the way the programs are funded and administered, there are often unintended consequences that prohibit economic stability and sometimes are counter productive to the purpose of work support programs in that they create a disincentive to work.
The Economic Stability Indicator can illustrate some of these unintended consequences, as well as the potential of public programs and tax credits in filling the gap between wages and a "basic needs" budget.