Progress Illinois looks at the findings of a new report detailing the "hidden cost of low-wage work" at the national and state levels.
Low wages paid by employers cost Illinois taxpayers over $1 billion annually in public assistance spending to support working families, according to a recent report detailing the "hidden cost of low-wage work" at the national and state levels.
According to the report, from the University of California at Berkeley's Labor Center, 58 percent of state public assistance spending in Illinois goes to working families. Illinois as well as California, Florida, New York and Texas are among the top five states with the "highest budgetary cost of low-wage work," the UC Berkeley researchers found.
Nationwide, U.S. taxpayers are left with a $153 billion tab each year to cover public assistance costs for working families, many of whom are forced to seek government aid due to their low wages and lack of benefits at work, the report says. Overall, 56 percent of state and federal public assistance dollars are spent on U.S. working families, defined in the report as those with "at least one family member who works 27 or more weeks per year and 10 or more hours per week."
"When companies pay too little for workers to provide for their families, workers rely on public assistance programs to meet their basic needs," said the report's co-author Ken Jacobs, chair of UC Berkeley's Labor Center. "This creates significant cost to the states."
Most American workers have faced "decades-long" stagnation in wages and benefits, researchers point out.
"Real hourly wages of the median American worker were just 5 percent higher in 2013 than they were in 1979, while the wages of the bottom decile of earners were 5 percent lower in 2013 than in 1979," the report explains.
From 2003 to 2013, the entire bottom 70 percent of U.S. workers saw either flat or negative wage growth. And over that same time period, the share of non-elderly Americans receiving employer-provided health insurance ticked down from 67 percent to 58 percent.
The report, said by researchers to be the first to "examine the cost to the 50 states of public assistance for working families," looked at spending for the following government programs: Medicaid and Children's Health Insurance Program (CHIP), Temporary Aid To Needy Families (TANF), the Earned Income Tax Credit (EITC) and the Supplemental Nutrition Assistance Program (SNAP).
By occupation, American fast food workers have the highest public assistance rate, with 52 percent living in families that rely on some form of government aid. U.S. home care and child care workers also have high pubic assistance rates, at 48 percent and 46 percent, respectively. The research, funded by SEIU*, also showed that 25 percent of part-time college faculty members live in families enrolled in at least one public assistance program.
The report's release came just a few days ahead of the massive, nationwide Fight for 15 strike that swept across more than 200 U.S. cities last week, including Chicago. Fast food workers and a whole host of other low-wage employees, including adjunct professors, home and child care workers and security guards, hit the streets to call for a $15 hourly minimum wage, union recognition and better working conditions.
UC Berkeley researchers say federal and state governments would see "significant" savings in public assistance costs that could go toward "other programs and priorities" if more workers had higher wages and employer-provided health care. The experts do not, however, recommend a specific amount to which wages should be raised.
"Our public-assistance programs provide a vital support system for American families," Jacobs stressed. "Raising wages would lift working families out of poverty and allow all levels of government to better target how our tax dollars are used."
*The SEIU Illinois State Council sponsors this website.