Transcript Bridging the Gaps: Structuring Benefits to Promote

Bridging the Gaps:
Structuring Benefits to Promote Mobility for Low
Wage Workers
A collaboration of the
Center for Social Policy, University of Massachusetts
Boston
Center for Economic and Policy Research, Washington,
D.C.
Overview of the current project
The Bridging the Gaps project has several important
research objectives surrounding low-wage workers
and work support programs intended to help them
get and keep employment.
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Which workers?
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For now we are looking at a single parent with two children
whose annual earnings range from $13,000 to $35,000
annually (corresponding to a full-time, year-round hourly
earnings of $6.25 to $17.00 an hour -- the minimum wage to
median wage in Massachusetts).
Which benefits/work supports?
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TAFDC, MassHealth/SCHIP, Child Care vouchers (CCDF
specifically), Food Stamps, Section 8 tenant vouchers and
public housing, and the Earned Income Tax credit.
Specific Research Goals
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A coordinated look at the ways low-to-moderate families
and individuals with earnings are eligible for and how they
get major public benefits in Massachusetts (from “paper to
pocket”).
Examination of the eligibility gap across a range of
earnings by measuring the actual utilization of worksupport benefits among eligible benefits.
Assess the size of the hardships gap between resources
(earnings plus benefits) and the costs low-income families
face over a wide range of earnings and combination of
public benefit receipt in 3 Massachusetts cities.
Measure the high “marginal tax rates” for low-income
workers who do use work-support benefits.
Research strategy
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Work within Massachusetts in conjunction with
providers, policy advocates, policy makers, and
low-income families to ensure accuracy,
responsible research, and policy impact.
Work with state research partners in Texas and
Illinois on the same set of research questions to
compare across states to highlight similarities and
differences in order to strengthen all our findings.
Work with Center for Economic and Policy
Research to make a national case for
improvement of the resource base for low-tomoderate earners in Massachusetts and across
the country.
What’s done
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Preliminary policy mapping.
Preliminary assessment of eligibility
gaps and preliminary programming
to estimate actual gaps.
Preliminary findings on the hardship
gaps.
What’s to come
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Incorporation of feedback on policy mapping and
hardship gap presentation.
Compare the earnings range we examine to
poverty and other reasonable measures of “lowincome” and to types and numbers of jobs in
Massachusetts.
Conducting focus groups with low-to-moderate
earners, policy advocates, public benefit
providers, and policy makers.
Completion of actual estimates of eligibility gaps.
Written state and national reports and state and
federal legislative briefings.
Findings to Date
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Benefits are administered in a fairly disparate way. Only
by applying for TAFDC does anyone get access to
information about a wide range of programs.
While this is useful for TAFDC recipients, the income cutoff for TAFDC is the lowest of the six programs (below
100% of the FPL), has the lowest participation rate, and
requires an office visit to get an application.
The cost of MassHealth swamps the other programs,
costing three times as much as the other five programs
combined reflecting the high cost of health care generally
and the large percentage of the population covered.
Coverage, Eligibility, and Access
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The breadth of coverage of these programs among the
population is narrow: ranging from about 14 percent of
people in Massachusetts receive MassHealth to about 1.7
percent receive TAFDC.
Income eligibility thresholds differ considerably: from
close to the official poverty line to over 2.5 times that
amount. For a family of three that translates into an
annual income of about $13,000 (TAFDC) to close to
$36,000 (EITC and public housing in Boston).
There is considerable variability on documentation
required in order to access benefits. On paper at least,
EITC is the simplest to access, while TAFDC is the hardest.
Getting Benefits?
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TAFDC’s eligibility requirements and the apparent
stigma attached to it limit the use of it among
low-income families with children and with
earnings making it among the least likely program
workers would access.
Housing and child care assistance needs far
exceed their availability, despite relatively high
income eligibility thresholds. Both have long
waiting lists and serve priority clients, making
these programs unlikely to be assessed by eligible
families with earners (those leaving TAFDC for
employment are the most likely to receive child
care assistance).
Getting Benefits?
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While the Food Stamps program is not capped and is
paid for by the feds, usage is low in Massachusetts
(ranking last among the states in 2002 with only
42% of the eligible population receiving them).
Massachusetts has been a leader among the states
in extending health coverage to low-income families
and MassHealth usage rates reflect that.
Everyone must file taxes, making the EITC the most
accessible of these six benefits. Private firms and
non-profit entities have done considerable outreach
to help people claim their refund.
Federal and state budget deliberations point to
changes in these program that are likely to reduce
current usage.
Defining Low-income Families
o
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In 2003, the federal poverty line (FPL) for
a family of three was $14,680. For such
a family 200 percent of poverty is
$29,360.
Defining low-income as 200% of the FPL,
who’s low-income in Massachusetts?
 20 percent of families
 25.2 percent of all the people
 30.7 percent of all children
 Over half (58 percent) of all femaleheaded households.
Earnings and Income
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It would take a worker in a 3-person
family working year round and full-time
$14.68 to be at 200 percent of the FPL.
It would take a year-round part-time (25
hours a week) worker $22.76 to get to
200 percent of the FPL.
The median wage in Massachusetts in
2003 was $16.67 while the wage of the
worker at the 25th percentile was $11.04
Measuring Resources and Expenses
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The “prototypical” family we examine is a
single parent with two children ages 3 and
8 moving toward full employment.
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Expenses include food, housing (with utilities),
child care, health insurance (if not received),
transportation, and miscellaneous expenses for
low-income families in Boston and Springfield as
calculated by the National Center for Children in
Poverty.
Resources include net earnings (taxes deduced
and credits added), cash assistance, cash value
of food stamps, and the cash value of child care.
Resources – Expenses = Net Resources.
A Policy Conundrum?
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A smaller number of benefits provides a
little more incentive for higher earnings,
but leaves families in financial difficulties
even as they earn more.
A high number of benefits helps families
move to financial economic security, but
at the same time provides no incentive
for more earnings over a very large range
of earnings.
Ways out
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Individual solutions: Families can
reduce expenses on their own; find
cheaper child care at the risk of
losing quality care, find cheaper
housing by crowding in with others
or living in less safe neighborhoods,
or go without medical insurance or
as much food.
Policy changes?
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Increase earnings: boosting the state
minimum wage will help lift wages and
move families further along the earnings
line.
Increase benefit levels generally and/or
phase them out over a wider range of
earnings.
Other countries have found a solution by
providing universal coverage of certain
benefits – such as health insurance and
child care.
Feedback
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Are policy rules properly
summarized?
What is the most effective way to
convey the hardship gap and the
eligibility gap?
Strengths and weaknesses of this
approach in illustrating the
relationship between low/moderate
earnings and public benefits?
Next Steps
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Identifying focus group participants to
talk about eligibility rules in practice and
about coping strategies.
Other organizations/individuals to involve.
Who should see the report at release time?
How do we best involve them?
How can we best work with you
throughout the project?