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Half of state aid benefits working poor, study says

San Diego Union-Tribune

By Jennifer Vigil; Staff Writer

Half of the $21.2 billion spent in California on welfare, health insurance and eight other social service programs goes to families with at least one wage earner, according to a report released today.

The study by the Center for Labor Research and Education at the University of California Berkeley is one element in a campaign to persuade lawmakers to pass laws that improve wages and benefits for the working poor.

The research is being released two months after a similar study by a San Diego-based group found that a family of four here qualifies for more than $23,000 in public benefits if parents work full time making the minimum wage of $6.75 an hour.

Berkeley’s analysis concludes that 53 percent of California families enrolled in 10 state and federal assistance programs are headed by at least one person who works most of the year.

Advocates who want to help low-wage workers have begun bypassing federal lawmakers to achieve changes. Increasingly, they are turning to state legislatures and city councils to try to increase wages and workers’ access to health coverage.

“We keep saying over and over again that the problem of our economy is growing inequality,” said Donald Cohen, head of the Center on Policy Initiatives, which issued the San Diego report in March. “The most important thing we can do is create better jobs and bring the standards up.”

Some California cities, including Los Angeles, San Jose and Sacramento, have passed measures to establish, in certain jobs, a salary higher than the state minimum wage.

San Diego is to consider its own form of the law next month. Advocates throughout the country have dubbed such measures “living-wage” ordinances.

In San Diego, a coalition of religious groups, activists and union representatives, led by Cohen’s organization, are asking the City Council to force businesses that sign contracts with the city to pay workers at least $9 an hour, with health benefits.

Business and industry groups have opposed the proposal, saying it would actually hurt the poor because companies would have to eliminate jobs as their personnel expenses rose.

Statewide, the business lobby has challenged a law passed last year that would have required companies with more than 50 employees to offer health insurance. Those in opposition, including the California Chamber of Commerce, pushed to give voters the final say. The issue is on the November ballot.

Business leaders, facing pressure from rising insurance and fuel prices, sometimes find themselves forced to cut back on personnel expenses, said Alan Gin, a University of San Diego professor who monitors the region’s economy.

“The problem is that there’s a lot of stress on business now as a result of health-care costs,” Gin said. “More and more businesses are thinking about not offering medical benefits, and if they know that their employees can qualify for assistance, that could help make the decision easier.”

But Mitch Mitchell, vice president of public policy for the San Diego Regional Chamber of Commerce, said business owners are not withholding benefits as a strategy to push their workers into aid programs.

“I don’t think businessmen go into this thinking, `Public assistance is available, so I don’t feel bad not offering health care,’ ” Mitchell said. “The cost has been a huge barrier to employers offering health care.”

But when the burden falls to California taxpayers, Cohen said, referring to the Berkeley study, “We are basically subsidizing business to the tune of $10 billion.”

An Oakland-based group, the National Economic Development and Law Center, which commissioned the Berkeley study, has established a statewide coalition that is likely to pursue legislative remedies for working families.

The effort is complicated, however, by the state’s continuing budget crisis and its attempts to deal with its own benefit structure, which critics have pointed out allows some of the highest payouts to recipients in the nation. Advocates for the poor argue that California’s high cost of living still has outpaced the growth of those benefits.

Gov. Arnold Schwarzenegger has proposed cutting social service programs as part of his efforts to balance the state’s budget, but some legislators are seeking bills to aid those battling poverty.

The Berkeley study predicts a concentrated push for the poor in the next legislative session, though some bills remain to be considered in the current session.

One, sponsored by state Sen. Richard Alarcon, D-Van Nuys, would allow time spent studying to become part of permitted welfare-to-work activities so recipients in training programs would not lose a portion of their checks. The bill is scheduled to be considered by a Senate committee today.

A proposal to increase the state’s minimum wage to $7.75 an hour by 2006 cleared a committee two months ago and will be presented to the Assembly in June.

In a separate action last month, a resolution offered by Alarcon urged the government to update federal poverty guidelines as a measure of what aid individuals can receive. The current guide fails to take costs such as child care and housing into account.

“There are things being proposed to be done here,” said Mike Herald, a lobbyist with the Western Center on Law and Poverty, an advocacy group. “Not investing in these folks just means we end up paying for them forever.”

The battle, said Aimee Durfee, coordinator of the economic development center’s coalition, is being fought not only with legislators but against public perceptions. The poor today, advocates point out, are not always unemployed.

“We’re moving further and further away from the stereotype of the welfare queen,” Durfee said.

Natasha Combs of City Heights agrees. The 27-year-old single mother of three worked 40 hours a week as an in-home health care assistant until she became pregnant two years ago.

Now, having watched her weekly pay drop by a third to a little more than $100, she is struggling to rebuild the client roster she lost while on maternity leave. Until she does, she qualifies for a host of assistance programs.

“I love this job,” Combs said of her position helping AIDS patients and other disabled clients, “but the income is just not enough. If wages go up a little more, it would be perfect.”

If wages were to rise, it could save taxpayers money, according to the Berkeley study. If workers earned $8, the state would save $2.7 billion now spent on public assistance; at $10 an hour, the savings would be nearly $5 billion.

“The numbers are big,” said Carol Zabin, one of the authors of the study. “If those people could be pulled up to higher wages somehow, then that money could be used for all those folks on waiting lists who can’t get access to the programs.”

The report addressed CalWORKs, which provides welfare payments for families with children, Medi-Cal, Healthy Families and Section 8.

The other six programs Zabin and her partners studied offer the poor tax credits, food stamps, school meals, nutritional education and payments to offset child-care and heating expenses.