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Center for Labor Research and Education

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Study: Many Calif. low-wage working families dependent on aid

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Associated Press

By Alex Veiga, AP Business Writer

Despite working full-time, many of California’s low-wage earning families are increasingly dependent on government aid programs to make ends meet, according to a university study released Thursday.

Researchers at the Center for Labor Research and Education at the University of California, Berkeley, examined the 10 largest statewide public assistance programs in 2002 and found that $10.1 billion of the $21.2 billion in total aid paid through the programs went to working families.

And working families, where at least one member was employed for a minimum of 45 weeks a year, comprised 53 percent of those who received aid. The study also showed that a majority of the working families who received public assistance had at least one member who worked full-time.

Researchers concluded that government aid programs are becoming more of a wage supplement for workers in low-paying jobs, rather than emergency assistance for the unemployed.

“We usually thought that when people worked full-time they were able to support their families and they wouldn’t be eligible or need income-based public assistance programs,” said Carol Zabin, associate chair of the center and one of the study’s authors. “The fact that they do raises concerns about the costs of an economy that produces low-wage jobs.”

The income gap faced by California workers in low-paying jobs has worsened as wages, particularly the minimum wage, have failed to keep up with the rising cost of living, Zabin said.

Meanwhile, many of the jobs created in recent years have been either in the low or high-wage range, rather than middle-wage jobs, the study found.

Zabin said the situation gives incentives to employers to pay low wages because their employees can make up the difference in their basic needs with government assistance.

“It’s really a shift in costs that employers are shifting to the public,” Zabin said.

According to the study, retail employees received about $2 billion in public assistance in 2002, more than twice that of workers in any other job category.

In all, workers earning less than $8 per hour on average got the biggest share of the government aid that year, $5.7 billion. While nearly $2 billion in aid went to workers making between $8 and $10 per hour, the study found.

“Those programs need to be complemented with programs and policies that figure out a way to get peoples’ wages higher,” Zabin said.

The government could help by raising the minimum wage to make up for increases in the cost of living and by considering the amount of pay per job, not just the number of jobs created, when deciding how to dole out contracts to private employers, Zabin said.

The state should also implement a program requiring that employers offer health insurance or pay into a statewide plan, Zabin said.