March 28, 2023
Even near full employment, today’s economy does not provide stable, decently compensated jobs for much of the diverse working class. This is one reason why the basic floor of security provided by Medicaid and the Supplemental Nutrition Assistance Program (SNAP) is crucial. These in-kind benefits help ensure that all working-class people, including ones in poorly compensated and precarious jobs, are at least able to afford food and health care. But now, Republicans in Congress are pushing across-the-board cuts to SNAP and Medicaid, as well as federal mandates that require states to impose punitive work tests on many adults who receive them.
At the same time, income benefits for working-age adults who are not employed tend to be difficult to access and limited to narrowly drawn categories. Disability benefits like Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI), which both have very strict eligibility rules, are two such examples. Both programs are limited to people who cannot engage in “substantial gainful activity” because of a “severe” mental or physical disability that is expected to last at least a year and meet either a work history test (SSDI) or a strict means test (SSI). Temporary Assistance, or TANF, gives states federal funds they can use—but are not required to use—to provide means-tested income assistance to parents living with minor children. But the monthly TANF benefit is so low—only $399 a month for a single parent living with one child in the typical state—and is conditioned on such onerous job search, employment, and other requirements that very few low-income children and parents receive it.
My newest published paper, co-authored with researchers at Columbia University and the University of Wisconsin-Madison, can help inform current policy debates about these programs. In this article, I summarize our approach and some of our key findings.
Data and Methods
Using the New York City Longitudinal Survey of Wellbeing, which collects employment and other information from a representative sample of NYC households every three months over 12 months, we categorized households based on the employment stability of their working-age (25- to 64-year-old) members. Household categories included those with working-age adults who, during the 12-month period tracked: 1) were not employed in any quarter, 2) were employed in every quarter, and 3) experienced transitions into or out of employment in one or more of the quarters during the period. We further categorized the last group by whether they gained or lost employment during the period (only gained employment, only lost employment, or both lost and gained employment during the period).
We then estimated the associations between these work trajectories and household income poverty and economic hardship. Our key income poverty measure was the Supplemental Poverty Measure, which uses a poverty line that is adjusted to take NYC’s higher-than-average housing costs into account and also counts in-kind nutrition and housing assistance into account (but not Medicaid or other health insurance benefits). We measured five types of economic hardship: food, utility, housing, medical, and financial.
Job Instability is Common
According to quarterly data, approximately 55 percent of NYC households in our study included working-age adults who experienced at least one episode of job instability during the 12-month period they were tracked. About 15 percent of all households included working-age adults who lost a job during the period and did not find a new one.
Another 15 percent of households had no employed working-age adults during the period. Near-elderly adults (55- to 64-year-olds) and adults with a disability or health problem were disproportionately represented in this group. In the overall sample, about 20 percent of respondents had a disability or health problem that prevented them from working, and 26 percent of respondents were near-elderly members, but among households with no employed adults, the shares were 70 percent and 51 percent, respectively.
Poverty and Material Hardship by Employment Category
Not surprisingly, households without an adult employed during the 12-month period were the most likely to have income below the poverty line and experience material hardships, followed by those with a precariously employed adult.
When we considered various demographic characteristics that may affect income, poverty, and economic hardship, we found that income assistance played a major role in boosting the incomes of households that included consistently non-employed adults. In-kind benefits were also important but played a lesser role. We also found that the hardship rate experienced by the consistently non-employed group was not significantly different from that of the consistently employed group (after taking demographic differences into account).
Given the extent of disabilities among the consistently non-employed adults, the most important income benefits are likely SSDI and SSI. Although disabled adults applying for these SSDI and SSI have to go through an arduous process to qualify, once they establish eligibility, the programs provide modest but relatively stable monthly income benefits.
Among the most precariously employed — those who moved from employed to not employed without finding a new job — the results after taking demographic characteristics into account varied by household composition. For precariously employed single adults, income benefits, in-kind benefits, and tax credits all helped boost income. But for precariously employed adult couples, only in-kind benefits and tax credits greatly impacted income.
At the same time, precariously employed single adults were much more likely to experience hardship compared to consistently employed ones, but there was only a modest hardship difference between consistently employed and precariously employed adult couples. For precariously employed single adults, the available income benefits are generally limited to Unemployment Insurance and Temporary Assistance—both these benefits can be difficult to access. And once eligibility is established, both programs impose paperwork and other requirements—TANF is especially burdensome—that make it difficult to continue receiving benefits.
Implications for Current Federal Policy Debates
Our results add to a growing body of evidence that precarious employment is common in the US, reduces economic well-being, and is not adequately buffered by our current social policies. Most other wealthy nations provide a monthly child allowance to families that is either universal or, if means-tested, includes low-income families regardless of employment status or history. For example, the Canada Child Benefit, which has no earnings test or paid work requirement, pays up to CA$583.08 per month for each eligible child under the age of 6 and CA$491.91 per month for each 6- to 17-year-old. In addition to boosting income and reducing poverty among precariously employed and non-employed adults caring for children, a monthly US child allowance like Canada’s would do more to reduce material hardship than providing a benefit conditioned on meeting a work test.
Our results are also a reminder that attaching punitive work tests and other conditionalities to the receipt of in-kind benefits—like requiring unmarried mothers to get court orders requiring the other parent of their child to pay child support—will likely harm precariously employed adults the most. After gaining control of the House of Representatives in last year’s election, Republicans are pushing for immediate across-the-board cuts to SNAP and Medicaid benefits and requiring all states to impose punitive work tests on many of the adults who receive them. As our research shows, SNAP, housing assistance, and other in-kind benefits, while inadequate by themselves, play a critical role in addressing the impacts of precarious employment. Proposals that make them harder to access will make workers experiencing job churning even less secure. Policymakers who want to increase job stability should ensure that all workers have paid family and medical leave, make it easier for workers to join unions, and support other employment reforms that improve the quality of poorly compensated jobs.
The full publication can be found here.