Work Requirement Proposals Would Kick Struggling Workers When They’re Down

The following article by Eliza Schultz, Anusha Ravi and Rebecca Vallas was posted on the Center for American Progress website November 2, 2017:

Taking away food, shelter, and health care from jobless workers won’t help them find work any faster. But that is exactly what President Donald Trump and his colleagues in Congress are proposing to do. While they call their proposals “work requirements,”¹ what these policies would do in practice is to kick people while they’re down, punishing unemployed or underemployed workers for not being able to find a job with enough hours and penalizing those who face barriers to work. As this issue brief sets forth, proposals to take food, shelter, and health insurance away from struggling workers would only exacerbate poverty and inequality, while putting opportunity even further out of reach for the very “forgotten man and woman” President Trump famously pledged to help.²

Certain groups of workers are left behind

The recovery from the Great Recession has, by many measures, been a success: Today, the national unemployment rate is 4.4 percent,³ compared with 10 percent in 2009.⁴ But these figures obscure significant variation by factors such as geography, as well as persistent discrimination in the labor market based on race, ethnicity, age, and disability status—not to mention labor market disadvantages faced by workers with limited educational attainment or a criminal record.

As of October 2017, fully 8 percent of African Americans are unemployed, as are 5.1 percent of Hispanics—versus just 3.8 percent of white workers. Across the board, Millennials, those currently ages 18 to 34, face comparatively high levels of unemployment compared with the national average, with an unemployment rate of 5.8 percent as of July 2017, the most recent month for which data are available.⁵ The unemployment rate for disabled workers is 10.5 percent, more than twice the national average.⁶ What’s more, many workers continue to face trouble finding full-time employment in the post-recession economy, with fully 9.2 percent of workers either unemployed or underemployed.⁷

What Trump and his colleagues in Congress have proposed

Despite claiming to care about communities left behind by economic growth, President Trump and Republican leaders in Congress have called for adding or stepping up so-called work requirements in three programs: Medicaid, which provides health insurance and essential services to more than 68 million Americans,⁸ including 15 million people with disabilities;⁹the Supplemental Nutrition Assistance Program (SNAP), which helps about 45 million Americans put food on the table;¹⁰ and the two main housing assistance programs—Housing Choice Vouchers and Public Housing, which together help 4.5 million households keep a roof over their heads.¹¹While the details of these proposals vary, or have yet to be fleshed out, the basic concept is the same: putting in place harsh time limits on assistance for so-called work-capable or able-bodied adults without dependents—adults who are not caring for children or other dependents for tax purposes and who do not have qualifying disabilities—who are not engaging in qualifying work activities for a set number of hours per week, no matter how hard they are looking for work.¹²

Medicaid

Several congressional Republican proposals to repeal the Affordable Care Act (ACA) would have created work requirements in Medicaid as part of draconian proposed cuts to the program’s federal funding. One amendment to the House of Representatives’ American Health Care Act (AHCA), for example, would have allowed states to condition Medicaid coverage on work for working-age adults without disabilities, excluding pregnant women, potentially subjecting up to 22 million Medicaid beneficiaries to work requirements.¹³ Even though partisan efforts to repeal the ACA and slash Medicaid have been unsuccessful so far, Medicaid remains in the crosshairs because of the GOP’s budget proposals. For example, the House budget would establish a mandatory work requirement in Medicaid for the same group of workers who would have faced work requirements under the AHCA.¹⁴

Meanwhile, struggling workers in many states with Republican governors face similar threats even absent federal legislation. Earlier this year, while all eyes were on the health care debate in Congress, the Trump administration quietly issued guidance to governors signaling that it would approve states’ requests to add work requirements to their Medicaid programs, giving them unprecedented authority to take away health insurance from Medicaid recipients who are not working a certain number of hours per week.¹⁵ Some have questioned the legality of this directive, arguing that it violates the Medicaid statute.¹⁶ But Republican governors in six states—Kentucky, Utah, Maine, Arkansas, Indiana, and Arizona—have already taken advantage of this new authority since the guidance was released by requesting permission from the Center for Medicaid Services to impose work requirements on Medicaid.¹⁷ Many tens of thousands of unemployed and underemployed workers could lose health insurance as a result.

While proponents of work requirements in aid programs typically claim that people with disabilities and severe health conditions will be protected, such claims should be viewed with significant skepticism. For example, as written, current proposals could even result in cancer patients having their chemotherapy terminated if they are not working enough hours to maintain eligibility for Medicaid.¹⁸ Such proposals are especially counterproductive given that Medicaid provides essential coverage and services that make it possible for millions of people with disabilities to work.¹⁹

Nutrition assistance

President Trump and his colleagues in Congress have also proposed making the existing work requirements in nutrition assistance even more stringent, as part of deep proposed cuts to SNAP and other vital nutrition programs. In 1996, as part of the legislation that converted Aid to Families with Dependent Children into the Temporary Assistance for Needy Families (TANF) block grant, nondisabled adults not caring for children in their own homes were subjected to a harsh time limit on food assistance through SNAP. This time limit permits them to receive just three months of assistance every three years unless they are working or participating in qualifying work activities for at least 20 hours per week.²⁰ The law does not, however, require states to provide unemployed workers with jobs—or even with qualifying job training slots—to enable them to maintain eligibility for nutrition assistance, and most states do not of their own volition.²¹

States are permitted to waive the time limits in areas of high unemployment, and most did so in the years during and immediately following the Great Recession.²² But as unemployment fell post-recession, many states’ waivers expired, and in 2016, time limits were in place in 40 states.²³ For 22 of these states, 2016 was the first year they had implemented them since the Great Recession. Meanwhile, on top of huge proposed cuts to SNAP, the Trump administration has proposed restricting these time-limit waivers even further to areas with unemployment rates greater than 10 percent—that is, peak unemployment during the Great Recession.²⁴ Some of the areas that would lose waivers include parts of Appalachia, the Navajo Nation in Arizona, southern Alaska, and other economically distressed parts of the country. The Center on Budget and Policy Priorities estimates that under this proposal, fully 1 million unemployed workers would lose access to SNAP in a given month.²⁵ While short on details, congressional Republicans’ proposals to slash SNAP include stepping up work requirements as well.²⁶

Housing assistance

Rental assistance programs are being targeted for work requirements as well. Last year, as part of House Speaker Paul Ryan’s so-called “Better Way” agenda, House leaders proposed modeling rental assistance programs after TANF.²⁷ This proposal would add work requirements to housing assistance, alongside deep cuts to the already woefully underfunded programs. Today, just 24 percent of families eligible for housing assistance receive it, ²⁸ leaving the rest to sit on what are often years-long waiting lists or even to be told that waiting lists are closed.²⁹

President Trump has also expressed support of conditioning housing assistance on work, and his Department of Housing and Urban Development (HUD) has announced plans to release a more specific proposal to that end in 2019.³⁰ As with Speaker Ryan’s “Better Way” proposal, these work requirements would come on top of the deep cuts to rental assistance funding that Trump called for in his budget.

Health insurance, adequate nutrition, and safe and stable housing help people work

Kicking struggling workers while they’re down is not just cruel; it is also wildly counterproductive, as health insurance, adequate nutrition, and safe and stable housing provide the very pathways to opportunity that conservatives claim to seek through work requirements. What’s more, they free up income for workers to meet expenses for necessities such as child care and transportation that make it possible to work.

Access to health insurance, for example, is associated not only with better health but also with improved employment outcomes, such as increased work capacity, and therefore higher wages and earnings. A significant body of research shows that the ACA and Medicaid expansion—which together cut the nation’s uninsured rate nearly in half—catalyzed widespread health improvements³¹ for newly insured individuals. These improvements include earlier detection of disease, better management of chronic conditions, and stronger adherence to medication. Improved health can, in turn, bring about improved employment outcomes.

For example, a 1993 study of New Haven, Connecticut, residents found that those in good physical health had annual earnings 37.7 percent higher than those in poor health.³² Similarly, among Medicaid recipients in Ohio, most respondents reported that enrollment in the program “made it easier to work and to seek work.”³³ And of those who were employed, 52.1 percent reported that Medicaid made it easier for them to continue working. Similar results were found in a 2015-16 study of Michigan’s new Medicaid enrollees who gained coverage under the expansion.³⁴ Of those who were employed, 69 percent reported that their new health insurance enhanced their performance on the job, and 55 percent of those out of work said it made it easier to look for work.

Likewise, access to nutrition similarly improves individuals’ capacity to work. Research shows that adequate food can lead to improved cognitive function, whereas hunger can diminish productivity and lead to cognitive decline.³⁵ More generally, food insecurity and hunger leave people in inferior health³⁶—with much higher likelihoods of chronic disease, in particular—which, as in the case of Medicaid, only makes it more difficult to find work. Indeed, one study found that interventions to correct iron deficiency—the most common nutritional deficiency in the United States—had positive effects on individuals’ wages and earnings, gave them more energy, and better enabled them to perform manual labor tasks. ³⁷ In addition, individuals who are malnourished generally face decreased levels of maximal oxygen uptake, which diminishes their capacity to perform physical activities.³⁸ Notably, many of the jobs available to SNAP beneficiaries require physical labor, such as jobs in the food service and retail industries. The mental and psychological toll imposed by hunger and food insecurity may also depress individuals’ ability to work.³⁹

Similarly, several studies indicate that rental assistance not only provides a roof over people’s heads in the short term but also helps them achieve longer-term economic mobility. Studies of Chicago, Los Angeles County, and Massachusetts residents who had recently stopped receiving assistance through TANF found that those with rental assistance had higher employment rates than those without it—even despite, in the case of the Massachusetts residents, greater barriers to employment relative to their peers who did not receive housing subsidies.⁴⁰ What’s more, they were more likely to remain in the workforce and, on average, earned higher incomes.⁴¹ These families were also found less likely to need to reapply for TANF down the road. These outcomes are likely explained in part by the fact that rental assistance often enables families to move to higher opportunity neighborhoods, as well as by improved health outcomes relative to people who face the stress of housing instability.

Furthermore, innovations in housing policy—including Housing First, which provides permanent housing for those experiencing homelessness without requiring them to first gain employment and address other goals—have been shown to improve employment outcomes when combined with supported-employment services that help people find and retain work.⁴²

Meanwhile, homelessness and housing instability impose myriad barriers to employment. In addition to practical obstacles, such as lack of consistent access to a shower and other resources needed for personal hygiene, the lack of a permanent address leads to significant employment discrimination against homeless applicants.⁴³ That’s not to mention the extensive toll that homelessness can take on physical health and the trauma to which it often exposes individuals, including sexual violence.⁴⁴

Work requirements don’t cut poverty or improve employment outcomes

Whereas access to food, shelter, and health insurance improve individuals’ capacity to work, the nation’s preeminent experiment with work requirements shows that such policies not only fail to improve long-term employment outcomes—they actually leave people worse off. In 1996, Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act⁴⁵—the legislation that famously purported to end “welfare as we know it.”⁴⁶ The law both converted Aid to Families with Dependent Children into the flat-funded TANF block grant and introduced a new policy requiring most adult recipients to participate in qualifying work activities as a condition of receiving cash assistance. The purpose of these work requirements—which, at the time, enjoyed limited bipartisan support—was to incentivize employment among TANF beneficiaries and thereby reduce the number of people receiving assistance.

Initially, TANF recipients did experience sizable gains in employment, thanks in part to the strength of the labor market during the booming economy of the 1990s, but those gains ultimately proved to be short-lived. Within just five years, employment rates among TANF recipients who did not face work requirements caught up to or even exceeded those of the individuals subjected to them.⁴⁷

Meanwhile, the program’s work requirements eventually proved counterproductive. For starters, few TANF recipients were able to secure stable, long-term employment with decent wages, and for most, any income earned was barely enough to offset the loss of TANF benefits.⁴⁸Many others were unable to meet TANF’s stringent work requirements at all, due to employment barriers such as caregiving obligations, health problems, low levels of educational attainment, and criminal records, leaving them without assistance even though they had not found work. Indeed, a 2003 study found that of adults who had left TANF and who were also disconnected from the labor market, a full 41 percent had poor physical or mental health, and 55 percent had limited educational attainment.⁴⁹

Furthermore, a review by the Center on Budget and Policy Priorities of 10 random-assignment studies found that for individuals subjected to work requirements around the time of TANF’s creation who found work, the pay was hardly sufficient to lift them out of poverty.⁵⁰ But still, these individuals saw their cash assistance and SNAP benefits reduced. The majority of them saw their poverty rates remain unchanged; worse yet, many were pushed deeper into poverty.

Work requirement proposals misdiagnose the problem

Claims that work requirements in public assistance programs are the solution to poverty could not be more out of touch with the real problem that struggling families are facing today: not enough good jobs that pay a living wage. Indeed, a minimum wage worker in 2016 had to clock an additional 244 hours to earn the same amount in real terms as they did the last time Congress raised the federal minimum wage back in 2009.⁵¹As a result, nearly three-quarters of individuals helped by public assistance programs are members of working families.⁵² It is also critical to note that, despite conservatives’ persistent claims that public assistance programs incentivize recipients not to work, a broad array of studies have underscored that neither SNAP⁵³ nor housing⁵⁴ assistance programs discourage work and that Medicaid even slightly boosts beneficiaries’ work effort.

In the case of Medicaid, of the roughly 24 million nonelderly adults without disabilities covered by the program in 2016, nearly 60 percent were working themselves, and nearly 80 percent lived in working families, according to analysis by the Kaiser Family Foundation.⁵⁵ Of those not currently working, 8 percent reported being on the job hunt, and more than one-third reported not working due to disability or illness. Another 28 percent had caregiver obligations to family members, while 18 percent were in school, and 8 percent were retired.

SNAP recipients are similarly situated. Among SNAP households with at least one nondisabled adult, 58 percent are employed, and 82 percent worked in the year prior to or after enrollment.⁵⁶ Even as the rate of unemployment climbed throughout and even after the Great Recession—when the time limits were waived—both the share and absolute number of SNAP households that worked increased, likely because individuals turned to SNAP to supplement underemployment and low wages.⁵⁷

Moreover, many people with disabilities lose needed assistance due to being wrongly categorized as “able-bodied.” For example, a study by the Ohio Association of Foodbanks found that when the state reimposed time limits in Franklin County, Ohio, in 2013, 1 in 3 of the thousands of SNAP enrollees who lost nutrition assistance had a medical or physical impairment—even though people with disabilities are supposed to be protected from time limits.⁵⁸ Another 16 percent required supportive services such as language interpretation or transportation in order to work, and 13 percent were caregivers for a parent, relative, or friend.

Likewise, the vast majority—88 percent—of recipients of HUD’s three main rental assistance programs are either elderly, disabled, or already work.⁵⁹And nearly half of the nonelderly, nondisabled households in each of these programs included a family member with a disability, which can make it nearly impossible for heads of household to work without significant caregiving support. Just 6 percent of the 4.5 million households that received rental assistance in 2015 were unemployed despite ostensibly being able to work—although this figure may very well be an overestimate, given that it likely includes household members who are disabled but not officially classified as such, as is the case with both Medicaid and SNAP.⁶⁰

Notably, work requirements do nothing to address the real problems facing struggling workers. For starters, they fail to raise wages or create jobs. Indeed, proposals to ramp up work requirements coincide with budget proposals that would slash job-creating investments in infrastructure and education and make deep cuts to job training—as well as with continued opposition from Trump and Republican leaders in Congress to raising the federal minimum wage.⁶¹

Put bluntly, work requirements are premised on the false notion that the poor are a stagnant group of workers who would not be poor if only they wanted to work. In reality, this could not be further from the truth: Nearly half of Americans will experience at least one year of poverty or near-poverty at some point during their working years,⁶² and fully 70 percent will need to turn to means-tested assistance of some type to make ends meet at some point during their lives.⁶³

Conclusion

Many Americans struggle mightily to afford the basics despite working one, two, or even three jobs because of low wages and unpredictable work schedules. Meanwhile, many others face challenges staying afloat due to work-limiting disabilities or illnesses. And still others find themselves stretched to the limit when out of work and pounding the pavement looking for a job, particularly as the nation’s unemployment insurance system has failed to keep pace with a changing economy.⁶⁴

Building an economy that works for everyone and not just the wealthy few requires embracing policies such as raising the poverty-level minimum wage; ensuring paid family and medical leave and access to affordable, high-quality child care; and investing in education and training to help workers gain the skills they need to get ahead.⁶⁵ Unfortunately, President Trump and his colleagues in Congress are seeking to weaken the very protections that help families maintain basic living standards when times get tough, while pursuing tax cuts that would further enrich the wealthiest among us.⁶⁶

Work requirements do nothing to create jobs or rectify labor market disadvantages. Instead, they would leave low-income people worse off than they already are.

Eliza Schultz is the research assistant for the Poverty to Prosperity Program at the Center for American Progress. Anusha Ravi is the program’s special assistant at the Center. Rebecca Vallas is the managing director of the Poverty to Prosperity Program at the Center.

Endnotes