Work Requirements
Public policy is based on bias not evidence
The Tax Relief for American Families and Workers Act, which includes a modest, non-refundable, three-year expansion of the Child Tax Credit (CTC), passed the House by a 357 to 70 vote on January 31, 2024 and was sent on to the Senate. It has the strong support of President Biden, who mentioned the CTC in his State of the Union speech.
The bill has languished in the Senate since January, however, largely because top Republican Senators — Mike Crapo (R-Idaho), Mitch McConnell (R-KY) and John Thune (R-SD) — object to the CTC’s lack of sufficient work incentives, though work is required to receive it.
Most people are already working
For the last ten years, 61 to 63% of those 16 or over have participated in the labor force. Of those who are not working, 14% reported retirement as the main reason; 6% cited home responsibilities; 5.5% were ill or disabled; and 5% were going to school. Less than 1% could not find work or gave no reason for not working, according to the US Bureau of Labor Statistics.
Nearly a third of the US workforce makes less than $15 an hour, including nearly two million who make the minimum wage of $7.25 an hour or less. The minimum wage has stayed the same for the last 15 years, while the cost of living has increased by more than 32%.
The minimum wage has not been a living wage since 1968. Had it kept pace with productivity increases over the last 50 years, the minimum wage today would be over $22 an hour, close to today’s living wage of $29.87 an hour for one adult with no children. For adults with children, the living wage is $30 to $55 an hour.
Contrary to the cruel trope that low income people are “just lazy,” 70% of those who receive public benefits work full time. They need these benefits because many US companies do not pay a living wage. Walmart, McDonald’s, Goodwill, Kroger, and Amazon, for example, are among the top six companies whose employees receive SNAP and Medicaid benefits.
Work is required for benefits
To receive almost any public benefit in the US, one has to be working. To be enrolled in the Supplemental Nutrition Assistance Program (SNAP), for example, one has to be working 30 hours a week unless one is caring for a child under six or an incapacitated person, is unable to work because of mental or physical limitations, is participating in an alcohol or drug treatment program or studying certain subjects in school at least part time. All of these exceptions must be extensively documented.
To receive Temporary Aid to Needy Families (TANF), one must also be working 30 hours a week; the requirement is reduced to 20 hours a week for single custodial parents with children under six.
Currently, only Arkansas and Georgia have work requirements for Medicaid, but Congressional Republicans are pushing for them in all states.
Behind the push for work requirements
The idea of work as a requirement for public benefits got its start in the late 1960s when President Richard Nixon wanted to enact a guaranteed income that would eradicate poverty in the US. The public, the newspapers, the National Council of Churches, the labor unions, 1,200 economists, as well as the corporations were all in favor of this unconditional income for poor families.
First, Nixon tested the idea on 8,500 recipients in cities around the country. What was found is that people did not work significantly less with a guaranteed income.
President Johnson’s War on Poverty had taught Nixon to recognize the structural unemployment endemic to the US. However, he modified his convictions in response to conservative arguments that a guaranteed income would incite the poor to idleness and decrease productivity and wages. To gain political favor, Nixon began to speak of joblessness as a “choice” and amended his guaranteed income bill to require unemployed beneficiaries to register with the Department of Labor.
On April 16, 1970, President Nixon’s Family Assistance Plan passed the House of Representatives 243 to 155, but it failed to pass the Senate. Reintroduced in 1971, it also failed to pass the Senate that year. The belief that a guaranteed income would excacerbate the inherent laziness of the poor and drive them to vice had taken hold.
But, citizens do not share this prejudice. In 1969, 90% of US newspapers were enthusiastic about unconditional income for poor families. Over 50 years later, a 2022 study found that 66% of voters think the US is spending too little to address child poverty. And, a 2024 survey poll found that 72% of voters agree that “many people in this country aren’t getting the help that they need to succeed and get ahead,” 69% also strongly agree that “most Americans just want to be able to work a good paying job and provide for their families,” and 64% support creating a federal guaranteed income program. Nevertheless, a bias toward the poor among conservative politicians continues to shape US public policy.
Today this bias is fueled by Opportunity Solutions Project, the non-profit lobbying arm of the conservative think tank, Foundation for Government Accountability, which promotes work requirements for federal safety net programs. In the last year, the foundation has pre-empted local governments in 10 states by attempting to ban guaranteed income pilots through state legislatures and Supreme Courts. Guaranteed income is unconditional by definition and has no work requirements.
Bias unsupported by evidence
The evidence is overwhelming that unconditional income does not significantly reduce work and productivity. During the recent expanded Child Tax Credit (CTC) of the American Rescue Plan, most families with children in the US received monthly cash payments of $300 per child under six and $250 per child between the ages of 6 and 17 for one year. Here is what researchers found:
- The National Bureau of Economic Research found that, “Across both samples and several model specifications, we find very small, inconsistent, and statistically insignificant impacts of the CTC both on employment in the prior week and on active participation in the labor force among adults living in the household.”
- The Brookings Institute found “that families used the CTC to cover routine expenses without reducing their employment.”
When work does decline in guaranteed income pilots, it is because recipients are taking more time to search for better jobs or caring for small children, starting a home business, or getting a degree or job training. In the Nixon trials, the rate of high school graduation increased by 30% among youth included in one experiment. Other research has confirmed the CTC research:
- In Iran in 2010, households received cash transfers equal to 29% of the median income. Researchers found that the cash did not encourage Iranians to drop out of the labor market. In fact, some worked more, using the cash to expand their small businesses.
- A University of Pennsylvania survey of data on several unconditional cash transfer experiments in North America found that “the evidence does not suggest an average worker will drop out of the labor market when provided with unconditional cash, even when the transfer is large.”
- In the mid-1970s, the Canadian government provided a guaranteed income to all of the residents of Dauphin, Manitoba. The pilot ensured that no family’s income fell below a certain level and thus eradicated poverty in the community. While the guaranteed income did result in a modest decline in work among mothers and teenage boys, it had a marked effect on the health and vitality of the town, reducing hospitalizations and mental health diagnoses.
Expanding the definition of work
Another problem with work requirements is their narrow definition of work, but this is beginning to change. In her bill, the Worker Relief and Credit Reform Act, Congresswoman Gwen Moore (D-WI-4) classifies low-income students, parents, and unpaid caregivers as workers for purposes of the Earned Income Tax Credit.
TANF is beginning to classify students, parents and caregivers as workers as well. In 2023, Governor Newsom of California signed into law SB 521, which provides exemptions from TANF work requirements for those in school full-time, for caretakers of another individual in the household, for those pregnant, and for new parents, among others.
The Center for the Study of Social Policy makes five arguments against work requirements for TANF:
1. Work requirements perpetuate a narrow definition of “work” that devalues the importance of caregiving. Caring for children and other family members is one of the most important contributions anyone can make to society. As this care work occurs outside of the labor market and is unpaid, it is often not considered to be “real work,” which reflects historically racist and sexist ideas of what kind of labor matters. By requiring parents and caregivers who need help making ends meet to work outside the home, work requirements perpetuate these harmful ideas and discount the fact that these adults are already providing valuable unpaid labor.
2. Work requirements don’t encourage wage work, but instead prop up an exploitative labor market. Several studies show that work requirements don’t encourage work because most public benefits participants are already part of the labor force. The minority who are not engaged in the labor market are either engaged in care work, attending school, or facing other barriers to work such as illness or disability.
3. Work requirements create administrative barriers to benefits, even for those who are working in waged labor.
4. Work requirements deny families much needed assistance, undermining the health, dignity, and well-being of all families.
5. Work requirements are rooted in anti-Black racism and slavery. The narratives that work requirements perpetuate — that caregiving for one’s own family is not valuable, that people need to be forced to work for their own good, and that a person’s well-being and worth depend on work — were popularized during and after slavery to justify a racialized system exploiting the labor of Black families.
Doing the right thing
Burdening the poor with the bureaucracy and humiliation of work requirements is just another way of keeping them in their place. This bias towards the poor puts the US at the bottom of countries worldwide in terms of child well being, along with Chile, Bulgaria, Romania, and Mexico.
Evidence shows that the citizenry wants to help those who are vulnerable. Politicians, on the other hand, are enslaved to their ideologies and out of touch with what people need. Everyone has a right to benefits without work requirements.
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