The Hidden Cost of Low-Wage Work
Hardworking Families Rely on Medical Assistance and other Support
178,000 Wisconsin families that earn low wages still need public assistance even though they
are working all year round. The federal and state costs of programs to support these workers
are substantial: $837 million per year.
A new report from the Center on Wisconsin Strategy (COWS), When Work Doesn’t Pay, takes a
close look at the “hidden public costs” of low wage jobs. The report shows that through five
important programs, Medical Assistance (from BadgerCare, Medicaid, and the State Child
Health Insurance Program (S-CHIP)); Wisconsin Shares child care subsidies; Food Stamps; the
Earned Income Tax Credit (EITC); and Temporary Assistance to Needy Families (TANF), the
public pays to fill in the gap between what work pays and what families need. The report also
shows that some employers may be increasingly taking advantage of Wisconsin’s strong safety
net—using publicly funded assistance programs, especially medical assistance, as essentially a
private subsidy.
Hard, consistent work does not always pay enough or provide health insurance to
sustain a family.
Of the $1.85 billion spent on public support programs, 45 percent—$837 million—supports yearround working families. Despite these families’ commitment to work, they must rely on the state to make ends meet. By far the most important and expensive support to year-round working families is medical assistance ($315 million). With employer provided health insurance in decline, the medical assistance costs of low-wage jobs will continue to grow.
Lower wage jobs mean higher costs for the public.
More than half of the year-round working families enrolled Wisconsin assistance programs earn
less than $10 per hour. The gap between what families earn and need is exacerbated by
industries that both pay low wages and do not provide health insurance. In these low wage/low
benefit industries, workers rely especially on state provided health insurance.
Health care, retail and social service sectors all generate high public costs.
The health care sector has the highest number of workers receiving public benefits. Of the $837 million spent annually on public benefits for year-round working Wisconsin families, $187 million, or 22 percent, is spent on workers in the health care industry.
Within health care, the residential care subsector contributes the overwhelming majority of
these costs. More than one-in-four of residential care workers receives public support and the
subsector alone accounts for $94 million of the total public expense.
The retail sector generates the second highest public cost in the state. Workers in this sector
account for $75 million of the public expense.
Finally, the social service sector generates costs that are most out of scale with the size of the
industry. While the sector accounts for only 2.1 percent of Wisconsin jobs, it accounts for 4.5
percent of working families that rely on public benefits.
“The irony of the high costs in health care and social services is obvious and bitter,” says report
author Laura Dresser. “The very workers committed to taking care of others have wages and
benefits so low that they must rely on public programs to help make ends meet.”
Read entire report here:
www.cows.org/pdf/rp-low-wage-jobs.pdf.
From http://wispolitics.com/1006/061205COWSWagePR.pdf
178,000 Wisconsin families that earn low wages still need public assistance even though they
are working all year round. The federal and state costs of programs to support these workers
are substantial: $837 million per year.
A new report from the Center on Wisconsin Strategy (COWS), When Work Doesn’t Pay, takes a
close look at the “hidden public costs” of low wage jobs. The report shows that through five
important programs, Medical Assistance (from BadgerCare, Medicaid, and the State Child
Health Insurance Program (S-CHIP)); Wisconsin Shares child care subsidies; Food Stamps; the
Earned Income Tax Credit (EITC); and Temporary Assistance to Needy Families (TANF), the
public pays to fill in the gap between what work pays and what families need. The report also
shows that some employers may be increasingly taking advantage of Wisconsin’s strong safety
net—using publicly funded assistance programs, especially medical assistance, as essentially a
private subsidy.
Hard, consistent work does not always pay enough or provide health insurance to
sustain a family.
Of the $1.85 billion spent on public support programs, 45 percent—$837 million—supports yearround working families. Despite these families’ commitment to work, they must rely on the state to make ends meet. By far the most important and expensive support to year-round working families is medical assistance ($315 million). With employer provided health insurance in decline, the medical assistance costs of low-wage jobs will continue to grow.
Lower wage jobs mean higher costs for the public.
More than half of the year-round working families enrolled Wisconsin assistance programs earn
less than $10 per hour. The gap between what families earn and need is exacerbated by
industries that both pay low wages and do not provide health insurance. In these low wage/low
benefit industries, workers rely especially on state provided health insurance.
Health care, retail and social service sectors all generate high public costs.
The health care sector has the highest number of workers receiving public benefits. Of the $837 million spent annually on public benefits for year-round working Wisconsin families, $187 million, or 22 percent, is spent on workers in the health care industry.
Within health care, the residential care subsector contributes the overwhelming majority of
these costs. More than one-in-four of residential care workers receives public support and the
subsector alone accounts for $94 million of the total public expense.
The retail sector generates the second highest public cost in the state. Workers in this sector
account for $75 million of the public expense.
Finally, the social service sector generates costs that are most out of scale with the size of the
industry. While the sector accounts for only 2.1 percent of Wisconsin jobs, it accounts for 4.5
percent of working families that rely on public benefits.
“The irony of the high costs in health care and social services is obvious and bitter,” says report
author Laura Dresser. “The very workers committed to taking care of others have wages and
benefits so low that they must rely on public programs to help make ends meet.”
Read entire report here:
www.cows.org/pdf/rp-low-wage-jobs.pdf.
From http://wispolitics.com/1006/061205COWSWagePR.pdf
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