Report: US Taxpayers Bear 'Hidden Cost' of Poverty Wages
Stagnant wages and declining employer-provided benefits mean that low-wage workers in the United States are increasingly reliant on federal and state-run public assistance programs.
In fact, U.S. taxpayers pay roughly $153 billion each year to supplement employers who refuse to pay a livable wage, according to report published Monday by the University of California, Berkeley, Center for Labor.
U.S. taxpayers “bear a significant portion of the hidden costs of low-wage work in America,” said report authors Ken Jacobs, Ian Perry, and Jenifer MacGillvary.
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According to the report, The High Public Cost of Low Wages (pdf), 73 percent of those enrolled in the country’s major public support programs are members of working families. The Berkeley study examined state spending for Medicaid/Children’s Health Insurance Program and Temporary Aid to Needy Families (TANF), and federal spending for those programs as well as food stamps (SNAP) and the Earned Income Tax Credit (EITC).
Despite a rebounding economy, U.S. workers are not being compensated. According to the research, when adjusted for inflation, wage growth from 2003 to 2013 was either flat or negative for the entire bottom 70 percent of the wage distribution. Further, the number of non-elderly Americans who receive insurance benefits from an employer has fallen from 67 percent in 2003 to 58.4 percent in 2013.
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