Opinion

The hidden cost of low wages

The following editorial appeared in the Philadelphia Daily News on Wednesday.

Mention the phrase social-welfare programs to a conservative and he winces in pain. To him, these billions paid for health care, food stamps, child-care support and other such programs do nothing but promote laziness and dependency on government handouts.

Every Republican budget proposal in the last eight years has combined steep cuts in safety-net programs with tax breaks for the wealthy. But there’s another way to look at these safety-net programs that the Republicans hate.

What they really do is subsidize businesses that help their bottom lines by paying low wages to their workers.

A new study from the University of California, Berkeley Labor Research Center reveals the truth. Nearly three out of four people enrolled in America’s major social-welfare programs are members of working families.

They aren’t lazy. They are underpaid. Their paychecks are too skimpy to support their families, so they turn to Medicaid, food stamps, the federal earned-income tax credit and TANF, the limited welfare program.

This aid doesn’t come cheap. The Berkeley study found that the federal government spent $127.8 billion a year and the states paid another $25 billion a year to help support working families.

These, the Berkeley researchers say, are the “hidden costs of low-wage work in America.”

To put it another way, if businesses paid living wages with modest benefits – instead of minimum wages with no benefits – it would save taxpayers billions.

Who has to rely on public assistance?

The Berkeley researchers found that 52 percent of fast-food workers received public money, 46 percent of child-care workers, 48 percent of home-care workers and 25 percent of part-time college faculty.

In other words, you can have a doctorate and still need food stamps to have enough for groceries for the month. Or be a mother of two children, working a full-time job and still need financial help from the government to make ends meet.

The situation isn’t getting better for these workers; it is getting worse. The Berkeley researchers found that real hourly wages for the average American worker were just 5 percent higher in 2013 than they were in 1979.

The picture was worse for workers at the lowest 10 percent of the pay scale. Their 2013 wages were 5 percent lower than in 1979.

The rich keep getting richer and the poor are getting poorer. This great income disparity is the shame of America.

In Pennsylvania, the state pays nearly $1.9 billion to help support such programs as Medicaid, CHIP and TANF. Of that total, $979 million goes to working families.

Imagine what Gov. Wolf – or any governor — could do with that money. Maybe something radical, like spending it on education so that today’s children won’t have to resort to low-wage jobs.

A few big businesses, such as Walmart and McDonald’s, have recently raised the wages of their hourly workers. This is a step — a baby step — in the right direction.

But let’s cut through the pious rhetoric of the captains of low-wage businesses.

Let’s set the record straight for Republicans in Congress and the state Legislature who ceaselessly complain about welfare programs. By sending billions of our tax dollars to help the working poor, we are subsidizing these businesses.

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