Raising the Minimum Wage Leads to Significant Gains for Workers, Not to ‘Benefits Cliffs’

NELP’s Minimum Wage Basics series sheds light on key issues related to the minimum wage, drawing on the latest research and campaign developments.

Introduction and Key Findings

Recent action to raise the wage floor is beginning to reverse decades of growing pay inequality, delivering the first large raises in years to workers at the bottom of the pay scale. An analysis by the Economic Policy Institute (EPI) finds that 33 million workers in low-wage jobs would benefit from a raise in the federal minimum wage to $15 per hour.[1] A separate November 2018 analysis of the impact of the Fight for $15 by the National Employment Law Project (NELP) reveals that over the next several years, 22 million workers will collectively receive nearly $68 billion in raises as a result of state and local minimum wage legislation and the voluntary action of employers.[2] The NELP analysis does not include minimum wage legislation adopted in 2019 or later, nor does it estimate the effects of other ongoing efforts to raise the minimum wage at the federal, state, and local levels, raising the possibility that millions of additional workers will also benefit.

Where public benefits programs were once designed for those who were not able or expected to work, policymakers have increasingly made low-income working families, especially those with children, eligible for these programs. According to a 2015 study by University of California researchers, low-wage workers or their families account for significant shares (between 36 and 74 percent) of total enrollment in the nation’s largest public benefits programs (Medicaid/CHIP, Temporary Assistance for Needy Families, the Earned Income Tax Credit, and the Supplemental Nutrition Assistance Program).[3] Thus, future action to raise the minimum wage may prompt questions about the interaction between higher wages and eligibility rules for various public benefits programs, and whether wage increases could push low-earning working families above maximum income thresholds, thereby leading to the loss of benefits, also known as a “benefits cliff.”

As we discuss below, however, these concerns are misplaced, since many minimum wage earners unfortunately do not qualify for this assistance, or receive small amounts of assistance if they do qualify. (Although most minimum wage workers are single adults without children, a significant number—roughly one-quarter—are parents to dependent children. Furthermore, while “single adult” workers are not typically responsible for dependent children, some may have family members, such as aging relatives, who rely on their earnings for their basic needs). And most of those who do receive public benefits typically do not experience a benefits cliff but rather a gradual phase-out of their benefits as their earnings increase. The result is that most affected workers and their families experience an increase in their net income, after accounting for changes in earnings and benefits.

The key findings of this policy brief are as follows:

• A majority of workers earning less than to slightly more than $15 per hour are single adults, and they are ineligible for most public benefits programs. According to EPI’s analysis of the impact of a federal $15 minimum wage, a majority (59 percent) of low-wage workers lifted by a higher wage floor are full-time earners.[4] Even at low hourly wages, full-time year-round workers without dependents typically earn too much to qualify for many of the nation’s most significant public benefits programs, including the Earned Income Tax Credit (EITC), the Supplemental Nutrition Assistance Program (SNAP), and Medicaid.
• Most major public benefits programs include phase-outs, not “cliffs.” The country’s major public benefits programs generally incorporate gradual phase-outs, not “benefits cliffs,” so that as earnings increase, benefits gradually decrease. Despite the reduction in benefits, these working families’ net incomes remains higher—in many cases, significantly higher—than they were before a wage increase.
• Child care assistance includes cliff-like features, but with recent federal changes they are less likely to affect workers with low incomes. Child care assistance is one of the few major public benefits programs where some participants can experience a “benefits cliff.” However, after recent changes to the Child Care and Development Block Grant (CCDBG), only a small fraction of those who do receive child care assistance are at risk of a benefits cliff.[5] Under the 2014 CCDBG reauthorization, states are now required to provide families with a graduated phase-out period if their incomes are above the state entry level for child care assistance, but below the federal cap of 85 percent of the state median income (SMI). During the graduated phase-out period, states may increase family copayments, reducing the potential for and size of a cliff.[6] To prevent a benefits cliff for child care assistance, and to expand the reach of the program,[7] Congress and the states should provide the additional funding needed to serve all eligible children, maintain affordable copayments throughout the phase-out, and increase exit-income thresholds to reflect the reality that nearly all families struggle to afford the high cost of child care.
• A higher minimum wage could help workers in low-wage jobs and their families access medical coverage. In states that have not expanded Medicaid, full-time workers without children generally do not qualify for Medicaid. In these states, even parents with very low earnings can face a benefits cliff with a small increase in wages. These workers may fall into a “coverage gap” with incomes too high for Medicaid and too low for subsidies to purchase private insurance through the Affordable Care Act (ACA) marketplace exchanges. The adoption of Medicaid expansion can eliminate this cliff effect. In addition, research published in the Journal of the American Medical Association Forum shows that raising the minimum wage improves access to health benefits for workers by helping them afford employer-sponsored health insurance or by allowing them to access ACA subsidies.[8]
• Whenever cliff-like scenarios occur, lawmakers should see it as an opportunity to review program eligibility criteria and phase-out schedules, making needed adjustments to ensure that workers and their families will continue to access public benefits. Keeping minimum wages low to prevent a benefits cliff is harmful policy that makes life worse for workers in the short and long terms. Low wages can condemn workers to a lifetime of poverty, poor physical and mental health, early death, and family disruption; and can prevent them from retiring with some level of economic security in their old age. Given the potential for serious harm to workers, rather than keeping minimum wages low, lawmakers should raise wage floors and address cliff-like scenarios when they occur by adjusting eligibility criteria and phase-out schedules so that public benefits continue to be available to those who need them.

We expand on these points in the sections below.

Most workers who benefit from minimum wage increases are single adults without children. These workers are unfortunately ineligible for or have limited access to most public benefits programs, and therefore are unlikely to face a benefits cliff.

Public benefits programs—such as Medicaid, the Supplemental Nutrition Assistance Program (SNAP), the Earned Income Tax Credit (EITC), and child care and housing assistance—can help to create economic security for workers and their families throughout their lifespan. These public services and supports can play a critical role in helping to address income inequality, mitigate the economic effects of structural racism, advance gender equity, and build worker power. Robust investments in, and the expansion of, these public programs can strengthen our communities and help to realize economic security for all. Unfortunately, these programs are often underfunded and impose limits on low-income people without dependent children. These individuals face significant barriers to accessing public benefits programs—such as low-income thresholds, which often put them outside of eligibility even at low earnings, and arbitrary time limits—and they are eligible for only small benefits when they do qualify. For example, as we discuss below, the EITC provides a maximum refund of only $529 for single adults, and completely phases out when their earnings reach just $15,570. Without a minimum wage increase, workers in low-wage jobs face the dual challenge of not being able to afford basic necessities on their earnings alone, and having little access to public supports to make ends meet. If a minimum wage increase were paired with an expansion of public benefits programs for single adults, these workers’ ability to make ends meet would increase substantially.

According to analysis by the Economic Policy Institute, the overwhelming majority (72 percent) of workers who would be affected by a federal $15 minimum wage increase are single or married adults without dependent children.[9] Most affected workers (59 percent) are employed full time, and another significant share (31 percent) work between 20 and 34 hours per week.[10] Nowhere in the country can a single worker make ends meet on the current minimum wage.[11] In fact, in some of the most expensive regions in the country, even a $15 minimum wage falls short of a living wage.[12]

Childless workers are categorically ineligible for the Child Tax Credit, while full-time workers without children generally earn too much to qualify for significant EITC or SNAP, particularly if their hourly earnings are above the federal rate of $7.25. And many are ineligible for Medicaid if they reside in states that have not expanded Medicaid under the Affordable Care Act. (Workers do not qualify for marketplace subsidies under the ACA until their incomes exceed 100 percent of the federal poverty level. In expansion states, workers are eligible until they reach 138 percent of the poverty line, which in 2019 was just $17,236 for a household of one.[13])

For instance, a single childless worker earning just $9 per hour and working 27 hours per week year-round, would earn a gross income of $12,636, which falls above the current woefully low federal poverty guideline limit for a household of one.[14]^, [i] Thus, it is likely that most childless workers earning low wages and working less than full time would quickly exceed this income limit, even at low earnings.

The EITC, too, is less than generous with these workers. In 2019, the EITC imposed an adjusted gross income limit of just $15,570 for single workers without children,[15] which is the equivalent of an hourly wage of just $8.56 per hour for 35 hours of work per week. According to an EITC calculator by the Center on Budget and Policy Priorities,[16] the EITC begins phasing-in benefits after $1.00 of earnings, but for childless adults it quickly reaches a peak at just $6,920 of income. At $1.00 in income, the estimated EITC refund is just $2.00, and at $6,920, it reaches the maximum refund of $529. The EITC for single adults without children begins phasing out when earnings reach just $8,650, at which point the refund decreases to $527, and gradually ends when earnings reach $15,570, at which point the refund is zero.[17] The EITC could be an important support for single adults earning low wages if it were expanded to more generously benefit these workers. When expanded and paired with a minimum wage increase, the EITC could help more working single adults make ends meet.

The nation’s major public benefits programs generally incorporate gradual phase-outs, not benefits cliffs. As workers’ wages increase, their net incomes also increase.

The nation’s broadest-based public benefits programs—the Earned Income Tax Credit, the Child Tax Credit, and the Supplemental Nutritional Assistance Program (SNAP)—in which the largest numbers of the nation’s low-wage workers and their families participate, are designed to provide supports to lower-income households. Rather than abruptly ending when workers’ incomes exceed a threshold, these programs gradually phase out as workers’ earnings rise. For example, as the Center of Budget and Policy Priorities summarizes, “SNAP’s benefit structure rewards earnings over unearned income, incentivizing participants … to seek greater income through higher wages or more hours…. As a result, the vast majority of SNAP workers will see an increase in their total income—that is, earnings plus SNAP—when their earnings increase, which gives them an incentive to … work more or at a higher wage.”[18]^{, [ii]} (Emphasis added.)

The EITC, too, has a phase-in and phase-out mechanism that incentivizes higher earnings, particularly for households with one or more children. For these families, in 2019, the phase-out ends when earnings reach $41,095 (for households with one child), $46,703 (for households with two children), or $50,162 (for households with three or more children).[19] These thresholds are well above the approximately $31,000 in gross earnings from full-time work at $15 per hour. Similarly, the Child Tax Credit (CTC) includes a phase-out mechanism that does not take effect until much higher income levels are reached. Currently, taxpayers with incomes up to $200,000 ($400,000 for married couples) can claim a non-refundable tax credit of up to $2,000 per child under the age of 17. Once households exceed this income threshold, the tax credit decreases by 5 percent of adjusted gross income.[20] The refundable portion of the tax credit—known as the Additional Child Tax Credit, or ACTC—allows families to receive up to $1,400 in refunds if the credit exceeds taxes owed. This refundable portion of the CTC is calculated as 15 percent of earnings over $2,500.[21]

The result of these built-in phase-out mechanisms in SNAP, the EITC, and the CTC is that as wages increase, affected workers’ net incomes also increase, while they retain access to public supports as they transition to higher and higher earnings.

Appendix Table 1, drawn from the Urban Institute’s Net Income Change Calculator (NICC),[22] shows the change in net monthly income for a typical worker (a childless adult working full time) in each state plus the District of Columbia as the minimum wage rises from $9 to $15 per hour. (We assume that the worker is currently eligible for SNAP only, since even at $9 per hour, this worker would have exceeded the maximum income threshold for the EITC.) The net income change reflects not only higher earnings but also higher total taxes (which consist of federal, state, and payroll taxes) and declining SNAP benefits. As the table shows, the difference in monthly income equals a net gain of $641 on average for all states.

For workers in low-wage jobs who have children, the size of the impact varies depending on the number of hours worked. A single worker with one dependent child who works full time will retain $421 on average in net income as the minimum wage increases to $15, as taxes increase with higher earnings, and as benefits are phased down (see Appendix Table 2). In contrast, a single worker with one child working part time (20 hours per week) will retain a bit more: $497 (see Appendix Table 3).

In truth, relatively few working households are at risk of facing cliff-like scenarios. As we discuss in the previous section, single adults without children (who constitute the majority of those affected by a minimum wage increase) are the least likely to face a benefits cliff, since they are typically ineligible for most public benefits programs or only receive meager benefits. According to the U.S. Department of Health and Human Services, less than 1 percent (0.2 million) of childless households with incomes below 200 percent of the poverty threshold face a benefits cliff.[23] The Department finds that households with children earning below 200 percent of poverty are most at risk of a benefits cliff, although even they account for a relatively small number (2.5 percent, or 0.6 million) of households.[24] Other analyses confirm this. According to the Center on Budget and Policy Priorities (CBPP), workers who are at most risk of facing a benefits cliff tend to be single parents raising two children in or near poverty (defined by CBPP as earnings below 150 percent of the federal poverty line), who receive EITC, SNAP, and either cash or housing assistance (or both). These cliff-affected families account for only 3 percent of all near-poor single-parent households with two children—and therefore make up just a fraction of the total share of workers receiving raises under a minimum wage increase.[25] But as we argue below, the predicament faced by these cliff-affected families cannot be faulted on policies such as a higher minimum wage—but rather, on program eligibility criteria that are set too low to allow working families with modest income increases to continue to access public benefits for as long as they need them.

In summary, under all scenarios above, workers in low-paying jobs who receive public supports will see significant net income boosts from a higher minimum wage—but the size of the increase will vary based on family composition and hours worked.

Child care assistance is one of few public benefits programs likely to incorporate a benefits cliff, where a small increase in earnings results in the loss of benefits.

There are few public benefits programs—most significantly, child care assistance—that can incorporate a benefits cliff, where a small increase in earnings can result in the complete loss of eligibility. Child care assistance—which is funded in full or in part through a federal block grant program called the Child Care and Development Block Grant (CCDBG) and administered locally at the state, U.S. territory, or tribal level—has a maximum income eligibility of 85 percent of state median income.[26] (Here, we limit the discussion to states and Washington, D.C. only.) States have the option of setting a threshold below 85 percent for initial eligibility, a higher income threshold for continuing eligibility (as long as the higher threshold does not exceed 85 percent of median income), or keeping both initial and continuing income eligibility the same.[27] In states where initial and continuing eligibility levels are the same, or where continuing eligibility is not much different from initial eligibility, families can quickly face a benefits cliff for receiving even a small pay increase—be it from receiving a promotion at work, from a simple raise by their employers, from additional hours worked, or from higher minimum wage rates. Under the 2014 CCDBG reauthorization, states are now required to provide families with a graduated phase-out period if their incomes are above the state entry level for child care assistance, but below the federal cap of 85 percent of the state median income (SMI). During the graduated phase-out period, states may increase family copayments, reducing the potential for and size of a cliff.[28]

Although child care assistance is an important support for families who receive it, unfortunately not enough workers in low-wage jobs receive child care assistance. Therefore, relatively few working families are at risk of facing a benefits cliff related to this program. The CCDBG, like other block grants, is not an entitlement program and therefore neither guarantees receipt of benefits to all who qualify, nor provides funding sufficient to meet the needs of families.[29] As a result, in every state, CCDBG serves a small fraction of eligible children,[30] and in some states there are waiting lists for child care benefits.

Not surprisingly, only 796,000 families (1.32 million children) received child care assistance on a monthly basis in 2017.[31] By comparison, the proposed federal minimum wage of $15 an hour would benefit 33.5 million workers, including 9.4 million parents with dependent children by the time the law is fully phased in in 2025.[32] And even among those who do receive child care assistance, only a small share face a cliff effect. The U.S. Department of Health and Human Services estimates that after a $2,000 earnings increase, just 3 percent of CCDBG households would lose their entire subsidy, and an additional 22 percent would lose a portion of their subsidy in the form of higher copayments. Even with a $10,000 earnings increase, less than half of such households would lose their entire subsidy.[33]

In general, even workers who participate in cliff-like public benefits programs are likely to see net income gains when the minimum wage increases to $15—just smaller ones. For example, in all but five states, a full-time working mother raising one young child receiving a full range of benefits—SNAP, child care subsidies, housing subsidies, Temporary Assistance for Needy Families (TANF), the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), and Medicaid or CHIP—would see a net income gain of up to $434 (see Appendix Table 4). For households working part time, net incomes are positive in all states, and range from $49 to $264 (see Appendix Table 5). However, the share of families who receive all of these benefits is vanishingly small.[34]

Whenever cliff-like scenarios do occur, they should be understood as the result of poor policy design, not as the “inevitable” or “unintended” result of higher minimum wages. Public benefits programs provide important supports for families with low incomes. Given their potential to reduce hardship, these programs should be fully funded, and Congress and states should see fears of a benefits cliff as an opportunity to review phase-out designs and eligibility criteria, and make the needed adjustments to ensure that working families with continued need will retain their benefits.

(For a brief discussion of housing subsidies, TANF, and WIC, see the appendix section, “Description of Other Public Benefits Programs for Working Families”.)

Raising the minimum wage improves access to health benefits by helping workers afford employer-based health insurance or coverage under the Affordable Care Act.

Medicaid is one of the nation’s major public benefits programs for which most working people in states that have not expanded the program under the Affordable Care Act (ACA) do not qualify. According to the latest estimate by the Henry J. Kaiser Family Foundation, the “median income limit [for Medicaid] for parents in these [non-expansion] states is just 43% of poverty, or an annual income of $8,935 for a family of three in 2018, and in nearly all states not expanding, childless adults remain ineligible.”[35]

The Kaiser Foundation notes that because the ACA was originally designed to provide low-income workers with access to health care through an expanded Medicaid program (and with subsidies for individuals earning above 138 percent of the poverty line, so they can purchase insurance through the marketplace), the ACA did not incorporate financial assistance for those earning below the poverty line. “As a result, in states that do not expand Medicaid, many adults, including all childless adults, fall into a ‘coverage gap’ of having incomes above Medicaid eligibility limits but below the lower limit for Marketplace premium tax credits.”[36]

Research by Andrew Bindman, a health policy expert at the University of California-San Francisco, indicates that raising the minimum wage improves access to health benefits by helping workers afford employer-sponsored or private marketplace insurance under the Affordable Care Act.[37] Dr. Bindman estimates that raising the minimum wage from $7.25 to $15 would increase the likelihood that low-wage workers would accept employer-sponsored insurance from 37 percent to 77 percent—a highly significant increase in coverage. He further notes that a “higher minimum wage will also make it possible, depending on household size, for a greater number of individuals who are not offered employer-based coverage to earn enough to qualify for subsidies to purchase coverage through a marketplace….  This is particularly important in [states] that have not expanded Medicaid coverage.”[38]

Rather than keeping wage floors low, legislators should revise eligibility criteria for public benefits, so that benefits phase out slowly as workers’ earnings rise.

Benefits cliffs happen as a result of poor policy design with regard to eligibility and funding for public benefits programs, not as an “unintended consequence” of raising the wage floor. In fact, benefits cliffs happen independent of minimum wage policy.[39] Whenever working families face the possibility of a benefits cliff following a raise in the wage floor, lawmakers should see it as an opportunity to review and amend eligibility criteria for these programs, provide adequate funding, and revise phase-out schedules to ensure that families with continued need are not adversely affected.

Many states have taken steps to address concerns with benefits cliffs, even in the absence of a campaign to raise the minimum wage. For example, in 2015, Illinois Gov. Bruce Rauner approved legislation raising income limits for the Supplemental Nutritional Assistance Program (SNAP) to prevent SNAP cliff effects.[40] At the time, there was no statewide campaign for a higher minimum wage. In 2012, the Colorado legislature adopted a law to authorize the Colorado Cliff Effect Pilot Program, a currently ongoing pilot that seeks to expand child care assistance and mitigate related cliff effects.[41] This was at a time when the Fight for $15 was in its infancy and had not yet reached Colorado. In March 2017, Maryland Gov. Larry Hogan established a commission, the Two Generation Family Economic Security Commission and Pilot Program, which was tasked with identifying barriers to economic security and making policy recommendations to mitigate multi-generational poverty.[42] The Commission found that, “Perhaps most commonly cited as a barrier to family self-sufficiency is the ‘benefits cliff.’ … Consider the detriment to the entire family when [Temporary Cash Assistance (TCA)] eligibility is lost when a single parent of two works part time for $8.46 per hour.”[43] At the time Gov. Hogan established the Commission, a statewide campaign for a $15 minimum wage had not yet been launched.

Even in cases where minimum wage campaigns have brought up concerns about potential cliff effects, states have opted for addressing eligibility criteria or funding, rather than keeping wages low. For example, in 2015, when Oregon was considering raising its wage floor to $15 per hour, some raised the possibility of a benefits cliff for some working families, including those receiving housing benefits. But instead of leaving the wage floor at a poverty rate of $9.25 per hour, the legislature passed a bill that raised income thresholds for ongoing eligibility from 60 percent of the median income, to a more generous 80 percent.[44] The next year, in 2016, Oregon adopted legislation gradually raising the minimum wage to $14.75 in Portland, $12.50 in rural regions, and $13.50 elsewhere in the state.[45] Similarly, in Vermont, a campaign for a higher minimum wage in the 2017-2018 legislative session led to concerns about a benefits cliff. A commission was established to look into the matter, which identified potential cliff effects for a minority of working families (2,000 in total) receiving child care assistance under the state’s Child Care Financial Assistance Program (CCFAP).[46] Based on those findings, the original bill[47] was amended to include a provision that would adjust the sliding scale and the market rate benchmarks for CCFAP to reflect the increase in the minimum wage.[48] Although the minimum wage bill was vetoed in 2018, the following year legislators in the House and Senate introduced new $15 minimum wage bills with similar language on CCFAP.[49]

Leaving wage floors low to prevent benefits cliffs threatens real harm to workers in the short and long terms. We should aim to tackle both low pay and cliffs.

Leaving wage floors low in order to prevent cliff effects can lead to negative short- and long-term impacts for affected workers. The immediate harm of low pay is well known: Earnings from low minimum wages often do not allow families to make ends meet.[50] Other less commonly known consequences of low wages range from short- to long-term effects, impacting both the physical and mental health of workers and their families’ well-being. These consequences include unmet medical needs;[51] chronic pain;[52] premature death;[53] depression;[54] unmet basic needs for children and its impact on parental stress, depression, substance abuse, and other barriers to family well-being;[55] and diminished educational opportunities for children in low-income households.[56]

Other additional consequences of low wages that can harm workers over the long term include hindering career advancement and lower retirement income.

According to research by the Urban Institute and the Georgetown Public Policy Institute, “[t]he likelihood of leaving low pay decreases dramatically as tenure in a low-paying job increases … [as] the characteristics associated with low-wage employment lead to greater rates of permanently low earnings.”[57] Some of the mechanisms through which workers become trapped in low-wage occupations include: Inability to afford a personal car, limiting workers’ ability to access higher paying jobs further away from home; [58] higher rates of turnover, either through firing or quitting, which is typical of low-wage occupations, and which over time reduces workers’ chances of escaping low-wage occupations;[59] and restricted ability to afford the cost of post-secondary education or training,[60] or to “forego income from work in order to participate in education or training activities.”[61]

The Urban Institute has also published research on the impact of low wages on retirement income. They point out that “[c]hanges in the distribution of wages shape workers’ lifetime earnings and affect the distribution of retirement income. People who experience high wage inequality during their working years are likely to experience high retirement income inequality, because Social Security benefits are tied to lifetime earnings, and people’s ability to save for retirement depends on how much they earn”[62] (emphasis added). The Urban Institute projects that unless wage inequality is curbed, lifetime earnings for low-wage workers (those at the bottom 20 percent of the income distribution) will decline between 2 percent and 9 percent over the next decades (depending on the year of retirement), and retirement incomes will decline between 3 percent and 13 percent.[63]

However, the Urban Institute also estimates that raising the federal minimum wage to $12 per hour and indexing it to inflation would significantly mitigate the erosion in retirement incomes: A $12 minimum wage would “offset nearly 60 percent of the retirement income lost by the bottom fifth of today’s 25-year-olds, and nearly 40 percent lost by today’s 5-year-olds.”[64] (Although the Urban Institute does not project the impact of a $15 minimum wage, it is reasonable to expect that the higher increase would have an even greater impact on retirement incomes for today’s lowest-paid workers.) Nari Rhee, an expert on retirement security, came to a similar conclusion when she analyzed the potential impact of a $15 minimum wage in California combined with the state’s Secure Choice Retirement Savings Program. Rhee found that for young workers in the bottom 50 percent of the income distribution, the higher minimum wage and participation in Secure Choice could increase their retirement income by 55 percent.[65] The impact of a $15 minimum wage, when analyzed separate from Secure Choice, was smaller yet still very significant: A $15 minimum wage would boost Social Security benefits by 11 percent for a 25-year-old worker upon reaching retirement age, and by 4.5 percent for a 45-year-old today.[66]

In fact, a higher minimum wage would not only boost Social Security benefits, but also allow low-wage workers to save for retirement through contributions to private plans and claim a tax credit. The Retirement Savings Contributions Credit—most commonly known as Saver’s Credit—is a non-refundable tax credit available to low-income workers who make contributions into retirement plans, such as 401(k) or IRA.[67] Workers can claim up to $1,000 in eligible contributions if filling individually, and $2,000 if married and filing jointly, lowering the taxes they owe by the equivalent of 10 percent to 50 percent of their retirement contributions for the year, depending on their adjusted gross income.[68] For example, if a single worker received a raise to $15 per hour today, worked full time and set aside $1,000 toward retirement for the year, she would be able to lower her taxable earnings from roughly $31,000 to $30,000, but would claim a tax credit of around $200 (20 percent of her $1,000 retirement savings).

Appendix: Description of Other Public Benefits Programs for Working Families

The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) is a program that provides food assistance and other related services to low-income women who are pregnant, breastfeeding, or have just given birth, and to their infants and young children up to five years of age who may be at nutritional risk.[69] States set the income eligibility limits at between 100 and 185 percent of the federal poverty level, and people who receive other benefits such as Medicaid, SNAP, or TANF do not need to separately establish their income eligibility for WIC. This program does not have a benefits cliff. Eligible households receive a set amount of monthly benefits that do not change with wage or work-hour increases. Benefit amounts per household only change with pregnancy status, the number of eligible children in the household, and their ages. Participants must recertify their eligibility every 6 to 12 months.

Housing assistance is an umbrella term for a range of housing programs that aim to provide safe, quality, and affordable housing. These programs include housing vouchers, subsidies, public housing, and other housing-related public benefits.[70] Housing assistance programs currently serve an estimated 13.7 million individuals—a figure that includes children, seniors, and persons living with a disability, many of whom are unable to work.[71] Housing vouchers, specifically, have an initial eligibility threshold between 50 percent and 80 percent of median household income, depending on location.[72] Benefits phase out slowly “until 30 percent of a family’s income (the required family contribution to rent under the program) equals or exceeds the allowable rental cost.”[73] Although the intention of these programs is to cover the gap between housing need and means, housing assistance often falls short of this goal due to inadequate funding. As the Public and Affordable Housing Research Corporation (PAHRC) notes, only 30 percent of qualifying households actually receive rental assistance due to underfunding.[74] As PAHRC also notes, in 2018, these programs “served 1.75 million families who earn a majority of their income from wages.”[75] Advocates recommend expanding these housing programs to meet the needs of all qualifying households, so that an estimated 29.7 million additional low-income individuals will receive the assistance they need.[76]

The Temporary Assistance for Needy Families (TANF) is a block grant program that provides cash assistance and other services to some low-income families.[77] As a block grant, TANF does not guarantee receipt of benefits to qualifying families; nor is it funded in response to increases in need or rising inflation. In fact, since its enactment, TANF has been funded at a steady $16.5 billion per year in federal dollars—which, due to inflation, has meant a real value decline of 40 percent.[78] TANF has also helped fewer families over the years. According to the U.S. Department of Health and Human Services, in 2019 TANF had a monthly caseload of 1.1 million families,[79] down from 4.4 million in 1996.[80] In addition to federal funds, TANF requires state contributions, known as Maintenance of Effort (MOE). [81] States have broad discretion over eligibility criteria and the use of funds. [82] The latter has meant that states are allowed to use TANF funds to provide services other than cash assistance, including child care programs, education and job training, transportation, and refundable tax credits.[83] While those other services are needed, funding them through TANF leaves fewer dollars to provide direct cash assistance to families. Nationally, only 21.4 percent of TANF funds are used to provide basic assistance.[84] Federal rules also require states to impose work requirements on benefitting households, although states have some discretion over who must participate in work activities and what must they do.[85] In nearly all states, if parents do not meet the work participation requirements and document their participation, the entire family will be denied benefits. Given the poor design of the program, today TANF serves fewer than 25 percent of families with children living in poverty.[86] Furthermore, the program’s onerous work requirements are believed to have led to an increase in deep poverty;[87] and the broad discretion given to states with regards to eligibility criteria and the use of funds has had a disproportionate impact on Black families.[88]

Appendix: Tables

ACKNOWLEDGMENTS

We thank Elizabeth Lower-Basch from the Center for Law and Social Policy (CLASP) for her invaluable feedback on the particulars of public benefits programs; and Karen Schulman and Julie Vogtman from the National Women’s Law Center (NWLC) for sharing their expertise on child care programs. Their insightful comments greatly assisted the completion of this paper.

© 2020 National Employment Law Project. This report is covered by the Creative Commons “Attribution-NonCommercial-NoDerivs” license fee (see http://creativecommons.org/licenses). For further inquiries, please contact NELP (nelp@nelp.org).

Endnotes

[i] The federal poverty guidelines are used to determine eligibility for federal programs, though typically, income limits are higher than the poverty line, such as 130 percent for SNAP (or higher in states with broad-based categorical eligibility), and 138 percent for Medicaid. While the poverty threshold—on which these guidelines are based—is adjusted each year to match inflation, the “food plan” component of the poverty guidelines was calculated only once, in 1963, and has never been revised to account for rising living standards, new necessities, and a changing economy. As a result, neither the poverty threshold nor the guidelines accurately reflect the cost of living and the needs of households. See the following from the U.S. Department of Health and Human Services, Frequently Asked Questions Related to the Poverty Guidelines and Poverty, https://aspe.hhs.gov/frequently-asked-questions-related-poverty-guidelines-and-poverty: “What Programs Use the Poverty Guidelines?,” “How was the Poverty Line Developed?,” and “Are the Poverty Thresholds Calculated Every Year by Multiplying the Cost of an Agriculture Department Food Plan by Three?” See also “Official Poverty Line Is Already Too Low” and “Updates of Official Poverty Line Should Fully Reflect the Costs of Meeting Basic Needs,” in Arloc Sherman and Paul N. van de Water, Reducing Cost-of-Living Adjustment Would Make Poverty Line a Less Accurate Measure of Basic Needs, Center on Budget and Policy Priorities, June 11, 2019, https://www.cbpp.org/research/poverty-and-inequality/reducing-cost-of-living-adjustment-would-make-poverty-line-a-less.

[ii] One of the tools that states have utilized to prevent a cliff effect under SNAP is Broad Based Categorical Eligibility (BBCE), which, as the Center for Law and Social Policy explains, “allows states to reflect cost of living, wages, and other local economic conditions by raising the gross income limit from the current standard of 130 percent of the federal poverty level (FPL).” However, BBCE is currently under threat by a Trump Administration proposed rule, which “effectively eliminates BBCE except for some households under very narrow conditions.” The result would be a benefits cliff in states that had managed to avoid it. See Carrie Welton, Proposed House Farm Bill Would Harm Workers, Bring Back “Cliff Effects,” Center for Law and Social Policy, April 2018, https://www.clasp.org/publications/fact-sheet/proposed-house-farm-bill-would-harm-workers-bring-back-cliff-effects.

[1].       David Cooper, Raising the Federal Minimum Wage to $15 by 2025 would Lift Wages for Over 33 Million Workers, Economic Policy Institute, July 17, 2019, https://www.epi.org/publication/minimum-wage-15-by-2025/.

[2].       Yannet Lathrop, Impact of the Fight for $15: $68 Billion in Raises, 22 Million Workers, National Employment Law Project, November 2018, https://www.nelp.org/publication/impact-fight-for-15-2018/.

[3].       Ken Jacobs, Ian Perry, and Jenifer MacGillvary, The High Public Cost of Low Wages: Poverty-Level Wages Cost U.S. Taxpayers $152.8 Billion Each Year in Public Support for Working Families, UC Berkeley Center for Labor Research and Education Research Brief, April 2015, http://laborcenter.berkeley.edu/pdf/2015/the-high-public-cost-of-low-wages.pdf.

[4].       David Cooper, op. cit. In EPI’s analysis, full-time status is defined as a minimum of 35 hours of work per week.

[5].       Nina Chien and Suzanne Macartney, Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services, Effective Marginal Tax Rates for Households with Child Care Subsidies: What Happens Following an Earnings Increase?, ASPE Marginal Tax Rate Series, Brief No. 3, March 2019, https://aspe.hhs.gov/system/files/aspe-files/260661/brief3-ccdfmtrbrief.pdf.

[6].       Hannah Matthews, Karen Schulman, Julie Vogtman, Christine Johnson-Staub and Helen Blank, Implementing the Child Care and Development Block Grant Reauthorization: A Guide for States, The Center for Law and Social Policy (CLASP) and the National Women’s Law Center (NWLC), June 2017 (updated), https://www.clasp.org/sites/default/files/publications/2017/08/CCDBG-Reauth-Guide-Updated.pdf. See also, U.S. Department of Health and Human Services, Office of Child Care, Child Care and Development Block Grant Act (CCDBG) of 2014: Plain Language Summary of Statutory Changes, November 18, 2014, https://www.acf.hhs.gov/occ/resource/ccdbg-of-2014-plain-language-summary-of-statutory-changes.

[7].       For information on the current reach of child care programs, see Rebecca Ullrich, Stephanie Schmit and Ruth Cosse, Inequitable Access to Child Care Subsidies, Center for Law and Social Policy (CLASP), April 2019, https://www.clasp.org/sites/default/files/publications/2019/04/2019_inequitableaccess.pdf. See Appendix III.

[8].       Andrew B. Bindman, “A Healthy Living Wage,” Journal of the American Medical Association Forum, October 29, 2015, http://newsatjama.jama.com/2015/10/29/jama-forum-a-healthy-living-wage/.

[9].       David Cooper, op. cit.

[10].      Ibid.

[11].      For example, in the relatively inexpensive states of Alabama, Arkansas, Kentucky, Mississippi and West Virginia—which currently require minimum wages ranging from $7.25 to $10.00—the housing wage for a 1-bedroom apartment (a proxy for the cost of living for single adults) surpasses their effective wage floors. See the National Low Income Housing Coalition, Out of Reach 2020, https://reports.nlihc.org/oor.

[12].      Maya Pinto, Workers in All 50 States Will Need $15 an Hour by 2024 to Afford the Basics, National Employment Law Project, May 2017, https://s27147.pcdn.co/wp-content/uploads/workers-in-all-50-states-will-need-15-by-2024.pdf. For more current estimates, see the cost of living for individual high-cost cities and metropolitan regions in Economic Policy Institute, Family Budget Calculator, https://www.epi.org/resources/budget/.

[13].      Rachel Garfield, Kendal Orgera and Anthony Damico, The Coverage Gap: Uninsured Poor Adults in States that Do Not Expand Medicaid, Kaiser Family Foundation, January 14, 2020, https://www.kff.org/medicaid/issue-brief/the-coverage-gap-uninsured-poor-adults-in-states-that-do-not-expand-medicaid/.

[14].      NELP analysis of U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, U.S. Federal Poverty Guidelines Used to Determine Financial Eligibility for Certain Federal Programs, https://aspe.hhs.gov/2019-poverty-guidelines. Retrieved November 6, 2019. We assume an hourly wage of $9.00, 27 hours of work per week, and employment for 52 weeks in a 12-month period.

[15].      U.S. Internal Revenue Service, Earned Income Tax Credit Income Limits and Maximum Credit Amounts, updated July 31, 2020, https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/earned-income-tax-credit-income-limits-and-maximum-credit-amounts.

[16].      Center on Budget and Policy Priorities, Policy Basics: The Earned Income Tax Credit, updated December 10, 2019, https://www.cbpp.org/research/federal-tax/policy-basics-the-earned-income-tax-credit. See both the calculator embedded in the first figure (“Value of Federal Earned Income Tax Credit, 2019”), and Table 1 (“2019 Earned Income Tax Credit Parameters (Filing status single)”).

[17].      Ibid.

[18].      Dottie Rosenbaum, SNAP’s “Broad-Based Categorical Eligibility” Supports Working Families and Those Saving for the Future, Center on Budget and Policy Priority, July 30, 2019, https://www.cbpp.org/research/food-assistance/snaps-broad-based-categorical-eligibility-supports-working-families-and.

[19].      Center on Budget and Policy Priorities, Policy Basics: The Earned Income Tax Credit, op. cit.

[20].      Tax Policy Center, “What is the Child Tax Credit?” in Tax Policy Center Briefing Book, Key Elements of the U.S. Tax System, https://www.taxpolicycenter.org/briefing-book/what-child-tax-credit. Accessed August 13, 2020.

[21].      Ibid.

[22].      Urban Institute, Net Income Change Calculator (NICC), http://nicc.urban.org/netincomecalculator/. Accessed August 12, 2020.

[23].      Nina Chien and Suzanne Macartney, Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services, What Happens When People Increase Their Earnings? Effective Marginal Tax Rates for Low-Income Households, ASPE Marginal Tax Rate Series, Brief No. 2, March 2019, https://aspe.hhs.gov/system/files/aspe-files/260661/brief2-overviewmtranalyses.pdf.

[24].      Ibid.

[25].      Issac Shapiro, Robert Greenstein, Danilo Trisi and Bryann DaSilva, It Pays to Work: Work Incentives and the Safety Net, Center on Budget and Policy Priorities, March 3, 2016, http://www.cbpp.org/sites/default/files/atoms/files/3-3-16tax.pdf.

[26].      Victoria Tran, Sarah Minton, Sweta Haldar, and Kelly Dwyer, The CCDF Policies Database Book of Tables: Key Cross-State Variations in CCDF Policies as of October 1, 2017, Urban Institute, October 2018, https://ccdf.urban.org/sites/default/files/CCDF%20Policies%20Database%202017%20Book%20of%20Tables%20%28final%2010%2009%2018%29.pdf. The analysis and discussion here are limited to child care subsidies funded in part or in full by the Child Care and Development Fund, and do not apply to programs such as Head Start (which may also serve as a form of “child care” for a smaller subset of young children), TANF-funded child care, or other similar government programs.

[27].      Ibid.

[28].      Hannah Matthews, Karen Schulman, Julie Vogtman, Christine Johnson-Staub and Helen Blank, op. cit.

[29].      Center of Budget and Policy Priorities, The Problems with Block-Granting Entitlement Programs, https://www.cbpp.org/the-problems-with-block-granting-entitlement-programs. Accessed August 13, 2020.

[30].      Rebecca Ullrich, Stephanie Schmit and Ruth Cosse, Inequitable Access to Child Care Subsidies, Center for Law and Social Policy (CLASP), April 2019, https://www.clasp.org/sites/default/files/publications/2019/04/2019_inequitableaccess.pdf.

[31].      U.S. Department of Health and Human Services, Office of Child Care, Characteristics of Families Served by the Child Care and Development Fund (CCDF) Based on Preliminary FY 2017 Data, February 6, 2019, https://www.acf.hhs.gov/occ/resource/characteristics-of-families-served-by-child-care-and-development-fund-ccdf.

[32].      David Cooper, op. cit.

[33].      Nina Chien and Suzanne Macartney, op. cit. (endnote 6).

[34].      Nina Chien and Suzanne Macartney, op. cit. (endnote 25).

[35].      Rachel Garfield, Kendal Orgera and Anthony Damico, The Coverage Gap: Uninsured Poor Adults in States that Do Not Expand Medicaid, Henry J. Kaiser Family Foundation, March 21, 2019, https://www.kff.org/medicaid/issue-brief/the-coverage-gap-uninsured-poor-adults-in-states-that-do-not-expand-medicaid/.

[36].      Ibid.

[37].      Andrew B. Bindman, op. cit.

[38].      Ibid.

[39].      Michelle Salvador, “Both Benefits Cliff, Minimum Wage Need Fixing,” VT Digger, April 23, 2018, https://vtdigger.org/2018/04/23/michelle-salvador-benefits-cliff-minimum-wage-need-fixing/.

[40].      See Randi Hall, Illinois Addresses Benefits Cliff, Raises Gross Income Limit on SNAP, Center for Law and Social Policy (CLASP), August 19, 2015, https://www.clasp.org/blog/illinois-addresses-benefits-cliff-raises-gross-income-limit-snap. Illinois raised these income limits through Broad Based Categorical Eligibility, a policy which is currently under threat by a proposed rule from the Trump Administration.

[41].      Brittany Birken, Erin Moriarty-Siler, and Roxane White, Reducing the Cliff Effect to Support Working Families, Ascend at the Aspen Institute, April 23, 2018, https://ascend.aspeninstitute.org/reducing-the-cliff-effect-to-support-working-families/.

[42].      Maryland Department of Human Services, Final Report on the Two-Generation Family Economic Security Commission and Pilot Program, December 2018, https://governor.maryland.gov/ltgovernor/wp-content/uploads/sites/2/2019/01/FINAL-Report-Two-Generation-Family-Economic-Security-Commission-12.28.18.pdf.

[43].      Ibid.

[44].      Denis C. Theriault, “Kate Brown Will Sign Bill Easing ‘Benefits Cliff’ for Low-Income Renters,” The Oregonian, May 18, 2015, https://www.oregonlive.com/politics/2015/05/kate_brown_will_sign_bill_easi.html.

[45].      Ian K. Kullgren, “It’s Official: Kate Brown Signs Minimum Wage Bill for $14.75 in Portland,” The Oregonian, March 2, 2016, https://www.oregonlive.com/politics/2016/03/its_official_kate_brown_signs.html.

[46].      Vermont Legislative Joint Fiscal Office, Report of the Minimum Wage and Benefits Cliff Study Committee, December 2017, https://legislature.vermont.gov/Documents/2018/WorkGroups/Senate%20Economic%20Development/Bills/S.40/W~Minimum%20Wage%20and%20Benefits%20Cliff%20Study%20Committee~Report%20of%20the%20Minimum%20Wage%20and%20Benefits%20Cliff%20Study%20Committee~1-11-2018.pdf.

[47].      Vermont General Assembly, S.40, 2017-2018 Session (2017) [bill as introduced], https://legislature.vermont.gov/Documents/2018/Docs/BILLS/S-0040/S-0040%20As%20Introduced.pdf.

[48].      Vermont General Assembly, S.40, 2017-2018 Session (2017) [bill as introduced and passed by the Senate and House], https://legislature.vermont.gov/Documents/2018/Docs/BILLS/S-0040/S-0040%20As%20Passed%20by%20Both%20House%20and%20Senate%20Official.pdf.

[49].      See Vermont General Assembly, S.23, 2019-2020 Session (2019) [bill as introduced and passed by the Senate], https://legislature.vermont.gov/Documents/2020/Docs/BILLS/S-0023/S-0023%20As%20passed%20by%20the%20Senate%20Official.pdf; and Vermont General Assembly, S.23, 2019-2020 Session (2019) [House proposal of Amendment], https://legislature.vermont.gov/Documents/2020/Docs/BILLS/S-0023/S-0023%20House%20proposal%20of%20amendment%20Official.pdf.

[50].      For example, according to the National Low Income Housing Coalition, nowhere in the country is the federal, state or local minimum wage enough to cover rent for a 2-bedroom apartment at fair market value. See their report, Out of Reach: The High Costs of Housing, 2020, https://reports.nlihc.org/sites/default/files/oor/OOR_2020.pdf. See also, Ben Zipperer, The Erosion of the Federal Minimum Wage Has Increased Poverty, Especially for Black and Hispanic Families, Economic Policy Institute, June 13, 2018, https://www.epi.org/publication/the-erosion-of-the-federal-minimum-wage-has-increased-poverty-especially-for-black-and-hispanic-families/.

[51].      Kelly McCarrier, Frederick Zimmerman, James Ralston and Diane Martin, “Associations Between Minimum Wage Policy and Access to Health Care: Evidence From the Behavioral Risk Factor Surveillance System, 1996–2007,” American Journal of Public Health, Vol. 101, No. 2 (February 2011): 231-237, https://ajph.aphapublications.org/doi/abs/10.2105/AJPH.2006.108928.

[52].      Natalie Shoemaker, “Not Knowing When Your Next Paycheck Comes In Literally Hurts, Researchers Say,” Big Think, May 18, 2016, https://bigthink.com/natalie-shoemaker/study-poverty-causes-physical-pain.

[53].      Tsu-Yu Tsao, Kevin Konty, Gretchen Van Wye, Oxiris Barbot, James Hadler, Natalia Linos and Mary Bassett, “Estimating Potential Reductions in Premature Mortality in New York City From Raising the Minimum Wage to $15,” American Journal of Public Health, Vol. 106, No. 6 (June 2016): 1036-1041, https://ajph.aphapublications.org/doi/pdf/10.2105/AJPH.2016.303188.

[54].      Matthew Desmond, “Dollars on the Margins,” New York Times, February 21, 2019, https://www.nytimes.com/interactive/2019/02/21/magazine/minimum-wage-saving-lives.html.

[55].      Kerri M. Raissian and Lindsey Rose Bullinger, “Money Matters: Does the Minimum Wage Affect Child Maltreatment Rates?” Children and Youth Services Review, Vol. 72 (January 2017): 60-70, https://www.sciencedirect.com/science/article/pii/S0190740916303139. See also slides by the authors presented at the Center on Wage and Employment Dynamics: A Symposium to Celebrate a Decade of Important Minimum Wage Research, University of California, Berkeley, December 8, 2017, https://irle.berkeley.edu/files/2018/02/Lindsey-Bullinger.pdf.

[56].      Lisa Dodson, Randy Albelda, Diana Salas Coronado and Marya Mtshali, “How Youth Are Put at Risk by Parents’ Low-Wage Jobs,” Center for Social Policy Publications, Paper No. 68 (Fall 2012), http://scholarworks.umb.edu/csp_pubs/68/.

[57].      In Andrew Yarrow, The Pernicious Economic Trap of Low Wages, The Politics of Poverty, Oxfam America, April 3, 2015, https://politicsofpoverty.oxfamamerica.org/2015/04/the-pernicious-economic-trap-of-low-wages/. Emphasis added.

[58].      Ibid.

[59].      Ibid.

[60].      Ibid.

[61].      Julie Vogtman and Karen Schulman, Set Up to Fail: When Low-Wage Work Jeopardizes Parents’ and Children’s Success, National Women’s Law Center, January 2016, https://nwlc.org/wp-content/uploads/2016/01/FINAL-Set-Up-To-Fail-When-Low-Wage-Work-Jeopardizes-Parents%E2%80%99-and-Children%E2%80%99s-Success.pdf.

[62].      Damir Cosic, Richard W. Johnson and Karen E. Smith, Growing Wage Inequality, the Minimum Wage, and the Future Distribution of Retirement Income, Urban Institute, July 2018, https://www.urban.org/sites/default/files/publication/98836/wage_inequality_minimum_wage_retirement_income_0.pdf.

[63].      Ibid.

[64].      Rachel West, “There’s a Retirement Crisis. The New $15 Minimum Wage Bill Could Help,” TalkPoverty, June 26, 2019, https://talkpoverty.org/2019/06/26/retirement-crisis-15-minimum-wage-can-help/.

[65].      Nari Rhee, California’s $15 Minimum Wage and Secure Choice Retirement Savings Program Can Boost Young Low-Income Workers’ Retirement Incomes by 50%, University of California, Berkeley, Center for Labor Research and Education, December 2017, http://laborcenter.berkeley.edu/pdf/2017/Minimum-Wage-and-Secure-Choice.pdf.

[66].      Ibid.

[67].      U.S. Internal Revenue Service, Retirement Savings Contributions Credit (Saver’s Credit), updated July 10, 2020, https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-savings-contributions-savers-credit.

[68].      Ibid.

[69].      Benefits.org, Special Supplemental Nutrition Program for Women, Infants and Children (WIC), https://www.benefits.gov/benefit/368. Accessed August 13, 2020.

[70].      National Low Income Housing Coalition, Housing Assistance, https://nlihc.org/explore-issues/housing_assistance. Accessed August 13, 2020.

[71].      Public and Affordable Housing Research Corporation, Trends in Housing Assistance and Who It Serves, 2019, https://www.housingcenter.com/wp-content/uploads/2019/06/Housing-Impact-Report-2019.pdf. Accessed 13, 2020.

[72].      Barbara Sard, No Steep Benefit Cliff for Housing Vouchers, Center on Budget and Policy Priorities, July 1, 2015, https://www.cbpp.org/blog/no-steep-benefit-cliff-for-housing-vouchers.

[73].      Ibid.

[74].      Public and Affordable Housing Research Corporation, op. cit.

[75].      Ibid.

[76].      Low Income Housing Coalition, Millions Who Qualify for Housing Assistance Do Not Receive It, June 17, 2019, https://nlihc.org/resource/millions-who-qualify-housing-assistance-do-not-receive-it.

[77].      Center on Budget and Policy Priorities, Policy Basics: Temporary Assistance for Needy Families updated February 6, 2020, https://www.cbpp.org/research/family-income-support/policy-basics-an-introduction-to-tanf.

[78].      Ibid.

[79].      U.S. Department of Health and Human Services, Office of Family Assistance, TANF Caseload Data 2019: TANF&SPP: Total Number of Families, Fiscal Year 2019, https://www.acf.hhs.gov/sites/default/files/ofa/2019_15months_tanssp_totalfamiles_07192019_508.pdf. Accessed January 8, 2020.

[80].      Center on Budget and Policy Priorities, Chart Book: Temporary Assistance for Needy Families, August 21, 2019, https://www.cbpp.org/research/family-income-support/chart-book-temporary-assistance-for-needy-families.

[81].      Center on Budget and Policy Priorities, Policy Basics: Temporary Assistance for Needy Families, op. cit.

[82].      Ibid.

[83].      Ibid.

[84].      U.S. Department of Health and Human Services, TANF and MOE Spending and Transfers by Activity, FY 2018: United States, [updated August 7, 2019], https://www.acf.hhs.gov/sites/default/files/ofa/fy2018_tanf_moe_national_data_pie_chart_b508.pdf.

[85].      Center on Budget and Policy Priorities, Policy Basics: An Introduction to TANF, op. cit.

[86].      Ife Floyd, Cash Assistance Should Reach Millions More Families, Center on Budget and Policy Priorities, updated March 4, 2020, https://www.cbpp.org/research/family-income-support/tanf-reaching-few-poor-families.

[87].      Center on Budget and Policy Priorities, Chart Book: Temporary Assistance for Needy Families, op. cit.

[88].      Ife Floyd, op. cit.

[89].      According to Child Care Aware of America, the average cost of child care nationwide is between $9,167 and $9,613 per year. We use an average of these figures to calculate the cost per month ($782.50, rounded to $783).  See Child Care Aware of America, The US and the High Price of Child Care: An Examination of a Broken System, 2019, https://info.childcareaware.org/hubfs/2019%20Price%20of%20Care%20State%20Sheets/Final-TheUSandtheHighPriceofChildCare-AnExaminationofaBrokenSystem.pdf, (pg. 44).

[90].      Ibid. We calculate the cost of child care on a per-working-hour basis (the national average of $783 for full-time child care, divided by 35 hours), and use this figure to calculate the cost of child care for a 20-hour work week ($443).

[91].      Ibid.

[92].      Ibid.