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Sunday, November 1, 2015

Welfare Reform Solutions for Low-Income Workers

The upcoming presidential race has brought out the worst in some candidates when it comes to the topic of low-income workers and wage inequality. Erroneously, some have tried to link poverty to immigration, dishonest practices and shear laziness. 

The truth of the matter is that social welfare and welfare reform is a complex, dynamic issue that is only made worse by political rhetoric.



Unemployed v. Underemployed

One of the most common of the social welfare mistakes made by politicians is the blurring of unemployed numbers with underemployed statistics. This is significant because any real social change policies depend on a definition of the target population. The unemployment rate for September 2015 in the United States is around 5.1 percent which is a little less than 8 million people. For these people, the fix is easy: more jobs. Underemployment is a bit trickier. A PhD working at a fast food restaurant is underemployed. A mom working 29-and-a-half hours per week so that she does not qualify for benefits is underemployed. The underemployed issue is a monster to tackle since it includes shifting employment rates, inflation calculations and regional cost of living estimates.

Minimum Wage v. Living Wage

The federal minimum wage is $7.25 per hour but can vary state-to-state depending on legislation. Linked to the issues of joblessness, living wage is the amount that a person working full time needs to make in order to live a “normal” life. Of course, the definition of normality is what politicians seem to be arguing. Housing standards are the benchmark for most living wage conversations. In about half of the states in the U.S., a person needs to make more than $15 per hour to afford a two bedroom apartment. In July of 2015, Sen. Bernie Sanders of Vermont introduced a bill that would raise the federal minimum wage to $15 per hour, matching living wage standards. The bill is sitting in committee currently.

Employee v. Independent Contractor

The way Americans are working is changing across every income level. A 2014 study commissioned by the Freelancers Union shows that 53 million Americans or about one-third of the workforce are freelancing. This shift comes with strong pros and cons. Technology is allowing working single parents the opportunity to work from home and create schedules that do not incur the high cost of child care. With an iPhone or other smartphone, a worker can use freelancing platforms like Uber or Handy to generate a living. This is a strong positive movement for single-parent families, some of the hardest hit by low income constraints. Unfortunately, being an independent contractor does not offer benefits and some employers are listing employees as contractors so that they do not need to pay benefits and taxes. Because health care is a large obstacle to self-employment, the Affordable Care Act went a long way to creating this new opportunity.

Truth v. Hype

Teasing apart the nonfactual rhetoric from good science is becoming more and more difficult to the detriment of the ones that need change the most. There are fringe populations that are gaining a voice based on conspiracy theories and marketing lies. As informed advocates, it is our job to bring social change to light with facts and evidence, despite the irrational fear that hype-mongers wish to spread.