No need to punish the poor or raise taxes to get people off welfare
President Donald Trump’s goal of moving people off Medicaid and food stamps is commendable.
His methods, though, are unsound.
Supporters say pulling the safety net out from under 14 million Americans will appeal to the selfish and merciless as tough love, and many will gleefully count their tax savings. But such an approach would spread suffering, particularly because most of the people losing benefits under Trump’s budget proposal will be impoverished pregnant women and children.
Luckily, Congress will draft something very different, and there are three ways of achieving Trump’s goals that do not punish the poor or raise taxes.
1. One of the biggest problems for low-income laborers is simply collecting their pay. Thousands of employers refuse to pay minimum wage, and many skip out without paying their employees at all. These companies know the chances of a low-income worker finding a willing government investigator or a competent attorney
are very slim.
“In the 10 most populous states in the country, each year 2.4 million workers covered by state or federal minimum wage laws report being paid less than the applicable minimum wage in their state — approximately 17 percent of the eligible low-wage workforce,” the left-leaning Economic Policy Institute found. “The majority of workers with reported wages below the minimum wage are over 25 and are native-born U.S. citizens, nearly half are white, more than a quarter have children, and just over half work full time.”
Employers cheat workers out of about $15 billion a year in the 10 most populous states, according to the institute. Other researchers estimate that nationwide they steal $35 billion a year from workers.
Companies cheated 265,000 Texans out of an average of $85 a week, or 30 percent of their pay, the institute found. That’s $1.1 billion. The problem is particularly severe on construction sites, where 20 percent of workers report getting ripped off.
Workers can file complaints with the Texas Workforce Commission or the county attorney. But if the dispute is less than $1,500, the theft is only a misdemeanor.
“Most of the employment rights issues, as well as the health and safety issues faced by construction workers, are already addressed by existing laws, but enforcement is often weak or nonexistent,” according to researchers at the University of Illinois at Chicago. “State and federal policymakers should increase funding and improve the efficiency of local agencies to enforce laws.”
2. Another sure-fire way to move people off government assistance is to guarantee women the same pay as men doing the same job. The adult poverty rate in Texas could be slashed from 10 percent to 4.9 percent if women were paid the same as men, according to the Institute for Women’s Policy Research. The poverty rate among single Texas mothers would drop from 31.4 percent to 19.5 percent.
“Persistent earnings inequality for working women translates into lower lifetime pay for women, less income for families and higher rates of poverty across the United States,” researcher Jessica Milli concluded. “If women in the United States received equal pay with comparable men ... the U.S. economy would have added $512.6 billion in wage and salary income.”
3. The granddaddy of all solutions to cutting Medicaid and food stamps is to raise the minimum wage and guarantee universal health care.
Under Texas law, pregnant women and children are the only people practically eligible for Medicaid, besides the disabled and elderly. A single mother with one child is eligible for Medicaid or the Children’s Health Insurance Program if their annual household income is less than $24,000. The same family is eligible for food stamps if their income is less than $26,448 a year.
Minimum wage, though, is only $7.25 an hour, or $15,080 a year, if she is lucky enough to work full time. That’s why major companies often teach their workers how to apply for Medicaid, CHIP and food stamps during employee orientation, because they know the government will provide benefits for their workers and they won’t have to.
If the federal government had indexed the minimum wage to inflation and worker productivity in 1968, it would be $12.75 an hour today, or $26,520. That’s above the Medicaid and food stamps thresholds.
And as I explained two weeks ago, if the U.S. spent the same per capita on health care as Europe, we could provide universal care for the same price we pay now for Medicare, Medicaid and other government health programs.
Trump’s budget is intended to cut government spending and get people back to work. Addressing these issues would achieve those goals, but only by requiring employers to behave responsibly.
Will Congress adopt these common-sense worker protections over the objection of corporate lobbyists? Will Trump keep his promise to protect the little guy and bring back good-paying jobs with guaranteed health care for all?
Forgive me if I don’t hold my breath.