ECONOMIC MOBILITY
The Ag Committee’s report, in its first finding on economic mobility, sets the table: “Unemployment and underemployment are leading causes of poverty, and promoting pathways to employment is the best way to help individuals climb the economic ladder out of poverty and into self-sufficiency.”
According to the National Commission on Hunger, employment is crucial to helping low-income people lift themselves out of poverty.
“While many families on SNAP work, there are a large number of households that do not report earned income, which is income that a person receives for doing work (such as salaries, wages, tips, etc.),” the report states. “According to the most recent ‘USDA SNAP Characteristics Report,’ 68 percent of total SNAP households reported no earned income. When looking at the SNAP households that one might expect to generate an earned income (e.g., households that do not contain children, disabled, or the elderly), only 20.6 percent of these households reported earned income.”
The report states it should come as no surprise that there’s a connection between employment and income.
“In 2014, according to the U.S. Census Bureau, only 2.7 percent of full-time workers lived below the Federal poverty level, compared with 32.3 percent of adults who do not work,” the report states. “Even part-time work makes a significant difference, with only 17.5 percent of part-time workers living below the poverty level.”
Jim McGovern, a Massachusetts Democrat and the Subcommittee’s ranking member, is quoted in the report: “It is not just about giving people food. It is about worker training. It is about getting people in the community back on their feet,”
The second finding in the “Economic Ladder” theme: “Better enforcement of work requirements is needed in some states, and enforcement needs to be coupled with more effective SNAP employment and training (E&T) programs.”
The Committee found that SNAP administrators all too often fail to emphasize the importance of work.
David Stillman of the Washington Department of Social and Health Services said in the report: “While [SNAP] has had a requirement to include an [E&T] component since 1998, most states’ programs have consisted of a referral to a job search program.”
The report noted the importance of employment and training programs for getting SNAP recipients into the working world. As proof, the report referred to a well-known Fresno leader with long experience in job creation.
“Pete Weber with the Fresno Bridge Academy cited research from the Center on Budget and Policy Priorities on common characteristics across effective E&T programs,” the report states. “They found that the most effective programs include providing education or remediation to allow individuals with low education levels to access industry-specific training programs; individualized, hands-on work to build life skills; and provision of supportive services (transportation and flexible funds to help purchase items to help individuals work or look for work).”
The report recommends that states must be more diligent in enforcing work requirements. This is important both to individual SNAP recipients and the integrity of SNAP itself.
The report quotes Dr. Ron Haskins with the Brookings Institution: “There is little evidence that harsh provisions are necessary to encourage able-bodied adults to work. Reasonable requirements, strongly enforced, and accompanied by the carrots for work provided by the work support system, may well be enough to encourage adults to work.”
For those who can work, Haskins added, providing them with the tools to be successful in a job “builds the participants’ confidence in their own natural ability and self-worth.”
The third and final finding under the “Economic Ladder” theme: “Combined with other welfare programs, SNAP recipients may face a ‘welfare cliff’ when they are just above the income eligibility level, which can create disincentives to finding work or increasing earnings.”
This finding may well be the most important in the report.
“SNAP does not operate in a vacuum,” the report states. “The recipients of one Federal program are often the recipients of multiple Federal programs. During a joint hearing on the welfare cliff, then-Chairman of the House Ways and Means Committee Paul Ryan pointed out that, ‘right now we have a safety net that is designed to catch people falling into poverty. What we need is a safety net to lift people out of poverty.’”
The report refers to the most recent “SNAP Characteristics Report,” which noted that 20 percent of SNAP recipients receive Supplemental Security Income, 24 percent receive some form of Social Security benefits, 9 percent receive child support enforcement payments, 7 percent receive support from Temporary Assistance for Need Families and 4 percent receive unemployment insurance.
The report explores what it calls the “welfare cliff.” This refers to the dilemma faced by someone whose income is low enough to receive substantial government help. If that person goes to work, or gets a better job, that would boost income a bit but could move that person above a certain threshold, thus triggering a devastating drop in welfare payments.
The report states: “Individuals may be forced to decide whether to reduce the number of hours worked and gain more government benefits, or work and lose said benefits but have less monthly income than if the recipient was to forgo working.”
What does the welfare cliff look like in real life?
The report draws on the experience of Chanel McCorkle, a SNAP recipient: “After I lost my job I applied for Temporary Cash Assistance through the Department of Social Services. Thirty days after I applied I was granted cash assistance, and immediately received daycare vouchers and an increase in food stamp assistance. The daycare vouchers I so desperately needed while I was working were finally granted to me after it cost me my job.”
The answer to the welfare cliff doesn’t wholly rely on reforming SNAP, the report states. The key is coordination among all agencies providing welfare to ensure that basic human needs are met while encouraging productive labor.
The report includes an example of the welfare cliff as described by Erik Randolph of the Illinois Policy Institute: “A single parent in Lake County, Illinois, who earns $12 per hour brings home just over $22,000 in net pay. However, that same single parent is eligible for an array of welfare benefits as follows:
“1.) Refundable tax credits from the Earned Income Tax Credit, the Additional Child Tax Credit, and the Illinois Earned Income Tax Credit; 2.) Food assistance, including SNAP, food packages from WIC, and the National School Lunch Program; 3.) Housing assistance from the Housing Choice Voucher Program; 4.) Subsidized child care services; 5.) and Medical assistance for both the parent and her children.”
When the value of these benefits is totaled, Randolph said, “it comes to an astounding $39,534, bringing the total net receivables in terms of earned income and benefits to $61,655. In comparison, suppose you earn $18 per hour, bringing home about $33,000 in net pay. That is a gain of about $11,000 in earned income. However, your potential welfare benefits will drop drastically to $5,236 from $39,534, for a loss of more than $34,000. Why would any sane person voluntarily give up $34,000 in benefits to gain only $11,000?”
