Economic Development

Precarious Work and the Employment-based Safety Net

Welfare reform to encourage work doesn’t take into account how unstable jobs have become, especially for the poorest.

The Hidden Lives of America’s Poor and Middle Class The Hidden Lives of America’s Poor and Middle Class This series explores how current programs and policies for helping families escape poverty, build stability, move up the ladder, and invest in the future need to change.

The phone call with a job offer from Chicago City Custodial Services came just days before the La Casa family homeless shelter was going to evict Jennifer Hernandez for failure to find work. For 10 months, she and her two kids had been living on cash income below $2 per person, per day, moving from one shelter to the next across the city. Luckily, Chicago City didn’t care that her address marked her as homeless or that her broken glasses sat askew on her face. All this position required was a desire to work hard for little pay.

“I’m proud, I like to do my work,” Hernandez says. Her views are right in line with the work-based transformation of the US government safety net that started in the 1990s. Today, the government offers more aid to low-income, working families than ever before. Poor parents who can maintain full-time work get a big boost at tax time, often lifting them out of poverty and providing aid in a way that makes them feel incorporated into society, rather than isolated from it. This is a triumph of social policy.

Yet this new safety net is built on a decidedly shaky foundation. Beyond low wages, few jobs available to someone like Hernandez offer benefits such as paid time off. Labor law violations such as failure to pay overtime or forcing people to work off the clock are all too common. Getting enough hours is a core dilemma. Many service sector employers use “just-in-time” scheduling practices to peg labor costs to fluctuations in demand, causing changes in a worker’s schedule from week to week. A recent nationally representative survey of early career workers found that nearly half of part-time hourly workers got one week or less advance warning of their work schedules. Nearly half of all black, non-Hispanic hourly workers of any age got advance notice of their schedule of a week or less, and fluctuating work hours are quite common.

The interaction between precarious work and an employment-based safety net is a big part of why we’ve seen a sharp uptick in the number of families experiencing conditions like Hernandez’s. My own research with Kathryn Edin, using the most reliable survey data available to measure the incomes of the poor, finds that the number of families with children that report cash incomes no more than $2.00 per person, per day, more than doubled between 1996 and 2011, to roughly 1.5 million families with 3 million children. Numerous other indicators paint a consistent picture of worsening conditions among America’s poorest families. The number of families with children on SNAP (commonly known as food stamps) reporting zero cash income has more than quadrupled over roughly the same period, to 1.4 million families in 2014, and the number of homeless school children has roughly doubled just since the mid-2000s. Perhaps surprisingly, there is considerable evidence that these troubling indicators are driven not by some class of Americans that is completely detached from the labor market, but primarily by families with a history of work.

At first Hernandez liked her new job. Her team spent most days cleaning vacant apartments and office suites, with some empty homes sprinkled in. But as fall turned to winter, her team found themselves mainly cleaning foreclosed homes. “People would break in” and “turn them into crack houses,” she says. Scrappers—who strip homes of anything of value—“took the toilets, they took the sinks.” Utilities were long since disconnected, meaning no lights, no heat, and no running water.

The moldy air in these homes left Hernandez light-headed. Her immune system weakened, and she was an easy mark for viruses, which she passed on to her kids. Her repeated sick days led to fewer hours on each week’s schedule, as her manager concluded she was unreliable. As her weekly paycheck fell below $200, Hernandez determined she had to give notice and devote herself full-time to searching for another position. It took 10 months to find this job—how long would it take to find the next?

Those who fall through the cracks in today’s safety net often face many barriers to success. Hernandez has numerous health challenges, and precious little support from family and friends. Yet despite her health problems and her social network, Hernandez is very capable of work. She even says that work has a certain healing power, that it gives her “a sense of purpose.” Among the families we interviewed for our book, $2.00 a Day, this desire to work—to make a contribution—proved a common theme, but so did work instability. Many families would take a stable, full-time job and safe working conditions over a higher hourly rate.

Poverty researchers often distinguish between outcomes of the “working” and the “non-working” poor. Yet whether Hernandez is considered working or non-working is entirely a matter of timing. While spells living on virtually no cash income are an extreme form of this instability, the US Financial Diaries project finds that income volatility affects people well up the economic ladder. Pew’s findings suggest that Americans value financial security far more than income mobility, yet the number of Americans who report that they are financially secure is shockingly low. These independent studies offer a consistent diagnosis of the changing challenges for American families and some goals for policy interventions to do better. The more policy can take these lessons into account, the more successful it will be.

So what more can we do for families like Hernandez’s? Our primary objective should be to help Hernandez and those like her attain their goal: a chance to work at a decent, safe, and stable job.

One promising possibility is receiving increasing attention among policymakers these days—subsidized jobs. Policymakers could design job programs as public-private partnerships to create more jobs for struggling families who want to work. We have had some recent experience with a federal program that supported such efforts, with promising results. In 2009, the federal government sponsored a broadly popular short-term program through which states could provide incentives for employers to hire unemployed workers with serious barriers to work. Most states took part, and a federal investment of $1.3 billion yielded 260,000 jobs. Participating workers, employers, and policymakers all liked it. Yet we let the program expire.

Creating a more robust, permanent version of this program would improve conditions for those at the bottom. We must pair job creation with wrap-around social services and work supports. In $2.00 a Day, we argue that such a program might have spillover effects, such as improving participants’ mental and physical health, reducing involvement in the criminal justice system, and even increasing marriage rates.

Hernandez doesn’t see a hand-out from the government as a solution to her problems. More than anything else, she wants the chance to work a stable job. We, as a country, can do a lot more to help her make this wish come true and give her support that helps her maintain employment. And if we do it right, it may cost us a lot less than what we’re doing now.

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COMMENTS

  • BY David Marzahl

    ON January 21, 2016 05:06 AM

    Luke Shaefer, Katheryn Edin and the US Financial Diaries are undertaking critically important research.  Luke mentions the one time a year ‘bonus’ low-income families experience when they get their tax refund.  At the Center for Economic Progress (CEP) we tested how we could restructure the Earned Income Tax Credit (EITC) so that families get up to 50% of their refund in periodic payments, during the year they earn it rather than waiting for tax time.  The results, highlighted in our report http://bit.ly/1JkfybR are promising and provide an opportunity to explore the mix of policies needed to address the income volatility and financial instability facing low-wage workers and their families.

  • Dextet Francis's avatar

    BY Dextet Francis

    ON January 23, 2016 05:20 AM

    The volitility also affects middle class workers. The dramatic rise of “permatemps” - essentially just-in-time / on-demand employment over the past decade further increases the risk in wages, healthcare and retirement security. At the same time, the use of unregulated derivatives to offset financial risks creates instability in financial markets - leading to further instability - while the distribution of wealth (another form of security) widens. There is a terrible, fragile, balance being threatened, which has the potential for significant impacts on us all.

  • Bob Johnson's avatar

    BY Bob Johnson

    ON January 24, 2016 01:11 AM

    NAFTA! Let us be frank and use the word, they matter you know? Couple NAFTA with open borders to drive wages down entwined with the coming TPP and oh baby, we ain’t seen nothing yet.

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