By: KATHERINE HEMPSTEAD
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We’ve reached an inflection point in our economic recovery from the COVID-19 pandemic. The unemployment rate currently stands at 3.4 percent — one of the lowest on record and far below the nearly 15 percent rate at the outset of the pandemic. But the labor force participation rate (the share of people working or seeking work) has not yet returned to pre-pandemic levels. Moreover, the gold standard for an equitable economy — secure, well-paying jobs for all who need them — remains elusive.
Recent legislation passed by the House of Representatives would expand existing work requirements for Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF) participants, and add them for Medicaid beneficiaries. This would be a colossal mistake.
Following years of careful examination of this issue, a new white paper released by the Robert Wood Johnson Foundation highlights the extensive research showing that work requirements do not increase employment or chart a path to self-sufficiency. Instead, they take necessities like food and healthcare away from people who can ill afford to lose them and put heavy cost burdens on states and localities. Our nation needs a thriving economy. But expanding work requirements is not the way to get there.
Advocates of work requirements believe that people receiving economic assistance prefer government dependency over self-sufficiency. The truth is very different. Nearly 3 in 4 SNAP participants in households with working-age adults without disabilities are employed at some point within the year; for households with children, it is nearly 90 percent. More than half of non-elderly Medicaid enrollees are working — sometimes multiple jobs — and nearly three-quarters live in a family where at least one member is working. Most of the rest have caregiving responsibilities and/or health problems.
Sizable shares of those subject to work requirements wind up losing their benefits. The reasons vary. Some are working, but their schedules may not meet the monthly work requirements throughout the year. Others may be temporarily between jobs, face barriers to employment that do not qualify for exemptions, or are stymied by the additional administrative burdens associated with work requirements that excessively complicate their applications.
The consequences can be severe. Less than a year after Arkansas became the first state to institute work requirements for Medicaid beneficiaries in 2018, 18,000 residents lost their health insurance. The fallout included increased medical debt and interruptions in care, such as losing access to needed medications. There was no evidence of increased employment.
When SNAP work requirements were reinstated in several states following a temporary suspension during the Great Recession of 2008, program participation fell significantly, with no evidence of increased employment or higher earnings.
A study that linked SNAP and earnings data in Virginia similarly found a reduction in enrollment coupled with no employment effect. The study authors concluded that “per dollar of public expenditure, eliminating work requirements would likely transfer more resources to low income adults than other programs targeting the same population.”
SNAP participants who lose eligibility are mostly poor and at risk for poor health outcomes. A Congressional Budget Office assessment reported that most people losing benefits have “few or no other sources of income and many of them are homeless.” Given SNAP’s proven connections to better health outcomes among participants, losing benefits due to an inability to meet stricter work requirements would likely have health impacts.
For states, the economic consequences of expanded work requirements would be catastrophic. Enrollment declines would mean a massive loss of federal funding coupled with an increase in financial hardship for individuals and families. The Department of Health and Human Services estimates that as many as 21 million people are at risk of losing their Medicaid coverage if work requirements are imposed, including about 25 percent of those who gained eligibility when states expanded their Medicaid programs under the Affordable Care Act (ACA).
A new Congressional Budget Office analysis projects that work requirements would result in a decline of more than $100 billion in federal Medicaid expenditures over the next 10 years. States would be faced with an unenviable choice between whether to make up the 90 percent federal share with their own funds or deal with the consequences of a large increase in the uninsured population. Similarly, the loss of federal SNAP and TANF dollars would place severe pressure on state and local governments, not to mention food pantries and other charitable assistance programs.
Instead of hurting people who rely on these vital programs, policymakers should invest in an effective and compassionate social safety net and enact policies that help working parents and caregivers keep their jobs.
An additional $1 billion in SNAP funding during economic downturns is associated with a $1.54 billion increase in gross domestic product and supports more than 13,000 new jobs.
States that expanded Medicaid eligibility under the ACA have reaped economic and health benefits; the states that have not yet taken that step should do so.
The development of social programs in the United States to assist those in need has been stunted by chronic ambivalence. Is the objective to wage a war against poverty or a war against the poor? Policies like a higher minimum wage, paid leave and affordable child care effectively address the former. Work requirements, on the other hand, serve the latter objective and are as punitive as they are ineffective.
We can’t balance our budget on the backs of the poor. Nor should we try. Work requirements are the wrong answer, this time and every time.
About the Author: Katherine Hempstead, Ph.D., is a senior policy adviser at the Robert Wood Johnson Foundation. Twitter: @khemp64.