Helping Low-Income Families Is Good for Business, Government

by Mike Hall, Nov 28, 2007

It’s not unusual for state legislatures to hand out tax breaks, subsidies and other financial goodies to Big Business. But shamefully, some lawmakers need to be convinced to focus on the needs of low-income working families.

The Sloan Work and Family Research Network at Boston College has pulled together a compelling list of the challenges low-income working families face and how legislation aimed at those working families benefits the state and the business community.

The latest installment of the group’s Policy Leadership Series reports:

Legislation supporting low-income working families can meet the state’s fiscal goals, encourage workforce participation and promote a healthy, productive workforce.

The report notes there are 9.2 million low-income working families—with 20 million children—in the United States. That’s about one-quarter of all working families. Low income is classified as earning less than 200 percent of the federal poverty level or $36,784 a year for a family of four. However, 27 percent of the low-income working families fall below the $18,392 a year federal poverty line for a family of four.

Not surprisingly, the report finds health care coverage is a major challenge for low-income working families. More than 33 percent of children in low-income families have at least one parent without health care coverage and 40 percent have foregone necessary medical treatment because they could not afford it.

The majority of low-income working families also have no paid leave, making it difficult to balance family and work. Further, these families pay a disproportionate amount of their income for housing and have significantly less access to child care resources, including employer–provided financial assistance to purchase child care.

The report highlights specific initiatives that can benefit low-income working families as well as business and local governments.

Providing low-wage workers with paid leave ensures that they can remain employed. Because low-income workers are significantly less likely to have any paid leave benefits than those earning higher wages, many low-income workers struggle to remain connected to the workforce when facing a personal or family illness or injury.

Job training and education programs targeted at low-income workers can help businesses meet skill shortages, increase productivity, and retain workers while also increasing a state’s attractiveness to business.

Low-income working families without child care assistance face greater work-family conflict. Those not receiving subsidies were also less amenable to schedule changes and reported higher levels of absenteeism.

Indiana state Rep. Phil Hoy (D) writes in the report that state legislatures can help low-income working families and take a step to a “more just and fair society” by requiring companies that do business with the a state to pay a living wage. But he adds that a living wage:

is only a step toward a more just and fair society in which the human dignity of all individuals is respected. Many other issues need to be addressed, including comprehensive health care coverage, affordable housing, availability of child care, safe working conditions, and educational opportunities for all. It is a long road to an equitable society and it is essential that we continue to move forward.

In the past year, 26 states have proposed legislation for low-income working families, including bills that:

• Support access to health care coverage;
• Investigate the impact of economic development subsidies;
• Establish fair wages or protections; and
• Encourage or support the use of the Earned Income Tax credit (EITC).

Click here to read the full report and here for more information on work and family issues from the Sloan Work and Family Research Network. Click here to learn how union membership can a make a difference in income, health care and other areas for low-income workers.

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