6 Federal Policies That Fall Short of Supporting Working Families
Hannah Sheehy & Aysha Pamukcu
The United States has policies in place to help working families afford necessities like food, housing, and child care. Working families encompass many types of households, from single-parent families to grandparents as head of household. What these families have in common is that they have members out in the workforce — and many of them are earning low wages, making it hard to help their family make ends meet. Because raising a family is difficult, many federal policies are intended to provide a foundation of economic security to help families create a stable environment. This stability helps children reach their full potential and then contribute to a new generation of prosperity.
Yet federal policies intended to support working families are often outdated and inadequate. In response, some states and local governments have created policies to fill the gaps; in other locations, families languish and inequality grows. Read on to learn about 6 policies that fall short of fulfilling their promise to support the health and well-being of working families. If these laws affect your family or families you know, check out the resources in each section to learn more about the issues and potential solutions.
1. Family and Medical Leave Act
The Family and Medical Leave Act (FMLA) was a landmark piece of legislation when it was signed into law in 1993, providing eligible workers with up to 12 weeks of leave to care for a newborn, a newly adopted child, or a sick family member. Under the FMLA, workers who take this leave have peace of mind, knowing that they will continue to receive employee health benefits and won’t lose their job by taking leave.
However, unpaid leave doesn’t fully meet the needs of many working families. Families are forced to choose between being with their new baby or sick relative and putting food on the table or paying the bills. Half of workers who take leave through FMLA return to work not because they are ready but because they can no longer afford unpaid time off. The FMLA also has strict eligibility criteria that exclude about 40% of the workforce; these workers lack even the limited protections of the FMLA. Those without FMLA protections are disproportionately likely to be low-income or part-time workers. This gap in FMLA protection can have serious consequences. Caring for a sick child forces most low-income mothers to lose wages, and almost 1 in 5 low-wage working mothers has lost a job due to illness or caring for a family member.
Families’ health is better when workers can afford to take the leave they need. Employees recover from illnesses more quickly when they can take time off from work, and employees with paid sick days are more likely to see a doctor and undergo preventive screenings than those without. Paid family leave is associated with fewer infant deaths, increased breastfeeding, improved maternal mental health, and decreased stress for the whole family. Several states and cities have begun to step in with paid family leave and paid sick leave policies.
To learn more about the connection between paid leave and health, check out Paid Family Leave Ensures Health Equity for All, which includes an infographic, a fact sheet, and a literature review from ChangeLab Solutions.
2. Earned Income Tax Credit and Child Tax Credit
The Earned Income Tax Credit (EITC) and the Child Tax Credit lift millions of children out of poverty every year. The EITC in particular is a highly effective anti-poverty program, boosting income and employment for low-income workers. Not only are most adult recipients lifted above the poverty line, but kids who have benefited from expanded tax credits are more likely to finish high school and go to college and less likely to be in poverty after entering the workforce.
The Earned Income Tax Credit and the Child Tax Credit are beneficial for families’ health, resulting in more prenatal care, less maternal stress, and fewer babies born prematurely or at a low birth weight.
Despite these benefits, the Earned Income Tax Credit was weakened under the tax bill signed in December 2017, which diminishes the EITC’s value over time. While the tax bill increased the amount of the Child Tax Credit benefit, it excluded millions of children in low-income working families. The structure of tax credits also fails to meet the needs of low-income families because of its lump-sum payment structure. A pilot program found that participants overwhelmingly preferred the payment structure of receiving half their anticipated EITC in monthly installments, reporting more disposable income, less stress in meeting expenses, and a significant reduction in the use of payday lenders. Payday loans have very high interest rates that can quickly create a cycle of spiraling debt for working families trying to make ends meet.
The Earned Income Tax Credit and the Child Tax Credit are beneficial for families’ health, resulting in more prenatal care, less maternal stress, and fewer babies born prematurely or at a low birth weight. Weakening these tax credits puts families’ health at risk.
For more information on the many benefits of tax credits, check out the Center for Budget and Policy Priorities’ report, EITC and Child Tax Credit Promote Work, Reduce Poverty, and Support Children’s Development, Research Finds.
3. Minimum Wage
The Fair Labor Standards Act (FLSA), signed into law by President Franklin Roosevelt in 1938, created a federal minimum hourly wage of 25 cents. Among its goals was to “end starvation wages” and keep workers out of poverty. However, the FLSA does not automatically adjust the minimum wage to account for inflation, the cost of living, or other concerns; the minimum wage can be raised only by an additional act of Congress.
There is no county in the United States with a high enough minimum wage to meet the cost of living for a single-parent household.
Erosion of the minimum wage is a key driver of income inequality, accounting for two-thirds of the increase in the income gap between middle- and low-wage women between 1979 and 2009. The inflation-adjusted value of the minimum wage peaked in 1968 and has been on a downward trend ever since. The current federal minimum wage is $7.25, the same as it has been since 2009 — and it has lost a dollar in value due to inflation since then. Twenty-nine states and several municipalities have higher minimum wages than the federal standard; however, there is no county in the United States with a high enough minimum wage to meet the cost of living for a single-parent household. What’s more, over half of states have preempted local governments from increasing the minimum wage above state or federal standards. (Preemption is a legal doctrine that allows a higher level of government to limit or even eliminate the power of a lower level of government to regulate a specific issue.)
Income has a clear impact on health, and not having enough income puts a burden on families’ well-being. More than 1 in 4 minimum-wage workers are parents. When minimum wage fails to provide an adequate financial foundation for working families, it disproportionately hurts women and people of color, who are more likely to earn low wages and experience poor health related to poverty as a result. Low-wage jobs are also more likely to make it harder for workers to be there for their families, with characteristics like unpredictable scheduling or a lack of paid family and sick leave.
For more information on the link between minimum wage and health, check out the American Public Health Association’s policy statement, “Improving Health by Increasing the Minimum Wage.”
4. Child Care Development Block Grant
The Comprehensive Child Development Act of 1971 would have created a national network of federally funded child care centers, with a 2-year budget of $2 billion that included tuition subsidies for families, pediatric well-child visits, meals, and staff training. Despite bipartisan support, President Nixon vetoed the bill. It wasn’t until 1990 that the Child Care Development Block Grant (CCDBG) Act was passed. States use the funds from this program to subsidize child care for families with income below 85% of the area median. Most of this assistance comes in the form of vouchers or certificates that parents can use at a child care program of their choice. When the CCDBG was reauthorized in 2014 for the first time, it doubled the number of eligible children and increased funding by $100 billion.
High-quality child care can boost physical and cognitive outcomes for young children, with particularly dramatic effects for children from low-income families.
Despite this major expansion, finding high-quality, affordable child care remains a struggle for millions of parents. Many working families make too much to qualify for subsidies but still cannot afford child care. Even families that are eligible may not be able to access child care in the 20 states with waiting lists for assistance.
Research shows that high-quality child care can boost physical and cognitive outcomes for young children, with particularly dramatic effects for children from low-income families. By contrast, parents who cannot afford high-quality care — or who lack access to high-quality care because of their work schedule, lack of reliable transportation, or other barriers — are often forced to choose child care arrangements that do not meet their children’s needs. These low-quality settings are linked to behavioral problems and low school readiness, setting the stage for poor achievement in school.
For more information, check out the National Women’s Law Center’s child care assistance resources.
5. Housing Choice Voucher Program
The Housing Choice Voucher Program, created by Section 8 of the Housing and Community Development Act of 1974, serves 5 million people in 2.2 million families. Families who receive these vouchers may rent housing for a specified rate that is based on their region. The household is expected to contribute about 30% of its income, and the voucher covers the remainder. In addition to being the country’s largest form of rental assistance, the Housing Choice Voucher Program is also considered one of the best and most cost-effective ways to provide affordable housing.
Working families need housing that is accessible to vital resources like jobs, child care, and social services.
Yet, due to chronic underfunding, the program serves only a fraction of eligible families. Many families remain on the program’s years-long waiting lists. Others can’t even do that: nearly half of housing authorities have frozen their waiting lists, preventing new families from joining. Despite attempts to correct long-standing issues that confine many voucher holders to high-poverty, low-service areas, discrimination against voucher holders remains rampant and further drives low-income families into racially and economically segregated neighborhoods.
Families need safe, stable, and affordable housing in order to thrive. Working families in particular need housing that is accessible to vital resources like jobs, child care, and social services. Children who are housing insecure are at greater risk for food insecurity, decreased health, developmental delays, and hospitalization. Low-income workers increasingly are forced to live at costly distances from their jobs, draining both time and money that could be used for other purposes. Housing that is conveniently located, well designed, and affordable can support family health. Quality housing has a well-established connection to physical and mental well-being.
To learn more about how housing can be used to improve families’ well-being, check out Preserving, Protecting, and Expanding Affordable Housing from ChangeLab Solutions. You may also be interested in the BLOCK Project, which highlights opportunities local institutions have to create a healthy housing system.
The Supplemental Nutrition Assistance Program (SNAP) is the nation’s largest food assistance program. SNAP helps millions of families in poverty put food on the table and has an especially positive impact on children who are very poor. SNAP lifted 8.4 million people out of poverty in 2015 and has reduced the number of children in deep poverty by half. SNAP assists both working families and families with adults who can’t work for various reasons (eg, advanced age, disability). Among families receiving SNAP benefits that had children in 2004, 87% of adults who could work had worked the previous year or would be working the following year. In other words, most family members on SNAP who can work do work. What’s more, the number of SNAP beneficiaries with some earned income has tripled over the last decade, surging sharply after the Great Recession and now tapering off. The number of families with earnings who receive SNAP indicates a pressing need for nutrition assistance among working families.
The primary shortcoming of SNAP is that there isn’t enough funding, given that many families using SNAP still fall short of meeting their nutritional needs. In spite of the evidence that most SNAP recipients who can work are already working, a proposal in the 2018 Farm Bill would implement additional work requirements for eligible adults to continue receiving SNAP assistance — requirements that could decrease SNAP participation by a million people over the next 10 years.
In addition to being a crucial anti-poverty tool, SNAP has a direct impact on alleviating hunger; 93% of the program’s spending goes straight to SNAP recipients for much-needed food purchases. This funding helps families who sometimes have to make difficult choices between fundamental needs like housing and health care. For working families, having food on the table and the ability to direct limited resources elsewhere often makes the difference between poverty and independence or between health and sickness.
To learn more about how SNAP supports working families, check out The Relationship Between SNAP and Work Among Low-Income Households from the Center on Budget and Policy Priorities.
This piece is part of the Building Healthy, Equitable Communities Series and is the second of our policy posts exploring the often unexpected ways that laws and policies can hinder community health — and ideas on how to remedy these problems. Take a deeper dive into the topic of health equity through archived recordings of the companion webinar and conversation with an expert panel.
Hannah Sheehy is a senior policy analyst at ChangeLab Solutions, where she focuses on early childhood policy and youth engagement in policy and advocacy processes. She also leads evaluation efforts in several program areas.
Aysha Pamukcu is a senior staff attorney at ChangeLab Solutions, where she uses law and policy to make communities more equitable and inclusive. She leads ChangeLab Solutions’ health equity practice. Through research, training, and technical assistance, she helps communities improve their policies on maternal and child health, healthy retail environments, and just food systems.