If my state was serious about ending poverty, we would focus on skill-building instead of work requirements
It’s easy to say people have to work– but it’s much more difficult to address people’s actual barriers to securing a good job. Recently Indiana applied for a waiver from the federal government to require people who receive Medicaid health insurance to work, volunteer or go to school for at least 20 hours a week. I wish this was the easy fix to move people from poverty to the middle class, but my decade of experience tells me otherwise.
These work requirements are based on erroneous assumptions about who is insured by Medicaid in Indiana. For one, most working-age, non-disabled Hoosiers insured through Medicaid are already working. To qualify for Medicaid in Indiana, a single adult must earn less than $16,956 per year. Unfortunately, people working in retail or other such low-wage jobs often don’t have regular schedules they can count on. Their employers might schedule them for 25 hours one week, then 18 the next — even if employees want to work more. Now, with a 20-hour Medicaid work requirement in place, multiple weeks of getting fewer than 20 hours of work will cause some people to lose their health insurance.
Second, consistent Medicaid insurance supports people’s ability to stay on the job. Poor health makes it more likely that workers will miss work due to untreated illness or injury. A loss of Medicaid insurance therefore increases the chances of a worker also losing a job due to preventable work absences.
Third, job growth in Indiana means businesses are hiring — but they want to hire trained, skilled workers. Record low unemployment means that people who aren’t working full time probably don’t have the education and training required to qualify for those jobs. About 85 percent of the jobs in Indiana require more than a high school diploma, yet most Hoosiers who earn poverty-level incomes and therefore qualify for Medicaid don’t have any education beyond high school.
These Hoosiers will need to enroll in a job training or community college program to qualify for one of these in-demand jobs, but Medicaid work requirements create “red tape” that make that hard. Training programs aren’t always measured in hourly increments and they don’t usually allow people to enroll at any given time. And because job training is already underfunded, some programs have waitlists. In short, there’s no guarantee that a job training program will have an open space with the right number of hours just as someone’s Medicaid work requirement kicks in.
You can imagine how these arbitrary work requirements frustrate the goal of helping people move out of poverty for the long-term. Think of the single young adult working a low-wage job sitting down with a career counselor and developing a plan to pursue a new, higher-paying career in healthcare, business, or information technology. This Hoosier may plan to enroll in a job training program at a local nonprofit for 18 hours per week.
But just when this young adult thinks she’s figured out a plan for her future, she learns that the state of Indiana will require Medicaid beneficiaries like her to work, attend school, or volunteer, for at least 20 hours per week — 2 hours more than her plan calls for. She’ll have to document those hours too. State leaders just mounted a huge new hurdle for this young woman.
She may consider enrolling in a 3-hour community college class that’s irrelevant to her training plan or struggle to find the right place to volunteer because she’s trying to fit the new requirements around the training schedule that she’s already established. Because the state wants to ensure that she’s sufficiently “engaged” in her community before they provide her with basic health insurance, Indiana just made it tougher for one of its promising young people to complete the training she needs in today’s economy.
If you were the young person in that scenario, you could see how it might seem easier for you to just give up on your dream, hunker down and continue to work that low-wage, low-skill job so that you can keep your health insurance. That’s the exact scenario that traps people in poverty — working in low-wage jobs that offer little opportunity for advancement instead of training for higher-paying jobs that enable them to provide for themselves without government assistance. That’s how work requirements lead to the very outcomes that everyone wants to avoid.
If policymakers in Indiana, and the nation for that matter, are serious about helping people move out of poverty, they would focus on skill-building instead of work requirements. There are effective workforce development programs that help people move from very low incomes to jobs that pay family-sustaining wages, but these programs cost money.
Instead of adding work requirements to safety net programs like Medicaid, we should make the tough, but effective, decision of investing in quality workforce development programs that meet people at their various skill levels and address barriers they may have to participating in training and work, like transportation and child care. Between 2015 and 2016, about 1.3 million people completed their participation in the nation’s primary workforce training programs for adults, but there are nearly 57 million low-income adults between the ages of 18 and 64 the country. More funding is required to meet the substantial training needs of people in or near poverty.
Fully funding workforce development programs and work supports are key steps in helping people move along the sustainable path out of poverty. Indiana cannot bypass these key steps and move people to the middle class by just announcing a requirement for people to work. To reach its poverty-reduction goal, the state must address people’s actual barriers to obtaining family-supporting jobs.
My state may be too far down the wrong path in trying to address poverty for people enrolled in Medicaid. But it’s not too late for other states and our federal government to invest in skills training and the safety net so that people with low incomes have a realistic path to the middle class.