# Presentation: 170040

## Making “Work Supports” Work:Illinois as Case Study

- Nancy K. Cauthen, PhD
- Deputy Director, NCCP
- ACF Annual Welfare Research and Evaluation Conference
- Arlington, VA   •   June 6, 2007

## National Center for Children in Poverty

- NCCP is a non-partisan, public interest research organization at Columbia University’s Mailman School of Public Health.
- NCCP uses research to promote the economic security, health, and well-being of America’s low-income children and families.
- Our ultimate goal: Improved outcomes for the next generation.

- www.nccp.org

***Who We Are***

- www.nccp.org

*Defining the Challenge:*
*When Work Doesn’t Pay*

## Defining the Challenge

- Most welfare leavers earn $8-$9 an hour.
- Even working full time/year round, a parent earning $8 an hour earns **less than $17,000** a year.
- That’s just under the official poverty level for a family of three—and far less than it takes to make ends meet.

- www.nccp.org

***Many TANF leavers don’t earn enough to support  their families ***

## Defining the Challenge

- Benefits such as health insurance, paid sick leave, and retirement plans.
- Flexibility to meet family needs.
- Stable income and job security.

- www.nccp.org

***Low-wage workers typically lack the benefits that supplement higher-income employment***

## Defining the Challenge

- In the absence of higher wages and employer-sponsored benefits, benefits such as earned income tax credits, child care assistance, health insurance, and food stamps can help.
- These benefits encourage, support, and reward employment.
- Work supports help low-wage workers make ends meet and increase employment stability.

- www.nccp.org

***“******Work supports” can help close the gap between low wages and basic expenses***

**Notes:**
Note that not everyone gets benefits for which they are eligible.

Most families do not receive multiple benefits, so part of the challenge is increasing access.

## Defining the Challenge

- As earnings increase, families begin to lose work supports. Small increases in earnings can trigger sharp reductions in benefits.
- The result? Families can earn more without improving their financial situation. They may end up no better off—or even worse off—than before.
- Sometimes, **working more doesn’t pay**.

- www.nccp.org

***But work supports present a paradox***

- www.nccp.org

*A Hypothetical Example:*
*The Johnson Family*

## A Hypothetical Example

- Angela Johnson is a single mother with two children, a 3-year-old and a 6-year-old.
- The Johnsons live in Chicago, where they rent an apartment.
- To meet her family’s basic needs, Angela needs to earn $17 an hour working full-time.

- www.nccp.org

***Single-parent family of 3 in Chicago***

## A Hypothetical Example

- www.nccp.org

**The Johnson Family’s Basic Needs Budget**

- Source: NCCP’s Basic Budget Calculator, Illinois, 2006.

|  | Annual | Monthly |
| --- | --- | --- |
|    Rent and utilities | $10,812  | $901  |
|    Food | $5,266  | $442 |
|    Child care | $9,924  | $827 |
|    Health insurance | $2,212  | $184  |
|    Transportation | $900  | $75 |
|    Other necessities | $4,341  | $362  |
|    Payroll and income taxes | $2,429  | $204 |
| TOTAL | $35,884  | $2,990  |
|  Hourly wage needed = $17 an hour, full time  |  |  |

**Notes:**
Bare-bones budget:
includes only the most essential daily living expenses.
based on conservative assumptions--access to employer-sponsored health insurance; public transportation
does not include out-of-pocket health expenses such as premiums, copayments, and deductibles
provides no cushion to withstand a crisis 
does not allow for investments in a family’s financial future, such as savings to buy a home or for a child’s education. 
nor does the budget allow for expenses that improve a family’s quality of life, such as enrichment activities, entertainment, and after-school activities (for example, sports, clubs). 

Families living on this budget are hard-pressed to survive, much less thrive.

## A Hypothetical Example

- Angela makes only $8 an hour at her full-time job--not $17 an hour.
- At $8 an hour, her annual earnings are $16,640--just under the federal poverty level.
- This leaves the Johnsons with an $18,000 annual gap between earnings and expenses.

- www.nccp.org

***The Johnson Family (cont)***

## www.nccp.org

## A Hypothetical Example

- In this example, the family receives the following work supports: earned income tax credits, public health insurance, a child care subsidy, and food stamps.
- But as Angela’s earnings increase, the family encounters benefit “cliffs.”

- www.nccp.org

***The Johnson Family (cont)***

## www.nccp.org

**Notes:**
Explain graph

These results are based on a tool developed by NCCP called the Family Resource Simulator. I’ll mention a little more about the tool in a minute, but there are a couple things to note here:
-  the FRS calculates the interaction of earnings, expenses, and public benefits
-  it can generate graphs like this for about 80 cities 14 states 
-  users can vary the city and family type (number of parents, number and ages of children, -  can also vary assumptions about expenses and benefit participation 

- www.nccp.org

*Making “Work Supports” Work:*
* **Finding Solutions to Make Work Pay*

## Making “Work Supports” Work

- Making “Work Supports” Work is a collaborative project in which NCCP works with state and national partners to formulate policy improvements to make work pay for low-wage workers and their families.
- The long-term goal is to create a national work support system that:
- Enables full-time workers to provide for their families when wages are insufficient.
- Ensures that earning more always improves a family’s financial bottom line.

- www.nccp.org

***Project Overview***

## Making “Work Supports” Work

- Project uses NCCP’s Family Resource Simulator--a policy analysis tool that calculates net family resources as earnings increase, taking benefits and expenses into account.
- Covers 80 localities across 14 states and DC:
- AL, CA (summer 2007), CO, CT, DC, DE, GA, IL, LA, MA, MD, MI, NY, PA, TX

- www.nccp.org

***The Family Resource Simulator***

**Notes:**
Can be used to model both existing and alternative policies.

## Making “Work Supports” Work

- Partners for Illinois work include:
- Sargent Shriver National Center on Poverty Law
- Voices for Illinois Children
- Center for Law and Social Policy (CLASP)
- NCCP is working with these partners to identify, model, and estimate costs for state-specific policy reforms.

- www.nccp.org

***Making “Work Supports” Work in Illinois***

## www.nccp.org

## www.nccp.org

## www.nccp.org

## www.nccp.org

## www.nccp.org

## Making “Work Supports” Work

**Visit NCCP’s website:**
- _www.nccp.org_
**Contact me:**
- Nancy K. Cauthen, Deputy Director
- 646.284.9626
- cauthen@nccp.org

- www.nccp.org

***For More Information***