The High Public Cost of Low Wages

Low Wages Cost U.S. Taxpayers $152.8 Billion Each Year in Public Support for Working Families

Even as the economy has at last begun to expand at a more rapid pace, growth in wages and benefits for most American workers has continued its decades-long stagnation. Real hourly wages of the median American worker were just 5 percent higher in 2013 than they were in 1979, while the wages of the bottom decile of earners were 5 percent lower in 2013 than in 1979.¹ Trends since the early 2000s are even more pronounced. Inflation-adjusted wage growth from 2003 to 2013 was either flat or negative for the entire bottom 70 percent of the wage distribution.² Compounding the problem of stagnating wages is the decline in employerprovided health insurance, with the share of non-elderly Americans receiving insurance from an employer falling from 67 percent in 2003 to 58.4 percent in 2013.³

Stagnating wages and decreased benefits are a problem not only for low-wage workers who increasingly cannot make ends meet, but also for the federal government as well as the 50 state governments that finance the public assistance programs many of these workers and their families turn to. Nearly three-quarters (73 percent) of enrollees in America’s major public support programs are members of working families;⁴ the taxpayers bear a significant portion of the hidden costs of low-wage work in America.

This is the first report to examine the cost to the 50 states of public assistance programs for working families. Read more…