The good news is that there are solutions for each of these three challenges, all of which would help get needed resources to families in a way that centers their dignity and respects their time. We should pursue them boldly, and ensure we are there to lift people up when they need it most.
A Safety Net
The safety net is the poverty-fighting tool of last resort. It is designed to reduce the inequality that our labor market and other institutions have created, and catch people when they fall on hard times. But there are three key ways in which California’s current safety net isn’t living up to this ideal.
The Safety Net Overlooks Populations
Although the safety net lifts millions of Californians out of poverty each year, some groups are overlooked because of gaps in eligibility or insufficient public funds to cover them. These groups include:
• Undocumented and mixed status families who are often ineligible or only eligible for reduced benefits.
• Working-age households with only part-time workers or no workers who miss out on safety net programs that are increasingly targeted to families with earnings.
• People with persistent barriers to work, such as domestic violence survivors, formerly incarcerated individuals, people exiting homelessness, and former foster youth.
The Costs of Time and Dignity
Applying for safety net programs and renewing them can be costly in terms of time, money, anxiety, and dignity. The application can be lengthy and confusing, and involves intrusive or even demeaning questions. There are often cumbersome reporting, verification, and work requirements for receiving and retaining benefits. And on top of it all, there can be direct money costs for things like tax preparation assistance or software. These types of barriers all reduce program participation.
Too Many Benefits Are Attached to Jobs
Many low-wage workers in California don’t have access to employer-provided benefits such as health insurance, retirement, and sick leave. These workers are disproportionately Black, Latino, and female. Independent contractors such as gig workers and day laborers face this problem as well, and are also not covered by social insurance programs like Unemployment Insurance and Workers’ Comp.
Extending Eligibility and Promoting Guaranteed Income Pilots
In some cases, the relevant eligibility requirements and budgeting shortfalls that lead to populations being overlooked are under California’s control (not the federal government), and can be addressed directly. To do that, eligibility should be extended to the overlooked populations, and where assistance falls short, be supplemented with a guaranteed income that ensures a minimum income floor for everyone. In the wake of the successful guaranteed income demonstration project in Stockton, California will roll out local guaranteed income pilots across the state in 2022.
Reducing Transaction Costs
Technology is a necessary, but insufficient, solution to this complex problem. While we must reduce time and paperwork through user-friendly apps, making that possible requires structural changes to the safety net programs themselves. These five changes—some of which must happen at the federal level—are key:
• Eliminate all program requirements that make people jump through hoops—such as work participation mandates and frequent eligibility recertifications.
• Coordinate requirements across programs, provide automatic referrals between them, and provide unified caseworker training.
• Align data and data-sharing between programs, prefill application forms, and offer automatic documentation of income and calculation of benefits.
• Create an integrated benefits system that explicitly centers people, not disparate government agencies. It should be designed to invite Californians who need help to get it, rather than to weed them out.
• Remove financial barriers to access support by providing free tax preparation assistance, free ITIN application assistance, and free smartphone plans.
Delinking Critical Benefits from Jobs and Bolstering Program Finances
For benefits like paid family leave, the simplest solution is to increase the wage replacement rate for low-wage employees and bolster the program’s finances. For other benefits, it is useful to trial “portable benefits” systems. By delinking critical health and retirement benefits from specific jobs, publicly-sponsored benefits systems can offer access to benefits for all workers. These systems can be funded through voluntary contributions by workers and can include public subsidies for individuals with low incomes. The federal Affordable Care Act (ACA) provided a foundation of portable health insurance benefits, and the state CalSavers program serves as a base for portable retirement benefits. If these systems expanded eligibility and provided greater public subsidies, they could assist in solving the job benefits problem for many low-income workers.
A better safety net is possible. It is a matter of dignity, efficiency, and respect.
Read our paper with the Stanford Center on Poverty & Inequality!
A Roadmap to An Inclusive Economy