April 05th, 2023
Devon Gray is President of EPIC.
Editor’s Note: This article is adapted from Ending Poverty in California: A Blueprint for a Just and Inclusive Economy, a roadmap for eliminating poverty in California developed by the Stanford Center on Poverty and Inequality (lead author, David Grusky).
California’s safety net is intended to help individuals and families striving for economic mobility through programs that include unemployment benefits and assistance with basic needs like food, housing, healthcare, childcare, and more.
However, there are three main areas in which California’s safety net is failing to provide adequate supports, including::
Previously, my colleague Patrice wrote about transaction costs. In this article, I’ll review our state’s failure to provide safety net coverage for “excluded households.”
Although the safety net lifts millions of Californians out of poverty each year, gaps in eligibility or insufficient allocation of public funds keep many Californias from getting the assistance they need. The very groups that face the most extreme discrimination are often the ones who are excluded and not receiving adequate support. There are three excluded groups, in particular, that need increased access to assistance:
Let’s look at each group in turn.
Undocumented individuals have a poverty rate that is more than twice that of U.S.-born individuals, yet are often ineligible for federally-funded assistance such as CalFresh, the federal Earned Income Tax Credit, and state unemployment benefits.
Mixed-status families are often only eligible for reduced benefits, and even documented immigrants have a complicated eligibility status that depends on such factors as the year they arrived in the U.S., their current immigration status, and the number of years they’ve worked in the U.S..
The poverty rate for single adults living alone is more than twice the rate of married or cohabiting adults. That’s because adults without children receive very limited support from federal and state refundable tax credits, cash assistance (which is locally funded for California adults without children), and other programs.
Federal and state programs are increasingly set up to assist families that are well-attached to the labor force. As a result, the poverty gap between households with only part-time workers (or no workers at all) and households with at least one full-time, full-year worker is growing.
Because of this, the California’s safety net chronically underserves many groups with persistent labor market challenges, including:
These people are often excluded from the labor market, then failed again by the safety net.
The safety net is intended to kick in when our labor market and other institutions fail, but it implicitly treats low-income populations, including those outlined above, as undeserving of assistance.
This result arises, at least in part, because California is shackled to federal rules and guidelines. The largest safety net programs are federally funded (either wholly or primarily) and incorporate eligibility rules and implementation guidelines set by the federal government. Though the most straightforward solution would be to address these federal problems with federal reforms, such action is not likely to happen in the near future. As such, we need fallback solutions.
What sort of solutions should California explore?
One fallback is to use local and state funds to operate parallel programs that provide support to excluded individuals, thereby compensating for the federal shortfalls. Examples include California’s Young Child Tax Credit created for families with low incomes and at least one child under age 6, as well as the California Earned Income Tax Credit. The Golden State Stimulus payments also provided some relief to excluded populations during the pandemic. A guaranteed income would insure a minimum income floor for everyone and we should look at the local pilots underway across the state to demonstrate how we can achieve that.
In some instances, the relevant eligibility requirements and budgeting shortfalls can be directly addressed when they are under state (rather than federal) control. We see this with the historic expansion of Medi-Cal to include all undocumented people and CalFresh to include undocumented people ages 55 and older.
The safety net, as it is currently configured, is not fully meeting its charge to help individuals and families access the basic needs we all need to survive.
Extending benefits to excluded populations requires us to reform eligibility rules and provide parallel state-funded programs as well.
We must include undocumented and mixed-status households in our safety net programs; offer support to households without workers or with part-time workers; increase supports for adults not living with children; and supplement existing safety net programs with a guaranteed income which would ensure an income floor for everyone.