Congress takes steps to help restore dignity of work in Illinois
Last April, I sat before Congress and made a simple plea: Make work matter and give people a reason to believe they matter.
I was there to fight for the dignify of work, the single-most powerful solution to helping people rise out of poverty in America. For too long, government policies have made it too easy not to work, stifling people’s growth, confidence and ability to prosper. It also has limited the labor pool for businesses.
This summer, Congress changed the status quo, requiring work or work-related activities such as volunteering or education for able-bodied adults on welfare. The results of this new policy should be beneficial for Illinois workers, employers and taxpayers as it will stimulate our labor market and economy.
As recent as 1960, nearly 100% of working-age, able-bodied adult men worked.
Today, more adult men are out of work than at nearly any other point in history. And that’s not because people suddenly stopped wanting to work.
Welfare recipients can receive the equivalent of more than $41,000 per year in government benefits. And what does that do to people? It tells them, “We don’t need you. Your work doesn’t matter.”
I completely reject that. Worse still, most people who enter the system never leave it. In the name of compassion, we created a system that quietly enables and perpetuates dependency.
This reform will help parents return to work and lift children out of cycles of generational poverty. For the first time in years, Americans will hear: “You are needed. Your work matters. Your contribution matters. You matter.”
This is no small win. It will save taxpayers across the country $100 billion during the next decade. But far more important, it will restore purpose to millions of lives and invigorate our economy.
The next step the government must take is to ensure we don’t harm these individuals. Adopting new policies or programs could help avoid making work requirements punitive. One natural way to do that is to taper government benefits gradually to ensure workers aren’t left flailing without support when they increase earnings at work.
Right now, we punish people for daring to earn more as they lose government assistance suddenly and unexpectedly when their income rises slightly above an eligibility threshold. These benefit cliffs hurt workers, as well as businesses that want to employ and reward workers with promotions, higher salaries and more hours.
According to recent research, 1 in 4 welfare recipients intentionally have held themselves back from career advancement to keep welfare benefits and avoid losing eligibility. With 3.2 million Illinoisans living at or below 200% of the federal poverty level, that means an estimated 710,000 Illinoisans have been held back by benefit cliffs.
For example, a worker making $54,000 a year who gets a modest increase to $55,000 could lose more than $25,000 in child care benefits in Illinois, leaving them worse off than they were before.
That dynamic undermines work ethic, ambition, stability and hope. When people are penalized for earning more, when a promotion or extra hours can cost them more in lost assistance than they gain, many rationally decide it is better to stay “safe” and not jeopardize their family’s well-being.
Illinois could make reforms in programs where it has the authority to do so, such as smoothing cliffs in the Temporary Assistance for Needy Families program.
Similarly, local initiatives could focus on testing gradual benefit transitions through pilot programs. Illinois municipalities can innovate and try out pilot programs to help people navigate cliffs, such as through financial literacy mentoring that helps participants plan for taking on expenses previously paid for through government programs.
Work requirements don’t mean less compassion. By helping people reclaim agency in their own lives, work requirements can result in more stability for children, a revitalized workforce, and dignity and self-sufficiency for formerly dependent workers.
I’m hopeful we will all benefit as we tell people they are needed, that their work and contributions matter. Anything less is a betrayal of both taxpayers and the neighbors these programs were designed to help.
• Matt Paprocki is the president and CEO of the Illinois Policy Institute.