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January 2013, Volume 19, Number 1

Poverty, Health Insurance

California had the highest poverty rate of all states, almost 24 percent in 2011, under the Supplemental Poverty Measure (SPM) developed by the Census Bureau, followed by Florida at 20 percent. ( California's poverty rate was 16 percent under the regular poverty line and Florida's 15 percent.

The SPM, which includes broader measures of income and expenditure than the regular poverty rate, such as payroll taxes that reduce take-home pay and the value of government benefits, gives California, Florida and 12 other states a higher poverty rate because of the high cost of living. There were 26 states in which the SPM was lower than the official poverty rate, including Texas and most Midwestern states where housing costs were lower. There was no difference between the regular poverty line and the SPM for 10 states.

TANF. Under the welfare reform enacted in 1996, the federal government turned cash assistance to poor Americans with children into a block grant of $16.5 billion to states. Welfare reform set rules on how long recipients could receive cash assistance, generally five years, and required states to have at least a share of adults receiving cash assistance to work. States are required to spend an additional $10 billion on poor residents.

The number of families receiving federal cash assistance fell from 4.5 million in FY96 to 1.9 million in FY11.

Some 46 million US residents received $80 billion worth of Food Stamps (SNAP benefits) in FY12.

Health. Employers with 50 or more full-time workers must offer health insurance or pay a $2,000 fine per worker beginning in 2014. In response, some large employers of low-wage workers have begun to adjust work schedules so that more of their workers are employed less than 30 hours a week, the minimum threshold for a full-time employee.

Many employers who now offer benefits to employees working 32 or more hours a week are using scheduling software from Dayforce and Kronos to hire workers for two- or three-hour shifts at times of peak demand in restaurants.

Many retailers, hotels, and restaurants hire part-time workers to save on wages and benefits. Part-time service workers are often paid $10 to $11 an hour and have few benefits, while full-time workers often earn $12 to $15 an hour and have more benefits. About 30 percent of those employed in retailing are part-time, and 30 percent of part-time retail workers would prefer full-time work. Some retailers add part-time workers rather than converting part-timers to full-time, helping to maximize their variable costs by pushing the risk of market fluctuations onto workers in the form of variable hours of work.