Trapped in America's Safety Net

American means-tested programs aren’t principally about pulling people out of poverty. Instead, they’re intended to provide a safety net that is absolutely minimal (given its taxpayer funding), goes to the “deserving” rather than the undeserving, and doesn’t deter holding a job. To achieve these goals, means-tested programs are tightly targeted on those at the very bottom of the socioeconomic ladder, with low income and asset ceilings. Tight targeting addresses the main fear, which has always been that programs for the poor deter working. Thus from its inception, American social assistance was organized around the principle of “less eligibility” that originated in the British poor laws of the nineteenth century. 2 The idea back then was to deter paupers from work-houses by making conditions there worse than the worst job on the outside. In contemporary America, this idea persists: means-tested programs have to remain inferior to the alternative—the worst jobs at the worst wages. If benefits were easy to get, stigma free, and generous, it would be too hard to find people willing to take bottom-ofthe-barrel jobs. There would be pressure on low-wage employers to improve pay and benefits. Instead, policy makers try to make means-tested programs as miserable as possible to discourage would-be applicants, minimize enrollment, and incentivize work in low-level jobs. And as conditions in the low-end job market have deteriorated over time, with shrinking real wages, an increase in part-time work, and the near disappearance of employer-provided benefits, means-tested programs have gotten worse in tandem. The problem is that narrow targeting and fear of replacing work have perverse consequences: the programs’ corresponding design features also prevent people from leaving poverty. The extreme eligibility criteria that tight targeting requires—the low income and asset ceilings—mean that as people leave assistance for work, their benefits first diminish and then disappear altogether. The cost of working is steep indeed, as the recipient loses cash assistance, housing, food assistance, child care subsidy, and medical insurance, one after another. And there’s little on the outside to replace these lost benefits.