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Indiana working poor highlighted in pair of studies

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A pair of reports released last week highlighted different angles of the continuing troubles faced by Indiana's working poor and raised questions about who ends up paying for their safety net.

The Kaiser Family Foundation found that 182,000 residents fall into a health insurance coverage "gap" because the state has not expanded Medicaid coverage, and a jobs study from the University of California, Berkeley found almost half of Indiana's fast food workers are also receiving public assistance.

The two reports provided sobering details as the state continues to struggle to pull out of the recession — the unemployment rate has hovered above 8 percent for more than a year now while the median income has declined over the past decade. It also helped shine some light on why the state's leaders have been so heartily focused on improving job-training programs statewide.

"It's not a good state to be poor, or out of work, or uninsured," said Morton Marcus, a veteran Indiana economist and former professor at the Indiana University Kelley School of Business.

Putting the health care gap in context: there are 182,000 adults earning between roughly $2,700 and $11,500 a year who will not receive federal health insurance. That excludes poor residents with children and Indiana's elderly, who receive Medicare. The Kaiser report found that Indiana's numbers are not out of step with other states which have not expanded Medicaid under the federal health care law, but also noted that in the states which did approve an expansion, there is no insurance gap.

That shortfall could be temporary here, however. Republican Gov. Mike Pence, long a vocal critic of traditional Medicaid, has said he would like to see the state expand the Healthy Indiana Plan to cover residents earning up to 138 percent of the federal poverty level, of roughly $15,400.

Democrats have charged the Pence administration with dragging its feet — an answer from the federal government could take many months — but Pence has said he wanted federal approval to continue the program before seeking an expansion, as a precaution against current enrollees losing coverage.

In the case of the fast food workers, the number is much smaller, but reflects a more worrisome trend: the ability to work a fulltime job in America and still be, effectively, poor. Roughly 20,000 employees — 45 percent of the Indiana fast food workforce — receive some level of assistance.

The authors determined Indiana's numbers are just slightly below the national figure of 52 percent of fast food workers receiving assistance. Among the most "surprising" discoveries: Many of the workers qualifying for public assistance were earning just above the poverty line and working 40 hours a week.

"In other words, public benefits receipt is the rule, rather than the exception, for this workforce," according to the report.

Marcus, who has written extensively about the availability of jobs and levels of earnings, said Indiana may be unique among other states because of a work culture where residents would slog through low-wage jobs with the promise of a better-paying union gigs in the manufacturing sector.

But, he said, that widespread strategy is decades old and most of those better paying jobs have disappeared. What have remained are the low-wage gigs.

At the macro-level, in state budget discussions, the central question has been: "What can the state, and thereby the state's taxpayers, afford?" Apprehension over expanding health coverage, in particular, has centered on concerns over the price tag.

But the fast food report authors make the argument that companies are upping costs to taxpayers.

"Jobs, jobs, jobs" continue to weigh on state leaders' collective mind as much as any issue. Multiple task forces and study groups were set up this year by Pence and state lawmakers. And Pence tasked his new overarching education department with working on job-training issues as much as raw education policy.

Aside from setting minimum wage levels, there's little the government can do directly to drive up wages and move workers off welfare — even though it's clear those low-wage jobs come with a price tag much like the one affixed to the health care debate.

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  • Terry is right.
    Article: "Many of the workers qualifying for public assistance were earning just above the poverty line and working 40 hours a week." As Terry said, the only reason for this is because the jobs do not pay enough. Time to raise the minimum wage so that work will actually pay.
  • Why Not Raise the Minimum Wage Rate?
    Am I wrong, or could much of this argument be removed from the table by simply increasing the minimum wage?

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