Let's Bail Out America's Tattered Safety Net

With the economic meltdown, more and more households are falling toward the social safety net.

Even before the financial crisis and the recession, a substantial proportion of working families were not making it in America. In 2007, 20% of the population in a family with a breadwinner -- that's 41 million people -- did not have enough income, including any Food Stamps, Medicaid, housing and child care subsidies, or other public support they received, to pay their basic living expenses.

The good news for this bottom 20%: in the current crisis, their plight of working hard but not making enough to pay the bills is becoming much more common, so the pressure to address this problem should be growing too. The bad news, of course, is the recession itself. The hardships these families face are growing by the day. More and more households are falling toward the social safety net.

And what about that safety net? In the 1990s, the Clinton administration ended "welfare as we know it," but at the same time promised work supports as low-wage workers moved up the ladder. Since then, employment rates for poor and low-income mothers have indeed soared, and so has the demand for affordable housing and child care assistance. But funding for them has not, with long waiting lists for both. As a result, by the early 2000s, these government work supports helped only 10% of the population in working families that couldn't meet their basic needs to actually meet them. Despite expansions in the Earned Income Tax Credit and public health insurance for children in the 1990s, the public support programs for low-income families provide inadequate help,and even that to only a fraction of those who need it. And for workers who lose their jobs, only about a third of all unemployed workers receive unemployment benefits today.

The safety net is not only tattered; it is nearly obsolete.

Rising unemployment is beginning to take its toll, as are draconian state budget cuts. Congress and President Obama appear ready to enact a large stimulus package to spur the economy and create jobs. Their focus so far is mostly on infrastructure, on "rebuilding our crumbling roads and bridges, modernizing schools ... building wind farms and solar panels," as Obama has said.

But bridge repair and even green jobs are not enough. Our physical infrastructure needs work, but so does our social infrastructure. And it's not just the safety net. Quality care for children and long-term care for disabled and elderly people are in short supply -- and unaffordably expensive for many families. Moreover, women are disproportionately employed in these sectors, many at low wages that barely enable them to support their own families. In contrast, the construction and green-energy jobs that often pay decent wages with benefits are overwhelmingly filled by men.

So let's enact a bold recovery plan that promotes employment but also reconstructs the safety net and jumpstarts the process of upgrading our social infrastructure. Here are four suggestions:

First, provide federal funding to states to prevent reductions in essential services. Now is not the time to reduce public health investments, stop transportation projects, cut higher education or lay off K–12 and early-education teachers.

Second, recreate our housing infrastructure. In exchange for buying up bad loans, secure foreclosed properties and develop an affordable housing stock.

Third, expand help for families who are struggling to pay for care for children and elders. Doing so will not only help the families struggling to care for their loved ones. It will also provide the job-creation stimulus for women workers that bridge-repair funding will provide for men.

Fourth, replace our outdated and arbitrary poverty measure with a realistic measure of what it takes to afford basic needs and participate fully in society. This measure should be used to gauge whether the eventual economic recovery is reaching all Americans.

Economic recovery will require bold, public action. Such action isn't limited to reforming our financial system or to traditional stimulus spending. It also means upgrading our social infrastructure in ways that ensure our economy works for all.

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