Examining the Complex Social Safety Net for Low-Income Working Families: How Benefits and Resources Respond to Increases in Wages

The United States social safety net aims to improve the lives of the lowest-income families and individuals. As the term “social safety net” implies, the goal is to provide a support system that “catches” families as they fall into poverty but still encourages work. The assortment of non-contributory assistance programs — in-kind and cash transfer programs — has grown and become more complex over the years, and families and case managers often face challenges in navigating through them.

The USC Price Center for Social Innovation partnered with Imagine LA to understand the total resources families have available and identify the threshold points where the safety net may actually become a barrier towards economic independence — a benefits cliff, where an increase in earnings leaves a family worse off, or a resource plateau, where such an increase leaves a family no better off in terms of the total resources available to them (income and benefits).

The study found that most families receiving social benefits will experience lengthy resource plateaus, where an increase in earned income is met with the equivalent loss of some benefit. However, the ecosystem of social benefits is challenging to navigate and protects mainly families with extremely low incomes by providing childcare and housing benefits.

 

Photo Credit: Imagine LA

 

KEY FINDINGS

  • Overall, the research finds that for most families, as earned income increases, there are long resource plateaus.

  • Only families whose incomes fall extremely low and receive both childcare and housing assistance are caught by the safety net and can cover necessary living expenses.

  • Navigating the safety net is complicated.

  • The safety net is particularly supportive for families with young children.

POLICY RECOMMENDATIONS

  • Create transparency of information about benefits via a digital tool that can simplify the complexity of navigating the safety net.

  • Take actions at the federal, state and local policy levels to coordinate, align, and streamline major benefit streams.

  • Increase access to housing benefits.

  • Promote increased participation in benefit programs.

Read the Report

Read the Brief


RESEARCHERS

An additional report author includes Molly Creighton, MPP ’21


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