Report: One in five Wisconsin production workers on public assistance

UC Berkeley authors advocate wage requirements in expansion subsidies

About one in five Wisconsin manufacturing and production workers use public assistance programs, ranking the state 38th lowest in the country, according to a report from the University of California Berkeley Center for Labor Research and Education.

Eight of the top ten highest states for manufacturing worker participation in public assistance programs were in the south, led by Mississippi at 59 percent. Others included Georgia (47 percent), California (45), Texas (42), Arkansas (41), Tennessee (40), Alabama, New York, North Carolina and South Carolina (all at 39).

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The report looked at use of assistance programs for frontline manufacturing production workers who work at least 10 hours per week for at least 27 weeks. The programs included Medicaid, the Children’s Health Insurance Program (CHIP), the Federal Earned Income Tax Credit (EITC), the Supplemental Nutrition Assistance Program and Temporary Assistance for Needy Families (TANF).

The authors found that the federal government and states spent $10.2 billion per year between 2009 and 2013 on public assistance for production workers and their families.

Nationally, 34 percent of the workers included in the report were enrolled in at least one of the five programs the report examined.

Wisconsin fared better with only 22 percent participating in at least one program, led by the EITC at 15 percent, Medicaid and CHIP was second at 13 percent and SNAP was third at 11 percent.

The report’s authors, Ken Jacobs, Zohar Perla, Ian Perry and Dave Graham-Squire, argue that growth in manufacturing jobs since the Great Recession are less likely to be union positions and more likely to pay low wages.

“Historically, blue collar jobs in manufacturing provided opportunities for workers without a college education to earn a decent living,” the authors write. “For many manufacturing jobs, this is no longer true.”

Average wages alone didn’t explain the authors’ findings. The average weekly wage for a manufacturing worker in Wisconsin was $1,021 in 2013, the last year the report’s data covered. Only three states from the top ten, Mississippi ($846), Arkansas ($819), and Alabama ($980), had lower weekly averages, according to the Bureau of Labor Statistics. Those figures include all manufacturing workers while the authors focused on “frontline manufacturing production workers,” excluding those with supervisorial roles.

The authors also estimated the cost in each state for the public assistance programs, with Wisconsin ranking 15th highest at $229 million. California was first at $1.26 billion.

Jacobs and company argue the cost of public assistance programs should give policy makers a reason to include wage requirements when offering subsidies to attract manufacturers to their areas.

“Conditioning subsidies on strong wage requirements across the workforce would reduce state and federal costs for public assistance, and allow states and local governments to better target how their tax dollars are used,” the authors conclude.

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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