Universal Work Requirements For Welfare Programs Are A Win For All Involved
- Federal welfare programs were developed to help the truly needy, but now at least 35 million able-bodied adults are enrolled in these programs and not working.
- Able-bodied adults are siphoning upwards of $400 billion away from the truly needy and taxpayers.
- Moving able-bodied adults from welfare to work could fill the nearly 10 million job openings and boost the economy.
- To restore program integrity and encourage work, Congress should pass universal work requirements.
Government programs like Medicaid and food stamps were created in the 1960s to help the truly needy.1-2 The programs were meant to ensure that people with disabilities who were unable to work, pregnant mothers, and people temporarily out of work because of an economic downturn would have a safety net. But now at least 35 million able-bodied adults are not working and instead enrolling in welfare programs.3 These individuals are siphoning resources from the truly needy while burdening taxpayers and putting stress on the budget, leading to massive deficits.
Congress should address this problem by implementing universal work requirements for these programs and all other federal welfare programs. Work requirements would help protect program integrity and ensure resources are available for the truly needy. In addition, they would save billions of dollars and help balance the budget all while boosting the economy by growing the workforce.
To be the most beneficial, work requirements should be applied broadly with few exemptions, covering all federal welfare programs. They should apply to all able-bodied adults aged 18 to 64, requiring 20 hours of work, training, or volunteering each week.
Able-bodied adults are draining funds from the truly needy, costing taxpayers billions
Medicaid has grown from a program with 35 million enrollees at the turn of the century to more than 100 million today.4 The program’s growth was especially steep during the COVID-19 pandemic, increasing an astonishing 33 percent.5 An estimated 40 million able-bodied adults are now enrolled in the program.6
Likewise, food stamps have increased from roughly 17 million enrollees in 2000 to nearly 43 million at the beginning of 2023.7-8 Before the pandemic, nearly 36 million individuals were enrolled in food stamps, meaning there has been close to a 20 percent increase in enrollment in just three years.9 More than 18 million of these individuals are able-bodied adults.10
Much of the growth in these programs is the result of ObamaCare expansion of Medicaid and COVID-19 policies.11 During the pandemic, Congress handcuffed states by preventing them from removing even ineligible enrollees from Medicaid.12 Congress also paused work requirements for able-bodied adults without dependents enrolled in food stamps.13 While states were still allowed to require certain individuals to enter employment and training programs, most states failed to do so.14
The growth in enrollment of these programs during the pandemic shows what happens when the standards for enrollment are dropped. It weakens program integrity and siphons resources from those in true need, the very people the programs were originally designed to help. Sadly, it also traps people in government dependency, disincentivizing them from finding work and taking the first step on the pathway to financial self-sufficiency.
The amount of taxpayer money that is spent on able-bodied adults in welfare programs is astounding. Medicaid alone spends upwards of $348 billion on able-bodied adults annually.15 Food stamps for able-bodied adults cost taxpayers upwards of $55 billion annually.16 This is only made worse by the Biden administration’s legally questionable moves to reevaluate the Thrifty Food Plan and boost emergency allotments during the pandemic.17-19 The changes to the Thrifty Food Plan alone will increase program costs by up to $250 billion over the next decade.20 These expenses both increase the burden on taxpayers and contribute to the budget deficit, increasing the national debt.
Fewer workers means jobs are left unfilled, limiting economic growth
In addition to harming the truly needy and taxpayers, able-bodied adults on welfare affect the overall economy. This can be seen in the slow growth the country is experiencing.21 Much of this can be attributed to a shortage of workers.
The workforce participation rate is still not back to pre-pandemic levels. The economy is missing nearly two million jobs from just prior to COVID-19 infecting the country.22 This number balloons to more than 10 million missing workers when compared to the workforce as late as January 2008.23
Despite wages rising faster than they have in more than two decades, there continue to be nearly 10 million job openings.24-25 This is nearly twice the number of people who are not working but are searching for a job.26 These openings are across all different industries and are open to everyone.27 More than two-thirds of the openings require a high school diploma or less and more than 85 percent require no experience at all.28
This lack of workers drives up wages, which drives up the cost of goods and services and contributes to inflation. It is also keeping the economy from running at full speed. To reinvigorate the economy, policymakers must incentivize work, not welfare.
Part of the problem is that most able-bodied adults enrolled in welfare do not work. A nationwide study of able- bodied adult ObamaCare expansion enrollees in Medicaid showed that 55 percent did not work at all.29 Worse still, nearly 75 percent of prime working-age able-bodied adults collecting food stamps reported no work.30 Less than three percent of these individuals reported working full time.31
Not every person who would fall under broad work requirements would go on to accept a job. Some would enter training programs, others would volunteer or enter school, and still others may forgo welfare altogether. But conservatively estimating that 10 million able-bodied adults, less than a third of the total population, would be incentivized to join the workforce would have huge implications. This simple move would boost the economy by more than an estimated $370 billion, increasing real GDP by 1.8 percentage points.34 Policymakers should be aggressive with broad work requirements, because real changes get real results. More importantly, these individuals would escape the dependency trap and create better opportunities for themselves.
Rejoining the workforce, or entering for the first time, would not only boost the entire economy, but it would also benefit those who leave behind the dependency of welfare for the promise of work. When food stamp work requirements were implemented at the state level, returning workers saw their incomes double within a year and triple within two years.35 Their higher incomes more than made up for lost welfare benefits, meaning they were better off financially, benefiting themselves and their families.36
Universal work requirements would both save taxpayers billions and provide a needed boost to the economy
To be most beneficial, universal work requirements should be broad with minimal exemptions and cover able-bodied adults aged 18 to 64, while excluding those with dependents under one year old. They should require 20 hours of work, training, or volunteering each week. While much of the focus is on how this policy would affect costly programs like Medicaid and food stamps, these requirements should apply broadly to all welfare programs.
Universal work requirements would encourage work and training. These requirements incentivize individuals to better themselves and transition from dependency to work and self-reliance. This policy also has a proven track record. States that have implemented work requirements have proven the success of the policy.37-39
This would also help stabilize welfare programs so that they remain available for the truly needy without busting budgets. Smaller or narrower requirements would result in smaller savings, whereas wide-ranging requirements would result in maximum savings.
For example, if work requirements were implemented for childless Medicaid enrollees aged 18 to 49, the Congressional Budget Office (CBO) estimated it would save $135 billion over 10 years at the federal level.40 Expanding the requirements to individuals aged up to 64 and exempting only those with young children would result in $282 billion in savings.41-44
Likewise, updating a CBO estimate of savings by implementing work requirements in the food stamps program would result in up to $20 billion in savings over a 10-year period.45 Whereas stronger work requirements in a U.S. Department of Agriculture estimate would result in savings of $65 billion.46
Workers are the driving force behind the country’s economy. Work requirements would help ensure that workers are available to fill job openings and keep the economy humming.
There are job openings in every state and every sector of the economy.47-48 Most do not require a college degree or any special training.49 Work requirements would incentivize individuals to escape the dependency trap and fill these openings. If even a third of the non-working, able- bodied adults enrolled in welfare entered the workforce, they could fill all current job openings.50
Congress has the opportunity to protect the truly needy and jumpstart the economy
These benefits give Congress every reason to pass broad work requirements in welfare programs without Swiss cheese-like exemptions.
The food stamps program allows states to waive existing work requirements for areas with unemployment rates above 10 percent or otherwise lack job opportunities.51 However, many states gerrymander areas and use other gimmicks to waive work requirements across the state, even during periods of strong economic growth.52
Congress should restrict waiver usage so states do not abuse it as they have with food stamp waivers in the past.53 Any work requirement reform should also remove no-good-cause exemptions.54 A strong work requirement is no good if an exemption is able to swallow the rule.
Members of Congress who introduce and vote for work can take credit for putting millions of people and their families on the path to financial stability, protecting taxpayers, ensuring program stability for the truly needy, and revitalizing the economy.
Rarely does Congress have the opportunity to do so much through one reform. Work requirements would incentivize individuals to reach for the American Dream while helping to balance the budget. This commonsense reform should be a no-brainer and gain bipartisan support, just as it did a generation ago.55
THE BOTTOM LINE: A growing number of able-bodied adults are draining funds from programs designed for the truly needy, which is busting budgets and harming taxpayers. Congress can address these issues by passing universal work requirements for welfare programs.
Congress has every reason to pass universal work requirements that apply broadly with few exemptions. This was uncontroversial just a generation ago when bipartisan reform was passed.56 This reform was successful in dropping the number of people on welfare, moving them to work and raising their incomes.57 Congress again has the opportunity to help millions of people while saving taxpayers billions of dollars, it should not delay.
Able-bodied adults who sign up for welfare and do not work are costing taxpayers billions of dollars and taking resources from the truly needy. The dependency trap this creates also prevents them from bettering themselves by taking the first step to self-sufficiency by accepting a job or entering a training program.
Universal work requirements in federal welfare programs would reverse the incentives for able-bodied adults, encouraging the move from dependency to thriving on their own talents and abilities. After finding employment, individuals would be in a better position to provide for themselves and their families.58
These work requirements would also ensure that resources are available for the truly needy without busting the budget and leading to greater deficits. Equally important, the economy would have the workers it needs to grow at its full potential.
Work requirements should cover able-bodied adults without dependents under the age of one. Doing so would preserve resources for the truly needy, save billions of taxpayer dollars, grow the economy, and put people on the path to economic freedom. This would be a win for all involved.
1 Centers for Medicare and Medicaid Services, “Program history,” U.S. Department of Health and Human Services (2023), https://www.medicaid.gov/about-us/program-history/index.html.
2 Jessica Shahin, “Commemorating the history of SNAP: Looking back at the Food Stamp Act of 1964,” U.S. Department of Agriculture (2014), https://www.usda.gov/media/blog/2014/10/15/commemorating-history-snap-looking-back-food-stamp-act-1964.
3 Tarren Bragdon, “Since when did linking work to welfare handouts become so controversial?” New York Post (2023), https://nypost.com/2023/04/26/since-when-did-linking-work-to-welfare-handouts-become-so-controversial/.
4 Jonathan Bain, “Busted budgets and skyrocketing enrollment: Why states should reject the false promises of Medicaid expansion,” Foundation for Government Accountability (2023), https://thefga.org/research/states-should.reject-false-promises-of-medicaid-expansion/.
6 Michael Greibrok, “Congress could boost economy by allowing Medicaid work requirements without bureaucratic intervention,” Foundation for Government Accountability (2023), https://thefga.org/research/congress-boost.economy-allowing-medicaid-work-requirements/.
7 “Supplemental Nutrition Assistance Program participation and costs,” U.S. Department of Agriculture (2023), https://fns-prod.azureedge.us/sites/default/files/resource-files/SNAPsummary-4.pdf.
8 “Supplemental Nutrition Assistance Program,” U.S. Department of Agriculture (2023), https://fns.prod.azureedge.us/sites/default/files/resource-files/34SNAPmonthly-4.pdf.
9 “Supplemental Nutrition Assistance Program participation and costs,” U.S. Department of Agriculture (2023), https://fns-prod.azureedge.us/sites/default/files/resource-files/SNAPsummary-4.pdf.
10 Jonathan Ingram, “House-proposed work requirements would limit dependency, save taxpayer resources, and grow the economy,” Foundation for Government Accountability (2023), https://thefga.org/research/house-proposed.work-requirements/.
11 Jonathan Bain, “Busted budgets and skyrocketing enrollment: Why states should reject the false promises of Medicaid expansion,” Foundation for Government Accountability (2023), https://thefga.org/research/states-should.reject-false-promises-of-medicaid-expansion/.
12 Hayden Dublois and Jonathan Ingram, “The Medicaid crisis is here: How Congressional handcuffs are causing Medicaid to implode,” Foundation for Government Accountability (2022), https://thefga.org/research/congressional.handcuffs-causing-medicaid-to-implode/.
13 Alli Fick and Scott Centorino, “The missing tool: How work requirements can reduce dependency and help find absent workers,” Foundation for Government Accountability (2021), https://thefga.org/research/one-tool-unleash.economic-recovery-solve-labor-crisis/.
14 Hayden Dublois, “State employment and training programs are well funded—they just need participants,” Foundation for Government Accountability (2022), https://thefga.org/research/state-employment-and-training.programs-are-well-funded/.
15 Author’s calculation based on an estimated 40,000,000 able-bodied adults multiplied by the average amount spent per enrollee in 2020 ($8,718) found at: https://www.statista.com/statistics/1289028/medicaid-spending-per-enrollee.by-state/.
16 Author’s calculation based on an estimated 18,000,000 able-bodied adults multiplied by the average amount spent per enrollee in January 2023 ($3,072) and multiplied by 12 to account for a full year. The January 2023 average monthly benefit per enrollee is found at: https://fns-prod.azureedge.us/sites/default/files/resource.files/34SNAPmonthly-4.pdf.
17 Hayden Dublois and Jonathan Ingram, “President Biden unilaterally and unlawfully increased food stamp benefits,” Foundation for Government Accountability (2023), https://thefga.org/research/president-biden-increased.food-stamp-benefits/.
18 Hayden Dublois, “Food stamp boosts are bankrupting taxpayers,” Foundation for Government Accountability (2023), https://thefga.org/research/food-stamp-boosts-are-bankrupting-taxpayers/.
19 Jonathan Bain, “How Biden’s massive increase in food stamps is fueling the worker shortage,” Foundation for Government Accountability (2023), https://thefga.org/research/bidens-increase-food-stamps-fueling-worker.shortage.
20 Hayden Dublois and Jonathan Ingram, “President Biden unilaterally and unlawfully increased food stamp benefits,” Foundation for Government Accountability (2023), https://thefga.org/research/president-biden-increased.food-stamp-benefits/.
21 Max Zahn, “US economic growth slowed significantly at start of 2023,” ABC News (2023), https://abcnews.go.com/Business/data-expected-show-us-economic-growth-slowed-outset/story?id=98865089.
22 Author’s calculation comparing the labor force participation rate for April 2023 of 62.6% with the labor force participation rate for February 2020 of 63.3% as found at: https://www.bls.gov/charts/employment.situation/civilian-labor-force-participation-rate.htm with the May 5, 2023, civilian noninstitutional population, 16yr+ of 266,443,000 as found at: https://www.atlantafed.org/chcs/calculator.
23 Author’s calculation comparing the labor force participation rate for April 2023 of 62.6% with the labor force participation rate for January 2008 of 66.3% as found at: https://www.bls.gov/charts/employment-situation/civilian.labor-force-participation-rate.htm with the May 5, 2023, civilian noninstitutional population, 16yr+ of 266,443,000 as found at: https://www.atlantafed.org/chcs/calculator.
24 Center for Human Capital Studies, “Wage growth tracker,” Federal Reserve Bank of Atlanta (2023), https://www.atlantafed.org/chcs/wage-growth-tracker.
25 U.S. Bureau of Labor Statistics, “Job openings and labor turnover survey news release,” United States Department of Labor (March 2023), https://www.bls.gov/news.release/jolts.htm.
26 U.S. Bureau of Labor Statistics, “Persons not in the labor force who want a job,” United States Department of Labor (March 2023), https://www.bls.gov/charts/employment-situation/persons-not-in-the-labor-force-who-want-a.job.htm.
27 U.S. Bureau of Labor Statistics, “Job openings and labor turnover survey news release,” United States Department of Labor (2023), https://www.bls.gov/news.release/jolts.htm.
28 Jonathan Ingram, “House-proposed work requirements would limit dependency, save taxpayers resources, and grow the economy,” Foundation for Government Accountability (2023), https://thefga.org/research/house-proposed.work-requirements/.
29 Nicholas Horton and Victoria Eardley, “Obamacare’s not working: How Medicaid expansion is fostering dependency,” Foundation for Government Accountability (2018), https://thefga.org/research/obamacares-not.working-how-medicaid-expansion-is-fostering-dependency/.
30 Jonathan Ingram, “House-proposed work requirements would limit dependency, save taxpayers resources, and grow the economy,” Foundation for Government Accountability (2023), https://thefga.org/research/house-proposed.work-requirements/.
32 Sam Adolphsen, “There has never been a better time for welfare reform,” Foundation for Government Accountability (2018), https://thefga.org/research/there-has-never-been-a-better-time-for-welfare-reform/.
33 Jonathan Bain and Jonathan Ingram, “How mandatory E&T can boost the economy and help solve the worker shortage,” Foundation for Government Accountability (2022), https://thefga.org/research/et-can-boost-economy.solve-worker-shortage/.
34 Author’s calculation based upon the results of a proprietary computable general equilibrium model calculating the long-run economic impact of moving able-bodied adults from welfare to work, adjusting for changes to the capital stock and labor supply caused by increasing the labor force.
35 Jonathan Ingram, “House-proposed work requirements would limit dependency, save taxpayers resources, and grow the economy,” Foundation for Government Accountability (2023), https://thefga.org/research/house-proposed.work-requirements/.
37 Jonathan Bain and Nicholas Horton, “Work requirements are working in Arkansas: How commonsense welfare reform is improving Arkansans’ lives,” Foundation for Government Accountability (2019), https://thefga.org/research/work-requirements-arkansas/.
38 Jonathan Ingram and Nicholas Horton, “Welfare reform is moving Mississippians back to work,” Foundation for Government Accountability (2019), https://thefga.org/research/mississippi-food-stamps-work-requirement/.
39 Hayden Dublois, et al., “Food stamp work requirements worked for Missourians,” Foundation for Government Accountability (2020), https://thefga.org/research/missouri-food-stamp-work-requirements/.
40 Congressional Budget Office, “Work requirements and work supports for recipients of means-tested benefits,” (2022), https://www.cbo.gov/system/files/2022-06/57702-Work-Requirements.pdf. (P.31-32)
41 Author’s calculation working from CBO baseline of $135 billion for childless adults aged 18-49. In states with available data, approximately 80 percent of expansion enrollees are aged 18 to 49. Accounting for the missing 20 percent would produce an additional $34 billion in federal savings.
42 In states with available data, roughly 80 percent of expansion enrollees are childless. Adding these additional enrollees would produce an additional $42 billion in federal savings but extrapolating from USDA data on parents with children aged one or younger would reduce these savings to $37 billion.
43 Total savings for non-expansion parents under work requirements would be $166 billion. Adjusting for relative Per-Member Per-Month payments between expansion and non-expansion adults would reduce these savings by $ 17 billion, of which the federal share would be $87 billion based on a 58 percent average federal Medicaid matching rate. Extrapolating from USDA data on parents with children aged one or young would reduce these savings to $76 billion.
44 Adding these savings up results in federal savings of $282 billion.
45 Author’s calculation based upon CBO’s 2018 projected E&T costs (https://www.cbo.gov/system/files/2018.07/hr2_1.pdf) adjusted for increased enrollment and average monthly benefits projections between the 2018 baseline projections, 2022 baseline projections, and 2023 baseline projections.
46 Author’s calculation based upon USDA’s 2020 explanatory notes (https://www.usda.gov/sites/default/files/documents/32fns2020notes.pdf). Since then the maximum monthly
allotment has increased 45 percent from $194 in 2020 to $281 in 2023. Applying the same 45% increase to the USDA’s $45 billion in savings results in $65 billion in savings today.
47 U.S. Bureau of Labor Statistics, “Job openings levels and rates for total nonfarm by state, seasonally adjusted,” United States Department of Labor (2023), https://www.bls.gov/news.release/jltst.t01.htm.
48 U.S. Bureau of Labor Statistics, “Job openings and labor turnover survey news release,” United States Department of Labor (2023), https://www.bls.gov/news.release/jolts.htm.
49 Jonathan Ingram, “House-proposed work requirements would limit dependency, save taxpayers resources, and grow the economy,” Foundation for Government Accountability (2023), https://thefga.org/research/house-proposed.work-requirements/.
50 Author’s calculation based on 35,000,000 non-working able-bodied adults (https://nypost.com/2023/04/26/since.when-did-linking-work-to-welfare-handouts-become-so-controversial/) and 9.6 million job openings from March 2023 Job openings and labor turnover survey (https://www.bls.gov/news.release/jolts.htm).
51 Jonathan Ingram et al., “Waivers gone wild,” Foundation for Government Accountability (2018), https://thefga.org/research/waivers-gone-wild/.
54 Alli Fick and Scott Centorino, “No good cause: How a food stamp loophole could become the next big battle in the war on work,” Foundation for Government Accountability (2022), https://thefga.org/research/food-stamp.loophole-next-big-battle/.
55 Tarren Bragdon, “Since when did linking work to welfare handouts become so controversial?” New York Post (2023), https://nypost.com/2023/04/26/since-when-did-linking-work-to-welfare-handouts-become-so-controversial/.
57 Robert J. Samuelson, “One ‘reform’ that worked,” Newsweek (2006), https://www.newsweek.com/one-reform.worked-108963.
58 Jonathan Bain and Jonathan Ingram, “How mandatory E&T can boost the economy and help solve the worker shortage,” Foundation for Government Accountability (2022), https://thefga.org/research/et-can-boost-economy.solve-worker-shortage/.