For example, in TANF, income  limits are determined by states. Workforce Ages 25 to 64

About 40 percent of U.S. workers ages 25 to 64 earned hourly wages of  $16 or less (in constant 2016 dollars) over the period 1995 through 2016,  according to our analysis of CPS data (see fig. In each of the 6 years  we reviewed, an estimated 1 to 5 percent of these workers earned an  hourly wage or less of that year’s federal minimum wage, about 17  percent earned above federal minimum wage to $12 per hour, and about  18 percent earned above $12 per hour to $16 per hour. Limited Hours Compounded Low-Wage Workers’ Income Disadvantage

Low-wage workers, on average, worked fewer hours per week from 1995  through 2016 than similar workers earning higher wages, according to our  analysis of CPS data. The combination of low wages and limited hours can affect a worker’s  earnings and potential eligibility for federal social safety net programs. 7). Percentage of Working Families in Poverty Has Remained Relatively Constant

The majority of families with a low-wage worker were not in poverty, yet  the percentage of families that were in poverty persisted in each of the  years we reviewed and in each of the low-wage categories we  examined. In  addition, while poverty was most prevalent among families with a worker  earning the federal minimum wage or below, it was most prevalent among  single-parent families earning this amount. Families of Low- Wage Workers Consistently Use Certain Federal Social Safety Net Programs, but Several Factors May Limit Eligible Families’ Use

Families with a low-wage worker may be eligible for and use one or more  federal social safety net programs. Our estimates based on CPS data found that the percentage of  families with a low-wage worker enrolled in Medicaid rose significantly  over the past 2 decades, almost tripling for families with a worker earning  more than the federal minimum wage between 1995 and 2016 (see fig. In 2016, about 29 percent of families with a worker earning federal  minimum wage or below, 31 percent of families with a worker earning  above federal minimum wage to $12 per hour, and 21 percent of families  with a worker earning $12.01 to $16 per hour were enrolled in Medicaid. Our estimates showed that 5 percent or less of families with a low-wage  worker received TANF cash assistance at least once in the prior calendar  year from 1995 through 2016. A low-wage worker’s family type also influenced the extent that families  used social safety net programs. For  example, among families with a worker earning federal minimum wage or  below in 2016, our estimates showed that two-thirds of married families  without children and about half of married families with children used  none of the aforementioned programs. In contrast, more than half of  single-parent families used three or more of the programs (see fig. Several Factors May Affect Eligible Families’ Participation in Social Safety Net Programs

Agencies that administer the selected social safety net programs  indicated that eligible working families participate in these programs at a  lower rate than the total eligible population for reasons that are not well  known. Assumed ineligibility. Minimal benefit amounts. At that time, we will send copies to the Department of Labor,  the Department of Commerce, and other interested parties. GAO staff who contributed to this report are listed in appendix IV. Appendix I: Objectives, Scope, and Methodology

Our review focused on the following questions: (1) what are the  characteristics of the low-wage workforce and how have they changed  over time, (2) to what extent are families with low-wage workers in  poverty, and (3) to what extent do families with low-wage workers  participate in selected social safety net programs and what factors affect  their participation. We used the CPS years 1995, 2000,  2005, 2010, 2015 and 2016. In addition to estimates, we  generated standard errors or the margin of error for the 95 percent  confidence interval, and report them with estimates in figures and tables. However, it excludes certain types of  resources, such as in-kind assistance (such as Supplemental Nutrition  Assistance Program benefits). We selected organizations from four  metropolitan areas: Atlanta, San Francisco, Santa Fe, and Washington,  D.C. The metropolitan areas represent a range of local minimum wage  levels relative to the federal minimum wage, costs of living, and  participation rates in the selected social safety net programs.
Why GAO Did This Study

According to the Department of Labor, private-sector employers have added millions of jobs to the economy since the end of the most recent recession in 2009; however, many are in low-wage occupations. GAO was asked to examine several characteristics of low-wage workers and their families, including their use of federally funded social safety net programs over time.
This report answers the following questions: (1) What are the characteristics of the low-wage workforce and how have they changed over time? (2) To what extent are families with low-wage workers in poverty? and (3) To what extent do families with low-wage workers participate in selected social safety net programs and what factors affect their participation?
GAO analyzed CPS data from 1995, 2000, 2005, 2010, 2015, and 2016 on worker characteristics, family poverty, and participation in social safety net programs. GAO defined low-wage workers as those workers ages 25 to 64 earning $16 or less per hour. In addition, GAO interviewed officials with state and local social safety net programs and other experts in four metropolitan areas—Atlanta, San Francisco, Santa Fe, and Washington, D.C.—representing a range of local minimum wage levels relative to the federal minimum wage, costs of living, and participation rates in five selected federally funded social safety net programs.

What GAO Found

According to GAO's analysis of data in the Census Bureau's Current Population Survey (CPS), on average, low-wage workers worked fewer hours per week, were more highly concentrated in a few industries and occupations, and had lower educational attainment than workers earning hourly wages above $16 in each year GAO reviewed—1995, 2000, 2005, 2010, 2015 and 2016. Their percentage of the U.S. workforce also stayed relatively constant over time. About 40 percent of the U.S. workforce ages 25 to 64 earned hourly wages of $16 or less (in constant 2016 dollars) over the period 1995 through 2016. The combination of low wages and few hours worked compounded the income disadvantage of low-wage workers and likely contributed to their potential eligibility for federal social safety net programs.
About 20 percent of families with a worker earning up to the federal minimum wage (currently $7.25 per hour), 13 percent of families with a worker earning above federal minimum wage to $12.00 per hour, and 5 percent of families with a worker earning $12.01 to $16 per hour were in poverty in each year GAO reviewed (see figure).The extent of poverty varied considerably by the type of family in which a worker lived. For example, single-parent families earning the federal minimum wage or below comprised a higher percentage of families in poverty. In contrast, married families with no children comprised the lowest percentage of families in poverty, and generally had family incomes at or above the poverty line.
Note: All references to the “federal minimum wage” are based on 110 percent of the hourly federal minimum wage in effect that year or the equivalent hourly calculated wage for salaried workers. Brackets are used to represent margins of error of estimated percentages at a 95 percent confidence level.
Families with a worker earning $16 or less per hour consistently used selected federally funded social safety net programs between 2005 and 2016, with varied factors affecting eligible families' participation. GAO estimated that the percentage of these families enrolled in Medicaid rose significantly over the past 2 decades, almost tripling among families with a worker earning more than the federal minimum wage between 1995 and 2016. In contrast, an estimated 5 percent or less of these families received cash assistance from the Temporary Assistance for Needy Families (TANF) program at least once in the prior calendar year from 1995 through 2016. A low-wage worker's family type also influenced the extent that families used selected social safety net programs. For example, among families with minimum wage earners in 2016, GAO estimated that about half or more married families used none of the programs GAO examined—Medicaid, TANF, Supplemental Nutrition Assistance Program, Earned Income Tax Credit, and Additional Child Tax Credit—while more than half of single-parent families used three or more. Program officials and others told GAO that eligible working families may not participate in programs for a variety of reasons, including time needed to apply for benefits, low benefit amounts, and assumed ineligibility.