Taxpayers subsidize the state's working poor at a rate of $10 billion a year, letting firms keep pay down, researchers find.

By Nancy Cleeland
Times Staff Writer
May 20, 2004

Taxpayers are subsidizing California's growing low-wage economy to the tune of $10 billion a year through public health services, tax credits, child-care programs and other assistance for the working poor, according to a UC Berkeley study to be released today.

The report, by the school's Center for Labor Research and Education, found that nearly half the money from the 10 largest statewide public assistance programs went to families with at least one full-time worker.

If paid more, the workers would be self-sufficient and would not qualify for the programs, the report states.

Such "hidden costs" of low-wage work are likely to increase unless the government intervenes to raise wages and benefits at the lowest end of the economy, the report says. Currently, low-wage jobs are growing faster than the overall economy in California.

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