Low-wage workers — a large and growing segment of the workforce — are drawing increased attention from policymakers, the business community, and officials at all levels of government. With labor market demand for low-wage earners continuing to grow, policymakers are trying to develop responses to a major challenge: how to raise household income for this group of workers in ways that are consistent with employers' needs and labor market realities.

In 2001, MDRC and the National Governors Association Center for Best Practices began an extensive examination of potential solutions and identified innovative programs under way in states and localities across the country. The culmination of these explorations is this report, which discusses the importance of serving the low-income working population and highlights many promising practices that take two broad approaches: (1) efforts that aim to increase job stability and career advancement and (2) initiatives that improve access to the range of work supports such as food stamps, subsidized health care and child care, and the Earned Income Tax Credit, many of which were expanded in the 1990s. The report also discusses state-level policy options and suggests principles to guide the development and delivery of services to low-wage workers.

Key Issues

• Practices that aim to improve job retention and advancement. To help low-wage workers (many of them single parents) remain employed, public and nonprofit service providers have developed programs to address problems that could threaten job stability. Working in partnership with employers or directly with individuals, some providers offer enhanced case management services that provide workers with access to counseling, soft-skills training, emergency child care, or assistance in addressing personal barriers. Advancement services, too, are customized to individuals’ experiences and circumstances. They range from helping workers identify and participate in adult and postsecondary education and occupational skills training to working with them to find better-paying jobs in industries that provide pathways to promotion as workers acquire additional skills and education.



 
• Practices that expand access to work supports. Programs that support families by increasing overall income have been expanded, but their greater availability has not always improved access for those who are eligible. States and localities are using a variety of means to address the access problem, including marketing and educational outreach campaigns to raise low-wage workers’ awareness of the availability of these supports and efforts to align eligibility criteria to make access more uniform across programs. They are also streamlining application and recertification procedures, thereby limiting the number of times information is collected and in-person interviews are required. And they are making eligibility determination available in multiple locations outside the welfare office.



 
• State-level policy options. To further the delivery of services to low-wage workers, states can adjust their welfare reform, workforce development, and higher education policies to better target these individuals. They can also fund programs and demonstrations that serve this population. Moreover, states can offer tax incentives to private employers who increase the availability of work supports such as child care or health insurance. Although current fiscal constraints may make it difficult for states to expand existing programs or develop new ones, budgetary pressures can be the catalyst to improve coordination of services, blend funding across systems, and deliver services efficiently.