Center for American Progress

RELEASE: New State Data Show Weak Safety Net Policies Exacerbate Economic and Racial Inequalities
Press Statement

Washington, D.C. — A new report and accompanying data interactive from the Center for American Progress demonstrate that U.S. regions with larger populations of color have weaker safety nets and anti-poverty policies, and that regions with weaker safety nets have worse economic outcomes overall.

The report and interactive look at data from the years 2000, 2010, and 2019 to examine regional differences in earned income tax credit (EITC), minimum wage, unionization and other worker protections, unemployment insurance, and Temporary Assistance for Needy Families (TANF). The authors found that the South, West, and Midwest (as defined by the U.S. Census Bureau) have consistently weaker safety nets than the Northeast, while the South and West both had significantly weaker economies than the Northeast in terms of poverty, food security, employment, and median income.

The authors found that because people of color are more likely to live in states with weak social safety nets, regional inequities in safety net policy potentially exacerbate racial economic inequities in the nation as a whole. The interactive allows users to examine the relationships between a number of variables at the state level, such as unemployment insurance average weekly benefits compared with the Black population rate, union representation with poverty rates, and TANF maximum benefit with food insecurity.

CAP’s analysis revealed several key regional takeaways and trends:

  • States in the South have, on average, the lowest TANF and unemployment insurance benefits of any region, and those benefits are received by fewer would-be eligible adults and families than in other regions.
  • Southern states are also the least likely to provide a refundable EITC supplement or a minimum wage above the federal level of $7.25.
  • States in the Midwest and West have significantly weaker safety nets than the Northeast, on average, across several dimensions.
  • States in the South, Midwest, and West are much more likely to enact policies that discourage or prohibit labor union activity.
  • The South has a relatively higher Black population than the Northeast, while the West has a relatively higher Hispanic population. These demographic trends leave many families of color with relatively weaker safety net protections.
  • States in the South have higher poverty rates, more food insecurity, smaller employment-to-population ratios, and lower median household incomes, even after adjusting for regional differences in prices and purchasing power.

The authors note that regional boundaries and trends can mask important differences within regions and states.  Still, there is a clear trend in many parts of the country showing that many state and local governments are underserving and failing to protect their lowest-income residents, increasing hardship for families and harming their economies.

The report also lists policies all levels of government should take to boost their social safety nets including increasing benefit levels for aid programs, particularly in the form of direct cash assistance; expanding eligibility and outreach for safety net programs and easing onerous administrative burdens; raising asset limits and earned income disregards to offset potential benefit cliffs; and setting strong minimum standards at the federal level for benefits and recipiency of safety net programs.

“As last week’s U.S. Census Bureau data confirmed, one of the biggest policy lessons from the pandemic is that strengthening social safety net programs is an effective way to both keep families out of poverty and keep the economy afloat,” said Justin Schweitzer, co-author of the report and policy analyst with the Poverty to Prosperity Program at the Center for American Progress. “Our analysis shows the benefits of a strong social safety net at the state and regional levels. Quite simply, U.S. regions with stronger safety nets not only have less poverty but also have stronger economies. As we rebuild from the COVID-19 crisis, policymakers must take the opportunity to strengthen assistance programs across every state and region to ensure that no one is consigned to poverty simply because of where they live.”

Read the report and use the interactive: “How Weak Safety Net Policies Exacerbate Regional and Racial Inequality” by Alexandra Cawthorne Gaines, Bradley Hardy, and Justin Schweitzer

For more information or to speak with an expert, please contact Julia Cusick at [email protected].