The Federal safety net: what citizens and non-immmigrants need

Roughly 20% of native-born households need federal support to survive and 35% of immigrant families need this support. Here is how I arrived at this conservative estimate, in the briefest possible words.  

Despite a relative increase in immigrant wages vs native born Americans (go here), there are a disproportionate number of immigrant workers in low paying jobs – say under $13 an hour. The restaurant and farm industries have median wages at that level or lower. The average wage at Walmart is about $14.50 an hour.  If you want to experience vacariously the contribution of low wage immigrant labor today, eat at a restaurant or, more simply, just eat.

Below 200% of federal poverty level, a household basically depends on federal support in food, housing and healthcare to survive. This is column D in the table. The family with a household annual income of under 200% of the federal poverty level is at or below $43,400.

A family of three with both parents earning $14.50 an hour full time (Walmart) has an annual income of $60,350 (col A).

A family, both parents earning the hourly wage of $13 an hour, has an annual income of $54,080 (col B). This wage approximates what the 25th % percentile of high school graduates (ie. 25% from the bottom) make.

Assume that in the Walmart couple, one works half time (perhaps due to disability or to care for the child or parent). The household has $45,240 in income (col C), which is 4% over the 200% poverty level.

Now let’s look at households where both parents left school before completing high school. 28% of immigrants fill that category. They make (estimated from gov’t tables) about $11.75 an hour. The household annual income, with one working half time, is about $37,000 (col E) or 85% of the 200% poverty level.

Summing up, roughly 20% of native-born households need federal support to survive and 35% of immigrant families need this support. These are rough, and perhaps conservative, estimates.

Data sources here, here, here and here.

One indication that the estimate is conservative is that many more people circle in and out of poverty than are in poverty at any one time.  A study of persons at 100% of the federal povety level found that “while 11 to 13 percent of people are in poverty in any single year based on after-tax income, 4 in 10 people spent at least one year in poverty over the 12-year period from 2007 through 2018.”

Use of the 200% federal poverty level is discussed here.


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