Service sector workers have always been essential to the health of NH’s economy. The COVID-19 pandemic has elevated the importance of their contributions. But many of these workers earn relatively low wages, despite providing vital health care, food and grocery, transportation and other essential services. As a result, many rely on public programs to meet their own basic needs, such as Medicaid for access to health care and the Supplemental Nutrition Assistance Program (SNAP) for nutritional aid.
A recent analysis from the Center on Budget and Policy Priorities found that, nationally, 5 million front-line workers receive health coverage through Medicaid. The report identified essential/front-line workers as those working in food production, manufacturing (including medicine), public services (including civic and public safety), transportation, utilities, warehousing, health care services, retail and other services, including child care.
In NH, this analysis found that 38%—more than one in three—of the state’s low-income front-line workers rely on Medicaid for health coverage. In this analysis, low income is defined as earning less than twice the federal poverty threshold, which amounted to less than $26,128 in annual household income for a single individual under age 65, less than $34,616 for one adult under 65 with one child under 18, and less than $40,462 for one adult under 65 with two children under 18.
Low-income essential workers are also likely challenged to afford other necessities, such as food, which have increased in price during the pandemic. Recent data from the Consumer Price Index for the Northeast indicates food prices in July were about 4.2% higher than last year, while overall inflation was 1.1% in the same period.
SNAP aids individuals and families with lower incomes by providing them with supplemental resources to purchase food, which during times of recession and increased food prices may be a key support for many of NH’s front-line and essential service sector workers. This program is designed to quickly respond in times of need. SNAP also helps stimulate the economy, particularly when it is weak, by boosting spending in local economies while providing direct assistance to those in need. An analysis by Moody’s Analytics of various economic stimulus tools used in response to the Great Recession found that every dollar invested in SNAP benefits, which are fully funded by federal dollars, generated $1.74 in economic impact in early 2009. This return on investment was greater than any other policy Moody’s examined.
The swift economic downturn brought on by the pandemic has affected lower-wage earners more substantially than any other income group. Recent analysis by the NH Fiscal Policy Institute identified that low and middle wages for workers had only recovered the ground lost in the long slow recovery since the Great Recession in the last few years, with some lower wages still a bit behind their pre- recession estimated levels. The data indicates that before the onset of the COVID-19 crisis, the purchasing power of individuals who had consistently earned a low- or middle-income wage had only recently returned to near the purchasing power levels experienced before the Great Recession. Relative to those earning higher salaries and wages, lower- and middle-income Granite Staters had less time to be economically prepared for the COVID-19 crisis.
And because many front-line and service sector jobs pay lower wages, those who may have been least economically prepared for the current crisis are more likely to have been deemed essential and potentially face higher health risks.
As NH considers its policy response to mitigate the health and economic crises in the months ahead, leveraging federal dollars available to support Medicaid, SNAP and other key programs will support residents with lower incomes and those struggling economically, including potentially many front-line and service sector workers. These efforts will also help stimulate the economy and build an equitable recovery. Helping to ensure NH’s essential workers and residents who are most vulnerable to the effects of the crisis have access to health and economic supports will be key to a better future for all Granite Staters.
AnnMarie French is executive director of the NH Fiscal Policy Institute, an independent nonprofit, nonpartisan public-policy research organization based in Concord. Learn more at nhfpi.org.