A Living Wage Floor

A Living Wage Floor: A generation of direct cash evidence, and the bet that turns it into a foundation every working-age household can count on.

THE BET IN BRIEF
Families should be able to work, care for each other, and build toward a future without the constant threat of financial collapse. But the labor market—defined by low wages, volatile income, and eroding employer benefits—no longer delivers that foundation for a growing share of working households. A generation of direct cash pilots has proven that an unconditional living wage floor works. Now the bet is to build one, and philanthropy is uniquely positioned to catalyze the research, state-level pilots, and systems needed to turn that proof into policy at scale.

Build A Living Wage Floor

The bet is specific: use philanthropic capital to catalyze policy research, state-level pilots, and purposeful administrative systems needed to establish a living wage floor—a regular, unconditional, sufficient cash transfer to ensure security for working-age households that does not depend on employment status, program compliance, or bureaucratic gatekeeping.

The U.S. already relies heavily on cash-based strategies to support households the labor market fails. Unemployment insurance for laid-off workers, disability support through SSDI and SSI, wage supplements through the EITC, and family assistance through TANF all transfer cash to households because wages alone are insufficient. SNAP and Medicaid fill in gaps their incomes can’t afford. These programs have been critical. But they were designed for different purposes and are delivered through different systems. The result is a fragmented, conditional, and often temporary patchwork.

What’s needed is a unified, coordinated approach that provides a genuine bulwark against economic precarity and inadequate, unstable wages. The history of U.S. cash policy shows we can meet that ambition. The recent generation of pilots shows how.

The contrast between TANF and COVID-era relief payments illustrates the stakes of design. TANF, though widely understood as the U.S. cash welfare program, imposes conditions, administrative barriers, and inadequate funds that leave it deeply misaligned with the needs of the families it is meant to serve. The unrestricted cash distributed to parents as part of COVID relief operated on entirely different terms, with no compliance requirements and no restrictions on use. The outcomes were immediate and measurable. Families stabilized. Child poverty dropped to its lowest recorded level. The intervention demonstrated what unconditional cash can do effectively when delivered at scale.

More than 155 direct cash pilots have since built on that evidence. Their explicit goal was to test the prevailing assumption that removing paternalistic restrictions would invite rampant abuse. After 155 pilots, the evidence is unambiguous: virtually no abuse of funds occurred. When sufficient, many recipients used cash to pay down debt, cover basic needs, invest in education and training, and absorb income shocks without falling into crisis. What the pilots cannot do on their own is appropriate funds and become policy. That translation requires sustained investment in research, design, and infrastructure that philanthropy is best positioned to fund.

The current safety net doesn’t fail families by accident — it was designed for an economy that no longer exists.

The intervention has three connected components. First, policy design research: determining how a living wage floor fits within the existing safety net and eventually reshapes it, including how it complements rather than competes with wage-raising strategies, and how adverse interactions with existing benefits can be avoided. Critically, this research must also define what complementary policies—affordable housing, healthcare access, paid leave—need to be in place for cash to do its fullest work.

Second, state and local pilots: testing implementation scenarios at jurisdictional scale before federal policy is viable, building both evidence and political will.

Third, delivery systems: designing the payment infrastructure, eligibility frameworks, and administrative architecture needed to move cash to households efficiently, equitably, and in ways that affirm rather than undermine the dignity of the people receiving it. The current system’s bureaucratic churn is precisely where dignity gets stripped. Easing the application complexity and getting the delivery right is not an operational detail. It is a design value.

The most credible objection is cost. A living wage floor would require significant public resources, yet these may also reduce the need for many other funded interventions inflicted on families by income precarity. But this funding objection, on its own, mistakes the philanthropic role.

The bet here is not to fund the living wage floor itself—that is government’s job. The bet is to fund the proof, the design, and the systems that make a federal living wage floor politically viable and administratively achievable.

Philanthropy’s comparative advantage is precisely here: moving faster than government, taking risks that public agencies cannot, and building the evidence base that eventually compels public investment as the purposeful choice.

The window to build this is now. Economists predict that disruptions and displacements from AI will make access to stable work and quality jobs with benefits even more precarious over the coming decade. Employer-based benefits are already relevant to fewer workers. The structures designed to fill that gap are failing. In ten to twenty years, success means the basic terms of working life have changed. Families are no longer one missed shift or unexpected bill away from crises affecting housing, health, or safety. Instead, they need to have the stability to choose work that fits their lives, invest in their futures, and care for the people who depend on them. That is what an accessible living wage floor makes possible: not just less precarity, but more agency.

The Safety Net: Outdated by Design, Overdue for Reinvention

Fifty-two percent of Americans are economically insecure, lacking the resources to consistently cover basic household costs, build short-term savings, save for retirement, and manage debt. That is not a fringe condition. It is the majority experience.

The labor market is the proximate cause. About 25 percent of all U.S. workers are considered low-wage, earning median hourly wages around $17.00 and median annual earnings of $35,000. Nearly half of low-wage workers, those earning under $25,000, experience significant income volatility. One in five workers earning $10 per hour experiences a period of no work over any given three-month period. And only 41 percent of low-wage workers have access to health insurance, a retirement plan, and paid sick leave combined—though access to a retirement plan is a hollow benefit when wages do not permit contributions and employers rarely match. These are not isolated hardships. They are structural features of a labor market that has shed the employer-provided benefits and wage floors that once made work a reliable path to stability. The expansion of gig and contingent employment has accelerated that erosion, pushing more workers outside the employment relationships that still anchor the benefits system.

The safety net was built to fill employment income gaps from disruptions in steady employment, but that design was for a different economy, one where low wages were a temporary condition on the way to better work. Today, low wages and precarious employment are the destination for a large and growing share of the workforce. Programs like SNAP, Medicaid, and the EITC function less as a safety net and more as a subsidized benefits package for employers who do not pay enough. Today, 92 percent of non-disabled, working-age adults using Medicaid are either wage earners or providing uncompensated care work, as are 86 percent of SNAP households within the same demographic. Meanwhile, the Earned Income Tax Credit boosted the incomes of approximately 24 million workers and families in 2025 by an average of $2,894 per claim.

Volatile incomes compound the problem. When small fluctuations in earnings can trigger changes in program eligibility, households cycle on and off benefits repeatedly—a pattern known as churning. Among SNAP households, working families are more likely to churn than non-working ones. Households with changes in employment status are more than twice as likely to churn. Each cycle means lost benefits, administrative burden, and renewed instability. The system designed to catch people falling is instead structured to let them fall again.

That design failure is being deepened, not fixed. The recently enacted H.R. 1 imposes new work-reporting requirements on Medicaid and SNAP recipients. Experts estimate that 5.2 million adults risk losing health insurance and 2.4 million people risk losing food assistance per month, with much of that loss attributable to documentation barriers rather than failure to meet the underlying requirements. These rules will cost millions to administer without improving employment outcomes. They will make a broken system more expensive and more punishing.

These outcomes are not incidental to the current approach. They are its logic. Solutions built on this foundation will replicate, rather than reduce, the conditions they were designed to address. In 2019, insufficient earnings prevented approximately 33 million people from receiving the EITC in full. One in four children, 17 million, were ineligible for the full Child Tax Credit because their family income was too low to qualify.

Beneath these trends are deep inequities. People of color and women are overrepresented in low-wage and volatile sectors and more likely to be laboring in their homes and communities without any compensation at all. The unpaid value of women’s caregiving work totaled $1.5 trillion in 2019 alone.