The High Cost of Doing Good: Earnings in Social Assistance Jobs in the United States

Workers in care occupations and industries in the United States earn less than counterparts with similar personal characteristics in other jobs. We document considerable gradation within care services, showing that workers employed in social assistance earn less than workers in other care industries such as education and healthcare. We posit that social assistance providers are particularly vulnerable to pay penalties because their clients suffer from low bargaining power, weak political voice, and cultural stigmatization. Institutional context matters—social assistance has witnessed a shift from public to private provision since the 1980s; unlike other care industries, private sector workers in social assistance (most of whom work in non-profits) earn less than their counterparts in the public sector. We suggest that public subcontracting to private firms is a cost-cutting strategy that has put downward pressure on the wages of social assistance providers.