Low Wages, Public Assistance, and Subjective Financial Well-Being: Evidence from a Qualitative Study of Minimum Wage Workers in Seattle
*Names in bold indicate Presenter
This study uses multiple waves of respondents’ monthly budgets and qualitative interview data to examine both the objective and subjective realities of financial well-being. We draw from theories of subjective well-being and personal agency to understand how these families view their financial situation and the choices they have to get by or get ahead. Specifically, we ask four questions: 1) How do monthly income and expenses balance? 2) What are the respondents’ subjective experience of financial well-being? 3) To what extent does subjective financial well-being reflect the objective balance of monthly income and expenses? 4) To what extent does subjective financial well-being relate to the use of work, public assistance, and other strategies to make ends meet?
Preliminary findings suggest that many families have monthly expenses that exceed income, but the number of these families decreased as the minimum wage increased. Respondents fell into four subjective financial wellbeing groupings: “things are good,” “we’re getting by,” “unsatisfied,” and “stressed.” Subjective financial well-being relates to objective budget realities, but not as strongly as one might expect. While those in the stressed category often had a lower or negative net balance in their monthly budget, there were people in the other categories that fared similarly on paper, but maintained a different subjective experience of their situation. Respondents in each of the categories utilized public assistance and community-based support, such as SNAP and housing subsidies, but stressed respondents tended to rely on these resources the most. Respondents who fell into the “things are good” category used public assistance the least. Cutting back or shifting around expenses, depending on what was most urgent, was a strategy used by respondents across groups to make ends meet on a monthly basis.