Rachel West Archives - Talk Poverty https://talkpoverty.org/person/rachel-west/ Real People. Real Stories. Real Solutions. Fri, 10 Jul 2020 15:22:09 +0000 en-US hourly 1 https://cdn.talkpoverty.org/content/uploads/2016/02/29205224/tp-logo.png Rachel West Archives - Talk Poverty https://talkpoverty.org/person/rachel-west/ 32 32 There’s a Retirement Crisis. The New $15 Minimum Wage Bill Could Help. https://talkpoverty.org/2019/06/26/retirement-crisis-15-minimum-wage-can-help/ Wed, 26 Jun 2019 14:00:20 +0000 https://talkpoverty.org/?p=27167 Congress hasn’t raised the U.S. federal minimum wage in more than a decade, the longest stretch between increases in history. To remedy that failing, House and Senate Democratic leadership have introduced the Raise the Wage Act, which would gradually increase the federal minimum wage to $15 per hour by 2024. It would also link the minimum wage to median wage growth thereafter, and phase out sub-minimum wages for tipped workers, which has been stuck at $2.13 per hour for 28 years, and workers with disabilities, which allows employers to pay disabled workers as little as pennies per hour.

If passed, the new federal bill would also have far-reaching consequences that aren’t widely touted — including helping address America’s growing retirement crisis.

As of 2013, nearly one in five Americans age 55 to 64 had zero retirement savings or pension. The crisis is much more acute for lower-income Americans: While nearly nine in 10 families in the top fifth of the income distribution have retirement account savings, fewer than one in 10 families in the bottom fifth do.

It’s not surprising, then, that seniors increasingly rely on Social Security’s very modest benefits, which make up 90 percent or more of the income of nearly one in four seniors — a share that rises to more than six in 10 for those in the bottom fifth of the income scale.

The yawning gap between the high pay of the rich and the stagnant or declining pay of the working and middle class is a key driver of the crisis: According to the Urban Institute, rising wage inequality means that today’s 45-year-olds in the bottom fifth of the lifetime earnings distribution will have 3 percent less retirement income than today’s seniors, 25-year-olds will have 6 percent less, and 5-year-olds will have 13 percent less. Meanwhile, for the richest fifth, annual retirement income will rise over time.

The amount a worker can afford to save for retirement is tied to her earnings, and the Urban Institute researchers find that raising the federal minimum wage from $7.25 to just $12 — below the $15 Congressional Democrats have proposed — would offset nearly 60 percent of the retirement income lost by the bottom fifth of today’s 25-year-olds, and nearly 40 percent lost by today’s 5-year-olds.

The minimum-wage bill’s impact would be especially profound on workers of color — particularly black workers, a full 40 percent of whom would get a raise. Black workers are paid much lower wages than their white counterparts, with the typical full-time, year-round black male worker earning just 70 percent of what a white male worker earns, while black women make just 61 percent. They also face a much more severe retirement crisis, exacerbated by systematic inequalities that hamper saving, prevent wealth-building, and inhibit upward mobility. Black Americans who are nearing retirement age have only about 10 percent as much wealth as whites in the same age group. Social Security benefits made up at least 90 percent of income for 46 percent of black seniors, compared to 35 percent of whites.

The low-wage, low-quality jobs disproportionately held by workers of color don’t pay enough to make ends meet — much less save — nor do many offer the tax-preferenced retirement accounts such as 401(k) plans and individual retirement accounts (IRAs) that help build wealth. As a consequence of shorter life expectancy and lack of resources, many black men will die before they are able to retire.

This raise is a decade overdue: In 2019, a worker earning $7.25 per hour will lose nearly $2,600 compared to 2009 — when the federal minimum wage last went up — because inflation has eroded the wage’s purchasing power. A $15 minimum wage would also lift millions of Americans out of poverty, dramatically reduce spending on public assistance programs, and improve infant health. In just the last five years, 22 states and Washington, DC, have increased their minimum wages, at little or no cost to government and without the job losses conservative pundits claim will result.

Americans get it: In every single state, voters say want their state’s minimum wage to be higher than it currently is. By passing the Raise the Wage Act, Congress would rightly give voters what they’re demanding, and help address the retirement crisis at the same time.

Editor’s note: This piece was originally published on Jan. 17, 2019. It has since been updated.

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Everyone Is Overlooking a Key Part of the New $15 Minimum Wage Bill https://talkpoverty.org/2019/06/19/everyone-overlooking-key-part-new-15-minimum-wage-bill/ Wed, 19 Jun 2019 13:00:34 +0000 https://talkpoverty.org/?p=23051 This July, the House of Representatives is planning to vote on a bill to raise the minimum wage to $15 by 2024. Most of the media coverage has highlighted the groundswell of progressive support behind the increase — a $15 minimum wage was considered a pipe dream only a few years ago, and now the bill is co-sponsored by a majority of congressional Democrats. But an equally monumental — and largely overlooked — story behind the bill is what it would mean for the 1 in 5 Americans living with a disability.

A loophole in the current minimum wage law allows employers to pay workers with disabilities a subminimum wage that’s even lower than the federal limit of $7.25 — in some cases, paying people as little as pennies per hour. In recent years, an estimated 420,000 individuals with disabilities have been paid an average of just $2.15 per hour.

The new bill would sunset the separate subminimum wage, immediately setting it at $4.25 and then gradually increasing it every year for the next six years until it is even with the minimum wage.

Disability advocates have been pushing for this type of legislation for years. The subminimum wage was initially introduced in 1938 to encourage employers to hire veterans with disabilities — and has barely budged in the nearly 80 years since. Now, the Depression-era policy does far more harm than good. Partly as a result of these extremely low wages, workers with disabilities are nearly twice as likely to be economically insecure as workers without disabilities.

While some advocates argue that the subminimum wage offers workers a foot in the door of the labor market — paving the way to skill development, training, and an upward career trajectory — research shows that it exposes workers with disabilities to exploitation and seclusion. In 2016, phasing out the separate subminimum wage was a key recommendation of the Department of Labor’s advisory committee on employment among individuals with disabilities.

The Depression-era policy does far more harm than good.

In its current form, the subminimum wage pigeon-holes workers into dead-end jobs — most often at sheltered workshops, where workers with disabilities are kept separate from other workers. It’s stigmatizing, sending the message that disabled individuals’ work is not as valuable as other individuals’ work. And it’s discriminatory, robbing workers with disabilities of the basic labor protections afforded to workers without disabilities and leaving them vulnerable to mistreatment and abuse. Senator Casey and others have introduced the Transformation to Competitive Employment Act, which would include a graduated phase out of these programs over six years and financial incentives to support current programs to move to a model of integrated employment at competitive wages. However, the Raise the Wage Act is notable for finally treating these workers as a key part of the workforce from the outset.

Congressional Democrats’ embrace of one fair minimum wage taps into a growing — but so far, largely frustrated — movement. President Obama attempted to partially rectify the law by including workers with disabilities in his 2014 executive order mandating a minimum wage of $10.10 for federal contractors, which President Trump has threatened to reverse. At least six states, New Hampshire, Alaska, Maryland, Washington, Oregon, and Vermont have independently passed legislation to phase out the subminimum wage for workers with disabilities. Other subminimum wages, like the one that exists for tipped workers, have been able to make more progress.  Eight states ban the tipped minimum wage, and all national minimum wage bills introduced since 2012 have included provisions to partially or fully phase it out.

For the 40 million workers who struggle to make ends meet on low wages, the Raise the Wage Act is an historic step towards ensuring a livable wage for all. This call is especially significant for the millions of workers with disabilities who — after 80 years of being left without a voice in federal legislation — are finally able to join the chorus, demanding the fair shot at fair pay that all workers deserve.

Editor’s note: This piece was originally published on May 18, 2017. It has since been updated

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New Bills Address the Racist and Ableist Wage Loopholes in the New Deal https://talkpoverty.org/2019/02/21/new-bills-address-racist-ableist-wage-loopholes-new-deal/ Thu, 21 Feb 2019 18:27:33 +0000 https://talkpoverty.org/?p=27354 While fresh-faced progressive lawmakers have been grabbing headlines with their Green New Deal, multiple bills have been quietly piling up in Congress to plug longstanding holes in the original New Deal. These bills would extend basic but critical labor protections to workers who have historically been cut out of these standards: workers with disabilities, tipped workers, farm workers, and home care workers.

Here’s the tl;dr:

A first bill, introduced at the end of January by Sen. Bob Casey, and Reps. Bobby Scott and Cathy McMorris Rodgers, would phase out section 14(c) of the Fair Labor Standards Act, which has made it legal for employers to pay disabled workers as little as pennies per hour. It would also provide resources to help these workers transition into competitive, integrated employment in their communities.

Second, Congressional Democrats’ $15 federal minimum wage bill, the Raise the Wage Act — introduced in mid-January by Sen. Bernie Sanders and Rep. Bobby Scott with the backing of the full Democratic leadership — would also eliminate the subminimum wage for workers with disabilities and phase out the separate subminimum wage for tipped workers, which is currently $2.13 per hour.

In the first week of February, Sen. Kamala Harris and Rep. Raúl Grijalva introduced the Fairness for Farm Workers Act, which would extend time-and-a-half overtime pay to agricultural workers, as well as minimum-wage protections to most agricultural workers who still lack them.

Finally, Sen. Harris and Rep. Pramila Jayapal recently announced the first-ever federal domestic workers’ bill of rights, which would give the nation’s more than 2 million home care workers long-denied rights to overtime pay, safety and health protections, recourse against harassment and discrimination, collective bargaining, and more.

This legislation is designed to chip away at several pernicious “-isms” written into the United States’ labor law — racism, sexism, and ableism.

Many labor carve-outs are the direct legacy of slavery: At the urging of Southern lawmakers determined to maintain a white economic and social hierarchy, the 1935 National Labor Relations Act (NLRA) and 1938 Fair Labor Standards Act (FLSA) — which established some of our most basic worker protections like the rights to form a union, earn a minimum wage, and receive overtime pay — cut out domestic and agricultural workers, who were overwhelmingly black and brown. At the same time, the discriminatory practice of tipping — which had originally enabled American employers to avoid paying wages to newly-freed black workers — and treating disabled workers as inferior permanently codified some forms of labor as lower-than-minimum-wage work.

As a result, workers in these groups tend to have a lot less power than other workers. For starters, the pay isn’t enough to keep workers out of poverty even if they have a full time job: In recent years, the median annual wage has been roughly $23,000 for tipped workers*, home care workers, and agricultural workers, and an estimated 420,000 disabled workers employed in “sheltered workshops” created under 14(c) were paid an average of $2.15 per hour. These groups of workers are also disproportionately likely to endure physical and verbal abuse, sexual harassment, wage theft, discrimination, and dangerous working conditions.

Many labor carve-outs are the direct legacy of slavery

Yet these unprotected jobs make up a large and growing swath of our economy: Caregiving is the fastest-growing major occupation in the United States, and is forecast to be one of the largest sectors by the end of the next decade, with more than 4.1 million workers employed as home health aides and personal care aides by 2026. The largest employer of tipped workers, the restaurant industry, accounts for 9.5 million workers, which is nearly seven percent of the U.S. workforce. Since these jobs are heavily dominated by women and workers of color, their devaluation perpetuates America’s already-deep inequalities on the basis of race, gender, and disability. The Trump administration has further endangered the many immigrant workers in these professions — who made up 24 percent of domestic workers and 76 percent of farm workers in recent years — by pushing anti-immigrant policies and using xenophobic language that make it even less likely that immigrant workers will seek recourse for illegal or inhumane treatment.

Opponents will likely break out the usual fearmongering that closing loopholes will harm rather than help workers by making it harder to find jobs, like we’ve recently seen in D.C., New Jersey, and Maine. The problem with their argument is simple: States have already enacted these policies and seen positive results. In the eight states where tipped workers are paid the full minimum wage, tipped workers earn more and restaurant growth has outpaced other states. States such as New Hampshire and Maryland are already phasing out the subminimum wage for disabled workers, while eight states and Seattle already have domestic workers’ bills of rights in place. And in several states, including agricultural powerhouses California and Minnesota, farm workers have won overtime protections.

Lawmakers’ proposed fixes are by no means perfect. Perhaps the most egregious untouched loophole affects America’s more than 800,000 incarcerated workers, who earn as little as a few cents per hour — or nothing at all — and for whom labor is compulsory in some states. Also excluded are the roughly 1 in 8 workers in so-called “alternative work arrangements,” including independent contractors (ICs) as well as workers whose employers misclassify them as ICs to avoid taxes and legal requirements, such as Uber and Lyft drivers. Still, even if they’re imperfect and eight decades overdue, the proposed fixes are an important steps forward.

It’s no accident that the champions of these efforts in Congress are largely women and people of color, who come from the communities that have borne the brunt of these exclusionary policies. And it’s encouraging that some lawmakers believe that in addition to big, bold ideas, being a true progressive leader involves unglamorous, piecemeal grunt work, such as plugging the longstanding leaks in the nation’s labor laws. As long as the loopholes continue to exist, the shameful “isms” that create our two-tiered society will continue to stare us down through the holes of our frayed worker protection system.

* The most recent analysis of tipped workers’ wages nationwide, by Sylvia Allegretto and David Cooper, uses 2011-2013 BLS data in 2013 dollars. We assume that median wages have grown at roughly the pace of inflation, adjusting to today’s dollars using the Consumer Price Index for All Urban Consumers.

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DC City Council’s Plan to Overturn the New Minimum Wage Law Will Hit People of Color Hardest https://talkpoverty.org/2018/09/14/d-c-city-councils-plan-overturn-new-minimum-wage-law-will-hit-black-residents-hardest/ Fri, 14 Sep 2018 21:24:15 +0000 https://talkpoverty.org/?p=26620 On Monday, Washington, D.C. Council members will hold a public hearing on the Tipped Wage Workers Fairness Amendment Act. The new bill, proposed by Council member Phil Mendelsen, would repeal Initiative 77—the progressive minimum wage ballot initiative that D.C. voters passed overwhelmingly last June.

Overturning Initiative 77, which would gradually raise the tipped minimum wage from $3.89 per hour to the full minimum wage by 2026, would be a tough blow for tipped workers. They’re already three times more likely to live in poverty than other workers—and those odds get worse for people of color.

New analysis by the Economic Policy Institute shows that in D.C., people of color make up 70 percent of the tipped workforce. This alone ensures that communities of color are most affected by Initiative 77.  Moreover, when we analyzed wage gaps for full-time, year-round workers in tipped occupations (referred to here as “tipped workers”), we found that tipped workers of color also earn significantly less than white tipped workers in D.C.

Black servers receive tips that average 15 percent to 25 percent less than white servers

Among full-time, year-round tipped workers in the District, the median annual wages of Hispanic tipped workers were $25,760—$10,737 less than the wages of non-Hispanic white tipped workers. Non-Hispanic black tipped workers made even less at $25,345, a gap of $11,152. This discrepancy is due in part to the nature of tipping itself, which creates a power structure that permits discrimination to blossom: Academic researchers found that black servers receive tips that average 15 percent to 25 percent less than white servers. The result is a wage gap so big that it could cover nearly 6 months of child care, or more than 8 months of rent, in one of the most expensive cities in the country.

This sizable gaps in tipped workers’ wages mirrors broader economic inequalities in the District, which has one of the nation’s largest racial income gaps. New data out this week from the Census Bureau show that while median household income for white families was more than $134,000, the median black household income was just over $42,000—less than one-third as much. And although at nearly $85,000 per year, D.C.’s Hispanic families have the highest household income of Hispanics across the nation’s 50 biggest cities, it still leaves them nearly $50,000 below white families.

Given the disparities they face, it’s not surprising that communities of color came out strongly in favor of giving tipped workers a raise. Across D.C.’s eight wards, support for Initiative 77 was highly correlated with the share of residents of color. In Wards 7 and 8, where more than 90 percent of residents are black, Initiative 77 passed with more than 60 percent of the vote. The only ward where initiative 77 did not win the majority of the vote was Ward 3—the whitest, and wealthiest, ward in the district.

In other words, if D.C. Council members reverse Initiative 77, they’ll not only be disproportionately hurting D.C.’s communities of color—they’ll also be directly silencing these communities’ voices by disregarding their votes.

Methods: In our analysis, which employs the 2012-2016 American Community Survey,  we used the same “customarily tipped occupations” that the D.C. government used it its minimum wage impact study. This definition is very similar but not identical to the occupations used by the Economic Policy Institute in their analysis. Notes: In this analysis, “workforce” includes all those who are employed.

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Yes, Eliminating DC’s Tipped Wage Would Reduce Poverty https://talkpoverty.org/2018/06/04/yes-eliminating-dcs-tipped-wage-reduce-poverty/ Mon, 04 Jun 2018 16:54:24 +0000 https://talkpoverty.org/?p=25816 This week, polls opened for early voting in Washington, D.C. This season’s campaign has been contentious when it comes to Initiative 77, a ballot measure that would gradually phase out D.C.’s tipped minimum wage, currently $3.33 per hour, and replace it with a unified minimum wage by 2026. The National Restaurant Association has come out hard against it, and signs opposing the measure have appeared in high-end dining establishments across the city.

The trouble is, there isn’t much actual information beyond the signage—and the information being shared isn’t backed by research.

D.C.’s overall minimum wage is $12.50 per hour, and will increase to $15 by 2020. By law, employers have to ensure that tipped workers make that amount as well—by combining the base wage of $3.33 with their tips—and if workers’ wages are too low, employers are required to supplement them. In practice, employers often fail to do this. Research by the Economic Policy Institute found that recent Department of Labor investigations of close to 9,000 restaurants resulted in workers receiving nearly $5.5 million in back pay because of tipped wage violations.

Low wages have left many tipped workers struggling to make ends meet. Roughly 1 in 4 D.C. bartenders, servers, manicurists and pedicurists, and shampooers made $11.71 per hour or less in 2017*—well below a living wage in the district. D.C.’s tipped workers are also nearly twice as likely to live in poverty compared to the city’s overall workforce.

The concerns with the tipped wage go beyond just money—the power dynamics of the tipping system allow discrimination and inequality to flourish. One study showed that black servers receive tips that average 15 percent to 25 percent less than white servers, and in D.C., tipped female workers are twice as likely as tipped male workers to live in poverty. It also paves the way for sexual harassment: 1 in 7 sexual harassment charges filed with the Equal Employment Opportunity Commission are in the accommodation and food service industry.

D.C.’s tipped workers are nearly twice as likely to live in poverty

In contrast, research shows that the eight states without a tipped minimum wage have higher average earnings and lower poverty rates among tipped workers, without hurting their employment rates. Specifically, in equal treatment states, tipped workers’ median earnings are 14 percent higher and the growth of restaurants and restaurant employment is more robust compared with states that use the federal minimum tipped wage of $2.13 per hour. Research also suggests that abolishing the tipped minimum wage may be particularly advantageous for women, as the average wage gap for women tipped workers in equal treatment states is one-third smaller than the wage gap for women tipped workers in states that maintain the federal tipped minimum wage.

While the evidence is clear on the positive impacts for D.C.’s lower-wage tipped workers, the District’s high-end restaurant and bar scene, with its higher-paid workforce, has been the center of attention during much of the debate, with figures ranging from Mayor Muriel Bowser to Chef José Andrés voicing concerns that the unified minimum wage will lead to higher prices and lower pay.

It’s tough to envision that high-end establishments’ well-off clientele, wine-and-dine lobbyists, and company-credit-card-wielding business travelers will suddenly become highly price-sensitive if the cost of a meal rises slightly. And any increase would likely be relatively small: Labor costs only account for an average of 30 percent of restaurant operating costs, and businesses absorb higher minimum wages through reductions in costly turnover and increases in productivity. It’s also unlikely diners would compensate for higher prices by offering a smaller gratuity: data on tipping show that tipping behavior in equal treatment states is virtually indistinguishable from tipping behavior in states that have different minimum wages for tipped workers.

What’s more, this focus on D.C.’s high-end establishments misses the bigger picture. Not only is the district home to many restaurant workers who struggle to make ends meet—even after tips—but one-fifth of D.C.’s tipped workers aren’t in the restaurant industry at all. Many valets and manicurists, for example, don’t earn 20 percent on top of an expensive meal, but the Department of Labor allows their employers to pay them D.C.’s $3.33 per hour base wage as long as they “customarily and regularly” receive $30 or more per month in tips.

Initiative 77—which 70 percent of voters support—would reduce poverty and increase economic security among tipped workers in the district, as well as better protect them against discrimination, wage theft, and sexual harassment. The effects would be particularly powerful for women and people of color. Chipping in a little more for craft cocktails and small plates at happy hour seems like a small price to pay.

* Note: At the time these data were collected, the minimum wage in Washington, D.C. was $11.50 per hour.

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Yes, Replacing Food Stamps With a Blue Apron-Style Delivery System Is As Bad As It Sounds https://talkpoverty.org/2018/02/13/yes-replacing-food-stamps-blue-apron-style-delivery-system-bad-sounds/ Tue, 13 Feb 2018 17:39:26 +0000 https://talkpoverty.org/?p=25205 Yesterday, the Trump administration released its fiscal year 2019 budget. For the most part, it’s similar to last year’s proposal: massive cuts to safety net programs, a big boost in military spending, and very Trump-ed up estimates of economic growth. But this year, tucked into the Department of Agriculture (USDA) subsection, the administration laid out a proposal to take away a chunk of the nutrition assistance many families rely on and replace it with a massive new food delivery program.

Under the proposal, households receiving $90 or more per month in Supplemental Nutrition Assistance Program (SNAP) benefits—which accounts for the vast majority of all of the households who currently participate in SNAP—will receive a portion of their assistance in the form of a box of pre-selected food. According to the USDA, which would be responsible for administering the program, the box would be filled with items like pastas, peanut butter, beans, and canned fruit, intended to “improve the nutritional value of the benefit provided and reduce the potential for EBT fraud.”

In effect, the proposal is a paternalistic spin on Blue Apron: Instead of being able to choose food based on their nutritional and family needs, SNAP households may get standardized boxes of food that the government chooses on their behalf. Hunger and nutrition experts have panned this as “costly, inefficient, stigmatizing, and prone to failure.” A 2016 USDA study found no evidence to suggest that households who receive food stamps need the government to select their food for them—their spending habits are almost identical to other households. (The only exception is baby food—SNAP households buy a lot more of it, because they’re twice as likely to have a child under age 3.) Replacing the food that people are buying for themselves with pastas and canned fruit is likely a nutritional downgrade. And, since the food is being delivered directly to families, it’s unclear whether families will get the opportunity to provide input based on allergies or specific nutritional needs—say, to account for a peanut allergy, or for all that baby food.

As for reducing EBT fraud, the Trump Administration is offering a complicated solution for a nonexistent problem: SNAP fraud is extremely rare, and the government spends about as much money looking for SNAP fraud as it actually finds in misused funds. (As a point of comparison, the Pentagon misplaces enough money every year to fund the entire SNAP program twice.)

The government spends as much money looking for SNAP fraud as it actually finds in misused funds

What’s more likely is that the proposal will become a giveaway to major agriculture companies. Creating this type of program will require a massive number of new government contracts for food, shipping, storage, and delivery. These contracts will have volume requirements that smaller farms will not be able to meet, but they’ll open the door wide to America’s “Big Aglobbyistsincluding those with close ties to Trump’s Secretary of Agriculture Sonny Perdue.

And given that this proposal is paired with a $214 billion cut over the coming decade—nearly one-third of total SNAP spending—as well as punishing time limits for workers who cannot find a job or get enough hours at work, it’s hard to believe this proposal is anything but malicious.

Considering Trump’s past statements on food stamps—and on poverty in general—it’s likely that malice actually is at the core of this. Remember the time that he said the only reason a protestor could be angry that he was talking about food stamps was because the protestor was fat? Or the time he said he “just doesn’t want a poor person” involved in decisions about the economy? The president sees his own wealth as the chief validator of his societal worth, and believes it makes him perfectly qualified to make choices about how low-income people live their lives. This SNAP proposal is the result of that line of thinking. It strips people of control over one of their most basic decisions—what they’re going to eat—and hands it over to a government agency. It flattens out the shades of humanity that go into our food—the garlic or chilis or cumin or fish sauce we use when we need to make dinner feel more like home, or the choice to splurge on a steak for your wife’s birthday dinner even if it means you’ll be scraping by for the rest of the month—and it replaces them with cans of fruit in a cardboard box.

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New Study Shows Free School Lunches Boost Earnings https://talkpoverty.org/2018/02/08/new-study-shows-free-school-lunches-boost-earnings/ Thu, 08 Feb 2018 17:21:41 +0000 https://talkpoverty.org/?p=25156 A new study from a trio of economists proves the old adage that there’s no such thing as a free lunch. According to their research, free lunch actually has payoffs—to the tune of $11,700 more in lifetime earnings for future workers.

The study starts in the 1950s and 60s, when Sweden gradually rolled out high-quality, nutritious, free lunches to every child in its school system. Thanks to Sweden’s meticulous data collection, the authors were able to link detailed information about individual schoolchildren—including how many years they had access to free lunches—with decades of subsequent earnings, employment, and even medical data.

The economists discover that the school lunch program had tremendous positive effects, increasing adult earnings by about 0.35 percent for every year a student had access to the program, for a total of 3 percent—or $11,700 over the working years—for the average kid who was exposed throughout nine years of primary school.

The program’s positive effects were nearly universal, with large gains for the students with family incomes in the bottom 75 percent. Even the richest students derived some benefit, though it was statistically insignificant. For the lowest-income children, the gains were particularly substantial: Kids in the bottom 25th percentile of family income increased their adult earnings by nearly 5.5 percent, for an average of $21,560 more in lifetime earnings.* That means the program’s benefits were seven times larger than the cost of the meals. And, since low-income students benefitted more than students in higher income groups, the program can actually be credited with decreasing inequality.

The study adds to abundant evidence that getting enough food helps kids succeed in school—and in life—with improved school performance, greater economic self-sufficiency, and better health.

Implementing a similar program in the United States would likely have an even larger effect than the one researchers observed in Sweden. In part, that’s because more students stand to gain. School lunches in the United States are typically free only to the lowest-income students—about 20 million kids last year—and experts say they have historically been underfunded and inadequately nutritious.

The program’s benefits were seven times larger than the cost of the meals

There’s also a dramatic difference in inequality between the two countries: Swedes have a much smaller income gap between the rich and the poor, and Swedish kids are only half as likely to grow up in poverty as American kids. As the authors note, “Food shortage and hunger was uncommon in Sweden during the 1950s and 1960s.” The program’s primary goal was to improve nutrition—similar to more recent U.S. changes like the School Meals Initiative for Healthy Children in 1994—rather than addressing a nationwide problem with childhood hunger.

By contrast, in the United States about 1 in 12 families with children experienced food insecurity in 2016, and our nutrition assistance benefits for families (like SNAP, formerly known as food stamps) are so modest that they can’t address the issue. That means school meals are all the more important for low-income American kids; it’s where they get as many as half of their calories. As a result, we’d likely have an even more significant proportion of students making the types of large income gains that Sweden observed with its poorest students.

The argument against such a program, of course, would be its cost. At $3.23 per meal, extending free school lunch to every American schoolchild would cost roughly $19.6 billion per year. ** That’s about 13 percent of what Trump and Republican lawmakers just spent on their monumentally unpopular tax bill. But unlike the tax plan, research shows that this would significantly boost an average worker’s earnings—and it’d be a lot more than the temporary bump of $1.50 per paycheck Paul Ryan boasted his tax law is bringing to workers.

Next week, the stakes are about to get much higher for kids when the Trump administration releases its fiscal year 2019 budget. Trump will likely propose deep cuts to nutrition assistance; last year’s budget cut SNAP benefits by nearly 30 percent. And despite opposition from two-thirds of Americans, congressional Republican lawmakers are already chomping at the bit to help. For kids whose families struggle to put food on the dinner table, that means the cafeteria lunch line may become a lifeline.

* Calculation is based on study’s report of a total real program cost per student of $3,080 over nine years, and an estimated benefit-cost ratio of seven compared to lifetime earnings (that is, earnings between ages 21 and 65) for students in the bottom quartile of household income. Figures representing dollar-value changes in lifetime earnings are based on the study’s calculations, which use the Swedish rather than the US distribution of income and earnings.

** In 2017, an average of 20 million students in primary and secondary schools received free lunch from the National School Lunch Program (NSLP) during each non-summer month. The total federal cost of the program was just over $13.6 billion, of which approximately $10.9 billion went toward reimbursements to schools for free lunches—an average per-participant cost of about $546 for the school year. If all 35.9 million additional schoolchildren in prekindergarten through twelfth grade at schools tracked by the National Center for Education Statistics (which captures all local public school systems and most private schools) were to participate in a newly offered free lunch program to the same extent as the current 20 million participants, the additional federal costs for reimbursements to schools would be about $19.6 billion per year. However, this likely represents an overestimate because many students prefer to bring lunch from home some or all of the time, and the newly eligible students—whose families tend to have higher incomes—may have more resources to do so.

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The Administration’s New Tipping Rule Could Make Sexual Harassment Worse https://talkpoverty.org/2017/12/15/administrations-tipping-rule-make-sexual-harassment-worse/ Fri, 15 Dec 2017 16:25:37 +0000 https://talkpoverty.org/?p=24866 Months into our national reckoning with sexual harassment, media coverage shifted this week from the abuses taking place in elite circles—like Hollywood and Capitol Hill—to the restaurant industry, where prominent restaurateurs like Mario Batali, John Besh, and Ken Friedman face allegations of misconduct toward their staff.

These allegations inch the media coverage closer to the reality many women face, in part because many of the people reporting are ordinary restaurant employees rather than high-profile actresses or news anchors. There’s also the matter of the industry they work in: Low-paid working women are often at the greatest risk for abuse, particularly if they are in service professions.

At the same moment, the Trump administration is pushing a rule that could make tipped workers even more vulnerable to harassment. In early December, the Labor Department—urged on by the restaurant lobby—announced a plan that could allow employers to steal tips from their workers. Under the new rule, employers could pool all tips and distribute this money to other workers, including non-tipped workers—or keep it for themselves. The Economic Policy Institute estimates that the rule could allow employers to pocket $5.8 billion in workers’ tips each year, in an industry where 66 percent of workers are women and 25 percent of workers are women of color.

The rule could allow employers to pocket $5.8 billion in workers’ tips each year

This could result not only in the theft of tipped workers’ wages—even though they are already nearly twice as likely to live in poverty as other workers—but it could also increase their likelihood of being sexually harassed. Tipped workers are often at the mercy of customers to make ends meet financially, and the new rule would add additional pressure from employers and managers who would control the distribution of tips. That could drive conditions from bad—accommodations and food service workers already account for 1 out of 7 sexual harassment charges filed with the U.S. Equal Employment Opportunity Commission—to worse.

And the proposal’s effects don’t stop with tipped workers. If employers choose to redistribute the tips to other non-tipped employees, they could classify them as tipped workers and knock their base wage down to $2.13 per hour. This could raise their risk for sexual harassment as well as wage theft because, while employers are legally required to ensure tipped workers are paid the minimum wage, evidence shows employers often don’t.

There is, of course, another option: Instead of rushing through a rule that will lower wages and increase vulnerability to harassment for tipped workers—all with a very limited period for public feedback—the Trump administration could focus on paying tipped workers fair wages. That means eliminating their separate minimum wage, which is something the minimum wage bill before Congress would do. Evidence shows this would work: In the seven states that have abolished the separate tipped minimum wage—where employers are now required to pay their workers at least minimum wage—tipped workers take home higher pay and are less likely to experience harassment. Pair that with solutions to reduce sexual harassment in the workplace, and you’re poised to make progress not only on economic security but also on reducing the number of workers who have to say #MeToo.

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For the Cost of the Tax Bill, the U.S. Could Eliminate Child Poverty. Twice. https://talkpoverty.org/2017/12/12/u-s-eliminate-child-poverty-cost-senate-tax-bill/ Tue, 12 Dec 2017 21:34:22 +0000 https://talkpoverty.org/?p=24837 Congressional Republicans are rushing to finalize their tax legislation before the holidays. They haven’t held a single hearing, in part because their plan is one of the least popular pieces of legislation ever. It’s easy to see why: The Senate version of the bill would raise taxes on most families making $75,000 or less per year by 2027, while tying a big bow on permanent tax cuts for millionaires and large corporations. And after years of panicking over the size of the deficit, Republican leaders are now planning to balloon it by a whopping $1.5 trillion over the coming decade.

That tells you a lot about Congress’ priorities—especially since, for less than the cost of the Republican tax plan, Congress could eliminate child poverty in the United States. Twice.

According to the U.S. Census Bureau, the 5.7 million poor families with children would need an average of $11,400 more to live above the poverty line in 2016. In total, the income needed to boost these families—along with the additional 105,000 children who were not living with their families—above the federal poverty level is about $69.4 billion per year in today’s dollars. Over ten years, that adds up to about 46 percent of what Congress plans to spend on its tax plan. There would be so much money left over after we boosted these kids out of poverty that the United States could also pay tuition and fees for all of them to get an in-state education at a four-year public university, and it still wouldn’t costs as much as the tax plan.

If Congress wanted to really let loose, and spend just 12 percent more than the tax bill does—for a total of $1.74 trillion—we could completely eliminate all poverty in America.

But instead of reducing poverty in the United States, Congressional Republicans are chipping away at the existing programs that support low-income people. Congress was so fixated on repealing the Affordable Care Act this summer that it ran out of time to reauthorize the Children’s Health Insurance Program (CHIP), which insures 9 million kids. It has been 73 days since CHIP’s funding expired, and more than half of states could run out of money in the first months of 2018. Some are already paring back services in preparation.

Child poverty costs the United States an estimated $672 billion per year

And now, House Speaker Paul Ryan (R-WI) and his fellow Congressional Republicans have announced that their next priority is cutting critical programs such as Medicaid, which provides health care to 2 in 5 U.S. children, and Social Security, which is the nation’s largest children’s anti-poverty program. To pave the way for these cuts, Ryan and friends are already rolling out poisonous rhetoric that paints low-income families as lazy and idle—even though Census data show that most families with children living in poverty do work, and are just being paid so little they can’t make ends meet.

These policies are obviously cruel. But, for a group of lawmakers who fancy themselves business-minded, they’re also stunningly financially irresponsible. Child poverty costs the United States a lot of money: an estimated $672 billion per year in lost productivity, worse health outcomes, and increased criminal activity.

Instead, congressional Republicans are choosing to saddle the nation’s kids with debt—the very thing they’ve repeatedly accused past administrations of doing—to finance a massive giveaway to the wealthy.

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For the Cost of Repealing the Estate Tax, Congress Could Buy Everyone in America a Pony https://talkpoverty.org/2017/10/16/trumps-tax-cuts-rich-congress-buy-every-american-pony/ Mon, 16 Oct 2017 18:01:35 +0000 https://talkpoverty.org/?p=24390 You know how you’ve always wanted a pony? How as a child you dreamed of feeding carrots and sugar cubes out of the palm of your hand to a little chestnut-colored horse named Maple?

It may sound fanciful to adults, but President Donald Trump and Republican leaders in Congress put together a wish list of tax cuts for the wealthy that are far more extravagant than ponies. It turns out for the cost of just one of these tax cuts—repealing the tax on wealthy estates—we could literally buy every single American a pony.

A lovely little Shetland pony, specifically. For all 325 million of us. In fact, the benefits Trump’s own adult children could get from his estate tax repeal would fund nearly 1.4 million ponies—that alone is enough to cover giving a pony to everyone in the state of Maine.

Let’s break down the numbers. Shetland ponies range in price from $300 to $1,500. We’re not lavish people, but we also don’t want to buy a cut-rate horse, so we assumed $800 per pony (and, of course, that there are enough ponies to go around). The larger expenses are the continuous costs of keeping our ponies healthy, active, and thriving: Every year our ponies will need lodging ($2,400), food ($1,200), and visits from the vet ($300) and farrier ($500).

These are sizeable expenses; on average, purchasing and caring for a pony will cost about $44,800 over 10 years. But the Senate is already considering a budget that includes a far more sizable expense: $1.5 trillion over 10 years in higher budget deficits for tax cuts that will mostly benefit the wealthy.

If Congress abandoned its tax cuts for millionaires and wealthy corporations, it could use that $1.5 trillion to purchase and care for a pony for roughly every American child ages 8 and below. Given the current dynamics in the United States—where economic inequality is skyrocketing and My Little Pony: The Movie is now playing in theaters—giving ponies to children is probably a more appropriate policy response than giving tax breaks to millionaires.

1 in 4 families will actually see their taxes rise under his plan.

Alternatively, instead of providing tax cuts for millionaires or ponies for children, lawmakers could also use $1.5 trillion in many other ways to create jobs, reduce child poverty, end homelessness, make college free, or provide paid family leave.

In reality, of course, average Americans will miss out on the pleasures of ponies. A lot of them will even miss out on the tax cuts Trump is promising: 1 in 4 families will actually see their taxes rise under his plan by 2027, while 80 percent of the tax cuts go to households in the top 1 percent. Those tax cuts for the wealthy are enormously expensive, and Congress cannot enact them without severe trade-offs.

Like the continuous costs of pony upkeep, maintaining America’s economy requires ongoing investments—in education, in transportation, in research and scientific innovation. Yet as we’ve seen time and again, when policymakers slash tax revenue by giving handouts to the rich, they turn around and cut these very investments by complaining that we can’t afford them. And policymakers have made no secret that that’s what they plan to do: Trump’s budget gets two-thirds of its draconian spending cuts by slashing programs that serve low- and moderate-income families, to the tune of $2.5 trillion over a decade.

At a time when 44 percent of Americans couldn’t come up with $400 in an emergency—and 9 in 10 prefer economic stability to greater economic mobility—Americans aren’t asking for ponies, presents, or parades. And they’re really not asking for massive tax cuts for millionaires, billionaires, and corporations.

Seventy-five percent of Americans agree that “the wealthiest Americans should pay higher tax rates.” President Trump and Congressional Republican leaders want to give away the horse, the cart, and the country’s future to the rich, leaving little or nothing for the rest of us.

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Study Shows Kids’ Test Scores Drop When Their Food Stamps Run Out https://talkpoverty.org/2017/09/25/kids-test-scores-drop-food-stamps-run/ Mon, 25 Sep 2017 13:20:54 +0000 https://talkpoverty.org/?p=24286 Last week, researchers released a new study that confirms what every student, teacher, parent, and human being with a stomach already knew: It’s harder to think when you’re hungry.

The study’s authors matched up the timing of math tests in South Carolina to the dates when low-income students’ families received monthly Supplemental Nutrition Assistance Program benefits (or SNAP, formerly known as food stamps). They found that kids’ test scores dropped at times of the month when nutrition benefits had run out. Put another way, access to SNAP substantially improves students’ academic performance—but only when there are actually enough benefits for families to be able to eat.

Running out of SNAP benefits isn’t an anomaly—nearly half of participating families run out before the end of the month. That means many students who receive SNAP see their academic performance dip every single month, and then rebound once their families receive more benefits. That’s not surprising, since SNAP benefits average just $1.40 per person per meal; it’s such a gross underestimation of food cost that nearly 80 percent of benefits are spent in the first two weeks. School meals provide a little bit of a buffer—in fact, kids get as many as half their calories from the National School Lunch and School Breakfast Programs—but these programs aren’t designed to provide all the food a child needs to survive. Plus, they can’t reach kids on weekends or during the summer months.

Many students who receive SNAP see their academic performance dip every single month

This new research adds to a wealth of evidence that hunger hampers kids’ ability to learn, holds back their development of social skills, and leads to behavioral problems. And it complements many careful studies that find that access to SNAP and other programs that provide basic living standards have large, positive effects on kids’ long-term outcomes.

What’s new and different about this paper, though, is that it demonstrates the immediate difference SNAP makes to kids, rather than the long-term effects. And it joins a small but growing body of research that examines how the economic insecurity many families experience on a month-to month—or even week-to-week—basis negatively impacts their lives.

This study also reveals a massive missed opportunity: For the modest cost of boosting SNAP benefits so that they’re enough to last all month—about $15 billion per year—the US could dramatically reduce hunger and significantly boost academic achievement and educational attainment for low-income students. That’s a fraction of what Trump has proposed in tax cuts: It adds up to $1 of food benefits for every $29 he wants to give to wealthy corporations and business owners.

Instead, President Trump wants to slash SNAP by a whopping 29 percent over the next decade. That could mean an average of 3.6 million families—including roughly 1.9 million families with children—would lose access to food assistance each year. Not to be outdone, House Republicans propose cutting SNAP by 42 percent between 2023 and 2027, which could leave 7 million families hungry in 2023.

The Roosevelt Institute’s Marshall Steinbaum calls out the irony here: Many elites insist—sometimes condescendingly—that education is the ticket out of poverty. If you’re poor, they imply, it’s because you should have gone to school longer to secure a higher-paying job. But while education does tend to provide some protection from poverty, this misses a key insight. Sometimes, the barrier to education is poverty itself.

It goes without saying that protecting children from hunger is far and away the most important goal of SNAP—and the only necessary one. But studies like this show that when Trump and House Republicans propose gutting programs that ensure basic living standards, they’re not just leaving kids hungry. They’re ripping away low-income kids’ chances to escape economic insecurity and experience upward economic mobility.

How can we expect our nation’s next generation to focus on a dream—especially one as ambitious as the American Dream—when they’re hungry?

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Congressional Democrats’ $15 Minimum Wage Bill, Explained https://talkpoverty.org/2017/05/01/congressional-democrats-15-minimum-wage-bill-explained/ Mon, 01 May 2017 15:10:19 +0000 https://talkpoverty.org/?p=22996 Last week, Democratic leaders in the Senate—including Bernie Sanders, Patty Murray, and Charles Schumer—announced legislation to raise the minimum wage to $15 per hour by 2024.

Five years ago, when fast-food workers formed the Fight for $15 movement, it seemed like a pipe dream. Sanders’s 2015 bill advocating for a $15 federal minimum wage received just five co-sponsors, and throughout the 2016 presidential campaign Hillary Clinton supported a more modest $12 per hour wage. But last week’s bill already has support of nearly half the Democrats in the Senate, and has champions lined up in the House.

With Republicans in control of both Congress and the White House, the bill stands little chance of passing. But raising the minimum wage is one of the best tools we have to fight poverty, so it’s worth understanding the details of the legislation that Congressional Democrats have united behind.

Here’s How the Bill Works

If enacted, the Raise the Wage Act of 2017 would raise the federal minimum wage by $2 this year, to $9.25. That would immediately raise wages in 37 states. Thereafter, the wage would increase by about a dollar per year until it reaches $15 in 2024. Ultimately, that will raise wages in 48 states (New York, California, and the District of Columbia, which make up nearly one-fifth of the national workforce, have already enacted their own $15 minimum wage legislation).

After 2024, increases would be linked to growth in the median wage. That’s actually a big deal. In the past, the minimum wage has only increased when new legislation specifically raised it. That’s a slow process, and Congress typically doesn’t bother to do it until inflation has caused the minimum wage to lose a lot of value.  There have been several proposals to link the federal minimum wage to inflation, so that it would increase automatically each year, but none of them have ever become law. This bill skips right over inflation and links to the median wage, which tends to grow faster than inflation does. That would ensure that wage growth for low-wage workers would keep pace with the rest of the workforce, which would curb inequality and make a meaningful statement about the value of their work.

The bill would also gradually phase out subminimum wages for tipped workers, young people, and people with disabilities. Their minimum wages—currently set at $2.13 per hour for tipped workers, $4.25 per hour for young people, and as low as pennies per hour for disabled people—would be raised gradually until they are even with the federal minimum wage.

By the time the minimum wage hits $15 in 2024, it will likely have the same purchasing power as about $12.50 to $13.50 does today (depending on inflation). That’s about 70 percent to 85 percent greater than the current federal minimum wage, and about 30 percent more than the minimum wage’s peak value in 1968. It would be just enough to keep a family of four out of poverty—unlike the current minimum wage, which leaves a family of four well below the federal poverty line.

Here’s Who It Would Help

According to analysis by the Economic Policy Institute, nearly 3 in 10 American workers—more than 41 million people—would see higher wages under the Raise the Wage Act of 2017. Two-thirds of affected people work full time, and well over half are women. And, although white workers would be the largest group to benefit in terms of population size, the bill would disproportionately help workers of color. More than 4 in 10 African American workers—and one-third of Latino workers—would get a raise. Children also stand to gain a lot, since nearly 1 in 4 have a parent who would be affected.

The average affected worker is 36 years old, and is a primary breadwinner who uses their earnings to support their family. These low-wage workers are not only older, but also more productive and better educated than their counterparts in prior generations. Nearly half (46.5 percent) have at least some college experience.

Here’s What It Would Do for the Economy

The average directly affected full-time, year-round worker would see his annual earnings rise by more than $5,000 by 2024—an increase of nearly one-third. The bill would increase consumer spending and reduce taxpayer spending on public-assistance programs such as nutrition assistance since workers would be able to make ends meet on their own.

To be sure, economists can’t predict the full effects of a $15 minimum wage, even if it is phased in slowly. We can be confident that the increased consumer spending would give local economies a boost, but we can’t be positive that there would be no adverse effect on employment.

There are benefits beyond pure economic growth

Even if employers responded to the wage hike by cutting workers’ hours, or if workers ended up spending a few extra days between jobs, the benefits would likely far outweigh the negatives. First of all, the wage hike is big enough that workers who experience a reduction in hours may still break even or come out ahead in terms of annual earnings. Second, there are other legislative options that could make sure disadvantaged workers do not feel negative effects. This includes, for example, expanding our Unemployment Insurance system to cover low-wage workers who spend a few extra days searching for their next job; extending short-time compensation and partial unemployment benefits for workers who experience reductions in hours; and creating subsidized employment, national service, paid training, and apprenticeship opportunities for folks who are unable to find work.

It’s also worth remembering that there are benefits beyond pure economic growth and workers’ pay. A $15 minimum wage would help increase family stability and close stubborn gender and racial wage gaps. Rigorous research also shows that higher minimum wages improve infant health, reduce crime, and decrease poverty.

It’s a Political Long Shot—but Not Introduced in Vain

Since Republicans have the majority in Congress, this bill can’t pass without their support. And, even though the bill is popular with the public and would help Trump keep his promise to give his supporters higher wages at virtually no cost to government, it’s unlikely that Congressional Republicans are going to reverse course and suddenly support minimum wage hikes.   

But even if Congress doesn’t pass this bill, it will likely encourage wage hikes on a local level. Sen. Sanders’ previous $15 proposal, inspired by the Fight for $15, preceded successful state and local bills such as those in California, New York, the District of Columbia, and Seattle. Similarly, Sen. Murray and Rep. Scott’s bill for $12 by 2020 provided the wage target for Arizona and Colorado’s laws. With a strong majority of voters across party lines supporting a higher minimum wage, more states and localities can be expected to take matters into their own hands by adapting federal legislation.

Correction: This article originally stated that the Raise the Wage Act of 2017 would immediately raise wages in 48 states. It will immediately raise wages in 37 states, and eventually raise wages in 48 states.

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The Washington Post Ran a Correction to Its Disability Story. Here’s Why It’s Still Wrong. https://talkpoverty.org/2017/04/18/washington-post-correction-disability-story-still-wrong/ Tue, 18 Apr 2017 13:55:52 +0000 https://talkpoverty.org/?p=22918 Last week, TalkPoverty pointed out several serious problems with The Washington Post’s recent analysis of Social Security disability benefits in rural America. Yesterday, The Post issued a correction alongside new calculations. Unfortunately, there are still major problems with their data—and their central thesis.

For starters, The Post continues to over-count “working-age” beneficiaries by including more than half a million people over 65—even adding in some people who are more than 80 years old. Moreover, instead of using the Census Bureau’s American Community Survey (ACS)—what the Census calls “the premier source for detailed information about the American people”—The Post uses a far less common data setThe CDC’s “Bridged-Race Population Estimates” data set was developed for the purpose of permitting “estimation and comparison of race-specific statistics.” It is used by researchers whose main goal is to calculate consistent birth and death rates for small-sized racial and ethnic groups—not at all what The Post’s analysis attempts to do. Researchers commonly adjust data for special purposes—but with the understanding that in doing so, they sacrifice the data’s accuracy in other ways. from the Centers for Disease Control and Prevention (CDC). Compared to ACS data, these data undercount the number of working-age people in rural counties, which in turn jacks up The Post’s findings on the percentages of working-age people who are receiving disability benefits in these counties.

But let’s not lose the forest for the trees here. Even using The Post’s flawed methods, they were only able to find one county—out of more than 3,100 counties nationwide—where the story’s central claim that “as many as one-third of working-age adults are receiving monthly disability checks” holds up. Not a single other county even comes close. In fact, The Post’s own analysis—which it has now made available in a public data file next to the story, yields an average rate of about 9.1 percent of working-age adults receiving benefits across rural counties—just three percentage points higher than the national average.*

And yet the article is framed as follows: “Across large swaths of the country,” the article still reads, “disability has become a force that has reshaped scores of mostly white, almost exclusively rural communities, where as many as one-third of working-age adults are receiving monthly disability checks.”

If by “large swaths” and “scores of… rural communities” The Post means McDowell County, West Virginia, population less than 21,000 residents—and nowhere else in America—then sure.

But the fact is there’s a word for using data this way: cherry-picking.

Moreover, if you swap out the unusual data set The Post chose for the aforementioned Census Bureau’s ACS data, you actually won’t find a single county in the U.S. where The Post’s central claim is true—and the dramatic percentages The Post’s map and other graphics depict start to look a lot less, well, dramatic.

Media should take great care in its coverage of critical programs like Social Security Disability Insurance. Reporting based on outliers—not to mention flawed data analysis—risks misleading the public and policymakers in ways that could jeopardize the economic wellbeing and even survival of millions of Americans with serious disabilities and severe illnesses who are already living on the financial brink.

Here’s hoping the rest of The Post’s disability series meets the highest bar for accuracy, even if that means less click-bait.

*The figure is the population-weighted average based on the working age population per The Post’s public data file. Researchers customarily use population-weighted averages to account for variations in county size.

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The Washington Post’s Data on Social Security Disability is Just Plain Wrong https://talkpoverty.org/2017/04/13/washington-posts-data-social-security-disability-just-plain-wrong/ Thu, 13 Apr 2017 18:18:50 +0000 https://talkpoverty.org/?p=22893 Earlier this month, The Washington Post ran a front-page story about Social Security disability benefits in rural counties, followed this past Sunday by an editorial calling for a wholesale restructuring of Social Security Disability Insurance.Often called SSDI, this is the plank of Social Security that replaces some of your lost wages if you become disabled before reaching retirement age. Several SSDI experts, including our colleague Rebecca Vallas, as well as Kathleen Romig of the Center on Budget and Policy Priorities and Dean Baker of the Center on Economic Policy Research, published responses explaining what the Post missed in their reporting. But it turns out the article’s problems go even deeper than they thought. Not only does the Post’s reporting paint a misleading picture about SSDI, but the data analysis they published is just plain wrong.

The Post’s central assertion—flanked by an interactive map—was that as many as one-third of working-age adults in rural communities are living on monthly disability checks. But the data analysis supporting this argument doesn’t hold up.

In a sidebar to the article, the Post says they used publicly available county-level data from the Social Security Administration (SSA) to count “every working-age person who receives benefits through the Supplemental Security Income (SSI) program, the Social Security Disability Insurance (SSDI) program or both.” But the Social Security Administration doesn’t publish the data needed for that calculation. In an email response to our request for these data, the SSA  confirmed that these data are “not readily available.”

The Center for American Progress also reached out to the Post to ask about their data. The Post confirmed in an email exchange that they did indeed rely on publicly available data, and identified the specific reports, tables, and figures they used.

We tried to replicate their analysis, and here’s why their numbers are flat-out wrong. (Warning: We are about to dive head-first into the weeds.)

The analysis overcounts working-age people receiving disability benefits by nearly 500,000. The SSA doesn’t publish county-level data on SSDI beneficiaries in the age range the Post defines as “working age” (18 to 64). SSA’s OASDI Beneficiaries by State and County report does provide county-level data on SSDI beneficiaries (Table 4), including disabled worker beneficiaries. However, of the 8,909,430 disabled worker SSDI beneficiaries whom the table breaks down by county, 472,080—or about 5 percent—are age 65 or older. Including these older disabled workers would inflate the share of working-age people with disabilities.

It overcounts “disabled adult children” by about 750,000. About 1 million SSDI beneficiaries are disabled adult children (DACs)—people whose disability onset occurred before age 22 and who are insured for SSDI benefits based on a parent’s work record. Since the Post claims to count working-age people receiving SSDI, SSI, or both, they need to include working-age DACs. But—contrary to the Post’s data sidebar—there are no data available on working-age DACs at the county level.

The same SSA table from above does provide county-level data on one group of “children” receiving SSDI—totaling 1,755,276 in 2015. The problem is, these children aren’t disabled adults—they’re actually the offspring of disabled workers. Most are under age 18, and most are not disabled. Not only does erroneously using these data mean including minors without disabilities, it also inflates the number of DACs by about three-quarters of a million, since the total number of DACs aged 18-64 is 977,776. What’s more, offspring of disabled workers and DACs are likely differently distributed across counties, creating problems in county-level comparisons.

It can’t accurately adjust for double-counting the 1.3 million working-age people who receive both SSDI and SSI (a.k.a. “concurrent beneficiaries”). About 1.3 million working-age Americans receive a small amount in benefits from both SSDI and SSI—generally people with very low incomes and limited resources. To avoid double-counting these folks, the Post would need county-level figures on concurrent beneficiaries. But here they run into another problem: SSA doesn’t publish county-level data on working-age concurrent beneficiaries. The Social Security Administration does provide the number of people receiving both SSI and Social Security benefits of any type (Table 3), but that figure also includes people receiving any other kind of Social Security benefit (like survivor or retirement benefits). What’s more, they also include concurrent beneficiaries who are children and adults 65 and older. Both of these issues make it impossible to calculate for working-age beneficiaries receiving both SSDI and SSI at the county level. So these county-level figures can’t give the Post what they need to accurately mitigate their double-counting problem.

It’s missing data for a whopping 106 counties. Mostly because of small population size, SSA doesn’t publish county-level data on SSI beneficiaries for 106 counties. This would be problematic for any county-level analysis. But it’s especially notable given that the Post’s article focuses on rural counties—as some 97 of the counties with missing data are rural. It’s unclear how the Post treats these counties in their analysis.

This might seem like a lot of trouble to go through to explain two inaccurate newspaper articles. But the thing is, misleading media reports have consequences—particularly in political climates like the one we’re living in right now. Just this week, White House budget director Mick Mulvaney once again opened the door to cutting Social Security Disability Insurance, despite President Trump’s pledge not to cut Social Security. Misleading media reports based on inaccurate data analysis risk giving Mulvaney and others cover to slash critical programs like SSDI.

Media covering this important program should get their facts straight before going to press.

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The Labor Secretary Nominee Promised to Defer to Trump. That’s a Problem for Workers. https://talkpoverty.org/2017/03/30/labor-secretary-promised-defer-trump-thats-problem-workers/ Thu, 30 Mar 2017 14:30:53 +0000 https://talkpoverty.org/?p=22811 Last week’s political news was dominated by the stunning failure of congressional Republicans’ health care bill. The resulting chaos will ultimately preserve health insurance for 24 million Americans, but it allowed the March 22 confirmation hearing for Alexander Acosta, President Trump’s second choice to lead the Labor Department, to slide by unnoticed.

In a party-line vote, the Senate Committee on Health, Education, Labor, and Pensions advanced Acosta’s nomination today, putting 160 million American workers one step closer to having a protector-in-chief whose views are largely unknown. During his hearing, Acosta fought to keep his opinions concealed. He repeatedly dodged questions about the department’s most significant recent activities, including updating overtime rules, reducing exposure to deadly silica dust, and requiring retirement advisers to act in their clients’ best interest.

But, despite his relative silence on labor issues, Acosta’s past has a giant red flag.

From 2003 to 2005, when Acosta was leading the Civil Rights Division of George W. Bush’s Department of Justice, the division became intensely politicized. An investigation by the Office of the Inspector General found the division violated federal law and DOJ policy by conducting hiring based on candidates’ political and ideological affiliations. Although the report did not find Acosta directly responsible for illegal behavior, former DOJ employee Kristen Clark wrote, “This egregious conduct played out under Acosta’s watch and the Inspector General found that, despite the special litigation section chief informing Acosta of the wrongdoing, Acosta failed to take sufficient action to address the illegal and unprofessional actions.”

Acosta used his authority to push the administration’s agenda.

Acosta’s worrisome record doesn’t end with turning a blind eye to illegal activity. During his tenure at DOJ, Acosta himself was accused of partisan meddling. Just days before the 2004 presidential election, Ohio Republicans challenged and purged the voter registration of thousands of mostly African-American voters through a practice known as “voter caging.” When the case was challenged in federal court, Acosta took the unusual step of sending a letter to the court claiming that the purge was allowed under the Voting Rights Act. Typically, federal agency chiefs go out of their way not to influence elections—but if this behavior sounds like déjà vu, you can thank FBI Director James Comey.

In other words, when the interests of the Bush administration—which favored restrictions on voting rights—conflicted with his responsibility as a civil rights chief, it appears Acosta chose to use his authority to push the administration’s agenda.

And if he is confirmed as labor secretary, Acosta will once again be tasked with protecting a marginalized group of Americans—workers. One of his first tasks will be deciding whether he will enforce a spate of new rules that are designed to protect workers, passed during the end of the Obama administration. The rules themselves are straightforward: companies would have to disclose worker exposure to a cancer-causing dust often found in construction, federal contractors would have to disclose labor law violations, and employers would have to pay overtime to additional eligible workers.  But in some cases, Trump has already criticized them.

If his previous actions are any guide, Acosta will likely place partisan loyalty above enforcement of his agency’s mission. And when he repeated during last week’s hearing that he’d defer to Trump as the “boss,” he gave little assurance that he won’t place ideology above the labor rights and civil rights of working Americans.

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Andy Puzder Brags About Low Wages. Now He’s Nominated to Be Secretary of Labor. https://talkpoverty.org/2016/12/09/andy-puzder-brags-low-wages-now-hes-secretary-labor/ Fri, 09 Dec 2016 15:40:22 +0000 https://talkpoverty.org/?p=21873 President-elect Trump, who campaigned as the savior of the working class, has spent the past three weeks staging a bait-and-switch of epic proportions. His pick for treasury secretary profited off of the 2008 financial crisis, his health secretary wants to cut Medicare, and his housing secretary referred to desegregation as a “failed socialist experiment.”

And now he has nominated Andrew Puzder, the billionaire fast-food executive, to lead the Department of Labor.

If Trump’s actual goal is to display utter contempt for American workers, then burger-czar Puzder is a pretty strong choice. He’s a key figure in an industry that’s notorious for labor abuses, including low wages and wage theft, and he has personally played a strong role in perpetuating those injustices. According to a recent Labor Department investigation, the majority of Puzder’s own restaurants—about 60%—were found to be in violation of labor laws.

Puzder will be tasked with enforcing the very laws he has repeatedly broken.

And now Puzder will be tasked with enforcing the very laws he has repeatedly broken.

Puzder vocally opposes labor protections that are crucial for most Americans, including overtime pay, protections from workplace discrimination, and access to affordable health care. But his nomination deals a particularly violent blow to the nation’s most vulnerable and lowest-paid workers. Despite the fact that he makes more in a day than the typical fast-food worker earns in an entire year, Puzder believes that low-wage workers are paid too much. He has been an outspoken opponent of the minimum wage, which puts him at odds with more than 90% of Americans. And his claims that higher minimum wages lead employers to cut jobs runs counter to decades of rigorous research showing that moderate minimum wage increases boost family income without affecting employment.

Nowhere is Puzder’s nomination more devastating than in the 21 states where policymakers have refused to raise the minimum wage above the federal level of $7.25 per hour. The overwhelming majority of those states—19 out of 21—voted for Trump after he promised to be “a president who will protect them and fight for them.” They have been waiting more than seven years for a raise, and every year the purchasing power of their $7.25 shrinks—making it even more difficult to make ends meet. But with a Labor Secretary who thinks “some jobs don’t produce enough economic value” to justify a minimum-wage increase, a president who has declared that wages are “too high,” and a Republican Congress that has repeatedly rejected widely supported minimum-wage legislation, these workers will likely have to keep waiting.

If the federal minimum wage stays at its current level, by the end of Trump’s first term it will be worth 20% less than it was worth when Congress last increased it in 2009. That means a full-time minimum-wage worker would earn just $13,750 per year in today’s dollars—nearly 15% below the poverty line for a family of two.

Adding insult to injury, Puzder penned an op-ed last year that lambasted Americans who must turn to public assistance to make ends meet. But there’s a simple reason that low-wage workers are eligible for public assistance programs like food stamps and Medicaid: It’s because employers like Puzder pay their employees too little to survive.

It’s the height of hypocrisy that Trump—who sold himself as a champion for American workers—has crowned an anti-labor billionaire to be the nation’s chief advocate for working people. To preserve and protect American workers’ rights, security, and dignity—and to prevent the most vulnerable, lowest-paid workers from sinking further into poverty—lawmakers must take a strong stand against the coronation of this anti-labor secretary.

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7 Steps to Make Sure Unemployment Insurance Is There When You Need It https://talkpoverty.org/2016/09/27/7-steps-make-sure-unemployment-insurance-need/ Tue, 27 Sep 2016 13:53:42 +0000 https://talkpoverty.org/?p=21353 Unemployment can be devastating—just ask the millions of workers who lost a job during the Great Recession. But it’s a commonplace experience: At some point during our working years, two-thirds of us will experience at least a year of unemployment firsthand (either ourselves, or for our household’s primary breadwinner).

The United States already has an effective program that protects workers from falling into poverty or losing their homes when they are laid-off, by temporarily replacing some of their earnings while they look for a new job. Unemployment Insurance (UI) isn’t exactly a household name, but the program’s benefits have provided stability and protection to working families for eight decades.

In 2014, just 1 in 4 jobless workers received UI benefits.

Unfortunately, the program isn’t reaching everyone who needs it—in 2014, just 1 in 4 jobless workers received UI benefits. In large part, that’s because policymakers have failed to update UI to keep pace with dramatic changes in the American workforce and overall economy. But in some states, lawmakers have done even more damage by cutting program benefits and tightening already-strict eligibility rules. This leaves workers—particularly low-wage workers, women, and people of color—without a safeguard if they lose their jobs.

Cutting UI also jeopardizes our entire economy, because it is our first line of defense against recession: it creates demand by boosting the spending power of struggling families, which helps to stabilize the economy during downturns. We’re currently enjoying our seventh year of economic expansion, but we’ve never had an expansion last longer than ten years—so lawmakers should be preparing for the next recession before it arrives.

Here are seven steps that would put the UI program on firm footing before the next economic downturn:

1. Give people enough time to find new jobs

Finding a new job takes time—in 2015, it took an average of 29 weeks. For that reason, UI was designed to replace about half of a typical worker’s wages for up to 26 weeks while she searches for work. But states have been slashing benefits so that they replace far less than half a worker’s wages, and nine states now offer fewer than 26 weeks of support (with Florida and North Carolina cutting off benefits after just half that time).

States are shortchanging workers on a protection they’ve earned.

Since UI is an earned benefit—workers contribute to the program through payroll taxes, just like Social Security—these states are shortchanging workers on a protection they’ve earned. It’s time for Congress to set standards guaranteeing all qualifying workers 26 weeks of protection, and replacing at least half of wages for low- and middle-income workers.

2. Keep workers in the jobs they already have

UI includes a provision that can actually prevent layoffs from happening in the first place. Work sharing  gives employers the option to temporarily reduce their employees’ work hours—rather than laying them off—while UI steps in to replace part of workers’ lost wages.

It’s a win-win—workers keep their jobs and businesses retain experienced employees—but 21 states still haven’t established work sharing programs. Policymakers should ensure work programs exist in all 50 states and the District of Columbia, so that employers and workers have an alternative to layoffs during the next recession.

3. Train unemployed workers for new careers

Many workers whose jobs fall prey to globalization and technological change will need to retrain for work in a different sector. Our nation’s workforce development system—and UI’s reemployment services, in particular—is highly effective, but it is woefully underfunded. As a result, the system doesn’t reach nearly enough workers. Worker retraining actually has bipartisanship support—the only hold-up is Congress’s failure to put more money where its mouth is.

4. Include low-paid workers

It’s bad enough that workers today can legally be paid a poverty wage. But leaving low-wage workers without assistance during unemployment because they were underpaid—even when they have typically contributed the same amount in unemployment tax as higher earners—is downright absurd. Yet because most states use an earnings threshold to determine who is eligible for UI, low-wage workers are only one-third as likely to get UI as higher earners (despite being twice as likely to be laid off).

To avoid punishing low-wage workers, UI eligibility should be based on the number of hours worked—not the amount of money earned. Once someone has worked 300 hours at the state’s minimum wage over the course of two calendar quarters, they should automatically qualify.

5. Protect more women in the workplace

Women are now primary breadwinners in 40% of American households, but UI hasn’t adapted to keep pace with this reality. Women are twice as likely as men to be part-time workers, but since part-time workers are excluded from UI in one-third of states, many women are being unfairly disadvantaged. Women are also more likely to have to leave the workforce to care for an ill relative or for personal reasons such as escaping domestic violence, and some states don’t allow them to receive UI when they search for new work.

All states should extend UI coverage to part-time workers, as well as workers who must quit for so-called “good causes.”

6. Make sure all workers pay their fair share

UI is funded through two modest payroll taxes. Nearly every worker—whether they are making millions of dollars or minimum wage—contributes the same $42 per year in federal UI tax. This is because workers only pay federal taxes on the first $7,000 of their wages every year. This hasn’t been adjusted in 33 years, and each year the tax gets more regressive. Congress should fix this by broadening the taxable wage base—for example, by applying UI taxes to earnings up to $59,000 (about half of the Social Security wage base). This would allow us to lower tax rates while still collecting the same amount of revenue.

7. Build the emergency exits before the next fire.

Jobs are scarce during recessions, so laid-off workers need longer on average to find new work. For that reason, UI has a program called Extended Benefits (EB), which is supposed to automatically activate when a recession approaches. It’s a great idea, but the triggers that turn on the EB program don’t respond quickly enough when unemployment rises, so the assistance EB provides is often too little and too late. To trigger EB now, more than 5% of the workforce would need to be receiving UI benefits—but since so few workers are eligible for UI, that’s a tall order.

Policymakers should fix these triggers so that the UI system is not caught unprepared when the next downturn arrives.

In the longer term, policymakers should give unemployment protections a big-picture update to match the modern economy.

Even if UI were fully updated, a substantial share of unemployed jobseekers today would remain ineligible for UI. This includes new college graduates and caregivers returning to work, as well as gig economy workers such as Uber drivers and TaskRabbit workers. To assist these workers, we should create a Jobseeker’s Allowance—a modest short-term stipend to support job hunting and training. Many countries—such as the United Kingdom and Germany—already have similar programs that help workers connect to job opportunities and improve their work-related skills.

Economic expansions don’t last forever—and experts are increasingly calling on Congress to prepare the nation for the next recession. By taking concrete steps today to fix the cracks in our nation’s unemployment protections, policymakers can protect more working families against the hardship of job loss.

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The Gender Wage Gap Is Wider in States with a Low Minimum Wage https://talkpoverty.org/2016/09/23/gender-wage-gap-wider-states-low-minimum-wage/ Fri, 23 Sep 2016 13:39:26 +0000 https://talkpoverty.org/?p=21318 Last week, the Census Bureau delivered a spectacular report card to the nation for the 2015 calendar year. Poverty fell dramatically, working- and middle-class households saw a long-awaited jump in income, and the share of Americans without health insurance shrank to an all-time low. Even the fine print—the footnotes breaking progress down by race, gender, age, and so on—contained cause for celebration.

As part of this good news, the gender wage gap finally stumbled across the 80 cent threshold. That means that in 2015, the typical full-time working woman earned 80 cents for every dollar earned by her male counterpart. To be sure, it’s only an inch of progress from the previous year’s 79 cents. But any step in the right direction is welcome news, since the gender wage gap is a key reason why women continue to experience higher poverty rates than men.

However, these gains weren’t consistent across all 50 states. A second round of Census data released on Thursday revealed that while no state has yet closed the gender wage gap, places like New York and Delaware are getting closer, with working women earning nearly 89 cents to men’s dollar. But in states like Wyoming and Louisiana, the gender wage gap was just 64.4 cents and 68 cents, respectively.

These stark state-by-state differences aren’t coincidences. In states where the minimum wage increased in 2015, workers with the lowest incomes—those whose wages were in the bottom 10 percent—experienced much faster wage growth than workers in states where no minimum-wage change took place. This wage growth was particularly strong for women, who make up two-thirds of low-wage workers. And in the 21 states where low-wage workers are stuck at $7.25 an hour for the seventh year in a row, the gender pay gap is nearly 25 percent wider than in higher minimum-wage states.

Gender Wage Gap in States with a $7.25/Hour Minimum Wage

If the minimum wage were increased to $12 by 2020, 19.6 million working women would see their wages rise. But Congress—steered by the Republican majority—has stubbornly refused to follow states’ successful examples and heed the will of the voters. Not a single Republican lawmaker has stepped forward to support raising pay for millions of working women—and other struggling low-paid workers across the country—by co-sponsoring the Raise the Wage Act. This federal minimum-wage legislation, introduced last year by Senator Patty Murray (D-WA) and Representative Bobby Scott (D-VA), would raise the wage floor to $12 over a period of five years and gradually phase out the separate sub-minimum wage for tipped workers, which has stood at $2.13 per hour for 25 years. It’s a move supported by more than 3 in 4 American voters, including a majority of Republican voters, yet Congress has yet to pass the bill.

The lawmakers who are dragging their feet on increasing the minimum wage could look to their home districts to see the dire need for the policy. In $7.25 states, working women are struggling disproportionately; poverty among working-age women in these states was more than 7 percent higher than in other states. However, when 80 percent of the U.S. Congress is made up of men, and more than half of its members are millionaires, maybe voters shouldn’t be surprised when lawmakers show they’re out of touch with the challenges facing working-class women.

In a country where 23 of the 30 lowest-paying occupations are female-dominated—and working-age women are 35 percent more likely than men to live in poverty—it should be self-evident that an economic justice agenda and a women’s economic justice agenda are one and the same. Once policymakers recognize this, they should line up behind the public policies that pick up the pace of economic progress for working women

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Inequality Trends, Rising Incomes, and More: What to Look for in the New Poverty Data https://talkpoverty.org/2016/09/12/what-to-look-for-new-poverty-data/ Mon, 12 Sep 2016 12:57:34 +0000 https://talkpoverty.org/?p=17275 There is a buzz around the office this morning, and it’s not just because pumpkin spice lattes are back. It’s because this week we wonks are going to be diving into a treasure trove of new data on poverty, income, and health insurance from the Census Bureau.

Two Census reports—the Current Population Survey and the American Community Survey—are critical resources for advocates, researchers, journalists, and policymakers alike. They provide rich information on issues that impact people’s health and economic wellbeing, ranging from their living situations, to public benefits usage, to how much money they earn.

These data, which are for 2015, inform us about what is working to cut poverty and reduce inequality, and how we might do better from a public policy perspective. Here are four key trends wonks will be examining closely:

Incomes are rising—likely for minimum wage workers, too

Some researchers are forecasting that real median household income might see the largest one-year jump in more than a decade. Low-wage workers should see a rise, too—especially in states that raised their minimum wage. This increase is particularly important for women, who make up nearly two-thirds of all minimum wage workers.

Rising wages, particularly for low-wage workers, could mean that this is the year we learn that the gender wage gap among full-time workers—which stood at women earning 79 cents for every dollar earned by their male counterparts—finally broke the 80 cent-barrier. (Not quite shattering this particular glass ceiling, but moving a step closer!)

Anti-poverty advocates will also examine these data to see if the income gains will reach families in deep poverty—those who have incomes of less than half the poverty line (approximately $12,000 annually, for a family of four).

Don’t kid yourself—racial and gender inequalities are alive and well

Any improvement in the poverty rate and the gender wage gap is critical, but we’re a long way from widespread economic equality. For example, the wage gap for women of color is severe: Last year, African American women typically earned only 60 cents, Native American women 59 cents, and Hispanic women 55 cents, for every dollar earned by their white Non-Hispanic male counterparts.

These gender and racial disparities apply to poverty rates, too. Hispanics and African Americans experienced poverty rates about 2.5 times higher last year than white Non-Hispanics. Women are also more likely to face poverty, as are individuals born in a foreign country, persons with disabilities, and single-parent families.

There is a hidden story in these data about who is more likely to be poor and paid unfairly that wonks and others need to shine a light on.

The data are seriously flawed—especially for LGBTQ people

Every year this Census release sparks conversation about how the stats themselves could be improved. Two topics come up repeatedly: The flawed way that we measure poverty and the shocking lack of data about LGBTQ people.

There is widespread agreement that the federal poverty line—$24,300 for a family of four in 2016—is far too low, which means many more Americans are experiencing serious economic hardship than are deemed officially “poor.” This disconnect isn’t surprising, considering the Official Poverty Measure (OPM) was developed more than half a century ago. A lot of things have improved since then—cars, phones, computers, Americans’ appreciation of soccer—but the OPM hasn’t, even as families’ needs and spending patterns have changed dramatically.

The OPM also fails to account for numerous public policies that relieve hardship. This is one reason why many wonks are fans of the Census Bureau’s alternative Supplemental Poverty Measure (SPM).

The SPM includes income households receive through assistance programs like the Supplemental Nutrition Assistance Program (SNAP), which lifted 4.7 million people above the poverty line in 2014; as well as tax credits such as the Earned Income Tax Credit and Child Tax Credit, which together lifted 9.8 million people out of poverty in 2014. The SPM also incorporates some of households’ necessary expenditures, such as clothing and utilities, and geographic variation in housing costs.

While these poverty measurements are less than ideal, they are far better than having almost no data at all—as is the case for members of the LGBTQ community. The lack of sexual orientation and gender identity data in these data sets is glaring, given that the limited data we do have demonstrate that LGBTQ individuals face higher poverty rates than many other communities. Since funding for anti-poverty initiatives often depends upon being able to show that economic need exists, this dearth of data can prevent the LGBTQ community from receiving help even when there is a clear need.

We must redouble our efforts to ensure we collect much-needed data on the LGBTQ community while also working to reform the way we are collecting and measuring poverty data.

Public policy choices reduce or exacerbate poverty, inequality, and hardship

Last year the Census data demonstrated the huge impact the Affordable Care Act had on Americans’ health care coverage, as uninsured rates fell to a historic low with declines in all 50 states and the District of Columbia. This year wonks anticipate a new low in the uninsurance rate—perhaps even below 9 percent—though it would be even lower if more states expanded Medicaid coverage.

Next week’s release will also show how other smart social programs are effectively reducing poverty. For example, last year’s SPM data revealed that without Social Security fully half of American seniors would have been poor, and that without refundable tax credits, nearly 1 in 4 children would have fallen below the poverty line as well. This evidence has fueled increasing calls from advocates and policymakers to strengthen and expand Social Security, refundable tax credits, and other key safety net programs.

Wonks look forward to continuing to assess our public policy choices based on this year’s data.  We already know a lot about what to do to reduce hardship, boost economic mobility, and increase opportunity.  The new Census data can help us move in the right direction—if we ask the right questions, and look for the answers.

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The Federal Minimum Wage Has Not Been Raised in 7 Years. Here Are the States That Hurts the Most. https://talkpoverty.org/2016/07/25/federal-minimum-wage-not-been-raised-seven-years/ Mon, 25 Jul 2016 12:58:15 +0000 https://talkpoverty.org/?p=16939 Yesterday was the anniversary of the last federal minimum wage increase—for seven years, it has remained at $7.25. Given the breakneck pace of state and local action—26 states, the District of Columbia, and at least 25 cities have ushered in higher minimum wages in the past two-and-a-half years—it’s easy to let the federal minimum wage fade in the nation’s rearview mirror, perched atop a distant do-nothing Capitol Hill.

But in 21 states, low-wage workers are still stuck at $7.25 per hour. That means 57 million workers—nearly 40 percent of our workforce—work in a state where the minimum wage is well beneath the federal poverty level for a family of two. What’s worse, at least 14 states have gone so far as to pass preemptive legislation that prohibits local areas from enacting their own minimum wage policies.

Source: Economic Policy Institute

Low-paid workers in these states aren’t simply being denied a long-overdue raise—they’re actually losing purchasing power. Because the minimum wage has not been indexed to keep pace with inflation, minimum wage workers are falling further behind every day that Congress fails to act.

Workers would need an extra 31 working days—more than six weeks—just to maintain their earnings from seven years ago.

In fact, a minimum wage earner in a $7.25 state who is working full-time, year-round would have to clock an additional 244 hours each year just to take home the same annual pay she did in a single year in 2009, after adjusting for inflation. Put another way, she’d need an extra 31 working days—more than six weeks—just to maintain her earnings from seven years ago.

For all our ingenuity, we haven’t yet figured out how to cram more days into a year. So, until we master the magic of time dilation, every year that Congress fails to raise the minimum wage will effectively mean another pay cut for workers in these states—and with it, a greater struggle to make ends meet.

The American people have made it abundantly clear where they stand on minimum wages. By wide majorities, voters on both sides of the political aisle—including small business owners, who occupy a special place in the rhetoric of many politicians—support raising the wage above $7.25. The research agrees: In the past, minimum-wage policy has proven an effective tool for increasing earnings and reducing poverty among working families—as well as increasing productivity and reducing turnover in the workplace—without leading to job loss.

Only one group seems to have missed the memo on America’s eagerness for higher wages: conservative lawmakers. In 2014, they rejected the Miller-Harkin bill, which would have raised the federal minimum wage to $10.10 per hour, with the congressional vote split almost perfectly along party lines. And so far no conservatives are among the 32 senators and 160 representatives co-sponsoring the federal $12 by 2020 bill that was introduced last year.

On this seventh anniversary of federal wage stagnation, policymakers should resolve not to let another July 25—another 7/25—go by with any workers in our nation still subsisting on $7.25. Federal lawmakers have an increasingly urgent responsibility to reach out to the millions of workers whose state legislatures refuse stand up for—or worse, actively stand in the way of—their right to be paid a decent wage for a hard day’s work. If we do not, struggling workers—surrounded by the rising costs of making ends meet in America—will be left further and further behind.

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Want to Reduce Child Hunger? Make Corporations Pay Taxes on Overseas Profits https://talkpoverty.org/2016/05/25/reduce-child-hunger-corporations-taxes-overseas-profits/ Wed, 25 May 2016 12:59:07 +0000 https://talkpoverty.org/?p=16421 This article was originally published by the Center for American Progress.

In 2014, 46.7 million Americans—more than one in seven—lived in poverty, and nearly half of Americans will experience at least a year of poverty or near-poverty during their working years. Along with causing tremendous human hardship and suffering, poverty is enormously costly to the United States. It hampers educational attainment, reduces health, decreases workforce productivity, and damages the social cohesion of communities. Child poverty alone costs the United States an estimated $672 billion every year—nearly 4 percent of U.S. gross domestic product.

Poverty is not inevitable, particularly not in the richest nation on earth. Rather, its persistence is in large part a result of misplaced priorities and deliberate policy choices. Indeed, it has already been shown—in both past experience and extensive research—that policy choices can make a difference in the lives of low-income families, helping them reach and remain in the middle class. Recently, however, politicians and policymakers have lacked the political will to make many of these policies a priority.

Most good policies are not costless. But the price tags for many poverty-reducing programs pale in comparison with the billions of dollars the United States already spends on tax breaks that primarily benefit wealthy individuals and corporations—funds that could be used to provide adequate nutrition or access to high-quality child care, reduce homelessness, or invest in low-income children and workers. What’s more, the price tags of smart policies do not reflect the substantial public savings the nation experiences from investments that improve health, increase educational attainment, enhance workforce productivity, and boost the economy. To take just one example, every dollar spent on benefits in the Supplemental Nutrition Assistance Program, or SNAP, generates an estimated $1.70 in additional economic activity.

The United States can afford to dramatically reduce poverty and increase economic opportunity. Here are four ways in which the U.S. Congress could make an enormous dent in poverty and the opportunity gap—each costing significantly less than the tax breaks Congress currently gives to the wealthy.

Boost effective tax credits for low-income workers and families

BudgetChoices_webfig1The Earned Income Tax Credit, or EITC, is one of the nation’s most effective anti-poverty tools, encouraging work and boosting family income. In 2014, it helped more than 6.2 million Americans—including 3.2 million children—avoid poverty. However, low-income workers without qualifying children receive very little help from the EITC; indeed, these so-called childless workers are the only group whom the tax code taxes further into poverty. Lawmakers across the political spectrum—including Speaker of the U.S. House of Representatives Paul Ryan (R-WI)—have long called for improving the EITC for childless workers. President Barack Obama’s and Speaker Ryan’s similar proposals, which would double the maximum credit to more than $1,000 and lower the minimum age of eligibility from 25 to 21, would help nearly 13 million workers, lifting more than half a million people out of poverty.

The Child Tax Credit, or CTC, delivers a credit of up to $1,000 per child to families with children. The credit protected about 3 million people from poverty in 2015, including 1.6 million children. Because it is not fully refundable, however, the CTC misses the poorest children entirely, and only about 20 percent of the CTC’s benefits go to families who earn less than $30,000, compared with 60 percent of the EITC.

Expanding the CTC—as proposed by the Center for American Progress in a recent report—would ensure that the credit does not skip the families who need it most. The proposal would also create a supplemental credit—delivered monthly—for families with children younger than age 3. This would nearly double the number of children younger than age 17 who are lifted out of poverty by the CTC and would protect more than two-and-a-half times as many children younger than age 3 from poverty than does the current law.

Reduce hunger and food insecurity

BudgetChoices_webfig2Each year, SNAP benefits, formerly known as food stamps, protect millions of struggling Americans from poverty, including children, individuals with disabilities, seniors, and low-wage working families. SNAP’s nutrition assistance also boosts health outcomes, educational attainment, and earnings over the long term. Currently, the value of SNAP benefits is based on the Thrifty Food Plan, the lowest-cost of the four food plans developed by the U.S. Department of Agriculture, or USDA. At an average of just $1.41 per person for each meal, SNAP benefits—while critical—provide only the “bare bones” of nutritional adequacy. Many families are unable or barely able to stretch these modest benefits until the end of the month: Recipients use nearly 80 percent of SNAP benefits within the first half of each month. Switching to the Low-Cost Food Plan, the second lowest-cost of the USDA’s four plans—would increase SNAP benefits 30 percent. This would dramatically reduce hunger, food insecurity, and poverty, as well as boost long-run economic mobility for struggling families.

End homelessness

BudgetChoices_webfig3Homelessness and housing instability are leading causes—and consequences—of poverty. On any given night in 2015, more than 560,000 Americans faced homelessness, a problem primarily caused by a lack of affordable housing. The housing voucher program plays a crucial role in keeping at-risk households stably housed, yet 3 in 4 eligible families receive no housing assistance due to scant funding.

The Bipartisan Policy Center’s Housing Commission calls for reforming and expanding the Housing Choice Voucher program in order to end homelessness in the United States. Their proposal would provide rental assistance to all 3 million currently unassisted renting households that are extremely low income and cost burdened, meaning that they spend more than 30 percent of their income on housing and utilities.

Allow all families to access high-quality child care for their children

BudgetChoices_webfig4

Child care is an economic necessity for most families with children: 65 percent of children younger than age 6 have all of their available parents in the workforce. But its cost is prohibitive for many families and especially for low-income families. In 37 states and the District of Columbia, the annual cost of child care for an infant is more than half of what a full-time, minimum-wage worker in that state earns. Existing child care assistance reaches only a small portion of eligible families and is much lower than actual child care costs.

Unable to forego critical income from work, many parents have little choice but to seek out low-quality care, potentially putting their children’s health, safety, and development at risk. The Center for American Progress recently proposed a tax credit that would expand access to affordable high-quality child care, allowing more low-income parents to participate in the work force while promoting their children’s healthy development. High-quality child care is an investment in the nation’s human capital: It increases children’s school readiness and reduces the educational disparities—based on socioeconomic status—that can be predicted long before a child even starts kindergarten.

Conclusion

Radically reducing poverty in America may sound like a costly proposition. But compared with the billions of dollars that lawmakers give away to the wealthy each year, Congress could make a huge dent in poverty at a bargain price. What’s more, investments that reduce poverty today will provide enormous economic opportunity for generations to come. Prioritizing the nation’s struggling families is an investment Americans cannot afford not to make.

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What Super Tuesday Voters Need to Know Before They Cast Their Ballot https://talkpoverty.org/2016/03/01/what-super-tuesday-voters-need-to-know/ Tue, 01 Mar 2016 15:29:58 +0000 http://talkpoverty-stage.devprogress.org/?p=11534 Today is Super Tuesday, the day that voters and caucus-goers in 14 states will make influential decisions—decisions that may determine which names appear on the presidential ballot this November and, importantly, which policy proposals are added to the national agenda.

As people in these key states head to the polls, they should take a hard look at the candidates’ plans to reduce poverty and increase economic opportunity for all Americans. As of 2014, nearly one in seven Americans lived below the official poverty level—roughly $24,000 a year for a family of four. The fact that 46.7 million Americans—including 15.5 million children—lived in poverty should come as no surprise, as rising inequality and stagnant wages continue to drive a wedge between poverty and prosperity. At the same time, the costs associated with key elements of economic security—such as child care, higher education, health care, housing, and retirement—rose by more than $10,000 between 2000 and 2012.

But this national picture masks tremendous disparities between the states. Today, families face vastly different chances of escaping poverty and moving up the income ladder depending on where they live. Children growing up in Alabama are more than twice as likely to be poor as children in Wyoming. In Massachusetts, well over half of young adults have been able to access higher education, compared to less than one in three in Arkansas.

If there is one lesson from states’ wildly different track records of reducing poverty and increasing opportunity, it’s this: policy matters.

With Congress in constant gridlock, state policymakers have stepped in to fill this legislative void, introducing a slew of recent policies—some innovative and commendable, others regressive and harmful—that affect struggling families in their states. Presidential candidates—and the voters who are deciding among them today—need look no further than our nation’s so-called “laboratories of democracy” for examples of both positive and preposterous policies.

In the new State of the States report, the Center for American Progress ranks states’ success in reducing poverty and improving opportunity, and highlights the good, the bad, and the ugly of policymakers’ recent decisions. For example, Texas voters face an uninsured rate that is more than five times that of Massachusetts. The Lone Star State ranks dead last in healthcare coverage, and is home to 20 of the country’s 30 worst counties in terms of health insurance coverage. Unsurprisingly, the state has the second-highest health insurance premiums in the country, as well as one of the highest teen birth rates. Yet Texas lawmakers continue their crusade against access to health care for residents by refusing to expand Medicaid, and imposing restrictive rules on healthcare providers that severely limit access to family planning services—particularly among low-income women.

Healthcare isn’t the only basic need that families struggle to meet today. Putting food on the table is all too often difficult for lower-income families—in some states more so than others. Nationwide, about 14 percent of households were food insecure between 2012 and 2014, meaning that they struggled to provide enough food for economic reasons. Three Super Tuesday states—Tennessee, Texas and Oklahoma—ranked among the bottom ten for food security. While the Supplemental Nutrition Assistance Program (SNAP) is designed to alleviate some of the economic stress brought on by food insecurity for lower-income families, some state lawmakers have erected barriers to this national program’s vital assistance. In 2014, eight states—including Texas, Ohio, and Kansas—reinstated harsh work requirements for nondisabled low-income adults, many of who struggle to find jobs in an unforgiving labor market.

Not all states have fallen behind the curve—some states have been pushing strong progressive ideas. That means candidates can turn to multiple states for innovative policy ideas that will improve opportunity and reduce poverty. For example, Minnesota was one of fifteen states to pass a minimum wage increase in 2014. Raising the minimum wage leads to higher earnings and reduced poverty rates among working families, without negatively impacting employment.

States have also taken the reins on paid family leave and medical leave in recent years. Decades after women began to enter the workforce in large numbers, they are still more likely than men to bear the brunt of caregiving responsibilities. Consequently, women are also more likely to experience a reduction in work hours or a disruption in work history, or to leave the paid labor force altogether—factors that explain about 10 percent of the gender wage gap. But states like Rhode Island have taken steps to mitigate this by enacting paid leave policies, which research shows will increase labor force participation and raise wages among women after childbirth.

Presidential candidates and Super Tuesday voters alike need only look to certain states for policies that strengthen American families and help them get ahead. At the same time, voters should hold their state’s policymakers accountable for decisions that damage families’ economic security and make sure presidential candidates learn from the states’ policies—the good, the bad, and the ugly.

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Boosting Economic Mobility through the EITC https://talkpoverty.org/2014/10/10/boosting-economic-mobility-eitc/ Fri, 10 Oct 2014 13:00:55 +0000 http://talkpoverty.abenson.devprogress.org/?p=5012 Continued]]>

The Earned Income Tax Credit (EITC) is one of our nation’s most effective anti-poverty programs, helping more than 6.5 million Americans—including 3.3 million children—avoid poverty in 2012. The EITC also has the rare distinction of being regularly showered with bipartisan support—no small feat in a historically gridlocked Congress.

In addition to reducing financial hardship in the near term, extensive research shows that the EITC is also an investment in the future health and wealth of our nation. For example, a more generous EITC substantially reduces the incidence of low birth weight, a key indicator of both infant health and later-life outcomes. Recognizing these benefits, lawmakers made important improvements to the EITC under the American Recovery and Reinvestment Act of 2009, including boosting the credit for married couples and larger families. These improvements should be made permanent before they expire in December 2017.

In a new Center for American Progress report, we offer new ideas to build on the EITC’s success, strengthening the credit in order to increase economic mobility. In addition to boosting the EITC for childless workers—a recommendation that has been embraced by Democrats and Republicans alike—and lowering the age of eligibility (currently 25) to include younger workers without children, we propose making the EITC a gateway to higher education and training through the Pell Grant program. We also propose an “Early Refund” option which would allow workers to receive a portion of the earned credit in advance of tax-time, lessening the need to turn to predatory payday loans in order to make ends meet. Finally, we recommend that strengthening the EITC should go hand in hand with raising the minimum wage in order to maximize the effectiveness of both policies for low-income working families.

Sharron, a bus driver in Montgomery County, Maryland, volunteers at her local Volunteer Income Tax Assistance (VITA) site and knows first-hand how important the EITC is for struggling families. For low-income single parents with children, for example, the EITC can boost earnings by as much as 45 percent. For someone like Sharron, however—working full-time at minimum wage, but without dependent children—the estimated EITC next year will be just $22. If the EITC were boosted for childless workers, her credit would increase to about $542.

In addition, Sharron recently suffered an unexpected loss of income. A few weeks ago, she was transferred by her employer, and her work is on hold while the transition takes effect. As of last week she was still waiting, with no paycheck, and very little money left in her bank account. She doesn’t know what she’ll do if she has to wait much longer.

For workers like Sharron, financial shocks don’t wait until tax time. When faced with an unexpected drop in income, a medical bill, or a broken-down car, many low-wage workers are forced to turn to payday lenders for immediate financial help. But the triple-digit annual interest rates that these lenders typically charge can quickly turn a small loan into a vicious spiral of debt. To help workers like Sharron avoid these predatory loans and make ends meet, we propose an “Early Refund” option of up to $500.  While that might seem modest compared to an average EITC of $2,335, it exceeds the size of the typical payday loan, which is $375.

Weathering emergencies isn’t the only reason to allow workers to access a portion of the EITC they have earned prior to tax season. A shortfall of cash may prevent families from making beneficial investments in their own future. A required training course for a new job, a summer math camp for a talented child—these are small expenditures today that pay significant dividends tomorrow. But these opportunities for advancement are often no longer available come spring when a family finally receives its EITC.

The EITC could be bolstered as a tool for economic mobility in other ways as well. Individuals who receive federal assistance through the Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), and several other types of public benefits are automatically eligible for the maximum Pell Grant; we recommend automatic eligibility for EITC recipients as well. This would streamline the process for receiving federal aid for higher education and training and put educational advancement within reach for more low-income workers and their families.

Strengthening the EITC to promote financial security, encourage savings, and increase access to education and training would not only increase its effectiveness in combatting poverty, but also create new pathways to the middle class.

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