Policymakers Should Make Investments that Help Put People on the Path to Economic Security
Today’s U.S. Census Bureau report shows that our state’s gradual economic recovery still hasn’t substantially expanded economic opportunity for working people and families in Wisconsin. Median incomes are still well below their pre-recession level (adjusted for inflation), and our state’s elevated poverty levels have yet to begin declining.
According to the new Census Bureau data, Wisconsin’s overall poverty rate edged up slightly last year to 13.5%, which is roughly one in seven state residents. Although the small increase from 13.2% in 2012 is not statistically significant, the change over the last five years is very clear. There were about 755,000 Wisconsinites living in poverty last year, an increase of 186,000 since 2008, when the overall poverty rate was 10.4%.
“We simply can’t accept three quarters of a million Wisconsinites living in poverty as the ‘new normal,’ ” said Ken Taylor, executive director of the Wisconsin Council on Children and Families (WCCF). Read more
Increasing Both the Earned Income Tax Credit and the Minimum Wage Would Strengthen Wisconsin’s Families
State lawmakers who want to help Wisconsin families recover from the recession should move to boost both the state’s earned income tax credit and its minimum wage. Each policy on its own helps make work pay for families struggling on low wages, but improving them at the same time goes further to putting working families on the path to economic security and opportunity, according to a new report from the Center on Budget and Policy Priorities.
Low wages make it hard for working families to afford basics like decent housing in a safe neighborhood, nutritious food, reliable transportation, quality child care, or educational opportunities that put families on a path to greater economic security.
But, state lawmakers have tools that can help address stagnant low wages. One, increase the state Earned Income Tax Credit. Two, raise the state minimum wage and make future increases automatic to keep up with inflation
These policies both are targeted to assist only those who are working, helping them to better afford basic necessities, including the things that allow them to keep working, like car repairs and child care. Read more
Women are vastly-overrepresented in jobs that pay low wages, in Wisconsin and across the country, according to a new report from the National Women’s Law Center.
Women’s educational attainment and work experience have increased dramatically in recent decades, but they are still far more likely than men to work at low-wage jobs, which are defined in the report as jobs that pay $10.10 an hour or less. In Wisconsin, 1 in 5 women work in low-wage jobs – adding up to nearly a quarter of a million workers. In contrast, only about 1 in 12 men in Wisconsin work in low wage jobs. Put another way, Wisconsin women are 2.3 times as likely as Wisconsin men to work for low wages.
Many women who work in low-wage jobs are parents, according to the report. Nearly one-third of women nationally who work at low-wage jobs are mothers, and nearly half of these mothers are single. Read more
Paul Ryan has a released a new poverty plan that advocates consolidating federal safety net programs and turning the money over to the states. It’s always worth taking a look at changes that could make anti-poverty program more effective, but Ryan’s approach would decrease opportunity for individuals living in poverty, not increase it.
Ryan frames his new proposal as aimed at giving low-income people the tools they need to make ends meet and lift themselves out of poverty. According to his proposal, Expanding Opportunity in America:
“A key tenet of the American Dream is that where you start off shouldn’t determine where you end up. If you work hard and play by the rules, you should get ahead. But the fact is, far too many people are stuck on the lower rungs…There are many factors beyond public policy that affect upward mobility. But public policy is still a factor, and government has a role to play in providing a safety net and expanding opportunity for all.”
Ryan believes that a fundamental redesign of how federal anti-poverty programs deliver services can help expand opportunity across the board. Read more
The minimum wage has lost about 11% of its purchasing power due to inflation since 2009, making it harder for low-paid workers to make ends meet. (In comparison, CEO compensation rose 46% between 2009 and 2013.)
Some states have increased their own minimum wages, rather than waiting for Congress to do it. Nineteen states have set their own minimum wage higher than the federal minimum wage, including our neighboring states of Illinois ($8.35) and Michigan ($7.40), where a Republican-controlled legislature recently approved a wage increase to $9.25 by 2018. In Minnesota, the minimum wage is scheduled to rise to $9.50 by 2016. In contrast, state lawmakers in Wisconsin have taken no action to increase the minimum wage.
It’s too bad that Wisconsin lawmakers have refused to raise the minimum wage, because such a move would have broad-based benefits for workers. Read more
A Decade in the Wrong Direction: Wisconsin Student Poverty Rate Increases for the 10th Consecutive Year
A recent release from the Wisconsin Department of Public Instruction reports upsetting news concerning the state’s student poverty rate. The percentage of Wisconsin children representing low-income families has increased for yet another year.
In the 2013-14 school year 43.3 percent of students were eligible for free or reduced-price school lunches. Although this is only an increase of one-tenth of a percentage from the previous academic year, it is important to note that this pattern of seemingly small increases over the past decade has led to a near 14 percentage increase in the number of Wisconsin’s children who are from low-income families and thus, eligible for free or reduced-price lunch.
Students who are in families with an annual income that is less than 130% of the federal poverty level quality for free school meals, while students in families earning more than the 130% but less than 185% of the federal poverty level are eligible to receive reduced-price lunches. Read more
Fast food workers in Wisconsin are part of a national strike to rally for higher wages. Strikes took place in Milwaukee, Madison, Wausau, and other Wisconsin cities. Workers are advocating for a wage floor of $15 an hour.
New Federal Money Provides Chance to Close Large Hole in W-2 and Improve Child Care
Wisconsin got some good news from Washington over the last couple of months, in the form of supplemental federal funding for Temporary Assistance for Needy Families (TANF) and additional child care and development funds (CCDF). The plans for using part of that additional funding – $19.8 million from TANF and $3.8 million from CCDF – will be reviewed by the Joint Finance Committee (JFC) on May 6th. (The LFB paper can be found here.)
I’ve written numerous times over the past year or so about the fact that the biennial budget bill made very unrealistic assumptions about declining participation in the state’s welfare to work program, known as Wisconsin Works or W-2. The budget bill cut the W-2 appropriation and siphoned off TANF block grant funding by using it to supplant state funds for the Earned Income Tax Credit. Read more
A worker in Wisconsin needs to earn more than twice the minimum wage to afford a typically-priced two-bedroom apartment, a new study has found. Wisconsin workers need to earn $14.76 an hour in order to afford the rent for a two-bedroom apartment. The state’s minimum wage is $7.25.
In some cities in Wisconsin, the hourly wage needed to afford a two-bedroom apartment is even higher. For example, in Kenosha, an hourly wage of $18.65 is needed to afford a typically-priced two-bedroom apartment. That means even two minimum-wage workers in Kenosha who work full time the whole year could not rent a two-bedroom apartment without having housing costs exceed 30% of their income. Other metropolitan areas in Wisconsin including Madison, Milwaukee-Waukesha, and Janesville, have housing costs that require an hourly wage that exceeds twice the minimum wage of $7.25/hour.
Unlike housing costs, the minimum wage has been frozen since 2009. That means that as rents go up, workers earning the lowest wages have increasing difficulty making ends meet. Read more
Early investments in children can help overcome the effects of poverty and income inequality that reduce opportunity for many Americans. But too many parents, particularly low-income ones, are forced to choose between their jobs and making the kinds of investments in children that can last a lifetime.
Workplace flexibility and access to paid leave are basic workplace benefits that help keep parents in the workforce while allowing them to be responsive to the needs of their families. But as this op-ed piece in the New York Times points out, few low-income workers have access to those basic workplace benefits. The lack of these benefits undercuts economic mobility, making it harder for the children of today’s low-income workers to achieve their full potential.
Only 15% of the lowest-paid workers have access to paid time off in case of illness, or to care for a sick family member, compared to nearly 8 out of 10 of the highest paid workers. Read more