Trump Tax Plan Would Shortchange Indiana, Middle Class & Working Families (But Would Let Them Eat Cake)
Andrew
Bradley, Senior Policy Analyst
The Trump
Administration’s proposed tax plan would shortchange Indiana as a state, especially
its middle-class and working families, while top earners would pocket a
windfall. Although the administration hasn’t yet released full details of the plan,
their public statements show that Indiana wouldn’t get its fair share of tax
cuts, which would disproportionately benefit the nation’s very wealthiest and
would likely be offset by damaging cuts to vital services.
A new analysis of the Trump tax plan
from the Institute for Taxation and Economic Policy shows that Indiana would only
get an 87% share of tax cuts relative to the state’s ratio of the U.S.
population. This is the 23rd-smallest share among states. In part because
the plan is aimed at high-income households and Indiana is a poorer state, no
matter how you slice it, Indiana gets shortchanged compared to the average
state by Trump’s plan.
Middle- and low-earning
Hoosier families together really get the short end of the Trump tax stick,
while the wealthiest earners profit big-league. Added together, the three low-
and middle-earning quintiles (making up 60% of Indiana’s population) would only
get 11.7% of the planned cuts, while the top 1% alone would take home 46.1% of
the state’s share of tax cuts. The top 1%, all with incomes of at least
$500,500 annually, would get an extra $95,940 each year (at $1,845, enough to
pop the corks on three cases of Moët & Chandon
champagne every single week). That $95,940 in additional cuts for the top 1% is
more than nearly 80% of Hoosiers earn in a year.
By contrast, the bottom 60% of middle- and working-class Hoosiers, all with annual
incomes less than $64,000, would get just $410 per year on average (at $7.88
each week, barely enough for a small
cake from Wal-Mart). So while the outcome
of Trump’s tax plan would shower the wealthiest with luxurious benefits, it
would lead to the destruction of the safety net that provides a measure of economic
security for middle-class and working families. (But it would let them eat cake.)
The upside-down nature
of the Trump tax scheme would only exacerbate Indiana’s regressive state tax
structure, and would do nothing to improve inequality and stagnant incomes for the
vast majority of Hoosier families. Indiana already makes the ‘Terrible
10’ list of most-regressive state & local tax systems that tax lower
& middle-income residents at far higher rates than wealthy earners. Meanwhile,
the same top 1% of earners who benefit most from Indiana’s regressive tax
structure (and who would get the largest payoff from the Trump plan) already saw
incomes grow by 86.9% since 1979. By contrast, the other 99% of earners - largely
shortchanged by the Trump plan - saw their incomes grow by only 2.3% over that
same time period. Even with outsized earnings at the top, Indiana had the fourth-lowest
real median income growth since 2000.
Trump’s tax cuts
wouldn’t come without strings attached. The tax proposal would cost at least
$4.8 trillion over the next decade,
and would mean higher government deficits, forcing a planned $1.85
trillion in devastating cuts in safety net programs, including $116
billion in cuts to SNAP alone. The
puny share for middle & lower-earning Hoosiers would pale in comparison to
gutting services that lift over
a million Hoosiers out of poverty.
Hoosiers should call
the U.S. Capitol switchboard at (202) 224-3121 to let Congress know that voting
for Trump’s tax plan would be choosing benefits for the elite over standing
with Indiana’s middle class & working families. Ask what they will do to
make sure this damaging Trump tax plan never sees the light of day!
____________________________________
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ACTION ALERT: Indy Council to Vote Monday to #RaiseTheWage to $13 for City-County Employees
ACTION ALERT: Indy Council to Vote Monday to #RaiseTheWage to $13 for
City-County Employees
The final vote on Proposition 92 will be August 14th at 7
p.m.
This coming Monday the Indianapolis City-County Council will
take a final vote on Proposition
92, which would raise the minimum wage for City-County employees to $13 per
hour. The vote will come after Mayor Joe Hogsett presents his 2018 budget
proposal.
CONTACT
YOUR COUNCILOR and ask them to VOTE YES ON PROP 92!
Also, be sure to call Mayor Hogsett at (317) 327-3601 and
ask him to make his support for Prop 92 loud and clear!
In May, IIWF Director Jessica Fraser said this at
the unveiling of Prop 92:
“Our research has shown
us that in
NO county in Indiana can even a single adult be self-sufficient on the
minimum wage of $7.25. For
Marion County, the real self-sufficient wage is about $10 an hour for a
single adult. Keep in mind that $10/hour is not a thriving wage-- it’s a
making-ends-meet wage. It is the first
rung on the ladder of upward economic mobility. Proposal 92, which moves all
city-county employees to a minimum of $13/ an hour goes a few rungs higher on
that ladder and will help some city county employees not only get to economic
self-sufficiency but to start on their own paths toward upward mobility and the
middle class."
Supporters of Prop 92 should pack the house Monday night to
show your support. If you can’t make the meeting in person, watch
the Council LIVE to see if your Councilor votes the way you ask them to!
 |
| IIWF Director Jessica Fraser Speaks at Prop 92's Unveiling, May 2017 |
Indiana to Provide Free Community College Certificate Programs for In-Demand Fields
By Rachel Hirsch, State Network Manager, National Skills Coalition, and
Andrew Bradley, Senior Policy Analyst, Indiana Institute for Working Families
Indiana Governor Eric Holcomb recently signed into law Senate Bill 198 which provides free community college to students seeking a certificate in a “high value” field. This legislation, called the Workforce Ready Grant, is the product of a partnership between Governor Eric Holcomb, the Indiana Commission for Higher Education, and the Indiana Department of Workforce Development, and was supported by the Indiana Skills2Compete Coalition. The Skills2Compete Coalition is a bipartisan coalition of state legislators, education policymakers, business, labor and community leaders, seeking to close the state’s skills gap. The state will provide $2 million a year for the grant program.
The Workforce Ready Grant will provide last-dollar tuition assistance to all students enrolled in a certificate program leading to a high value field, regardless of financial need. “High value” fields have been defined by the state as those that have “high job placement, high completion rate, high wage and high demand.” This grant builds on the energy of the state’s "You Can. Go Back." campaign, created last year, to encourage more adults to return and complete degrees and credentials through direct outreach, support from Indiana colleges, and $1,000 Adult Student Grants. Much of the Workforce Ready Grant’s intention is also to help adults return to school and gain new skills. Earning a certificate in an in-demand industry not only helps businesses to fill crucial human capital needs, but also allows adults in low-skilled, low-wage jobs to enter into career pathways leading to family-sustaining wages.
The Indiana Skills2Compete Coalition and National Skills Coalition are strong proponents of policies that help to expand equitable access to middle-skill credentials and careers. Establishing last- dollar scholarships for certificates in in-demand fields, as Indiana’s Workforce Ready Grant does, is one way that states can help adults with limited skills earn a postsecondary credential that leads to a quality middle-skill job while also ensuring that businesses have access to workers with the skills they require.
Middle-skill jobs, which require education beyond high school but not a four-year degree, make up the largest part of America’s and Indiana’s labor market. Many key industries in Indiana are currently unable to find enough sufficiently trained workers to fill these jobs. Like many states, Indiana faces a growing middle-skill gap. In 2015, 58% of jobs in Indiana were middle-skill, but only 47% of the state’s workers are trained to the middle-skill level.
As Indiana policymakers continue to consider ways to close the skill gap, we encourage them to take an expansive view of “high value” fields, so as not to unnecessarily limit students’ access to the diversity of community college pathways that lead to family-sustaining, middle-skill jobs. We also encourage them to look at policies that will leverage the Workforce Ready Grant by further expanding adults’ access to middle-skill training. These include increasing investments in proven programs, such the WorkINdiana adult education program that combines high school equivalency diplomas with industry-recognized credentials, as well as making new investments in job-driven adult literacy services that provide the first rung on the ladder to further middle-skill training. Indiana policymakers can also help adults pursue in-demand, middle-skill credentials by connecting them with services, such as childcare and transportation assistance, that make it easier to balance work and family responsibilities with their training.
The Indiana Skills2Compete Coalition is made up of a bipartisan group of state legislators as well as education policymakers, business, labor, and community leaders that have come together with the aim of closing Indiana’s skills gap and serving as a resource for policymakers working toward that end. The Coalition uses research and data to promote public policies that will bring greater awareness to and help match the skills of Indiana’s workers with the demands its workforce.
*Numerous states have enacted legislation this year to help close the skills gap by expanding job-driven financial aid policies, increasing work-based learning opportunities (particularly apprenticeships), and increasing the use of workforce data. NSC's recent roundup outlines 2017’s key state legislative actions.
Indiana’s employers say they need increased skills, wages, & benefits to grow workforce
By Andrew Bradley
The Indiana Chamber of Commerce
recently released its 10th annual Employer
Survey, and the responses paint a telling picture of the Hoosier workforce
and what’s needed to grow our economy. While the survey results reinforce a
growing demand for skilled employees, they also show employers need to be able
to increase wages and benefits to secure the workforce they want. Indiana’s policymakers can help employers on both counts by implementing a 'Good Jobs' strategy and job quality policies that create a more stable and skilled workforce.
What makes headlines from the
survey is the increasing proportion of employers who report difficulty filling
their workforce with skilled applicants as a top concern, and the 47% who report
unfilled jobs due to a lack of qualified applicants. And those employers have a
point – the data
show a growing gap between the number of in-demand middle-skill jobs and
the percent of Hoosiers who currently have the education and skills attainment
to qualify for them. A new
report from the Indiana Institute for Working Families breaks down the
non-academic barriers (such as childcare, transportation, and stable housing)
that prevent would-be adult students from enrolling, persisting, and completing
the training needed for these in-demand jobs. To help fill the skills gap, Indiana
policymakers should focus on removing these barriers to adult attainment as
they overhaul
workforce policies this year.
Incumbent worker training should
be a natural way to increase the skills of a company’s workforce, but employer
responses reveal roadblocks here, too. While nearly half (48%) of Indiana’s
employers reported they offer tuition reimbursement programs to upskill their
employees, and 40% report partnering with educational institutions to provide
it, few indicated that employees successfully take advantage. Disturbingly high
percentages of employers claim reasons such as employees' lack of desire/motivation to participate
(60%) and ‘see no personal benefit in advancing their education’ (35%). But
taken together, 58% of employers not taking advantage of reimbursement echo
non-academic barriers: employees' inability to afford upfront tuition costs (32%), unaware
(13%), lack of childcare (10%) or transportation (3%). Employers should better
articulate internal career pathways for promotion and compensation to see more
reimbursement program uptake. And policymakers should support their efforts by
expanding and better marketing upskilling programs including prior learning assessments, EARN Indiana
work-study, and aid for working adults pursuing degrees and credentials.
But beyond skill issues, the
Chamber’s survey results about wages give a fuller picture of why Indiana’s
employers have a hard time maintaining a skilled workforce. Nearly half (45%) of
employer respondents agree or strongly agree they have applicants who are not
willing to accept the pay offered, while the reported lack of minimal
educational requirements in those cases was only 27%. That means the Chamber's
own survey speaks to more of a ‘wage gap’ than a skills gap! In addition, only
26% of employers responded being very likely or extremely likely to add
high-wage jobs in next two years. In fact, employers’ specific comments about
their challenge with filling positions included “offering sufficient benefits/
compensation and matching salary expectations.”
The disconnect between employers' reported
difficulty of filling positions and the high percent of applicants turning down
low wage offers reflects a policy environment in Indiana that keeps wages and
incomes below where employers and employees need them to be. Indiana’s
wages increased only one tenth of one percent from 2000-2016, among the
bottom ten in the nation. Median household incomes are more than $5,000 below
the U.S. average as well, and grew
so little in the past year that Indiana slipped from #34 in 2014 to #36 in
2015. U.S.
Chamber of Commerce data from its own members shows a great majority of employers
support higher wage and job quality policies.
Nationwide, 79% of surveyed Chamber members supported raising the minimum wage,
73% supported paid sick leave, and 83% supported paid family leave.[1]
So what can be done? Change often
starts at home, and employers can take steps to provide the wages and benefits
applicants require to be self-sufficient at home and stable on the job.
Companies who have problems with applicants turning down offers should seek to
‘transform
today’s bad jobs into tomorrow’s good jobs’ by utilizing MIT research to
provide wages, training, and skills that will more effectively grow the workforce of the future. These profitable strategies could help give a competitive edge to employers
who feel they’d be putting themselves in a vulnerable position by offering
better wages and benefits than they currently do.
Indiana’s legislators should support
employers’ efforts by ‘raising
the floor’ of wage & job quality policies such as fair scheduling & paid family leave, at the same time they ‘build ladders’ to career pathways with workforce development initiatives.
Improving Indiana’s bottom-dwelling
work & family policies will not only jibe with employers’ wishes as
mentioned above, it will also give business a more stable and self-sufficient
workforce and applicant base. This in turn will help reward high-road employers
and build a high-wage, high-demand business climate for Indiana.
Indiana should listen to
employers when they tell the state they need a skilled, sufficiently-paid
workforce, and policymakers need to do their part to boost the economy and take
the state's workforce to the next level.
[1]
While Indiana received a federal
grant to study paid family leave, the Legislative Council declined to assign it as a topic. This is unfortunate, because as our report shows, a state
insurance system for paid leave could increase the supply of skilled labor and
improve employee retention, morale, and productivity while lifting costs for
businesses.
Like what you see? Please donate to help us advocate for an Indiana economy that works for all Hoosier families!
Federal Bulletin | 6.1.2017
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17 Reasons to Raise Indiana's Minimum Wage in 2017
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17 Reasons to Raise Indiana's Minimum Wage in 2017
May 2017 | Amy Carter & Maria Laster
The past three years, the Indiana Institute for Working Families has given more and more reasons to increase the
minimum wage. This year, we updated the list and added two new items with one
theme: public health. As minimum wage debates continue, the positive public
health outcomes cannot be overlooked or denied. Read on to see a compelling,
though not exhaustive, list of seventeen reasons to raise the minimum wage in
2017.
1. Working Towards Self-Sufficiency - 40 Hour Work Week: There is not one
county in Indiana where working full time (40 hours/week) at the minimum wage
of $7.25 per hour is sufficient to support even a single adult, as shown in our Indiana
Self-Sufficiency Standard 2016 report. A single adult has to work a
median 48 hours per week at the minimum wage in order to be self-sufficient.
The number of hours increases significantly - to 108 hours - for a single adult
with one preschooler and one school-age child. For a family with two adults, a
preschooler, and a school-age child, each
adult would need to work 64 hours for the family to be self-sufficient. Let’s raise
the minimum wage to a level that allows Hoosiers to spend time with the
families for which they are working so hard to provide.
2. Working Towards
Self-Sufficiency – Housing: A full-time (40 hours), minimum
wage ($7.25) worker in Indiana earns about $1,160 per month. The median
Fair Market Rent for a single adult in a one-bedroom home across Indiana’s
counties is $486, equaling 42% of a minimum wage worker’s monthly wages. The rule
of thumb for housing says that no more than 30% of a worker’s monthly
income should be spent on rent. However, national
data shows over a third of US households faced housing cost burdens
(meaning spending more than the rule of thumb) including 17% that are severely
burdened (spending 50% or more of income). In order to afford the Fair Market Rent for a
two-bedroom apartment, which is what a family with children needs, a
minimum wage earner must work 77 hours per
week, 52 weeks per year!
The minimum wage needs to be closer to $14 in order for a minimum wage worker
to afford housing at less than 30% of their income.
3. Working Towards Self-Sufficiency – Childcare: In Indiana, the
cost of childcare almost exceeds monthly earnings for minimum wage workers. In
2015, the average cost of childcare for families with one infant and one four
year old was over
$1,300/month! Comparing that expense to the monthly minimum wage for a
full-time worker, $1,160, it is not difficult to see why families are not
self-sufficient. Childcare
tax credits and state childcare vouchers can help, but not all children
receive vouchers. In January 2017, Indiana had
4,385 children on Child Care Development Fund (CCDF) waitlists. National
data from 2015, the most recent year for which we have data, suggests
that with the current investment in Child Care and Development Block Grant
(CCDBG), only 15% of children eligible for child care assistance are getting
support. A raise in the minimum wage could help make childcare more affordable for
those at two and three times the federal poverty level, thus leaving spots open to increase
access for low-income families who want this aid.
4. Public Opinion: A
strong majority of Americans support raising the minimum wage. According to a
2015 New York Times poll, 71%
of respondents favored raising the minimum wage to $10.10. The Bowen Center for
Public Affairs at Ball State University found in their 2015 Hoosier Survey that 64% of respondents were supportive of a minimum wage
raise to $10.10. While Democrats and Independents were more favorable, almost
46% of Republicans were in favor. It’s time for legislators to listen to their
constituents.
5. Tipped Workers – 26 Years
Without a Raise: Waitstaff in Indiana are paid $2.13 per hour by
their employers (29% of the minimum wage) according to the Department of Labor. Tips are
expected to cover the difference between that wage and minimum wage; if they
don’t, employers are to cover the difference. The last time tipped
workers saw a raise was a quarter-century ago (1991), even as the industry has
seen strong growth and profitability. Women make up the majority in tipped
occupations. According the National
Women's Law Center, gender gaps and poverty rates for tipped
workers are smaller in states where the tipped minimum wage is equal
to the minimum wage. See a simplified table of minimum wage, tipped wage,
and poverty rate of women in tipped occupations here. As
the fight for an increased minimum wage continues, tipped workers cannot be forgotten.
6. It's Not Just for Teens Anymore: Contrary to common perception, fewer than 20% of
workers earning the minimum wage or below are teens. Minimum wage workers
are not just high-schoolers earning spending money; they are at
least 20 years old and have greater family responsibilities. (Check out Table
1 here for a breakdown by age, gender, and race.) In Indiana
specifically, 88% of those who would be affected by an increase in the
minimum wage to $15 are age 20 and older.
According to a recent Economic
Policy Institute fact sheet, “the typical worker who would benefit
from a $15 minimum wage is a 36-year-old woman with some college-level
coursework who works full time.” The minimum wage conversation cannot be pushed
aside based on the perceived age of minimum wage workers. (Though there is no
justification for paying teenagers poverty level wages either. Perhaps a
conversation for another day…)
7. Gender Gap: Based on 2011-2015 data,
white and Asian Hoosier women holding full-time, year-round jobs earn $0.76 for
every dollar paid to white, non-Hispanic men. Black and Latina Hoosier women
earn even less, $0.66 and $0.54 respectively. This is unacceptable and raising
the minimum wage can help. More than 301,000
households in Indiana are female-led. Thirty-two percent of those households –
more than 97,000 – have incomes that fall below the poverty level. Increasing
the minimum wage, especially in these female-dominated professions, could give
these families more money for savings, child care, education, and housing. Because 3/5th of minimum wage workers
in Indiana are women, raising the wage is a good step toward equalizing pay.
8. Wage Erosion: Adjusted
for inflation, the minimum
wage peaked in 1968! (That's 49 years ago. 49 years!) The last federal raise was in 2009 and since then minimum
wage has lost 9.6% of its purchasing power. If the minimum wage had grown with
productivity, it would have been $18.85
in 2016. If it had only grown with average wages, it would still have been $11.35
in 2016. Because the value of the minimum wage has been left to erode due to
inflation, more workers are earning poverty wages. Reducing the erosion of
wages would be a good step towards reducing income inequality.
9. Low-
to Mid-Wage Workers Earning Less: Real
(inflation-adjusted) median hourly wages are down $0.84 since 2007, and 20th
percentile wages are down $0.73. See interactive data here. Raising the minimum wage would likely increase
these mid-range wages as well.
10. Race to the Bottom:
According to a 2016 report from the Bureau of Labor Statistics, 3.9% of hourly workers in Indiana
make at or below minimum wage. 3.9% represents 32,000
workers at minimum wage and 37,000 workers below minimum wage. That's more
than all neighbor states (Illinois 3.2%, Kentucky 3.5%, Michigan 3.7%, and Ohio
2.9%) and the U.S. average of 3.3%.
11. Myth of a Spike in Unemployment: Critics of raising the minimum wage often argue that an
increase will cause a spike in unemployment. However, seven decades of historical data
find no correlation between minimum wage increases and employment levels. On the contrary, in the considerable majority of instances
(68%), overall employment increased after a federal minimum wage
increase. In the most substantially affected industries, the rates were even
higher: in the leisure and hospitality sector, employment rose 82% of
the time following a federal wage increase, and in the retail sector it rose 73% of the time. Moreover, the small minority of instances in which
employment declined —either overall or in the indicator sectors—following a
federal minimum wage increase occurred during periods of recession or near
recession.
12. Economic Growth: In
a stagnant economy, increasing wages can lead to economic growth.
Low-wage workers tend to spend any additional income they receive on their
basic needs. If the minimum wage increases, these workers would pump money into
the economy, boosting GDP, which would produce job growth in the broader
economy. Economic Policy Institute supports this idea, saying that a “high pressure economy that
eliminates the remaining demand shortfall in the U.S. economy and leads to low
rates of unemployment and rapid wage growth would likely induce faster productivity
growth.”
13. Growing the Tax Base: Standard and Poor's cites
rising income inequality as contributing
to weaker tax revenue growth, making it more difficult for state and
local governments to invest in education and infrastructure. This year,
the Indiana General Assembly (IGA) discussed the expansion
of Pre-K education, which not only prepares students for academic and social
success, but allows
parents to work or go back to school. However, funding was not increased
as much as advocates suggested. Increasing the minimum wage could give the IGA
more money to provide supports for low-income Hoosiers (which helps them reach
self-sufficiency, which means more income for taxes, which can increase funding
for education, which helps people reach self-sufficiency, and so on and so
forth.)
14. Reduce Need of and Spending on
Public Assistance: According to a 2016
Economic Policy Institute report using Census data from 2012-2014, for
those in the lowest wage category (those earning up to $9.91/hour), a $1
increase in hourly wages reduces the likelihood of needing public assistance by
3.8%. So if this entire group consisting of 15.5 million workers had an average
$1 increase in hourly wages, there would be an approximate 3.8% decline in
dependence on public aid, or 600,000 fewer workers receiving benefits. The
study also found that for each $1 increase in minimum wage, benefit dollars for
all public assistance programs decreased by $199. If those making $9.91/hour or
less each had an average $1/hour raise, the expenditures on means-tested government benefit would go
down $3.1 billion annually.
15. Future Generations: Low wages not
only affect adults, but children as well. Research has found that
children being raised in poverty have worse physical, psychosocial, and
academic outcomes than more affluent peers. A recent
study of minimum wage increases showed that a $1 increase in minimum wage
implies a 9.6% decrease in neglect reports.
Raising the wage will help ameliorate the deleterious effects of poverty
on children, specifically reducing the risk of child welfare involvement for
children 0-12 years old.
16. Decreasing
Teen Birth Rate:
Teen parenthood costs the public more than $9 billion per year
and can decrease the
educational and employment outcomes
of both the teen and the child. A recent study done by an Indiana University
researcher found that a minimum wage increase of $1 would reduce the adolescent
birth rate by 2%, leading to about 5000 fewer adolescent births per year. As the
discussion on minimum wage continues, positive unintended consequences, like
the effects on public health, can be strong debate points and influences in
creating minimum wage policy.
17. Decreasing
Infant Mortality Factors:
A 2016 study looked at minimum wage, birth weight,
and post-neonatal mortality by state from 1980-2011 to see what effect minimum
wage had on infant mortality and birth weight. They found that a $1 increase
above the federal minimum wage decreased low birth weight births by 1-2% and
decreased post-neonatal mortality by 4%. In 2005, the social and health cost
for low weight births was over $26 billion! Imagine how great the impact is a
decade later. According to KIDS COUNT data from
the Annie E. Casey foundation,
Indiana does not compare well to neighboring states – 7.3 infant deaths per
1000 live births compared to 6.0 in Illinois, 6.7 in Kentucky, 6.6 in Michigan,
and 7.2 in Ohio. (You can see interactive data on infant mortality here.) Raising the minimum wage can not
only save money on public health outcomes, it can literally save lives.
Tag :
Minimum wage
