Building Platforms for Prosperity on Capitol Hill

"Economic justice is the unfinished business of the Civil Rights movement."
Hope Enterprise Corporation CEO Bill Bynum at the CFED Assets Learning Conference in Washington DC

By Derek Thomas

To increase asset acquisition for low-wealth Hoosier families and to strengthen our local economies in Indiana, the Institute (along with Indiana Association for Community and Economic Development and Local Initiative Support Coalition) co-leads the Indiana Asset & Opportunity Network (Indiana A&O Network).

This week, the Indiana A&O Network is participating in CFED's Asset Learning Conference in Washington D.C. where we've had the opportunity to learn more about "building platforms for prosperity". 

During this conference, CFED also released - along with Community Development @ CITI - their Assets & Opportunity Local Data Center (a brand new tool to measure financial vulnerability in cities and counties across the nation). With this data, we now know that in Indy, for example, 30.8% are asset poor, 44.7% are liquid asset poor, 14.3% are unbanked and 25.6% are underbanked.

We're also thankful for the time Representative Todd Young, Senator Joe Donnelly and Senator Dan Coats have set aside for us to discuss A&O Network's federal policy agenda to complement our policy goals back home in Indiana. 

We'll talk to all of them about the critical role federal tax policy plays in promoting financial security and economic opportunity, highlighting CFED's latest reportFrom Upside Down to Right Side Up - Redeploying $540 Billion in Federal Spending to Help All Americans Save, Invest, and Build Wealth. 

The report highlights that while "the federal government spends $540 billion (in 2013 alone) on tax programs to boost savings, investments and wealth....most of these programs are Upside Down". According to the authors, this means that "households in the top 1% receive more than a quarter of all support from these programs - more than the entire bottom 80% combined." To turn this "upside-down spending right side-side up", the paper features policy proposals "so that all Americans can save, invest, and build wealth." 

In addition, to complement positive wealth-building efforts in Indiana, we'll:

Ask Senator Donnelly and Senator Coats to support the Senate companion bill for the American Savings Promotion Act, which allows expansion of Prize Linked Savings. The Act passed the House of Representatives with bipartisan support this week. When Governor Pence signed HEA-1235 in 2014, Indiana joined a handful of states that allow credit unions to offer this innovative savings tool. Senate passage would complement Indiana's efforts by expanding access to banks.

We'll also ask each of them to support the Protecting Consumers from Unreasonable Credit Rates Act of 2013 to reduce the costs for small-dollar credit to 36% APR. According to the Center for Responsible Lending, "payday lenders create a multi-billion dollar debt trap and aggressively market payday loans as a way to meet a one-time need but specifically designed to force borrowers to take out loan, after loan, after loan at an average interest rate of nearly 400%." Their research finds that: the typical borrower is stuck in 9 loans per year; 75% of payday loans come from borrowers with 10 or more loans per year, and; a typical borrower with 10 loans in a year paid $458 in interest alone to borrow $350.

Ask Representative Young to co-author bipartisan legislation to exempt college savings programs - such as 529's and Children's Savings Accounts - from asset tests. Research shows that students who have savings are four times more likely to graduate collegeYet, asset limits act as a disincentive to college savings program participation by forcing families "to choose between saving money for college and putting food on the table." This common-sense legislation would allow all families to save for higher education and complement Indiana's post-secondary completion efforts.

Thursday, September 18, 2014

Inequality in Indy - A Rising Problem With Ready Solutions

By Derek Thomas

This week, the Indy Star reported on the U.S. Conference of Mayors’ ‘Income and Wage Gaps Across the U.S.’ report.  The story presented the group’s finding that “wage inequality grew twice as rapidly in the Indianapolis metro area as in the rest of the nation since the recession”, largely due to the fact “that jobs recovered in the U.S. since 2008 pay $14,000 less on average than the 8.7 million jobs lost since then.

We at the Indiana Institute for Working Families have spotlighted similar problems in our report, ‘Work and Poverty in Marion County’: four out of five of the fastest growing industries in Marion County pay at or below a self-sufficient wage for a family of three ($798 per week); weekly wages declined over the past year, and; median household income declined 11 percent from 2008 – 2012. Each year that poverty increases, economic mobility - already a real challenge in Indy - becomes more of a statistical oddity for the affected families and future generations.

There are ways we can address these problems. The mayors’ report proposed several solutions that were not mentioned in the Star's story. Those include: increasing the minimum wage, strengthening the Earned Income Tax Credit, public programs to retrain displaced workers, universal pre-k and programs to build the nation’s infrastructure.

The Mayors’ report is among a growing and diverse chorus of economists, policymakers and advocates warning about the dangers of rising income inequality. Most notably, just days prior to the Mayors’ report, Standard and Poor’s Rating Service (S&P) – “[t]ackling an unusual subject for a credit-rating firm” – warned that inequality was damaging the economy.  

Policymakers in Indianapolis should take these warnings seriously. At last count in Marion County: following an 82 percent increase over the last decade, poverty is still rising; the minimum wage is less than half of what it takes for a single-mother with an infant to be economically self-sufficient; 47 percent of workers do not have access to a paid sick day from work, and; a full 32 percent are at or below 150 percent of the federal poverty guidelines ($29,685 for a family of three).

To cite S&P: “Some degree of rebalancing—along with spending…could take the form of reallocating fiscal resources toward those with a greater propensity to spend, or toward badly needed public resources like roads, ports, and transit.” 

George W. Bush increased the minimum wage and Ronald Reagan strengthened the EITC because they knew, as S&P knows, and as our mayors and so many others know, that putting money into the hands of low-income families is not only good for our families, but for entire communities.

Wednesday, August 13, 2014

Indiana’s Kids Count On Us for Policies to Improve Child Poverty, Too!

photo courtesy Indiana State Fair
(photo courtesy Indiana State Fair)

By Andrew Bradley

More than one in five Hoosier children are stuck living in poverty, and they need Indiana’s policymakers to tackle innovative policy solutions to help secure their future. Data recently released by Kids Count and the Indiana Youth Institute reveal that the poverty rate for Indiana’s children has worsened over the past decade, jeopardizing the economic well-being not just for today’s kids, but also the social and economic future of our state. But poverty doesn't have to be a forgone conclusion for Hoosier families: by implementing “two-generation” policies that do double duty by helping parents put themselves on the pathway to economic success while simultaneously putting kids on the path to educational and personal success, Indiana can turn around a decade lost to economic decline.

While the Kids Count data book has some bright spots for Indiana children, including gains in health coverage and educational attainment, the worsening economic trends show where Indiana’s policymakers’ attention needs to turn. The data finds that as of 2012, 22.1% (350,000) of Indiana’s children were living below 100% of Federal Poverty Guidelines (FPG), down 0.5% from a year ago, but up dramatically from just 15.7% in 2004. The rate of child poverty has worsened even since the recession ended in 2009, when 19.9% of Hoosier kids lived in poverty. The Kids Count data also suggests that the lack of economic security of Indiana’s kids’ parents and communities endangers the whole family. A full 30% of Indiana’s children have parents that lack secure employment, up from 28% in 2008. Perhaps most disturbing is the increase of Hoosier children living in areas of concentrated poverty, up almost four-fold from only 3% (48,000 kids) in 2000 to 11% (182,000 kids) in 2012.

Sadly, these figures only confirm the research that we at the Indiana Institute for Working Families have been reporting: our working families have suffered a ‘lost decade’ economically, made worse by a policy climate inhospitable to low-income Hoosier families. According to our ‘Status of Working Families in Indiana 2012’ report, Indiana has seen a 30% increase in child poverty since 2007, the 8th largest increase in the U.S. and greater than that of all our neighbors in that period except Michigan.  Beyond the narrow federal measure of poverty, we know that 38.7% of Hoosier children live in low-income families (that is, those below 200% FPG), ranking 32nd in the nation. These are working families, too: 72.8% of Indiana’s low-income families already work, with low-wage jobs only on the rise. In fact, 41.5% of Indiana’s children under 13 from working families were living below 200% of the poverty line in 2012, ranking 33rd in the nation according to Working Poor Families Project data.

It would be negligent (not to mention naïve) for Indiana’s policymakers and advocates to pin their hopes solely on the educational gains of children and rely on Hoosier kids to grow up to solve the state’s deep-rooted problems of poverty on their own. That’s because when children grow up poor, the effects of poverty often don’t melt away even under the best of circumstances. According to a study by the Urban Institute, “persistent poverty among children is of particular concern, as the cumulative effect of being poor may lead to especially negative outcomes and limited opportunities.” The stark truth is that after a decade of growing child poverty, Indiana’s policymakers and advocates commit malfeasance by avoiding serious attempts to alleviate the economy’s impact on low-income families.

However, Indiana’s policymakers have a history of taking two steps back for every step forward on child poverty. This year, the Institute included as part of our 2014 policy agenda a proposal to smooth out the ‘Cliff Effect’ that happens when a $0.50 bump in income leads to the loss of up to $8,500 in quality child care benefits. This low-cost proposal was introduced as a bill during the recent session of the General Assembly, but it didn't go far in the Statehouse. Indiana also currently has the potential to take a step forward with a pilot program that could lead to universal pre-kindergarten. But the state would take at least two steps back if it follows through with the idea of “obtaining a Head Start and a Child Care and Development Fund (CCDF) block grant to fund prekindergarten or early learning education programs in Indiana”, which would in effect take from the futures of infants and toddlers in order to fund a program for 4 year olds.

To reverse the trend of inadequate policies, Indiana must intentionally invest where its needs are the greatest: in the economic well-being of both Indiana’s kids and their families. To see permanent improvement in Indiana’s stubborn child poverty problem, the state should purposefully seek to implement “two-generation solutions” that help the whole family by giving an economic boost to low-income parents while providing the foundation of future success for their kids. While the term isn't new, advocates including the Annie E. Casey Foundation and the Aspen Institute are now championing state-based two-generation policies that focus on adult-focused systems that serve low-income parents and children. Many of the strategies dovetail with initiatives that Indiana has already begun to explore, and have the potential to benefit parents by helping them develop marketable education and skills while also improving kids’ chances at success by providing a more secure and stable home environment. Here are a few examples:

* Provide education & training to both generations at once: parents are better able to earn high-quality degrees and credentials (which would help Indiana reach its Big Goal) when children have access to high-quality childcare and families are supported with wraparound services. An example is CareerAdvance in Tulsa (described in this brief by CLASP), which provides skills training for parents leading to a degree in health sciences while simultaneously connecting to child care, transportation, and links to services such as HeadStart that provide “intensive parenting support”.

* Multiply the impact of workforce development: combine the Indiana Career Council’s new Sector Strategies Taskforce with the current momentum of early childhood education in the state. According to the Aspen Institute, the “combination of high quality early childhood education (preschool through 3rd grade) with sectoral job training leading to high skill/high wage employment, supplemented by wrap-around family and peer support services, will lead to long-term academic and economic success for low income families”.

* Expand access to financial literacy and assets for all members of the family: policies that unlock economic opportunity and financial literacy are more powerful when they impact every family member. Indiana’s federal representatives should support child savings accounts and financial education for low-income students, while simultaneously removing asset limits and encouraging prize-linked savings for parents, all key parts of Indiana's Assets & Opportunity Network agenda. Meanwhile, Indiana should be careful to protect existing policies such as the state’s Earned Income Tax Credit against attempts at ‘simplification’ that would strip away important tools with little in return for working families.

This is just the tip of the iceberg: Indiana’s policymakers and advocates can immerse themselves in a whole arsenal of research studies and policy proposals that provide options for customized state-based two-generation solutions. Beyond that, stakeholders should stay tuned in late 2014 for the most up-to-date data and policy recommendations from the Institute’s upcoming ‘Status of Working Families in Indiana’ report. Armed with the data of Indiana’s decade-long, untreated crisis of child poverty and a full toolbox of two-generation solutions, the state has no excuse not to make progress towards reducing the poverty rate of Hoosier children and their families in 2015.
Wednesday, August 6, 2014

Indiana Tax Conference: If You're Not At The Table, You're On The Menu

By Derek Thomas

On Tuesday, June 24th, Governor Pence will hold a closed-to-the-publicTax Competitiveness and Simplification Conference’ at the Indiana Government Center. According to Indiana Law Blog, the event leans heavily on “outside sources” and will feature academics, national think-tanks, local law firms, large CPA firms, state and local officials, the Indiana Chamber of Commerce and Indiana Manufacturers Association. 

Because work is the key to economic self‐sufficiency, policymakers should be commended for ensuring that Indiana is a business‐friendly environment. However, the last decade has disproportionately been defined legislatively by picking winners in Indiana’s economy through lopsided tax-cuts for high-income earners and profitable corporations. Yet, according to The Times of Northwest Indiana"Indiana came in dead last [in 2013] among surrounding states in total facilities or expansions per capita...and was second to last after only Minnesota in the 12 U.S. Census Bureau-designated Midwestern states". Moreover, in the past several years, Indiana has seen increases in poverty-wage jobs at a rate faster than all neighboring states and the national average. And over the last decadeHoosiers themselves have experienced some of the largest declines in household incomes, swelling of inequality, and increases in impoverished and low-income individuals in the nation. Reworking these low-road growth strategies of low-taxes and light-regulations into transformational strategies to improve the economic health of working families will be, perhaps, the greatest challenge for policymakers. Because working-families haven’t had a representative seat at the table, here are some suggestions we’ve submitted on their behalf - a toolbox of family-friendly tax-policies to raise the standard of living for all hard-working Hoosiers.

Ensure That Profitable Multi-National Corporations Are Paying Something Resembling The Legal Rate   When large companies are able to dodge almost all state income taxes on their U.S. profits, the inevitable impact is a tax shift away from big corporations and onto everyone else, including small businesses and middle-income families. Creating a level playing field between large businesses and “mom and pop” businesses should be a priority for state policymakers—but that is best done by repealing harmful tax giveaways, not through reducing corporate income tax rates. 

Provide Relief To Those With The Largest Burdens – To reflect the realities of struggling working-poor families, and to help more Hoosiers close the gap between stagnant wages and the cost of the most basic needs. The most recent 3% reduction in the states personal income tax was regressive in its distribution. More than half (55%) of the 3% cut will flow to the best-off 20% of Indiana residents, while the bottom 60% will see 23% of the cuts, and the poorest 20% will receive just 2% of the cut. Currently, Indiana ranks as the 9th most regressive tax system in the nation (with the 7th highest taxes on the poor). Combining all of the state and local income, property, sales and excise taxes, the average overall effective tax rates for Hoosiers, by income group are: 12.3 percent for the bottom 20 percent; 10.8 percent for the middle 20 percent; 5.4 percent for the top one percent. According to the Institute on Taxation and Economic Policy, if the 3% cut had been in effect in 2012: the poorest 20% of Hoosiers would see an average tax cut of just $6 per year; the middle 20% of Hoosiers would receive a tax cut of $33 annually and; the top 1% of taxpayers would see cuts averaging over $694 per year.

Increase Indiana’s Tax Threshold And Personal Exemptions — Currently Indiana is one of 15 states that taxes below the Federal Poverty Guidelines ($22,350 for a family of four in 2011). By enacting a $25,000 no‐tax floor, for example, families making below that amount owe no income taxes, but once income surpasses that level the tax is owed on all taxable income from one dollar up. When the Indiana income tax was enacted in 1963, the basic personal exemption was set at $1,000 per family member — where it remains today. Since then, inflation has eroded the value of $1,000 substantially.

Increase The State’s Earned Income Tax Credit From 9% To 25% Of The Federal EITC —The Earned Income Tax Credit (EITC) is a federal tax credit for low‐ to moderate‐ income working individuals and families, to which the state EITC is indexed. The credit reduces the tax burden placed on workers by offsetting payroll and income taxes. The credit is also refundable –meaning that if the credit exceeds the amount of taxes owed, the difference is given back to the worker. Given the current status of working families, a stronger EITC may be more important to working families than ever before, particularly when low‐income workers are taxed in a regressive system.

Eliminate the Marriage Tax Penalty (Recouple The State EITC With The Federal EITC Formula) – During the 2011 Session the budget bill HB 1001 decoupled Indiana’s State EITC eligibility guidelines from the federal guidelines originally expanded under the recovery act. As a result, those claiming Indiana’s EITC no longer benefit from the larger EITC payment to families with three or more children. Also, they no longer benefit from the reduction of the “marriage penalty,” which started the income phase out at a higher income level for married couples. Marriage penalties are not only regressive, but encourage cohabitation over marriage for low-income individuals.

Expand the Sales Tax Base to Services — A less regressive way to increase state sales tax revenues in a more equitable manner would be to expand the sales tax base to include services, since low‐income taxpayers pay more in sales taxes than those of higher incomes, who tend to purchase more services. For example, if an individual purchases cleaning supplies to clean their home, they pay sales tax. However, if the same individual hires a cleaning service, they do not pay any sales tax.

Outreach to Employers on the Work Opportunity Tax Credit to Increase Employment Opportunities for Populations Who Face Significant Employment Barriers — The Work Opportunity Tax Credit (WOTC) is a Federal tax credit for private sector businesses for hiring individuals from nine target groups who have consistently faced significant barriers to employment.

Smooth Out “Cliffs” in Childcare — At the same time that low-income Hoosiers are burdened by paying the highest effective tax rates, they also pay some of the highest effective marginal tax rates - "the percentage of an additional dollar of earnings that is unavailable to a worker because it is paid in taxes or offset by reductions in benefits from government programs". . This occurs when a small increase in income leads to a large loss of public resources – also known as the “cliff effect” phenomenon. At a wage of $8 per hour, a single mother with one preschool age child and one school age child, with the support of federal and state tax credits, SNAP, public health insurance, and a child care subsidy is self-sufficient. The first significant loss in net resources occurs when the participant loses SNAP benefits between the wages of $11.50 and $12.00 per hour—a total annual net resource loss of $2651—nearly 11 percent of annual income. Most dramatically though is the “cliff” that occurs as child care subsidies are lost between the wages of $15.00 and $15.50 per hour—a total net resource loss of $8,454—a painful 25 percent loss in annual resources as a result of a $0.50 raise. The unintended consequence of this design either leads to a disincentive towards economic mobility, or leads to a situation in which the parent or guardian is working harder, but is financially worse off – effectively trapping families into poverty. By smoothing out the “benefit cliff”, policymakers could begin restore a system that rewards hard work.

Friday, June 20, 2014

Can't Buy Me Love

By Derek Thomas

In a recent column printed by the Indianapolis Star, the Indiana Family Institute (not to be confused with the Indiana Institute for Working Families – that’s us) asserts that the U.S Government alone is the culprit for the “collapse” of the American family. To correct for this decline, they offer a simple solution; government-subsidized marriage. It’s at least thought provoking.

According to the authors, here’s what happens: a baby is born out of wedlock; the mother and father then calculate (by managing to navigate a complicated and punitively-designed web of benefits) that the mother will collect $25,000 annually in benefits if she remains single; and thus, without the financial incentive to marry, the couple co-conspires to cohabitate.

Citing studies that show an increase in the number of couples who cohabitate before marrying, they propose “cohabitation reform”. This means if the couple agrees to put a ring on it, the government can correct their scheme (which assumes a couple’s decision to marry is primarily one of income) by tapering out the so-called handsome package of benefits.

In fact, the financial incentive isn’t as great as the authors surmise and is certainly not widespread enough to be the sole cause of societal shifts in marriage patterns. Only a meager 3% of the nearly 1,000,000 Hoosiers in poverty receive TANF benefits, and of that 3%, only 11% of those are also receiving housing assistance. All told, it would be a stretch to say that even 1% of Hoosiers in poverty are collecting the full-range of benefits equal to $25,000. 

There are also potential unintended consequences of this proposal. The research on cohabitants shows that 40% of these couples split 5 years after the birth of their first child. Most likely, this isn’t the result of Uncle Sam not being there to coax them. Using the government to push any marriage at the expense of good marriages for families who aren’t yet ready may make it that much more difficult to leave an otherwise abusive relationship.

Across the nation, well-meaning attempts on both sides of the political aisle have supported marriage counseling to “build relationship skills” for low-income families, but have failed to produce results. Instead, the best foundation for a healthy marriage is economic stability; without the strong foundation that economic well-being provides, even the most dedicated partners would struggle to keep their marriage together. Indeed, according to the same research, 91% of young adults believe they should be financially independent or finished with their education before marriage.

To the credit of the authors, tapering out benefits is a good idea – for proven programs.  In fact, the cliff effect is the exact opposite of tapering - resulting in a disincentive to work, and to two-parent families. This phenomenon occurs when a $0.50 increase in hourly wages leads to the complete termination of the benefit and a dramatic net loss of resources – the loss of childcare alone can result in a 25% net annual loss of income. During our statewide outreach, we've heard from couples considering marriage, who willingly set themselves in this poverty trap in order to set a good example for their children.  Simple reforms to income-eligibility thresholds in the childcare development fund can restore the most basic incentive for hard work – a raise that results in an increase in net resources – without punishing marriage. This proposal does not pick winners and losers, but instead provides all families with a smooth landing into economic self‐sufficiency.

It’s not misplaced to say that pooling incomes reduces the burden of household expenses, but the same is true when you move in with your mother or a roommate. Just because people with education beyond high school that hold stable, good paying jobs are more likely to get married, that doesn't mean a wedding will lead to stable employment and a strong family.

Everyone agrees, we really should make families a priority, but we should be doing that regardless of how many parents are in the home. Let the record also show that according to Center for Economic and Policy Research, "there are more married parents with incomes below the poverty line than there are never-married ones, and more food-insecure adults live in households with children headed by married couples than in ones headed by just a man or woman." Ultimately, investing in and prioritizing a toolbox of family friendly policies (such as paid sick leave, childcare and early education) can go a long way towards strengthening all families by leading to better education, which leads to more stable families, which leads to reduced poverty.

Monday, June 16, 2014

Poverty Jobs on the Rise in Indiana

By Derek Thomas

We reported last year that as of 2011, Indiana had a higher percent of jobs in occupations with poverty-level wages than all neighboring states, the Midwestern average and the U.S. average, and that job growth was largely concentrated in low-wage work. New analysis shows that among neighboring states, Kentucky took the 2012 title back by a slim margin. However, Indiana still holds the dubious distinction of having the largest percent growth in occupations with poverty-level wages over the past three years – nearly 12% from 2010 - 2012 (Figure A). Additionally, the percent of jobs in occupations with median annual pay less than twice the poverty threshold is up from 71% to 72.1% - of neighboring states, only Kentucky has more (slightly).

FIGURE A: Percent Of Jobs In Occupations With Median Annual Pay Below 
Poverty Threshold for Family Of Four
Source: Working Poor Families Project & PRB analysis of Occupational Employment Statistics, May 2012

Furthermore, a new report from the National Employment Law Project (NELP) finds that: “Service-providing industries...have led private sector job growth during the recovery.These industries, which pay relatively low wages, accounted for 39 percent of the private sector employment increase over the past four years."

While the data from the chart above is from 2012, and the NELP report takes a deeper dive into sub-sectors that this blog doesn't, a quick look at data on industry growth reflects similar trends in Indiana (Figure B). In the past year, the 'Leisure and Hospitality' sector has accounted for 21% of job growth in Indiana, (22% since the recession began and 10% since the recovery began). This industry includes 'Food Preparation and Serving Workers, Including Fast Food', and as of May 2013, Indiana had the 5th highest concentration of jobs and location quotients in this occupation in the U.S. Contrary to minimum wage opponents, and from the Center for Economic and Policy Research, the majority of these fast food workers are adults (of whom 85% have a high-school degree or more) and more than a quarter are raising children.

FIGURE B: Job Growth, By Industry in Indiana
Source: Economic Policy Institute Analysis of Current Establishment Survey March 2014 & STATS Indiana, using U.S. Bureau of Labor Statistics and Indiana Department of Workforce Development data 

Worse, not only are low-wage jobs on the rise, but in real dollars, the 20th percentile wages (right around the poverty level wage) have declined, and more so than all neighboring states and the U.S. average (Figure C).

            FIGURE C: 20th Percentile Wages by State by Year - In 2013 Dollars

Source: Economic Policy Institute analysis of Current Population Survey data ** Using CPI-U-RS 

Following a decade of low-road growth strategies, there's good reason to be "skeptical of arguments about the job-killing impact of taxing and regulating." To raise the standard of living for hundreds of thousands of Hoosiers, Indiana lawmakers should give sincere consideration to policies that can meaningfully increase economic security and create opportunity through greater access to childcare and early-ed, job-traininghealthcare (update - Governor Pence proposes HIP 2.0 alternative) and an increased minimum wage.

Monday, May 19, 2014

Our Mothers Deserve Better

By Derek Thomas

For Mother's Day, let's start honoring Hoosier moms (and their children) by supporting public policies that not only provide them with the tools necessary for economic mobility, but also reflect our appreciation for their role in promoting strong families. The 21st century has exponentially increased demands on working mothers, yet lawmakers are moving like snails to keep up. So, from the perspective of a public policy institute (that's us), here are some gifts we'd like to give our moms: the ability to balance work, family, and professional responsibilities; time to care for a newborn child; equal pay for equal work; living wages; and healthcare coverage. 

Public Polices For Mothers

Smooth Out the Cliff Effect: A recent report by the Institute looked at the Cliff Effect phenomenon. This occurs when even a $0.50 increase in hourly wages leads to the complete termination of a benefit, and a dramatic net loss of resources. The most devastating cliff is the loss of childcare subsidies - where a $0.50 increase in hourly wages leads to a loss of up to $8,500. This creates a disincentive towards economic mobility; a parent or guardian turns down the raise due to the prohibitive cost of childcare, or does accept the hard‐earned increase but is now financially worse off. By reforming income thresholds in the childcare development fund, policymakers can restore the most basic incentive for hard work - a raise that results in an increase in net resources - and provide Hoosier families with a smooth landing into economic self‐sufficiency. 

Here's a video on our You Tube page highlighting the impact that the Cliff Effect has on "Sarah" - a single mother with two children, and here's a link to much more information, including media coverage, policy briefs and community conversations on the Cliff Effect.

Provide Paid Family Leave: The United States is the only industrialized nation that does not guarantee working mothers paid time off to care for a new child. Here's a recent cost-benefit analysis from IUPUI's School of Public and Environmental Affairs Capstone Program, which showed that 48% of all private employees in Indiana do not have access to Paid Sick Days (more than all neighbors states) and a benefit to the state (“reduced costs associated with less contagion of communicable diseases, reduced employee turnover, and increased employee productivity”) of $3.12 million.

Raise the Minimum Wage:  From our recent blog, 14 Reasons to Raise Indiana's Minimum Wage: Nationally, nearly 2/3rds of tipped workers are women, and Indiana is 1 of 5 states – along with Alabama, Arkansas, Louisiana and Mississippi – in which more than 7 in 10 minimum wage workers are women. According to this analysis of the EPI report from GovBeat, 20% of female workers in Indiana would be directly affected. With women earning just $0.73 cents to their male counterpart (the 6th largest gender gap in the U.S.), increasing the tipped minimum wage is a good step towards equal pay. The Wall Street Journal showed this past weekend that less than 12% of those that would benefit are under 20 years old. From Sarah Jackson and Elizabeth at Brookings Institution on the recent shift in low-wage worker demographics: "The typical worker likely to be affected by a raise in the minimum wage today is a woman in her 30's working full-time, with a family to support." Speaking of families to support, Indiana is among eight states where over a quarter (25.5%) of children have a parent who would benefit from the minimum-wage increase.

Expand Medicaid: A recent report by Save the Children ranked the U.S. as 30th of 176 nations in  the industrialized world for "best places to be a mom."  The report says that the U.S. has the  highest first-day death rate in the industrialized world. An estimated 11,300 newborn babies die each year - 50 percent more first-day deaths than all other industrialized countries combined. In Indiana, infant mortality stands at 7.6 of every 1000 births - tied for 5th highest in U.S. Among leading causes, the report cites high adolescent births, lack of education, and calls for greater investments in healthcare.  Jesse Cross-Call at the Center for Budget and Policy Priorities posted a blog on the benefits of medicaid expansion for mothers, saying that up to 6 million women between the ages of 19 and 44 may become eligible if all states were to expand Medicaid. The Sergeant Shriver National Center on Poverty Law lists a few ways the ACA is currently helping women, and whereas only 12% of women were previously eligible for maternity through individual market plans, 100% of them now do. 

Here an infographic from Half in Ten on the work that needs "to be done to ensure that mothers are provided the same economic opportunities to thrive not only as individuals but also for their families and for the nation."

Contact your federal and state legislators and tell them that you support your mothers and families. Ask them to do the same!
Saturday, May 10, 2014

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