Wednesday, April 22, 2020

When families are financially stable, they can achieve their full potential and better contribute to their communities. Policy plays an important role in contributing to families' economic well-being. Now more than ever, Hoosiers understand the consequences of financial instability and the need for thoughtful policy approaches that create a sturdier base of support on which to build our economic lives.

Signs of deterioration were evident before the crisis. At the turn of the 21st century, Indiana stood as a leader in the Midwest, ranking at least average or better than the region as a whole in family incomes, poverty, prime age employment rates, union coverage, and more. But after 2004, wages began to decline alongside policy choices that cut job quality standards and worker voice, weakened the safety net, and limited economic opportunities for middle- and low-income families. The lasting damage has left scars on working families that are being exposed in this crisis.

As our legislators consider interim study topics, we need them to prioritize policymaking that rebuilds Indiana’s foundation stronger and better. To that end, we recommended the following strategies and topics for assignment to interim committees:

·       Increase job quality. Essential workers continue to treat patients, stock shelves, and care for children. When the economy reopens, those who were sidelined will seek out ways to rebuild their financial lives. It is imperative that they do so in jobs and workplace environments that support their health.

o   We asked that study of reasonable accommodations for pregnant workers (SB 342) be assigned to the Interim Study Committee on Public Health, Behavioral Health, and Human Services. Twenty-nine states have now provided a clear, affirmative right to reasonable accommodations for pregnant workers, with two new states passing such laws in the spring of 2020. These state laws fill a gap in existing federal law and allow pregnant women to continue working and maintain a healthy pregnancy. Without these protections, women who are financially vulnerable report that they continue working without accommodations or are afraid to ask. In short, they are putting their health at risk.

o   We asked that study of paid employee leave (SB 34) be assigned to the Interim Study Committee on Public Health, Behavioral Health, and Human Services. The COVID-19 crisis exposed just how essential it is for workers to have paid leave; it prevents impossible choices between going to work sick or losing a paycheck. Other states have created paid leave programs to take the burden of providing wage replacement off businesses’ shoulders, and Indiana should explore this as well. Paid leave has innumerable benefits to public health, including decreased infant mortality, increased vaccination rates and well child visits, decreased re-hospitalizations, and more. Our report, Paid Family and Medical Leave: Policy Analysis and Recommendations for Indiana, highlights many of these benefits and the structure of others states’ programs.

·       Encourage savings and responsible lending. Too many Hoosiers entered this crisis with limited to no savings and an overwhelming amount of debt. As our policy brief  on debt collection notes, nearly one in three Hoosiers had a debt in collections prior to the public health emergency. These included medical bills and high student loan balances, as well as car loans and credit card debt. Meanwhile, as access to defined benefit plans has declined and individuals are on their own to prepare for retirement, the number of Hoosiers unprepared or underprepared for retirement should raise red flags about the structure of existing systems.

o   We asked that the topic of consumer credit (SB 395) be assigned to the Interim Committee on Financial Institutions and Insurance. Since 2002, when Indiana created a carve out to the state’s loansharking law for payday lenders, modifications to the consumer credit code have facilitated predatory lending. Our report, Financial Drain: Payday Lenders Extract Millions from Hoosier Communities suggests that these loans are made in communities that can least afford them, and result in a pipeline of money out of our communities and our state. It is imperative that Indiana revisit its consumer credit code and re-establish usury laws that encourage responsible lending.

o   We asked that the topic of private sector retirement savings programs (SB 92) be assigned to the Interim Committee on Financial Institutions and Insurance. Making savings automatic – or, at least, easy – increases the likelihood and amount that people save. Given the importance of retirement savings in the absence of defined benefit plans, we encourage the study of mechanisms to promote access to defined contribution plans.

·       Increase access to stable, affordable housing. Safe, stable housing is a cornerstone of strong families and strong communities. It facilitates success in work and education and promotes public health. Here again, Hoosiers struggle. Indiana has several cities at the top of the charts for evictions and homeownership is out of reach for too many families.

o   We asked that the topic of incentives for affordable housing (SB 123) be assigned to the Interim Committee on Fiscal Policy.

There is certainly a great deal more that could be tackled. However, these topics - all recommended during the 2020 legislative session - would yield strong public policy suggestions that could put Hoosiers on a more stable financial footing as they rebuild following the current crisis. 

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