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Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute November 18 th , 2015 Working Our Way Out of Poverty Working Our Way Out of Poverty

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Page 1: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

Conor Williams, Economic Policy Analyst

David Riemer, Senior Fellow

Julie Kerksick, Senior Policy Advocate

Community Advocates Public Policy Institute

November 18th, 2015

Working Our Way Out of Poverty

Working Our Way Out of Poverty

Page 2: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

2

Government’s Current Role

All Persons Children (<18) Adults (18-64) Seniors (65+)0%

10%

20%

30%

40%

50%

60%

21.3% 21.5%15.4%

50.3%

11.2% 13.6%10.5% 10.4%

Poverty BEFORE and AFTER Government Economic Security Programs: All Poor Persons: Wisconsin in 2008

BEFORE Government Programs: IRP Market-Income-Only Poverty RateAFTER Government Programs: IRP Disposable Income Poverty Rate

Pove

rty

Rate

Source: Institute for Research on Poverty (IRP), University of Wisconsin-Madison

Page 3: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

Big Remaining Problem: Job Shortage

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 201561.0%

62.0%

63.0%

64.0%

65.0%

66.0%

67.0%

Labor Force Participation Rate

Source: BLS

Page 4: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

Who is in Poverty?

27 million adults 8 million adults

16 million 8 million 3 million 4 million 4 million

Page 5: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

5

A Five-Part “Policy Package” is Needed

Page 6: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

6

Make Work Available

Policy 1: Create a Transitional Jobs Program:

Program:• For unemployed & underemployed, ages 18-69• Not incarcerated or receiving Social Security, SSDI, or SSI• Opportunity to work in a minimum wage TJ, up to 30 weeks• Min. 8 hours, max. 40 hours per week

Page 7: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

7

Make Work Pay

Policy 2: Increase in the Minimum Wage:

• Raise the minimum wage to $10.10 per hour, indexed for inflation

• 39 percent increase

$7.25

$10.10

Page 8: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

8

Make Work Pay Further

Policy 3: Reform the EITC

• $4,000 increase• Remove marriage penalty

Page 9: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

9

Reduce Obstacles to Work

Policy 4: Strengthen Child Care Funding:

Guaranteed subsidized child care for every familybelow 150% of official poverty line

Page 10: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

10

Help Retired Seniors and Adults with Disabilities

Policy 5: Secure Retirement and Disability Income Tax Credit:

Eligibility Criteria:• Income from Social Security, SSDI, or SSI• Age 18 or older, and not a dependent of another taxpayer

Credit:Equals = 150% of official poverty line - Sum of Social Security + SSDI + SSI + SNAP + Federal AGI (if positive)

Page 11: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

11

Stand-Alone Policies = Small Impact

Baseline Transiitonal Jobs Minimum Wage EITC Reform Secure Retirement Credit

Child Care Subsidies0%

2%

4%

6%

8%

10%

12%

14%

16%

SPM

Pov

erty

Rat

e

Page 12: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

12

Policy Package = Dramatic Impact:Poverty Reduced by 50% +

Baseline Policy Package0%

2%

4%

6%

8%

10%

12%

14%

16%

SPM

Pov

erty

Rat

e

Page 13: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

13

Preview: Policy Package for entire United States in 2010

All Persons Age < 18 Age 18-64 Age 65+0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

15%16%

14%15%

7%9%

7%

6%6%

7%6%

5%

BaselineCommunity Advocates Package - Low TJ Take-UpCommunity Advocates Package - High TJ Take-Up

SPM

Pov

erty

Rat

e

Page 14: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

14

Impact of Policy Package byRace & Ethnicity

All Persons White Black Hispanic Other0%

5%

10%

15%

20%

25%

30%

15%

10%

22%

28%

16%

7%

4%

7%

15%

7%

SPM

Pov

erty

Page 15: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

15

Other Packages, New Evidence• Other packages have found similar results

• Wisconsin - Community Advocates Wisconsin Package 1.0• Wisconsin Only – Poverty reduction of 58%

• New York City – Federation of Protestant Welfare Agencies, Catholic Charities and United Jewish Appeal

• New York City – Poverty reduction of 54%

• United States – Children’s Defense Fund• Nationwide families with children – Poverty reduction of 60%

Page 16: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

16

Lessons Learned

Poor

Adults

SSI

SSDI

SocialSecurity

Children

Unemployment Insurance

Minimum Wage

Earned Income Supplements

FoodShare

Senior and Disability Income Tax Credit

Transitional Jobs

EarningsSupplement Reform

Medicaid

K12 Education

Early Childhood Education

Increase & Index

NOT in Labor Market

IN Labor Market

Age andRetirement (65 + older)

Disability

Unemployed Full-Time

Working Full-Time

Unemployed Part-Time and Working Part-Time

ExpandedSubsidized

Child Care

Page 17: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

17

Cost in Perspective (Percent of Other Spending)

Page 18: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

18

It Sounds Like a Good Idea….

Higher Minimum Wage:• 27 states, plus the District of Columbia, have minimum wages higher than the federal level of $7.25 per hour.• 6 states will be at $10 per hour or more by 2017.• President Obama’s current budget proposal calls for a federal minimum wage of $10.10 per hour.

Expanded Earned Income Tax Credit:• 24 states, plus the District of Columbia, have state or local Earned Income Tax Credit programs, in addition to the

federal Earned Income Tax Credit.• Both President Obama and Congressman Paul Ryan, chair of the House Ways and Means Committee, have

proposed similar expansions of the federal Earned Income Tax Credit to include single adults without dependents.

Transitional Jobs Programs:• There are 22 states that have publicly or privately funded transitional jobs programs.

State Property Tax Credit/Rebate Enhancements for Seniors and Persons with Disabilities:• 28 states have tax credits or rebate programs for seniors and/or persons with disabilities.

Child Care Subsidies/Tax Credits:• Over 20 states also provide child tax credits and childcare tax credits.

Page 19: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

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State Progress

Page 20: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

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State Progress

Page 21: Conor Williams, Economic Policy Analyst David Riemer, Senior Fellow Julie Kerksick, Senior Policy Advocate Community Advocates Public Policy Institute

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Questions and Feedback ?Community Advocates Public Policy Institute728 North James Lovell Street, Milwaukee, WI 53233

Conor Williams, Economic Policy [email protected], 262.442.4646

David Riemer, Senior [email protected], 414.270.2943

Julie Kerksick, Economic Policy [email protected], 414.795.8566

Urban Institute2100 M St NW, Washington, DC 20037

Kye Lippold, Research [email protected], 202. 709. 6786