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Benefits of Union Membership Narrow Racial Wage Inequality for Black Workers

black-workers-unions-2016-08-fig12Washington D.C. – Black workers are more likely than workers of any other race to be represented by a union, finds a recent report from the Center for Economic and Policy Research (CEPR). The report, “Black Workers, Unions, and Inequality”, finds that Black union workers experience higher wages and better access to health insurance and retirement benefits than their non-union peers.

The report investigates the demographic characteristics and wage trends of Black workers, union and non-union, from 1983 to 2015. Compared to their predecessors of the early 1980s, Black union workers of today are more likely to be female, older, have more formal education, be immigrants, and work in the public sector.

Black union workers on average earn 16.4 percent higher wages than similar non-union Black workers. Black union workers are also 17.4 percentage points more likely to have employer-provided health insurance and 18.3 percentage points more likely to have an employer-sponsored retirement plan.

Other highlights in the report include:

  • Black union workers in low-wage occupations have wages that are 18.9 percent higher than their non-union counterparts.
  • Black immigrants are more likely than native Blacks to be unionized. In 2015, Black immigrant workers had a unionization rate of 16.9 percent compared to 13.8 percent for native Blacks.
  • Unionization rates for Black workers have declined across all sectors, but the decline has been especially steep for manufacturing (from 42.3 percent in 1983 to 13.3 percent in 2015).
  • Black union workers on average earn $24.24 per hour, compared to $17.78 for non-union Black workers.
  • 71.4 percent of Black union workers have employer-provided health insurance, compared to 47.7 percent of non-union Black workers.
  • 61.6 percent of Black union members have employer-sponsored retirement plans, compared to 38.2 percent of non-union Black workers.

Despite the clear benefits of being a member of a union, decades of anti-union policy decisions have resulted in a tenuous environment for collective bargaining. Over the past three decades, the Black unionization rate has dropped 56 percent while the overall unionization rate has fallen 48 percent. The deunionization that has occurred over the past thirty years has occurred alongside and contributed to a rise in U.S. wage inequality.

Cherrie Bucknor, author of the report added that “unionization for Black workers is critical to narrowing the wage gap between Black and white workers. When talking about growing wage inequality, you can’t exclude unions and the role they play in that discussion.”

You can find the full report here.

Here is a short video of Alan Barber and Cherrie Bucknor posted just before Labor Day, discussing their new report: Black Workers, Unions, and Inequality.

 

As Union Density Declines Nonunion Workers Suffer Low Wages

Decline in union density costs nonunion workers
$133 billion annually in lost wages

In the new report, Union decline lowers wages of nonunion workers: The overlooked reason why wages are stuck and inequality is growing, Washington University sociologist Jake Rosenfeld and co-authors find that the dramatic decline in union density since 1979 has resulted in far lower wages for nonunion workers, an impact larger than the 5 percent effect of globalization on their wages found in recent research. Specifically, nonunion men lacking a college degree would have earned 8 percent, or $3,016 annually, more in 2013 if unions had remained as strong as they were in 1979.

Between 1979 and 2013, the share of private sector workers in a union has fallen from about 34 percent to 11 percent among men, and from 16 percent to 6 percent among women. The authors note that unions keep wages high for nonunion workers for several reasons: union agreements set wage standards and a strong union presence prompts managers to keep wages high in order to prevent workers from organizing or their employees from leaving. Moreover, unions set industry-wide norms, influencing what is seen as a “moral economy,”

“Working class men have felt the decline in unionization the hardest,” said Rosenfeld. “Their paychecks are noticeably smaller than if unions had remained as strong as they were almost 40 years ago. Rebuilding collective bargaining is one of the tools we have to reinvigorate wage growth, for low and middle-wage workers.”

Rosenfeld, along with co-authors Jennifer Laird and Patrick Denice, find that the effects of union decline on the wages of nonunion women are not as substantial because women were not as heavily represented in unionized private sector jobs. The authors note, however, that any substantial growth in collective bargaining would be expected to have as much or more impact on women as men. Specifically, the authors find that women’s wages would be 2 to 3 percent higher if unions had stayed at their 1979 levels. Their study also reveals that private sector nonunion men of all education levels would earn 5 percent ($52) higher weekly wages in 2013 if private-sector union density (the share of workers in similar industries and regions who are union members) remained at its 1979 level, an increase of $2,704 in annual paychecks for full-time employees.

This is the first study providing a broad estimate of the wage decline for nonunion workers as the result of the erosion of unions.

This decline in unions has eroded wages for nonunion workers at every level of education and experience, costing billions in lost wages. For the 32.9 million full-time nonunion private sector women and 40.2 million full-time private sector men, there is a $133 billion loss in annual wages because of weakened unions.

Given dramatically weakened unions, their effect on nonunion wages has declined over time: these effects have fallen to between one-half and two-thirds of their late-1970s levels.

Union decline has exacerbated wage inequality in the United States by dampening the pay of nonunion workers as well as by eroding the share of workers directly benefiting from unionization: union erosion can explain a third of the growth of wage inequality among men and one-fifth of the rise of wage inequality among women. At least for middle-wage men, the impact of the erosion of unions on the wages of both union and nonunion workers is likely the largest single factor underlying wage stagnation and wage inequality.

“Unions have functioned to raise the wages of all workers, union and nonunion,” said Lawrence Mishel, EPI President. “The erosion of collective bargaining has clearly taken a huge toll on nonunion wages in the United States, and is a major factor in the wage stagnation of the last four decades.”

The DOL To Double Overtime Rule Lifting The Wages Of An Estimated 12 Million Workers

Thomas Perez delivers remarks after President Barack Obama announced Perez as his nominee for Labor Secretary, in the East Room of the White House, March 18, 2013. (Official White House Photo by Pete Souza)

Thomas Perez delivers remarks after President Barack Obama announced Perez as his nominee for Labor Secretary, in the East Room of the White House, March 18, 2013. (Official White House Photo by Pete Souza)

12.5 Million Americans: the number of people that the Economic Policy Institute (EPI) estimates will be affected by President Obama’s changes to the overtime rule.

Today, the Department of Labor, under President Obama’s direction, will update the threshold for salaried workers who automatically qualify for overtime when they work more than 40 hours a week.

“We’re making more workers eligible for the overtime that you’ve earned. And it’s one of the single most important steps we can take to help grow middle-class wages,” said President Obama.

“New overtime protections mark a major victory for working people that will improve the lives of millions of families across America,” said Richard Trumka, President of the AFL-CIO. “We applaud the Obama Administration heeding the call for action to ensure working people get paid for all the hours we work. Taking this step to restore overtime is one of the many ways we are beginning to change the rules of our economy that are rigged in favor of Wall Street.”

“The fight for even stronger overtime protections and to raise wages for all working people continues. But today, millions of workers will receive a long overdue raise, healthier and more productive jobs, and more time to spend with our community and loved ones,” added Trumka. 

This simple rule change will have a significant impact on our local and national economy. The White House estimates this rule change will put $12 billion dollars into the hands of hard working Americans over the next ten years.

The DOL is lifting the threshold for salaried workers from just over $23,660 a year to $47,476. This means that if you are a salaried employee who makes less than $47,476 dollars you will now be entitle to overtime (time and 1/2) for every hour worked in a week above 40.

This doubles the current salary threshold while being responsive to public comments regarding regional variations in income by setting the salary threshold at the 40th percentile of full-time salaried workers in the lowest income Census region (currently the South). Tying the salary threshold to the lowest-wage region of the country has strong historical precedent in previous rulemakings.

This salary threshold will be reevaluated and updated every three years ensuring that if continues to meet the 40th percentile mark.

Employers have used this low salary threshold to cheat workers out of higher wages for decades. Many of these workers routinely work 50-60 hours a week and are paid a flat rate. In some cases salaried workers were putting in so many extra hours, without any additional pay, that their per-hour rate would drop below the federal minimum wage of $7.25 an hour.

Now employers will have to choose between raising the wages of salaried employees or keeping employees at their current salary but reducing the number of hours they work in a week. Reducing the number of hours worked would lead to job growth as employers will need to hire additional workers to fulfill their needs.

Check out this short video from the White House that explain the rule change and how it will effect individual salaried workers. 

EPI estimates that raising the overtime salary threshold will directly benefit a broad range of working people, including:

  • 6.4 million women, or 50.9 percent of all directly benefiting workers
  • 4.2 million parents and 7.3 million children (under age 18)
  • 1.5 million blacks, and 2.0 million Hispanics
  • 4.5 million millennials, defined as workers age 16 to 34 (who make up 28.2 percent of the salaried workforce but 36.3 percent of directly benefiting workers)
  • 3.6 million workers age 25 to 34 (who make up 22.9 percent of the salaried workforce but 28.7 percent of directly benefiting workers)
  • 3.2 million workers with a high school degree but not more education (who make up 15.5 percent of the salaried workforce but 25.3 percent of directly benefiting workers)

This is a monstrous step in the right direction to lift the wages of millions of Americans. The White House estimates that the new rule is expected to extend overtime protections to 4.2 million more Americans who are not currently eligible under federal law.

The new rule is slated to take effect on December 1st of this year.


Below are a couple of charts from the EPI that break down what industries will see the biggest boost from this new rule change and the number of workers impacted by the new rule, state by state.

In New Hampshire, over 54,000 workers will be directly effected by this new rule change.  Texas, Florida and California will see the biggest increases with over 1 million workers benefiting from this change.

New Report Shows New Hampshire Workers Are Continuing To Lose Ground

New Report Examines New Hampshire Economy, Finds Wages for Many Workers Losing Ground    

CONCORD, NH – The New Hampshire Fiscal Policy Institute (NHFPI) today released a new report, The State of Working New Hampshire, which finds that while the Granite State economy appears to be flourishing by some measures, the benefits are not being felt by everyone. 

“A well-functioning economy should ensure that the workers contributing to it share in the gains they have helped to produce,” said NHFPI Executive Director Jeff McLynch. “Yet wages for the typical New Hampshire worker have not regained ground lost during the recession. Those workers – and the financial anxiety they face – should be the focus of policymakers’ efforts to shape the New Hampshire economy in the years ahead.”

The State of Working New Hampshire examines short- and long-term trends in employment, workforce demographics, wages, and incomes. Key findings include:

New Hampshire’s workforce is aging in character and stagnating in size. More than 25 percent of the state’s workforce is over age 55; in 2015, only Maine and Vermont had larger shares of the workforce in this age category. As increasing numbers of workers retire, there may not be enough younger workers to replace them, which raises concerns for the future of the workforce.

While employment is expanding in terms of the number of jobs, the quality of these new jobs has declined. An analysis of New Hampshire’s major employment sectors from 1990 to 2015 finds a steady shift away from higher wage manufacturing jobs toward lower wage service sector positions. Employment gains are found largely in the health care, social assistance, administrative support services, and hospitality industries, which traditionally offer lower wages on average.

Economic output for New Hampshire is expanding, but income for the typical household has declined. The state’s median hourly wage fell nearly 7 percent between 2007 and 2015. While New Hampshire has one of the highest median wages in the country, it experienced one of the steepest declines among all states since the onset of the recession.

Since 1990, New Hampshire has experienced uneven wage growth, which has grown increasingly more pronounced over time, particularly for workers on the lower end of the wage distribution. After adjusting for inflation, a worker in the top fifth of the distribution saw wages grow by 11 percent, while the hourly wage for a worker in the bottom fifth is now 7.4 percent lower overall.

As NHFPI explained in its earlier report, Taking the Measure of Need in the Granite State, the official poverty threshold understates the degree of economic insecurity in New Hampshire and elsewhere, as a family of three is considered “not poor” if it earns a collective income of $20,000. Of the roughly 77,900 working age adults living in poverty in New Hampshire, around 54 percent were employed full-time or part-time in 2014, and one-third of these adults – around 28,900 individuals – had attended college at some point in their lives. 

“As we consider public policies that will bolster employment and enable individuals to engage in the workforce more readily, we should be mindful of the fact that some jobs simply may not pay enough for workers and their families to achieve economic security,” said McLynch.

 

Learn more in NHFPI’s report, The State of Working New Hampshire, available online here 

The New Hampshire Fiscal Policy Institute is an independent, non-profit, non-partisan organization dedicated to exploring, developing, and promoting public policies that foster economic opportunity and prosperity for all New Hampshire residents, with an emphasis on low- and moderate-income families and individuals. Learn more at www.nhfpi.org.

A Significant Percentage Of NH Jobs Do Not Pay Enough To Meet A “Basic Family Budget” Threshold

New Report Examines Cost of Making Ends Meet in the  Granite State, Finds Many Jobs Lack Pay Sufficient to Achieve Economic Stability

NHFPI logo -Color-with-TagCONCORD, NH – New Hampshire’s official poverty rate of 9.2 percent was the lowest in the nation in 2014, but a new analysis underscores the failure of official poverty measures to present an accurate picture of the numbers of people struggling to make ends meet. The New Hampshire Fiscal Policy Institute (NHFPI) today released a new research paper, Taking the Measure of Need in the Granite State, which examines the shortcomings of the traditional poverty measures and offers a more comprehensive method of assessing what it takes to get by in the Granite State.

“The official poverty rate stands at odds with the economic anxiety many Granite State families continue to experience,” said NHFPI Executive Director Jeff McLynch. “Traditional measures fail to account for New Hampshire’s high cost of living, which leaves even greater numbers of working families struggling to pay for necessities and puts financial stability far out of reach.” 

In Taking the Measure of Need, NHFPI examines the level of income necessary to secure basic necessities using the Basic Family Budget concept developed by the Economic Policy Institute, a Washington, DC-based think tank. The Basic Family Budget approach accounts for regional price differences and attempts to assess the true cost of achieving a modest standard of living. This method reflects costs for housing, food, transportation, healthcare, child care (if applicable), taxes, and other necessities, such as clothing, in a particular area for various family types. 

The cost of living in Manchester illustrates the stark difference between the federal poverty measure and actual cost for basic needs. The official federal poverty threshold for a two adult, one child family is $19,055. Under the Basic Family Budget approach, the same family living in Manchester would need an income of $62,684 to afford a modest standard of living, a number that is more than three times the official poverty threshold. In fact, EPI’s Basic Family Budget assessment finds Manchester ranks among the most expensive places to live in the country. 

NHFPI’s research also finds that a sizeable percentage of jobs fail to pay enough for many families to achieve a modest standard of living in the Granite State.

“New Hampshire’s low unemployment rate obscures the fact that many of the jobs that are available do not pay the level of wages required for families to make ends meet,” said Jeff McLynch. “This mismatch leaves many working families with difficult choices, deciding whether to put food on the table or pay the rent, one car repair away from financial disaster. They work tirelessly each day, but remain unable to meet their most immediate needs, much less achieve their longer-term financial goals – saving for retirement, sending their kids to college, or purchasing their own home.” 

Preliminary NHFPI estimates suggest that a substantial share of jobs in the state do not pay enough for families to afford to make ends meet. Based on New Hampshire Office of Employment Security wage data, roughly 64 percent of occupations in New Hampshire likely pay enough for a single person to afford their Basic Family Budget, while only about 56 percent pay enough for a two-worker family of four to do so. More importantly, only 30 percent of occupations pay enough for a single parent with one child to afford a modest standard of living.

Learn more in NHFPI’s paper, Taking the Measure of Need in the Granite State, available online at:  http://www.nhfpi.org/research/state-economy/taking-the-measure-of-need-granite-state.html 


The New Hampshire Fiscal Policy Institute is an independent, non-profit, non-partisan organization dedicated to exploring, developing, and promoting public policies that foster economic opportunity and prosperity for all New Hampshire residents, with an emphasis on low- and moderate-income families and individuals. Learn more at  www.nhfpi.org. 

New Poll Shows 66% Of Republicans Oppose The TPP, Spelling Possible Trouble For Ayotte

Former NH State Senator Jim Rubens Challenges
Sen. Ayotte to a debate on American worker wages

A poll released today by the conservative group Americans for Limited Government and independent pollster Pat Caddell shocked the establishment about voters’ attitudes on the 2,000 page Trans-Pacific Trade Partnership agreement.  The shocker: 66% of Republicans oppose the TPP.  Some highlights from the results: 

– 69% of Republicans say they would be more likely to vote for a candidate for U.S. Congress who promises to put a stop to the Trans-Pacific Partnership.

– 63% of Republicans oppose an effort to pass TPP in a special session of Congress.

– 85% GOP voters agree that “political leaders are more interested in protecting their power and privilege than doing what is right for the American people.”

– 76% of Republicans say “the same political elite who have been rigging the political process in Washington are the same ones that have been rigging trade deals that hurt Americans, but benefit themselves.” 

-77% of Americans oppose a Republican leadership effort to vote on TPP in a lame-duck session.

– An astoundingly low 4 percent of GOP voters think that free trade deals have been “more of a benefit to the U.S.”.  

Jim Rubens issued the following statement in response to the poll results: 

“Since the first drafts were leaked in 2014, I have publicly opposed the TPP.  I am firmly on the side of American workers.  It’s time for the U.S. Senate to take the side of American workers and against the crony capitalists and their bought-and-paid-for politicians who want to export American jobs and drive down American wages.

“Conservative Republicans are way out front in opposition to the TPP.  It’s unfortunate that Sen. Kelly Ayotte not only supports this crony capitalist agreement, but she voted last May to give President Obama fast-track trade authority to grease it through Congress.  New Hampshire is among the top 10 states most hurt by our trade deficit with China, having lost over 22,000 jobs over the decade ending 2011.  It’s clear that voters think that Washington career politicians are selling them out.

“Many people have referred to the TPP as ‘NAFTA on steroids’ because this deal benefits other countries at the expense of American workers who are being replaced by cheap foreign labor.  85% of GOP voters have lost faith in the Washington political class because of their blatant crony capitalism.  I’m running for senate to give voters a way to stop this wholesale sell out of the American worker.”

In the press conference discussing the poll results, pollster Pat Caddell predicts there will be significant primary losses based on this issue.  

Rubens challenges Sen. Ayotte to a debate on TPP and how to get American wages rising again.

On International Women’s Day, AFL-CIO Talks Of How TPP Will Negatively Impact Women

AFL-CIO Secretary-Treasurer Liz Shuler Highlights TPP’s Negative Impact on Women 

AFL-CIO Releases Fact Sheet on International Women’s Day 

Women and TPP(Washington, DC, March 8, 2016) – On a press call in honor of International Women’s Day, Liz Shuler, AFL-CIO Secretary Treasurer and Thea Lee, AFL-CIO Deputy Chief of Staff, discussed the negative impact the Trans-Pacific Partnership (TPP) will have on women across the world.

“This International Women’s Day, the labor movement recognizes that while women in the workplace have gained a great deal, the harsh reality is too many of us continue to struggle when we shouldn’t have to,” said Shuler. “The bad policies of the TPP are another corporate attack on women and we will continue to fight for policies that lift all women up and recognize the immense contributions we make to the economy.”

“There is no question that flawed trade agreements and policies have cost America’s working women good jobs and have contributed to stagnant wages and growing inequality,” said Lee. “We need to address unfair trade practices like currency manipulation, illegal subsidies and workers’ rights violations and must defeat TPP so we do not accelerate the race to the bottom that benefits global corporations.”

Read the fact sheet: Bad Trade Deals and Their Impact on Women Globally
Lower Wages, Reduced Access to Lifesaving Healthcare and Human Trafficking

New Report: A Year of Raising Wages Agenda

AFL-CIO_Headquarters_by_Matthew_Bisanz2
Worker wins rule since first ever Raising Wages Summit,
but challenges remain

(Washington, DC) – Marking nearly one year since the first ever Raising Wages Summit, the AFL-CIO today released a new report detailing the successes, struggles and path ahead to raise wages for working people.

The report, “Fighting for a Better Life: How Working People Across America are Organizing to Raise Wages and Improve Work,” finds that over the last year income inequality has shifted from a problem we discuss to a problem we can solve.

The report points to clear and unequivocal steps for a path forward. Armed with the solutions outlined in the report, the central conclusion is that America is ready to move beyond the discussion of income inequality and is beginning to write new rules that will shape the economy.

“One year ago, we made clear that raising wages for all working people was our number one priority,” said AFL-CIO President Richard Trumka. “In 2015 we came together in collective voice and action, and made significant progress.”

The report goes well beyond direct wage increases, highlighting successes that demonstrate the all-encompassing nature of the raising wages agenda. Numerous organizing victories, paid sick leave laws in multiple states and municipalities and new protections against wage theft if five states are outlined as part of the effort to create an economy built on raising wages.

The report also outlines hurdles to further victories, and challenges that remain as the raising wages agenda grows.

In December 2015 alone, the report shows, President Obama and Democrats in Congress were forced to fight off six amendments to the budget that would have rolled back protections for working people. And while the unemployment rate continued to fall last year, wage growth showed only modest improvement before grinding to a halt.

Even with modest wage growth and significant gains for working people in 2015, the report is a reminder that more work is needed in order to keep raising wages a priority in political and economic conversations. 

“Although the victories and the momentum of the Raising Wages movement in 2015 demonstrate that collective action works, we are still far behind where we need to be and where we can be,” said President Trumka. “In the year ahead, we will continue to push for a comprehensive economic agenda that puts working people first. Raising Wages is not a hobby, it is our mission.”

View the report at: http://www.aflcio.org/content/download/174433/4152655/RaisingWagesReport2015.pdf

Granite State Rumblings: Wages, Child Care And The Working Poor

If you have been following the Presidential candidate debates, you are beginning to hear some very important policy differences not only between the two parties, but between the candidates themselves. One of those differences is quite evident when the talk turns to low and stagnant wages for the working poor.

The Democrats are in agreement that the minimum wage should be increased, though they differ on how high, based on their comments at the debate last Saturday evening. The Republican candidates have mainly talked about other ways of addressing stagnant wages and income inequality. Plans that have been discussed include cutting business taxes to spur more job growth and opportunities for jobs with higher rates of pay, boosting worker productivity, more technical job training, and an overhaul of higher education.

While all of these ideas may be valid, there is one issue for low-income workers that remains, even as they see incremental increases in their wages, or an increase in the minimum wage – Work Support Programs – also known as public assistance programs. Work supports help close the gap between low earnings and the cost of basic expenses.

But, public assistance for the working poor isn’t designed to allow parents the opportunity to incrementally increase their wages to work toward self-sufficiency.

In many cases, as a parent’s earnings increase and they rise above the poverty level, they begin to lose eligibility for assistance programs such as child care subsidies, housing subsidies, food stamps, and health care coverage, even though they are not yet self-sufficient.

I saw this play out way too often for many of the single moms at the child care center where I worked. In some cases even as little as a fifty cent increase in wages could mean a budget breaking rise in her out of pocket child care cost. The raise she had worked so hard to achieve would not cover the increase, so she was left with the decision of turning it down, trying to dig deeper in an already stretched budget, or finding less expensive (and lower quality) care for her child(ren) while she worked. This is called the Cliff Effect, and it results in many women refusing pay increases, rather than lose their shelter, lose their quality child care so that they can work, or have to give up health care or meals for themselves. The dream of self-sufficiency becomes the reality of assistance dependence.

Colorado Public Radio has been exploring the lives of Colorado children who are living in poverty. The story below is part of that work.

Why Getting Ahead Often Feels Like Falling Behind When You’re Poor

BY MEGAN VERLEE/ CPR NEWS

Call it poverty’s “glass ceiling.”

Longmont resident Tracey Jones grows vegetables from her garden to feed her family in the summer. Since Jones started making too much to qualify for food stamps, she’s had more trouble keeping food on the table.

The way many public benefit programs are structured, even minor increases in income can result in a big loss in assistance. That’s sometimes so large a loss that it can send families tumbling backwards just when they thought they were finally getting ahead.

Longmont resident Tracey Jones knows all about the phenomenon, often called the “cliff effect.” She’s been living at its edge for several years now.

In the past few years, she’s moved from unemployment to a rewarding full-time job as a certified nursing assistant for a hospice program. But in some ways she’s lost as much as she’s gained. Food stamps, for one thing. When she started making too much to qualify, Jones had to turn to food banks. And she took up gardening, “to take a little bit of the edge off my food insecurity.”

As her income has risen, Jones has lost other benefits too. Her big worry currently is Medicaid. She went through a major surgery a few months ago, and in the weeks leading up to it kept getting conflicting letters about whether or not she was still covered.

“I got three notices in one week,” Jones said. “‘Oh, you have insurance, yay!’ Two days later: ‘You do not have insurance.’ Then the end of the week: ‘You need to fill out this paper for your insurance.’ I don’t know. At this point, I’m just praying it all works out.”

This uncertainty has permeated her life for years — it’s the dark side to her improving income.

“It doesn’t make sense to me. It’s kind of like you get punished for trying to get out of poverty,” Jones said.

Programs Offer Perverse Incentives

The cliff effect stems from the fact that most government assistance programs have hard and fast income limits: start making even a little more than the cut-off and a person stands to immediately lose a lot of benefits.

Jessica Valand oversees job training programs through Colorado’s Department of Human Resources. The way she sees it, both policy makers and the poor themselves value work over assistance, but the way the system is set up, it ends up encouraging the exact opposite.

“If someone wants to give me a dollar raise, or even a $2-an-hour raise, but I know that that $2-an-hour raise is not going to make up for the $1,500 in child care subsidy I’m going to lose, what is my incentive to keep going?” Valand said.

Many don’t keep going. When the Women’s Foundation of Colorado and the Bell Policy Center asked focus groups of poor single mothers whether they’d ever turned down a raise or extra hours at work because they were afraid of losing their benefits, about a third said yes.

“In any given month, a woman may need to monitor very closely the hours she’s working to make sure she’s always maintaining her eligibility,” says the Foundation’s Louise Myrland. The group considers the cliff effect a women’s issue because the impacts often fall most heavily on working mothers and their children.

Official concern about the cliff effect has picked up steam in recent years, as data has shown that despite the improving economy, many working poor appear to be stuck relying on public benefits.

“It’s like, how did we get people this far, and they can’t get to the next step?” said Jefferson County Human Services Director Lynn Johnson.

But while there may be increasing agreement that the cliff effect is a problem, the solution won’t come cheap. In order to taper higher income people off of benefits more gently, the government will either have to increase overall funding for programs, or put more limits on the total number of people they can serve.

“Are we here to be just the safety net, the handout? Or is it a handout and up and off?” asks Johnson, who thinks easing the fiscal cliff would save money in the long term. “The more successful people are moving out of our system, the more money we should have to invest.”

Jefferson County is one of 10 counties taking part in a new state experiment to try to fix the fiscal cliff in one big program: child care assistance. Instead losing their entire subsidy when they hit a hard and fast income limit, families in these counties just have to pay a slowly increasing chunk of their daycare costs out of pocket. Bell Policy’s Rich Jones lobbied the Legislature to invest in this pilot effort. He said the idea is to turn the benefits cliff into more of a gentle slope.

“As you move further up the economic ladders, you still get some support, but you get a lot less. And then you gradually work your way off,” Jones explains.

The child care assistance pilot only started over the summer, but anecdotal reports suggest it’s so far succeeding in its goal of allowing families to earn more money without worrying they’re about to be crushed by a giant new daycare bill.

Two Families Stuck On The Cliff

Nicole Davis found out about the cliff effect the hard way. Nearly a decade ago the preschool teacher and her husband George, who worked in manufacturing, made getting off of all public assistance their goal. They succeeded, but that success almost destroyed their family.

“A lot of times we would have time to decide which bills that we wanted to pay. And sometimes it would mean that George or I would go without meals,” said Davis, recalling life without any government benefits. “When we realized we weren’t brining in enough money to pay rent … we went to the church for help and they basically said, ‘you need to get on assistance!'”

Instead, Davis and her young children ended up homeless. It took years for the family to work their way back to stability.

Today, the Wheat Ridge resident says she’s stopped even thinking about trying to make it to self-sufficiency. The cliff is just too daunting.

“I am intrigued myself by the fact that our family tried to get off of all the services and all the things that happened when we were getting off,” she said. “I’m surprised by what happened.”

For another Wheat Ridge mother, Sheila Lucero, the benefits cliff has turned life into a balancing act.

After struggling through the Great Recession, things have been looking up for the Lucero’s; Sheila’s husband Ian is an HVAC contractor and the housing boom means lots of work. But they’ve been making sure his income stays low enough to keep qualifying the family for Medicaid.

Lucero believes in small government; it’s painful to her to rely on taxpayer money. But she puts up with it for her children’s sake.

“You know, we’re not proud of being in this situation, but we definitely need our kids to have their check-ups and stuff,” Lucero said. “The cliff effect just puts people back where they were, or in a worse position, and it makes them not want to try.”

As an increase in the minimum wage is discussed and debated at both the federal and state level, now is a good time to start the discussion and debate about benefit eligibility levels. Hard working parents should not be penalized for trying to do better for their families.

GROWING UP GRANITE 

Here are several opportunities to discuss class and classism in our state, a conversation that can be both difficult and challenging, but so very necessary. These workshops are hosted by a coalition of NH organizations.

Exploring Class and Classism in New Hampshire Building Unity in our Community

  • Why is class often so difficult to talk about? How does class impact your work?
  • What is your class story?

Discuss these questions and more at Class Action’s New Hampshire open workshops hosted by a coalition of NH organizations.  Class Action has spent 11 years developing creative ways of asking questions, sharing personal experiences and helping people to engage with issues of class in a meaningful way. Their workshops are highly interactive, engaging and focused on learning from one another in the room. All workshops are on a sliding scale, $75 – $20. Scholarships available. To inquire, please send us an e-mail.

Dates and Locations

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Berlin, NH

Hosted by: North Country Listens and Women’s Rural Entrepreneurial Network

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Hosted by: United Valley Interfaith Project and Rethink Health

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Manchester, NH

Hosted by Investing in Communities, NH Citizens Alliance and New Futures

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Pittsfield, NH 

Hosted by Investing in Communities, NH Citizens Alliance and New Futures

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Featured Image by US Army on Flicker

What You Should Know About That Completed TPP “Trade” Deal

global deal free tradeSpecial Guest Post from Dave Johnson of Campaign For America’s Future.  

Countries negotiating the Trans-Pacific Partnership (TPP) say they have reached a deal. So here it comes.

Monday morning it was announced that a “Trans-Pacific Partnership Trade Deal Is Reached,” presented as much as a foreign policy success as a “trade” deal.

“The United States, Japan and 10 other Pacific basin nations on Monday agreed after years of negotiations to the largest regional trade accord in history, an economic pact envisioned as a bulwark against China’s power and a standard-setter for global commerce, worker rights and environmental protection.

… The trade initiative, dating to the start of his administration, is a centerpiece of Mr. Obama’s economic program to expand exports. It also stands as a capstone for his foreign policy “pivot” toward closer relations with fast-growing eastern Asia, after years of American preoccupation with the Middle East and North Africa.

The effect the deal will have on actual “trade” is unclear, since the U.S. already has trade agreements with many of the participating countries. Also much of the deal appears to be about things people would not usually consider “trade”, like investor rights and limits on the ability of countries to regulate.

Though the deal remains secret, here is some of what is known about the agreement deal.

● Currency manipulation is not addressed in TPP, even though Congress’ “fast track” legislation said it must be. To get around this, a “side agreement” supposedly sets up a “forum” on currency. Past side agreements have proven unenforceable. For this reason Ford Motor Company has already publicly announced opposition to TPP.

● A “tobacco carve-out” is in the deal, in some form. This was added because the agreement contains investor-state dispute settlement (ISDS) provisions that will allow corporations to sue governments that use laws or regulations to try to restrict what the companies do. These provisions restrict the ability of governments to protect their citizens so thoroughly that tobacco companies have used ISDS provisions in similar agreements to sue governments that try to help smokers quit or prevent children from starting smoking. TPP proponents felt that this carve-out will help TPP to pass, while the ability to limit other laws and regulations remains.

● President Obama has said TPP includes the “strongest labor provisions of any free trade agreement in history.” Previous “trade” agreements do not even stop labor organizers from being murdered, so even if TPP has “stronger” labor provisions, that is an extremely low bar.

● TPP reduces or eliminates many tariffs, further encouraging companies to move factories out of the U.S. to low-wage countries like Vietnam. An example of the effect TPP will have on U.S. manufacturing is Nike vs. New Balance. Nike already outsources its manufacturing to take advantage of low wages, while New Balance is trying to continue to manufacture in the U.S. When tariffs on imported shoes are eliminated Nike will gain an even greater advantage over New Balance. New Balance has said that the tariff reductions in TPP will force it to stop manufacturing inside the US.

● The reduction and elimination of tariffs reduces revenues for the governments involved.

What Next?

Here is a brief rundown on what to expect as TPP begins to make its way toward a Congressional vote:

● The TPP is still secret and according to the terms in this year’s fast-track legislation it will remain secret for 30 days after the president formally notifies Congress that he will sign it. That could be a while still, as the agreement’s details need to be “ironed out.” After that 30-day wait the full text has to be public for 60 days before Congress can vote. The full timeline is yet to unfold and will be reported here as it does.

● Expect a massive and massively funded corporate PR push. The biggest corporations very much want TPP. It massively benefits the interests of giant corporations and the “investor” class, even as it incentivizes moving jobs and production out of the U.S.

● While only a small portion of TPP is about what people would normally consider to be “trade,” TPP will be heavily pushed as a “trade” deal. Many people believe that “expanding trade” increases jobs. Note that closing a U.S. factory and importing the same goods “expands trade” because those goods cross a border.

Also see the American Prospect, “What’s Next for the TPP: Clyde Prestowitz in Conversation with David Dayen.”

Questions To Ask About TPP

When the still-secret TPP becomes public, these are some of the questions the public will want answered:

● What do regular, non-wealthy people in the U.S. get from TPP? Will it increase American wages? Will it have provisions that force wage increases in countries that currently pay very little, thereby helping those workers (and helping them buy American-made products, too) and reducing downward pressure on American wages? Or will there be NAFTA-style provisions encouraging outsourcing to low-wage countries like Vietnam, creating further downward pressure on wages and increasing inequality?

● What do people in the U.S. lose? For example, the Los Angeles Times explains, “U.S. industries such as auto, textiles and dairy, however, could experience some losses as they are likely to face greater competitive pressures from Vietnam, Japan and New Zealand.”

● Does the TPP contain badly needed provisions to require member countries to jointly fight global climate change?

● Will provisions on state-owned enterprises force further privatization of publicly owned and publicly operated infrastructure like the U.S. Postal Service, highways, water systems and other public utilities – even services like municipal parking operations?

● Will TPP enable the U.S. to continue using tax dollars to help American companies, like our “Buy America” procurement policies?

● Will TPP expand imports from countries where food is often found to contain banned toxic chemicals? If so, will TPP require increases in food and product safety standards and inspections?

● Does the TPP increase oversight of financial companies like banks, insurance companies and hedge funds?

TPP Pits Obama, Republicans, Wall Street And Big Corporations Against Democrats, Labor, Progressives

While still secret, the agreement is likely to have many of the same proponents and opponents as the fast-track trade promotion authority battle had. As the Los Angeles Times words ittoday, it “pits the White House, many Republicans and supporters of free trade against organized labor, civic groups and many lawmakers from Obama’s own party, who fear the deal will hurt workers and the environment.”

In a Monday morning call Representative Rosa DeLauro (D-Conn.) said the TPP text Congress is allowed to see has not been updated for some time, so even they don’t know what is in it. Saying Congress has had to rely on leaks and hasn’t seen the supposed “side agreements” at all, DeLauro asked the administration to “have the courage” to show Congress and the public the text now.

DeLauro complained that leaked drafts show U.S. negotiators negotiating hard for pharmaceutical companies, but not for the interests of American workers. “The administration has put big corporations first, workers last.”

She said rules-of-origin requirements allow less than half to be made in U.S. and TPP countries, the rest can come from countries like China. “None of us can think of a clearer mechanism for taking American jobs”

Rep. Paul Tonko (D-N.Y.) said, “we’ve seen the nightmare NAFTA brought to our manufacturing sector and hard-working American families; this deal is NAFTA on steroids” because this is much broader. Multinational corporations will benefit from increased drug prices and access to cheaper labor.

Rep. Dan “Rock Star” Kildee (D-Mich.) said “what’s not there is there is a lack of any enforceable currency provision. This ties American manufacturer’s hands behind their back as they try to compete. Worse, new rules of origin allow the Chinese to provide more than half the content of a car and it will be treated as domestic. Combined with no currency rules, this will have a devastating effect.”

He added, “I would ask members who voted for fast track to look at the details. When they see specific details and impact on their businesses I think they will vote no.”

Rep. Debbie Dingell (D-Mich.) said, “I’m a car girl … we are only operating on early reports but already Ford and Chrysler are opposed, joining the UAW, and those companies have strongly supported previous deals.”

Rep. Brad Sherman (D-Calif.) called TPP a “huge win for China because of currency, rules of origin; we get zero access to the Chinese market.”

On the ability to ensure even these ow rules of origin, Sherman said, “What about de facto rules? How does anyone police it? Are Chinese going to report companies that are mislabeling?”

Petitions

The Teamsters are asking people to sign this petition:” Tell Congress: Show Me the Text on Reported TPP Deal.”

Democratic presidential candidate Bernie Sanders has released this petition and is asking people for signatures: “Sign my petition to join our fight against the disastrous Trans Pacific Partnership trade deal. We cannot afford to let this trade deal hurt consumers and cost America jobs.”

The U.S. Trade Representative office has released this summary

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