It’s time for policymakers in Washington state to take steps to reverse decades of widening economic disparities that threaten broad prosperity, now that it has again been shown that all income growth since 2009 continues to flow to the wealthiest Washingtonians.
An updated report from the Economic Policy Institute (EPI) shows that the richest 1 percent of households – those making over $388,000 a year – captured all of the new income generated in Washington state between 2009 and 2013 (see graph). By contrast, and in a stark reversal from past decades, average incomes among the remaining 99 percent of Washingtonians declined during this period, causing far too many hardworking families to fall even further behind.
The richest 1 percent of Washingtonians didn’t always reap such an outsized share of income gains during periods of economic growth. Prior to 1980, the 99 percent typically captured at least 80 percent of all income gains during economic expansions.
Further, as the EPI report points out, it used to be considered outrageous for executives to receive multimillion dollar salaries and outsized bonuses while laying off workers. Today, as the vast majority of working people and families in Washington state continue to struggle, super-rich CEOs living here are doing better than ever. In fact, in 2015, the CEO of Washington state-based Expedia received the highest pay ($94.6 million) of any corporate chief executive in the county.
It has become abundantly clear in recent years that everyday Americans and Washingtonians are tired of the economic inequality that has become the norm. In our state, we need policies that help all communities thrive by strengthening employment and creating more living-wage jobs. We need to make sure our tax code doesn’t favor the wealthy and the politically connected over the common good.
In fact, our upside-down tax system – where Washingtonians with the lowest incomes pay seven times as much in state and local taxes as a share of their income than the richest 1 percent – makes it even harder for the 99 percent to get ahead.
Building a stronger Washington economy requires greater economic equality and overall equity. Lawmakers must undo the systemic inequities that have created gaps in opportunity for many people of color to receive good jobs and living-wage salaries.
In Washington state:
- Voters can help advance economic equality and close the opportunity gap if Initiative 1433, now gathering signatures, makes it on the November ballot and passes. It would incrementally raise the minimum wage to $13.50 over four years, increasing the take-home pay for 730,000 people working across a range of sectors. It would also provide paid sick leave, so parents don’t lose wages when they need to take care of themselves or their children when they’re sick.
- Lawmakers during the 2017 legislative session must pass the capital gains tax recently proposed by Governor Inslee and leaders in the State House, which has been endorsed by major papers and many community groups throughout our state. And they should use the revenue from capital gains to invest in education, health care, and other services that expand economic opportunities for everyone.
And as lawmakers work to craft policies that seek to provide economic opportunity to Washingtonians, they must be especially mindful that those policies empower those who have been most harmed by racism and other structural inequalities that fuel the rise in economic inequality.
Key among the positive changes: Since 2008, the number of children growing up without the health coverage they need to see a doctor when they’re sick has improved by 38 percent. What’s at work is the state’s Cover All Kids law, which passed in 2007 and created affordable health coverage called Apple Health for Kids. The Affordable Care Act’s 2014 creation of a flexible market for individual plans has also propelled child coverage in Washington to one of the nation’s highest.
Yet the child poverty rate is nearly 30 percent higher than it was in 2008, with an additional 59,000 children growing up below the federal poverty level. Poverty can impede children’s cognitive, social, and emotional development and contribute to poor health. And poverty disproportionately harms kids and families in communities of color, who face other barriers to economic security in the form of an educational opportunity gap and a high cost burden for housing, food, and other basic needs. These stressors are caused by, and contribute to, the structural racism faced by families of color. This undermines progress for children and the state as a whole.
The two organizations that make up KIDS COUNT in Washington – the Washington State Budget & Policy Center and the Children's Alliance – support two-generation approaches to creating economic security for both children and their parents. One 2016 proposal that would help both kids and families is Initiative 1433, the $13.50 minimum wage initiative now gathering signatures for the state’s November ballot. It would raise the take-home pay for the working parents of thousands of Washington children. And it would also provide up to seven days of paid sick and safe leave per year, helping Washington families by ensuring that workers don’t lose wages when they need to take care of themselves or their children when they’re sick.
The implementation of a higher minimum wage would be an important step toward lifting more Washington kids out of poverty. And, as noted in the 2016 Data Book, it is one of many policy solutions needed to improve the well-being of future generations.
The Annie E. Casey Foundation creates a brighter future for the nation’s children by developing solutions to strengthen families, build paths to economic opportunity, and transform struggling communities into safer and healthier places to live, work, and grow. For more information, visit www.aecf.org. Visit datacenter.kidscount.org for the most recent national, state, and local data on hundreds of indicators of child well-being.
- Melinda Young-Flynn, Budget & Policy Center communications manager, 206.262.0973, ext. 223
- Adam Hyla, Children's Alliance communications director, 206.324.0340, ext. 18
Welcoming refugees who flee to the United States to escape potential persecution in their home countries is not just the right thing to do from a humanitarian perspective. It’s also good for the continued growth of our economy, according to a new report by the Fiscal Policy Institute and the Center for American Progress.
Refugee Integration in the United States focuses on four groups that are identifiable in Census Bureau data – Somali, Burmese, Hmong, and Bosnian refugees – that together constitute about 500,000 U.S. residents, and 20 percent of all refugees. The report demonstrates the many ways that refugees contribute to economic growth in cities and states throughout the country. A few highlights:
- Refugees contribute to the labor force soon after they arrive and become even more fully integrated into the workforce after 10 years in the United States.
- Refugees start a wide range of small businesses at high rates.
- Refugees bring economic and cultural vitality to many areas with dwindling populations.
With regard to business ownership, refugees follow the trend of U.S. immigrant populations in general: They have high overall rates of business ownership. For example, there are 36 immigrant business owners for every 1,000 people in the labor force, higher than the rate for U.S.-born, which is 31 for every 1,000 in the labor force. And within the refugee populations studied in the new report:
- Bosnians own businesses at a rate of 31 per 1,000, with high rates of ownership in trucking and construction businesses, as well as in professional and business services and restaurants.
- Burmese, with a business ownership rate of 26 per 1,000, are spread across a wide number of types of businesses, from retail store owners to doctors with their own private practices.
- Hmong, at 22 per 1,000, tend to own businesses in agriculture, retail, restaurants, home health care, and nail salons.
- Somalis, at 15 per 1,000, often become shop owners and travel agents, and they own incorporated businesses in taxi or truck driving – with some concentration also found among engineers and scientific consultants.
Click on graphic to see enlarged version.
Local economies throughout Washington state benefit from the addition of these small businesses, especially given the high percentage of Somali and Bosnian refugees who reside in this state. Washington has the nation’s third-largest Somali refugee population – more than 9,000. There are also more than 3,700 Bosnian refugees, nearly 2,000 Burmese, and more than 1,000 Hmong who make Washington their home. All refugee and immigrant communities are an important part of the fabric of society, making our state more culturally rich and economically vibrant.
The four refugee groups studied in this report came to the United States to escape hardships unimaginable to many people – including civil war, genocide, displacement, and sectarian violence. And yet since starting over in an unknown country over the last several decades, they have helped to strengthen local economies, build thriving businesses, and enrich communities in unquantifiable ways.
Policymakers in our state and our country continue to wrestle with how to handle a sharp rise in the number of people around the globe displaced by conflict and persecution in places like Syria. The United States has only resettled around 1,200 Syrian refugees, well below its pledged goal of 10,000 for fiscal year 2016. In Washington state, Governor Jay Inslee has made the case for welcoming Syrians. In an op-ed for the New York Times, he highlighted the example of how Governor Dan Evans welcomed the Vietnamese refugees in the 1970s, unlike governors in many other states at the time. It has led to a large, thriving Vietnamese-American community in our state.
Yet resettlement still continues to be a complicated issue with many vocal critics. Amid these complications, Refugee Integration in the United States demonstrates there is reason for encouragement. When welcomed into the United States and provided a safe haven, refugees bring untold cultural and economic benefits to our states.
For further reading about how all immigrants contribute to Washington, see our previous blog post on the topic.
All of Washington's children could have the opportunity to thrive in school and life if policymakers took key steps to improve economic security and remove barriers to success, our new report finds.
State of Washington’s Kids 2016, co-published with the Children’s Alliance through our Washington KIDS COUNT partnership, shows that children are better able to prosper when such basic needs are met as a secure place to sleep at night and food on the table. Yet four out of 10 kids in Washington state live in families that struggle to meet these basic needs, according to the report. This economic insecurity puts kids at greater risk of falling behind throughout their life – in school, jobs, personal health, and civic engagement. What's more, structural racism – which exists because of a historical legacy of discriminatory practices in housing, finance, and education – means that kids of color find themselves on increasingly unequal and unstable footing.
State of Washington’s Kids shows that:
- The number of homeless children is up by nearly 15,000 since 2008, and is particularly high among students of color.
- Just four in 10 children entering kindergarten are prepared in all six areas of readiness: social, emotional, physical, cognitive, literacy, and math. Only one in three American Indian/Alaska Native, and Native Hawaiian/Other Pacific Islander students are prepared in all six areas of readiness.
- In all but two Washington counties, the number of child care slots available for hardworking parents is less than the number of children in need of such care.
There is plenty of reason for hope. The rate of low birthweight babies in our state has remained quite low – below 6.4 percent – since 2005. The number of children with health insurance increased to 96 percent in 2014. And on-time high school graduation rates in Washington have held steady, above 75 percent since 2010.
Nevertheless, much work remains to be done. We cannot achieve our promise of a brighter future for all children when so many kids of color are being left behind. Our report offers two multi-faceted solutions to provide all of Washington’s children with the opportunity to get ahead:
- Take meaningful steps to undo structural racism and the system of exclusionary practices and policies that breed inequities for kids of color. Replace them with solutions that enable kids from all backgrounds to succeed. One way policymakers can advance inclusivity is to use racial equity measurement tools to review the impact of proposed legislation that seeks to close the opportunity gap. [See our racial equity toolkit for one resource to accomplish this.] Another essential step is to work directly with leaders in communities of color to learn from them about recommended strategies to redress inequities.
- Invest in the success of whole families by recognizing that the well-being of children is inextricably tied to the well-being of their parents. Kids do better when their parents do better. That’s why two-generation approaches to poverty prevention in particular offer a good model. Proposed legislation focusing on intergenerational poverty that was introduced in the 2016 legislative session was a good start. Further, Initiative 1433, now gathering signatures for the November ballot, would smartly raise the take-home pay for the working parents of thousands of Washington children. And by providing paid sick and safe leave, it would also help Washington families by ensuring that workers don’t lose wages when they need to take care of themselves or their children when they’re sick.
Taking steps to implement these common-sense solutions would set Washington’s children up to have a healthy start in life, have their basic needs met, and succeed in school and life. We'll build a better future for all of us if we take the right steps for our children now.
This morning, the state Supreme Court unanimously struck down Tim Eyman’s latest attempt to restrict the legislature’s ability to eliminate wasteful tax breaks and enact new revenue for public priorities like education, infrastructure, and health care. Initiative 1366, another in a series of Eyman’s unconstitutional supermajority proposals, would have allowed a handful of lawmakers to stand in the way of attempts to raise revenue for these and other state investments. Supermajority laws require a two-thirds vote of the legislature to enact any tax increase, essentially granting veto power to just 17 senators out of 147 state legislators.
As we’ve described in the past, I-1366 would have been disastrous for Washington. It would have essentially blackmailed the legislature into restricting its own ability to enact new state revenue, or else lose $1.4 billion a year from the state budget for important services like higher education, safe communities, and health care. This, in the face of an historic mandate from the state Supreme Court to fully fund basic education for our kids and grandkids, which will require billions of additional dollars for schools each year.
In order to fund state priorities that build strong communities, like parks and libraries, safe roads, and schools that we can depend upon to educate the next generation of Washington’s leaders, the legislature must be able to do its job. That includes raising revenue equitably and sustainability – and by decision of the entire legislative body, not just a handful of influential lawmakers.
As the Court stated in its opinion: “[If I-1366 were allowed to stand, t]he new norm would be for the initiative sponsors to pair one drastic or undesirable measure with an ultimatum that it go into effect unless a specific constitutional amendment is proposed to the people.”
In 2005, a visionary group of public policy experts, community leaders, and social justice advocates joined forces to create an organization that would ensure that Washington state invests in the priorities that create a more just and prosperous state. Priorities like schools and health care, economic security and jobs.
A year later, the Washington State Budget & Policy Center was officially open for business. The organization’s goal: to advance the well-being of Washington communities and improve the economic and social opportunity of all in the state – with a particular focus on people struggling to get by.
Today, all of us at the Budget & Policy Center are proud to be celebrating 10 years of fulfilling that goal.
We have spent the past decade conducting the rock-solid research and analysis it takes to develop common-sense policy solutions. We’ve put our findings into the hands of legislators, decision makers, and grassroots advocates who mobilize for change. In so doing, we’ve worked in a bipartisan way to help shape the public debate and build diverse coalitions – all to help Washington be a state where everyone has the opportunity to thrive.
Throughout this time, the Budget & Policy Center has become the go-to source for comprehensive budget analysis and policy solutions that respond to crucial issues in Olympia and across our state. The result has been many significant policy wins that keep Washingtonians moving forward – from enacting the Working Families Tax Rebate to eliminating wasteful corporate tax breaks, expanding Medicaid healthcare coverage to passing legislation that supports early childhood education. (Click on the graphic for many more details.)
Click on the image to see the full two-page PDF.
That isn’t to say that we haven’t faced challenges. A historic recession that set our economy and workers back, cuts to public investments that put many people at risk of falling behind, and repeated ballot initiative attempts to help powerful interests at the expense of the common good, to name a few. And there’s plenty left to do – especially turning around the most upside-down tax structure in the nation, where people with the lowest incomes pay seven times the rate in state and local taxes than the wealthiest 1 percent.
At the Budget & Policy Center, we will remain a key player defending our state against these challenges. We have been, and will remain, focused on the long game. We share a vision of Washington as a state where all children go to great schools; workers earn what they need to build a secure future; the environment is healthy; and all communities can thrive. A state where people from all races, ethnic and socioeconomic backgrounds, and zip codes have equal opportunity for prosperity. Where the tax code isn’t set up to favor the powerful few.
Speaking of that long game, we’d like to show you what a difference 10 years has made. We invite you to click here or on the graphic above for a sampling of the work the Budget & Policy Center has done and the policies we’ve helped shape in our first decade. These successes are the result of the passion and commitment of our hardworking staff and board. They are a testament to the support of so many policymakers, community leaders, partner organizations, students, activists, and others we’ve worked with over the years – as well as the many generous individuals and foundations that believe in our work and invest their dollars in us. Together we are a powerful community of change-makers.
And we are just getting started. We will continue to provide the data, develop the strong messaging, and build the grassroots partnerships needed to make sure everyone in this Evergreen State can reach their full potential. We look forward to the next 10 years and beyond.
The legislature’s annual report on its progress toward meeting the state Supreme Court-mandated McCleary school-funding requirements shows that lawmakers have a lot more work to do.
The report, filed this week, makes clear that there is not enough revenue to provide Washington’s children with the high-quality K-12 schools the state constitution requires.
The committee that published the report, which has been issuing such progress reports to the Supreme Court each year since 2012, has identified five major areas where additional state funding is needed. According to the committee, three out of five areas have already been fully funded since the McCleary decision was handed down in 2012: materials, supplies, and operating costs (often referred to as MSOC), full-day kindergarten, and student transportation. Unfortunately, however, much of this was accomplished by using unsustainable revenue sources such as the overburdened sales tax, cutting funds from other important priorities that serve Washington’s communities, and using one-time accounting gimmicks.
The report plays up the fact that this year’s Senate Bill 6195 laid out a framework for funding basic education and created the Education Funding Task Force to make further recommendations. While those steps are certainly commendable, the legislature nevertheless did not make enough progress to fulfill its McCleary mandate this year. By the end of the 2016 legislative session, it had failed to make the additional investments necessary to fully fund basic education under the court’s order. Two big-ticket items remain to be addressed during the 2017 legislative session: K-3 class size reduction (which the committee estimates will cost over $1 billion); and staff compensation (the cost of which is significant, but still unknown). Great teachers and small class sizes are necessary for a high-quality learning environment. It is especially challenging to get and keep the best teachers and aides when they are overextended and don’t receive a decent salary.
Excellent schools are a foundation for thriving communities. They set our future generations up for success. And we cannot expect excellent schools in our state unless our legislature makes real and equitable investments in the education system. As we’ve written in the past, finding the billions of dollars required to pay for our K-12 public schools will require policymakers to bring in new sources of revenue, as well as to reform our tax system, which over-relies on the dwindling sales tax and asks the people with the lowest incomes to pay the highest percentage of their incomes in taxes. Further, cutting existing investments in important priorities like feeding hungry kids and having safe communities threatens the well-being of our state and still won’t provide the billions of dollars needed to fund McCleary.
The 2016 session marked the fifth year the legislature convened to work toward complying with the Supreme Court’s order and identifying a solution to fund basic education. Now, the legislature has only one more session to do so: the deadline to fund basic education is the end of 2017.
The clock is ticking.