Schmudget Blog


Income gains are not being shared equally

Posted by Julie Watts at Oct 12, 2018 01:50 PM |

New Census data show many Washingtonians of color are still facing barriers to economic opportunity 

By Liz Olson, State Priorities Partnership policy fellow

From 2016 to 2017, Washington state’s median household income rose while the statewide poverty rate slightly declined, according to new data released by the U.S. Census Bureau. While this is good news, it is tempered by the fact that gains in prosperity have not been shared equally across racial and ethnic groups. Substantial barriers to financial well-being persist for many people of color as a result of a continued legacy of discrimination in hiring and promotions, overrepresentation in low-wage work, and redlining policies that pushed people into neighborhoods that often don’t have the resources they need to thrive. 

In 2017, our state’s median annual household income increased by $2,430 (in inflation-adjusted dollars) from the previous year. But even though hardworking people of every racial and ethnic identity are driving growing economic prosperity in our state, not all households are reaping the benefits. 

White households represent the only racial group in Washington to have seen a meaningful bump in household income (1),  with median income rising to $72,254 in 2017. Meanwhile, income growth stalled for Black and Latinx households. And even more disconcertingly, incomes for Native American and Alaska Native households slid backwards. 

Washington’s median income was just $52,212 for Latinx households, $49,300 for Black households, and $42,127 for Native American and Alaska Native households in 2017. This means that many households of color are struggling to make ends meet, with incomes well below the high cost of living in our state – $64,203 for a single parent with two kids (2). These patterns reflect the outcomes of centuries of discriminatory federal, state, and local policies.

Census data also show that 3,532 fewer Washingtonians lived in poverty last year than in 2016, as the overall poverty rate fell slightly from 11.3 to 11 percent. Even with this modest decline, the actual number of people in poverty in Washington remains higher than it was a decade ago at the onset of the Great Recession. In fact, the number of Washington families living in deep poverty (with an income of less than $10,210 for a family of three) grew by nearly 30 percent from 2007 to 2016 (3).

 

Families of color – particularly those headed by single women – and kids are hit especially hard. As the chart below illustrates, too many young people of color don’t have access to the financial resources they need for a safe, secure, and bright start in life. More than a quarter of Latinx, Native American, and Pacific Islander children, and nearly 30 percent of Black children, lived in a household below the poverty level in 2017. 

Click on image to enlarge

Children in poverty

 

Washington’s kids and families deserve better, and our policymakers can do better by making investments in our communities that enable all of us to thrive. We know that anti-poverty programs like the Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families (WorkFirst), affordable housing, affordable childcare, and Apple Health work. They provide families who have fallen on hard times the opportunity to meet basic needs, get and keep jobs, and increase their income over time. State lawmakers should take advantage of a growing state economy to invest in poverty reduction efforts so that everyone in our state can have the opportunity to thrive – especially those communities of color who have historically been excluded from economic opportunity.

1. While other racial/ethnic groups also saw an increase in annual median household income from 2016 to 2017, the bump in median income for white households was not only larger than most other groups but also the only statistically significant increase, according to Center on Budget and Policy Priorities analysis of 2017 American Community Survey (ACS) data.

2.  MIT Living Wage Calculator for single-parent household with two children, Washington state; http://livingwage.mit.edu/states/53

3.  Center on Budget and Policy Priorities two-year analysis of Current Population Survey (CPS) data.

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Brief: Poverty reduction programs support families to work and should be strengthened

Posted by Julie Watts at Aug 01, 2018 03:50 PM |

Even with a strong economy and low unemployment rates, many households in Washington struggle to meet basic needs. Fortunately, poverty reduction programs remove obstacles that make it harder for families to get and keep jobs and help them grow their incomes over time. 

Our new policy brief, “Supporting Parents to Work,” shows how programs like the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF) support families to work. It also identifies certain situations in which families may face benefit “cliffs,” or a sudden loss of support that hurts their financial bottom line. State lawmakers need to take steps to strengthen some benefits so families can better take advantage of opportunities to increase their incomes. 

The good news is it pays to work when participating in anti-poverty programs. Programs like SNAP, TANF, Apple Health and Affordable Care Act health insurance subsidies, and federal housing assistance are all designed to allow families to take advantage of wage and income growth (see chart below). That helps a family’s financial bottom line when they work more hours or get a raise or promotion.

(Click on image to enlarge)

public benefits support work

 

However, families with children who receive child care subsidies through Working Connections Child Care (WCCC), do face a benefit cliff when their wages go up (see chart below). A benefit cliff is a sudden loss in benefits that results in a net loss in income. This can set families back substantially when they need to buy child care at market rates. 

 (Click on image to enlarge.)

benefit cliff in Working Connections Child Care

 

There are also some cases in which families may face a benefit cliff even when they do not see an increase in earnings. This can happen when families hit time limits or face sanctions in Washington’s TANF, or WorkFirst, program. This particular cliff is the result of a series of legislative and executive policies enacted over the past 12 years that cut off TANF benefits for the entire family when a parent failed to meet work requirements and that restricted time limit extensions. (For more information see our policy brief, “Reinvest in WorkFirst.”)

Every family should be able to meet their basic needs so that they can work, get ahead, and help their children reach their full potential. Washington lawmakers must take commonsense steps to strengthen poverty reduction programs. For WCCC, they should increase the period of time a family can participate in the “phase down” period from three months to 12 months. They should also increase program eligibility from 200 percent of the federal poverty line (or $3,462 for a family of three) up to 325 percent of poverty (or $5,625 for a family of three). For WorkFirst, lawmakers should provide extensions to program time limits for families who are “playing by the rules” and meeting program requirements, but aren’t making enough to be able to move off the program. They should also make it easier for families to comply with work requirements. Taking these kinds of steps will create better opportunities for all families to thrive.

Read the full brief, “Supporting Parents to Work: How poverty reduction programs in Washington support employment and need to be strengthened.” 

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Brief: Set kids up for success from early learning through higher education

Posted by Julie Watts at Jul 10, 2018 05:10 PM |

In recent years, Washington state has made important strides in investing in public education and early learning. In the coming years, these changes will be put to a crucial test: Will they help children, especially children of color, surmount the barriers to quality K-12 learning and lifelong achievement?

For KIDS COUNT in Washington’s new “Ensuring All Kids Have an Opportunity to Succeed” brief (a part of the State of Washington Kids 2018 series), we asked local education leader Matt Charlton, superintendent of Manson School District, “What would it take to make sure all kids have a path to success in life?” 

Thanks to local voter levies and to the state’s Early Childhood Education Assistance Program (ECEAP), which provides high-quality preschool to kids with very low incomes, the Manson School District offers free preschool to every four-year-old residing within its boundaries. Charlton said his district looked at the data to make this decision. And he said that quality pre-kindergarten was the single best investment the school district could make “in terms of readying children for kindergarten and overcoming language and poverty barriers.”

All kids should get off to a strong start in school. Yet in Washington, kids of color face the greatest barriers to kindergarten readiness. Far too many families cannot afford high quality early learning, especially programs that have a track record in addressing racial disparities.

Click on image to enlarge.

Many kids of color face the greatest barriers to a strong start in school

Fortunately, our state has powerful tools for removing barriers to kindergarten readiness through ECEAP and robust quality standards in child care. Recent analysis by KIDS COUNT in Washington found that additional investments in ECEAP to serve more kids would dramatically reduce disparities in kindergarten readiness for kids of color.

Kids also need to be able to stay strong through elementary and middle school and finish strong through graduation and post-secondary enrollment. Yet, kids of color face the greatest barriers to success there, too. 

Racial disparities persist in our education system because of systemic racism, including factors like inequitable funding between low-income and high-income schools, housing instability and racially disproportionate disciplinary practices. 

For example, an extensive body of research shows that systemic barriers like living in poverty and having low socioeconomic status are leading predictors of whether or not kids graduate on time. Kids of color face the greatest barriers to on-time graduation. American Indian, Pacific Islander, Black, Latinx, and mixed race students are two to three times more likely to live in poverty in Washington state than their white and Asian counterparts.

More public investments are needed to address these kinds of disparities. While recent investments in public education and early learning are an important step, more needs to be done to address racial disparities in education and to ensure all kids, especially kids of color, have a path to success in school and life. State lawmakers, parents, educators and administrators should consider supporting the following steps to boost success of children in school and in life: 

  • Expand the reach and flexibility of the Early Childhood Education and Assistance Program and invest in affordable access to quality child care, including investing in family, friend, and neighbor care.
  • Expand the state need grant, which provides tuition assistance to all students with a household income below 70 percent of state median income, so all income-eligible students have an affordable path to a degree or certificate. 
  • Invest in local communities and school districts that are designing programs and policy solutions that remove barriers for students of color to thrive in school, including investing in school board trainings on race and racial equity, ensuring parents of color are included in the hiring of leadership staff and principal leaders, and taking other important steps to create accountability and make progress toward more equitable outcomes for students of color.

Ensuring All Kids Have the Opportunity to Succeed” is the third release in the State of Washington’s Kids 2018 series.

KCinWA

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Governor’s initiative on economic security is a big win for Washington’s families

Posted by Julie Watts at Nov 29, 2017 03:15 PM |

Governor Inslee has created a new inter-agency work group on family economic security that is a big step in the right direction to help families move themselves out of poverty in our state. The work group will be tasked with developing a 10-year strategy for poverty reduction in Washington state, based on an intergenerational approach to addressing poverty.

Intergenerational approaches to poverty promote the economic well-being of whole families across generations so that children can thrive and reach their full potential. The approach is centered around coordinated support for families across five key areas: high-quality early childhood education; higher education and career pathways; asset building; health and well-being; and social capital.

Family economic security

Nationally, similar initiatives that focus on economic success of families, as opposed to a focus on children or adults alone or in silos – are gaining momentum and showing very promising results. In Colorado, Utah, Connecticut, Massachusetts, and Oklahoma – to name just a few states – early investment in intergenerational programs are paying off and are leading to living-wage careers for parents, better education outcomes for kids, and a low rate of return to social benefit programs. 

The governor’s directive to create this work group is an important step to help families move out of poverty. It is also an important step to grow the middle class so that more residents can benefit from economic growth. As more families move out of poverty permanently and contribute to economic activity, that will pay dividends for the state economy.

The directive was the result of bipartisan efforts advance intergenerational strategies to address poverty in Washington. The creation of the work group is a sign that Washington’s leaders are turning a new page on how we go about policy development on economic security. The initiative calls for broad participation by state agencies, stakeholders, employers, people who are in poverty, and other communities that have historically not been included in conversations on public policy. 

Advancing poverty reduction policies using an intergenerational approach has long been a priority of the Washington State Budget & Policy Center. We look forward to continuing to work with the governor and his staff as well as with legislators and other key stakeholders to develop specific data-driven policy recommendations to reach poverty-reduction goals. This is a monumental step toward ensuring that every child, parent, and grandparent in Washington is able to reach their full potential and thrive.

 

New Census Numbers: To Build Thriving Communities, Invest in Removing Barriers to Economic Security

New data released by the U.S. Census Bureau shows that there is some good news when it comes to poverty rates and access to health care in our state. At the same time, the data shows that many Washingtonians – in particular, some communities of color, women, and people with disabilities – still face barriers to economic security. The numbers make it clear that to build thriving communities, our policymakers must invest in priorities that remove obstacles to prosperity for Washingtonians.

First the good news: Last year, the poverty rate in Washington state declined slightly to 11.3 percent from 12.2 percent in 2015. And between 2013 and 2016, the rate of people with health insurance increased to 94 percent from 86 percent.

The fact that fewer Washingtonians are living in poverty is likely due to economic growth and a low unemployment rate. And the insurance rate is more evidence that the Affordable Care Act has been extremely effective in ensuring more people can afford to have access to a doctor and preventive health services.

Yet the numbers also reveal that despite economic growth, far too many residents of Washington face barriers to economic security, especially people of color, women, and people with disabilities. In fact, the poverty rate for some communities of color in Washington is nearly two to three times that of whites. Systemic barriers are impacting many people’s ability to put food on the table and pay for their housing. For example:

  • Twenty-seven percent of American Indian/Alaska Natives, 23 percent of Blacks, 20 percent of Native Hawaiian/Pacific Islanders, and 19 percent of Latinos live in poverty.
  • Among full-time workers, women earned 75 percent of what men earned in 2016.
  • One in four working age Washingtonians with a disability live below the federal poverty line, compared to one in ten adults without disabilities. 


Further, when looking at the data over a longer time period, they show those facing the greatest hardship are not reaping the benefits of economic growth. In fact, more people in Washington are living in deep poverty – below 50 percent of the federal poverty line, which is less than $10,080 a year for a family of three in 2016 – than in 2006. The number of Washingtonians living in deep poverty grew by 17 percent between over the last decade (See figure below).

(Click on graphic to enlarge)

Washingtonians in Deep Poverty

Our economy and our communities will be stronger when everyone is able to not only to make ends meet, but also to have a better future – and when lawmakers act to undo systemic and institutional barriers that prevent people from having equal access to opportunity.

While it is good news that there is declining poverty overall and greater rates of health insurance coverage in our state, the new Census numbers nevertheless underscore that too many people are still facing financial hardship. In order to build thriving communities, lawmakers in our state need to make investments that enable all our residents to thrive. Further, federal policymakers must protect essential health care coverage – pushing back against continued efforts to repeal the Affordable Care Act – and they must protect programs that ensure that when people hit hard times, they don’t go without the basics.

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New Report: Supplemental Nutrition Assistance Program Critical to the Wellbeing of Many Washingtonians with Disabilities

Posted by Julie Watts at Jun 14, 2017 06:25 PM |
According to a new report by the Center on Budget and Policy Priorities, the Supplemental Nutrition Assistance Program (SNAP) – which provides basic food support to people with lower incomes – helps 126,000 Washingtonians with disabilities secure a better quality of life and protect their basic health. The report underscores the key role SNAP plays in lifting people with disabilities out of poverty, helping them put food on the table, and contributing to a wide range of positive long-term health and economic outcomes.

 

What is a Disability

Far too many Washingtonians with disabilities are just one accident or mishap from financial catastrophe. SNAP plays a vital role in providing them with added financial security. Further, by ensuring they have the resources for adequate nutrition, SNAP offers them a key foundation of good health. Policymakers must protect this important program against funding cuts being proposed by Congress and President Trump.

Two out of five non-elderly individuals with disabilities in Washington state participate in SNAP. For them, it is an especially important resource because having a disability can make life more expensive and can make it harder to earn enough money to buy food and other necessities.

People with disabilities are more likely to live in poverty than those who don’t. In fact, as seen in the chart below, 33 percent of children with disabilities live below the federal poverty line in Washington state, compared to 21 percent of non-disabled children. And among 18 to 64 year olds, people with disabilities are twice as likely to live in poverty than non-disabled people. Given that this is the time of life when most people are in the workforce, earning income, and saving money, this data underscores how much harder it can be for people with disabilities to make ends meet without basic supports like SNAP.

[Click on graphic to enlarge.]

People with Disabilities are More Likely to Live in Poverty in WA

Despite the fact that SNAP provides important nutrition benefits to millions of low-income people with disabilities nationwide, President Trump has proposed shifting 25 percent of the federal cost of the program to states, which would cost Washington state an additional $363 million a year. Congressional House Republicans are also in the process of negotiating a 2018 budget resolution that will likely propose sweeping changes to SNAP, including cuts to overall spending and shifting costs to states. Among the other things the president and Congressional Republicans have proposed are:

  • The elimination of a small SNAP benefit (called the “minimum SNAP benefit”) that seniors and people with disabilities can qualify for in connection with other public supports. This modest amount of additional assistance is critical for people living in poverty.
  • Limits on the length of time people living in communities with high unemployment can receive SNAP. This is yet another challenge for people with disabilities who already have a difficult time finding work.
  • New fees imposed on grocers who accept SNAP benefits, which will result in many grocers opting out of the program. This will obviously make it harder for SNAP participants to find stores where they can use their food assistance benefits.

Not only will none of these proposals help people move out of poverty; they will actually increase hardship for working families and millions of Americans with disabilities.

SNAP plays a vital role in ensuring that many Washingtonians with disabilities can put food on the table and have an opportunity to move out of poverty. As Congressional budget writers in Washington D.C. sit down to figure out how they will allocate public resources, Washington state’s elected officials should ensure that all residents – especially those with disabilities – have access to basic supports like SNAP.

To find out more about how SNAP is a critical resource for many people with disabilities, read the Center on Budget and Policy Priorities’ report, “SNAP Provides Needed Food Assistance to Millions of People with Disabilities.”

 

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President’s Budget Would Harm Washingtonians, Leave State on the Hook for Massive Costs

Posted by Julie Watts at May 23, 2017 07:05 PM |
This post was updated on May 24 to add clarifying information about the Medicaid data.
 
Statement by Executive Director Misha Werschkul:
 
The federal budget proposal released by President Trump would give massive tax cuts to the rich by cutting important programs that help lift people out of poverty and help people struggling to make ends meet. On the chopping block are critical services like Medicaid, food assistance, and basic support for people with disabilities. This “Robin Hood in reverse” proposal would hurt the wellbeing of our communities while lining the pockets of the wealthy and special interests. It should be rejected by Congress.
 

Far too many American families are just one accident or personal catastrophe away from financial collapse. The federal government needs to make sure that when people hit hard times they do not go without the basics. However, the president’s budget would cut $2.5 trillion from poverty-reduction programs in the United States over the next decade. That funding would help pay for huge tax breaks for the wealthy and corporations.

In Washington state, the proposed federal budget proposal would leave lawmakers on the hook for finding billions of dollars in additional funding over the next decade to make up for cuts in federal programs for states. For example, it would:

  • Cut Medicaid funding by 20 percent over 10 years, which would cost the state approximately $5 billion in federal funds per biennium by 2027.*
  • Cut the Supplemental Nutrition Assistance Program (SNAP) by 25 percent over 10 years, costing the state up to $1 billion per biennium by 2027.
  • Cut another $1.9 billion in other federal funds to the state over 10 years that provide basic supports to low-income families, prevent homelessness, and help people meet basic needs and train for better jobs.

We all share in the responsibility to ensure that everyone in our communities has food on the table, a roof over their heads, and basic supports. Programs like Medicaid and SNAP are effective at helping provide people with the foundations they need to move out of poverty. They also bolster local economies. 

If President Trump truly wants to help the American people and strengthen the economy, his budget should invest in services that actually help people find work, get education and essential job training, and have access to mental health services. He shouldn’t be focusing on making the rich richer at the expense of the rest of us.

Greenstein quote Trump budget

For more analysis on the federal implications of Trump’s proposed budget, see this statement from the director of the Center on the Budget and Policy Priorities: “Greenstein: Trump Budget Proposes Path to a New Gilded Age.”

 

* This estimate is based on Congressional Budget Office projections and does not take into account the potential passage of the American Health Care Act that has passed the U.S. House of Representatives and is now under consideration in the U.S. Senate, which would dramatically increase these cuts to the state even more. This estimate could be updated on the basis of new information.

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Thank you for attending Budget Matters

Our Budget Matters 2018 policy conference took place on November 13 at Seattle Center. john a. powell from the Haas Institute for a Fair and Inclusive Society and Gov. Jay Inslee were the keynotes. Stay tuned for the TVW coverage.  

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