with a focus on the current legislative session. We had a very good, productive discussion covering what is going on at the legislature right now and talk about the ever-present budget woes and the need for more revenue.
In addition, we talked about a very exciting bill that would bring very significant and positive changes to Connecticut´s property tax system, by far the most regressive tax in the state. The bill in question is S.B.1, and includes some long overdue changes that would reduce the tax burden on low income families by modifying the car tax, and provisions that would promote economic activity in urban centers.
We have prepared a one pager on SB1 and car taxes - You can download it here. You can find the slides on the legislative update after the jump.
On tax deadline day, we want to put a spotlight on a proposal contained in the President's 2015 budget that would expand the federal Earned Income Tax Credit (EITC) for lower-income, childless workers.
As quick background - the federal EITC is a fully refundable[i] tax credit that is targeted to support low- to moderate-income workers. The credit becomes available to workers with their first dollar of earned income, peaks at certain predetermined amounts (which are based on marital status and family size), and phases out until it eventually reaches $0 for higher income earners.
The EITC has been routinely cited as a highly effective tax policy that both encourages and rewards work - and has seen support from both the left and right. Research shows that the credit produces major long term benefits for children that go well beyond a single tax year -- this study finds that children in families who receive the EITC have higher test scores, fewer teen births, and live in better neighborhoods as adults.
However, the EITC falls short, and should do more, when it comes to supporting young and childless workers. Childless workers under age 25 are completely ineligible for the credit and the average credit for qualifying workers between 25 and 64 is less than one-tenth the average credit for families.
Yesterday the Center on Budget and Policy Priorities created an infographic that further demonstrates the problem with the current structure of the EITC:
The Center has found that childless workers are in fact the only group that are pushed further into poverty as a result of the federal tax code.
In his 2015 Budget, the President has proposed reducing the qualifying age to 21 and raising the credit amount available to childless workers (from a max of $500 to a max of $1,000). The President's proposal also raises the phase out point for the EITC for these workers from $15,000 to $18,000. There are also several proposals before Congress that would expand the EITC beyond the changes proposed in the President's budget -- potentially creating even larger credits for these workers.
A change to the federal EITC could also bring a change to our state's EITC -- Connecticut is one of 21 states (there are total 26 states with a state EITC) that sets its tax credit as a percentage of what is offered on the federal level. We know that the combination of a state EITC with the federal credit helps bring an even larger number of families out of poverty. We should be extending this same opportunity, at both levels, to our young and lower-skilled workers who we know are facing an extremely difficult time in this economy and in this job market.
We call on politicians in Washington to adopt these measures, and to provide much needed support to these working Americans.
[i] A fully refundable tax credit is one where a payment will be made by the IRS directly to the taxpayer in the event that the amount of the credit exceeds the individual's income tax liability.
In Connecticut, black and Hispanic children fall behind their peers early on education, and never catch up.
Small differences in the early years grow over time. Children of color report only slightly lower rates of participation in early childhood programs, but this early disparities end up hurting their test scores in 4th and 8th grade. Once black and Hispanic children fall behind, they never catch up.
It is time to really look closely to the programs that are serving our youngest children, and look for results. The numbers show that early years are critical. We need programs that give all children with the tools they need to succeed.
Data from Annie E. Casey KIDS COUNT release, Race to Results which can be viewed here.
We have been talking a lot about the importance of the minimum wage here at the CAHS Blog. Past posts have tackled the issue of who really earns low wages (parents, not just teens), whether a raise hurts business (it doesn't!), and how taxpayers subsidize big corporations when companies fail to pay workers a living wage.
Today we wanted to discuss another group of low wage workers -- tipped workers. According to state and federal law, if an employee receives more than $30 a month in tips their employer is allowed to pay them an amount lower than the minimum wage. So in 2014, CT's "full" minimum wage is $8.70. Employers who hire bartenders are allowed to count 11% of tips received as part of that bartender's wage, and therefore are only required to pay these workers $7.34 an hour. The wage for hotel workers and restaurant employees is even lower -- state law allows an employer to count tips as 31% of these employees' wages, and therefore these workers only receive $5.69 an hour.
Seven states have decided to abandon this complicated "tip credit" system entirely and require full minimum wage payment for ALL workers. Restaurant Opportunities Centers, an amazing organization with a wealth of resources, has put out a number of papers discussing the problem with this tip credit system. ROC has shown that employees rarely recover wages when they receive insufficient tips (as required by law), that the instability of a tip wages means a greater reliance on government programs, and that a disproportionate number of women hold service jobs and suffer as a result.
Here in Connecticut the tip credit issue is about to get even more complicated. When our state passed a minimum wage increase in 2013, which raised the base wage to $9.00 effective January 1, 2015, the law modified the tip credit to prevent an increase in the tipped minimum wage. This means servers will stay at $5.69 an hour. While the rest of our state's workers get a raise, these vulnerable employees remain subject to the same uncertainty and low earnings.
Fortunately, the Governor's new minimum wage bill, Senate Bill 32, has been written to allow servers and bartenders to receive a higher wage as the full minimum wage increases. We want to encourage advocates and legislators to support this parity, and to fight on behalf of our state's lowest earners, as we continue the campaign to raise the minimum wage to $10.10.
Additionally, CAHS has created a one-page fact sheet that dives into the tipped minimum wage a little further. We encourage you to share broadly and to reach out if you have any questions.
As we continue to follow Governor Malloy's proposal to raise the state minimum wage to $10.10, and the President's effort to do the same on the Federal level, we wanted to share with you some great work that is being done by our friends at the Economic Policy Institute (you can read some of our previous blog coverage on the minimum wage campaign here).
One of the most pervasive myths about the minimum wage (second only to the fear that a raise is a job killer -- in a previous post we shared a number of resources that debunk this misconception) is that it is mostly being earned by teenagers who need spending money. This infographic produced by EPI shows us that this is not the case:
A 2012 analysis produced by EPI told a similar story; in that year EPI determined that if the minimum wage had been raised to $9.80 here in Connecticut over 80% of the effected workforce would have been individuals over age 20.
These minimum wage earners are also disproportionately women. This map from the National Women's Law Center shows that nationally almost two-thirds of minimum wage workers are women, while here in Connecticut, women are six out of every ten minimum wage earners.
So as we can see -- a minimum wage increase is a targeted reform that will help women and families in Connecticut, and across the country, move out of poverty and towards economic stability. Continue to follow us here on the blog, as well as on Twitter and Facebook, for updates on the state and federal campaign.
All individuals define themselves using multiple identities that ultimately determine their perspective on life. I not only see myself as a student, daughter, and friend, but also as a human rights advocate, feminist, and leader. These last three identities have a large impact on my decision to support the concept of family medical leave insurance (FMLI) here in Connecticut and around the world.
As a human rights advocate, I stand with those who are currently left out of, struggle with, or are unaware of the current Family Medical Leave Act (FMLA) which, as mentioned in my previous FMLA blog, does not allow the majority of workers to support their families. I believe that it is a human right to be able to take time off of work to care for oneself, an ill/aging family member, or a newborn baby without fear of losing one’s job and with the appropriate pay to cover basic needs. The necessity to take leave from work in certain situations is a reality that every single employee and employer faces and it is about time that policies fit the needs of human beings rather than some elusive concept of business.
Many in the business world bring up the argument that employers are also individuals with rights and that their businesses need to be protected in order for them to sustain themselves. While valid points have been raised, the fact is that FMLI is taking into account these employers and treating them as human beings by ensuring that the employer is able to continue and actually save more than with their own leave policies alone.
If workers can draw benefits from a FMLI program in lieu of some part of what the employer would otherwise provide, the employer enjoys a costs savings. In the first comprehensive study of California’s Family Leave Insurance program, the majority of employers reported either cost savings or no additional costs associated with implementation because they temporarily assigned the work of employees on leave to other employees or hired temporary replacements. In other words, the concept of FMLI does not hurt businesses as much as some have expected and is thus beneficial to both employers and employees.
As a feminist, I am aware that women are often discriminated against under the FMLA as they are still considered the primary caretaker of their children. While Connecticut has one of the most broad Family and Medical Leave laws, there are still a significant number of parents who have little to no time off after the birth of their child. In addition, many families cannot afford to take unpaid FMLA because in today’s economy, both parents in a two-family household need to work in order to make ends meet.
For single-parents with a newborn child, there are additional financial challenges that are mostly faced by mothers. As I mentioned in my blog post about the new Women’s Economic Agenda, true equality cannot be reached in the workplace without affordable and accessible child care. This does not only affect women as families and the next generation will also suffer as gains in workplace equity won't be realized by mothers who can't return to work in the first place.
As a leader, I believe that it is my responsibility to bring people together for the common good which, in this case, is protecting human rights through FMLI. I hope to inspire others to see how all members of society can benefit from a family and medical leave program that is tailored to the needs and rights of human beings. For more information on the recently established FMLI Task Force, please visit www.ctfmli.org.
Yesterday, August 5th, marked the 20th anniversary of the implementation of the Family Medical Leave Act (FMLA), the nation’s first federal law guaranteeing most workers job-protected unpaid leave for certain medical or family emergencies. This monumental law promises qualified employees the right to take up to 12 weeks of unpaid leave for the birth or adoption of a child or for serious health conditions.
The Economic Opportunity Institute reports that since its implementation, FMLA leave has been used more than 100 million times by an estimated 35 million men and women. However, FMLA does not cover all workers, conditions, and situations and thus does not reflect current realities of the workforce and of families. Specifically, FMLA does not:
- Provide pay so workers can cover basic expenses when taking leave
- Include all family members in the definition of “family”
- Apply to more than 40% of workers (those in companies with fewer than 50 employees, who have been on the job less than a full year, or average fewer than 25 hours of work per week)
- Provide for short-term leave for common illnesses, such as a cold or the flu
Due to these downfalls, organizations and politicians alike have been encouraging cities and states to enact paid sick days and family medical leave insurance (FMLI) programs. Washington’s proposed FMLI legislation would “provide up to 12 weeks to care for a new child or seriously ill family member, and 12 weeks for the worker’s own serious health condition. It would also provide benefits of 2/3 of weekly pay for most workers. The program would pay for benefits through payroll premiums shared by workers and employers, starting at $1.00 per week for the typical worker.”
Federal assistance for state family leave insurance programs may be forthcoming. The State Paid Leave Fund proposed by President Obama has been included in the budget approved by the Senate Appropriations Committee.
The recently mentioned and established Women’s Economic Agenda has consistently been said to be one of the solutions that will strengthen FMLA standards. Democratic Leader Nancy Pelosi stated “FMLA marked a critical step forward in the ongoing struggle to ensure the economic security of all families. Yet today, millions of workers, including more than 13 million women, are still forced to defer or delay their personal needs in favor of financial security. That’s why House Democrats believe we must offer FMLA’s protections to more of the workforce and ensure expanded access to paid and unpaid leave – and why we made stronger family and medical leave policies central to our economic policies.”
Representative Cartwright similarly stated that “Almost half of all workers are women, and 40 percent of working women are the primary breadwinners in their families. We need to take further steps to help America’s working women – and all of America’s workers – better balance their responsibilities on the job with their responsibilities to their families at home.”
California, New Jersey, and Rhode Island have family and medical leave insurance programs in place, and New York and Hawaii have statewide disability insurance covering all workers. Seattle, Portland (OR), New York City, San Francisco, Washington, DC, and Connecticut have adopted paid sick leave standards. As noted in our previous blog posts, Connecticut is now trying to establish a family medical leave insurance program out of our newly formed FMLI Task Force. Please visit our website, http://ctfmli.org/, for more information.
Gender equality is certainly not a new topic both in the United States and around the world as women have been fighting for their rights for centuries. There appears, however, to be new momentum building up in US politics that seeks to establish equality in the work place and shed light on the importance of childcare.
House Minority Leader Nancy Pelosi, Representatives Rosa DeLauro and Doris Matsui, and others announced a new Women's Economic Agenda last week that will be built on three key pillars: 1) equal pay for equal work, 2) work-family balance, including paid sick leave and a livable minimum wage, and 3) access to quality, affordable child care.
President Obama and Democrats in Congress have continued to champion issues that affect women including equal pay and minimum wage. Child care has recently received increased attention as the President called for increased investment in early learning and care in this year's State of the Union address and parents and providers are working together to address severe shortages in child care.
Since women are still considered the primary caretakers of their children, it is essential that we realize the connection between equality, child care, and the economy. The reality of a working mother is gaining popularity in the media and has seen more support, especially from men, as we come to realize that without affordable, accessible child care, the next generation will suffer and gains in workplace equity won't be realized by mothers who can't return to work in the first place.
There is a substantial amount of research that shows that 90 percent of brain development occurs in the first five years of a child's life. Thus, the key to education reform is access to high quality child care and early learning to adequately prepare the next generation to be successful leaders that are not held back by their gender.
There is not only a moral justification of striving for equality and investing in child care, but also an economic gain that will benefit everyone. Nobel-prize winning economist Dr. James Heckman concluded that investing in young children is America's best economic stimulus package and the Bay Area Council, which represents businesses like Kaiser, AT&T, PG&E, seeks future innovators and talent as it looks forward to stable workplaces and a 21st century workforce with the skills and smarts to grow and compete in the global economy.
Unfortunately, a large portion of the action on child care falls to the states, which have suffered deficits and budget cuts in the wake of the recession, and although 27 governors used their 2013 State of the State speeches to call for increased investment, certain states that should be ahead are falling behind.
Mary Kay Henry believes that California, as our most populous state, should be leading the way since “it is where a strong coalition of labor and women's groups helped pass the first-of-its-kind paid family leave bill in 2002”. However, even as California now enjoys a multi-billion dollar surplus, “a proposal to reinvest $257 million in child care was sharply curtailed as the final deal reached Governor Brown's desk. In the last four years, Sacramento has cut more than a billion dollars from early education, getting failing marks in nationwide school readiness studies, and ranking 41st in overall children's health and wellness.”
It is time that we fully dedicate ourselves to finally achieving equality in the work place and improving our child care system that not only hurts the future generation, but continues to discriminate against mothers. As we move forward, it is critical that we understand that issues such as paid medical leave, minimum wage, and child care are not issues that affect one single gender or generation.
Rhode Island lawmakers have recently passed a bill that positions the state to become the third in the country to offer wage replacement during family leave, after California and New Jersey. The Temporary Caregiver Insurance Bill (H.B. 5889, S.B. 231) is now awaiting the signature of Gov. Lincoln Chafee, who has already expressed his support.
The Temporary Caregiver Insurance (TCI) bill will be the first law in the U.S. to protect the job security of all employees needing to take leave. The bill will ensure that workers can take up to four weeks of paid leave to take care of a new child, a seriously ill family member, or themselves.
TCI was supported in the legislature by coalitions of workers, local business owners, economists, health care providers, health and family advocates, as well as national business associations. Support for the bill undeniably outnumbered opposition as legislators who are small business owners pointed out that the measure will benefit the economy by helping people cover the basics.
"I want my employees to be able take care of who they need to at home without worrying about being able to cover their bills. An employee who is distracted on the job is no good to me, and after a period of paid leave, they come back to work and stick with me for years. Hiring and training replacement workers is expensive, so keeping turnover low is a huge cost saver for any business”, said Ann-Marie Harrington, President of Embolden, a digital media firm in Pawtucket and one of the many Rhode Island business owners who contacted legislators in support of TCI.
Similar paid family leave insurance programs in California and New Jersey have proven popular among business owners. A 2011 study of California's family leave insurance (FMLI) program estimated savings for employers at $89 million a year. The program has been easy to implement and most California employers coordinate their own benefits with the state's FMLI program. A recent Rutgers study shows that New Jersey's FMLI program has reduced costs by decreasing turnover and improving productivity.
TCI builds off of Rhode Island's existing Temporary Disability Insurance program and extends replacement income to workers who need to take time off. The program is revenue-neutral and is funded solely through employee contributions which amount to about 64 cents a week for workers earning $40,060 a year. These pooled payments provide replacement income to keep families afloat, and off public assistance, during the time when they are caring for family members.
The Huffington Post reports that more than 70 percent of children in Rhode Island live in families with all parents working, so loss of income for a primary breadwinner and caregiver has significant economic consequences for the whole family. Many families cannot afford to have one parent miss work to care for a family member, and studies show that many bankruptcies happen after a worker misses two or more weeks of work due to illness.
The entrance exams for community colleges will no longer be the lone factor determining whether or not students can enroll in credit-bearing courses. The validity of these standardized tests, named Accuplacer, have long been criticized by educational providers and students alike including Columbia University's Teachers College just recently.
Approximately 70% of students fail these placement exams each year and only 13.6% of full-time students who take the required remedial courses after failing actually earn an associate's degree in four years, which is twice the time it should take. The Board of Regents passed a law on June 20th to require a dozen colleges and the four Connecticut State Universities to use multiple indicators. These indicators can include a high-school transcript, senior portfolio, or anything else that can predict a student’s preparedness for college-level courses.
If students fail these entrance exams under the current system, many are forced to take and pay for non-credit remedial courses that may hinder their ability to graduate in the expected number of years.
This policy change is only one of many steps that must be taken in the next 15 months to improve Connecticut’s higher education system.
The law passed in 2012 also limits remedial enrollment to one semester beginning in the fall of 2014. However, many believe that students will then begin to fail introductory courses they are not ready for.
The current plan, which has not yet been finalized, would allow fewer students to take one semester of remedial non-credit courses before being allowed to take college-level courses. The flow of students that would then be able to take credit-bearing courses will need an updated support system that may include small class sizes, tutors, and computer-assisted technology. A draft budget has shown that it could cost $8.9 million a year to decrease class sizes, $2.9 million to hire tutors and counselors, and $1.6 for intensive technology.