November 21, 2017

Raising the floor

Recently, I worked on a report about the state of West Virginia's low-wage workers with the West Virginia Center on Budget and Policy. Some results weren't surprising. The number of low-wage jobs, defined in this case as 150 percent of the federal poverty level for a family of two ($11.59 per hour or under $24,108 per year) has grown by 14.5 percent since 2001, while employment in high wage industries has declined by 2.8 percent.

Key industries employing low-wage workers include grocery stores, retail, food services and personal care for children or the elderly. Nearly one in four West Virginians works at such a job. For many, these jobs are no longer a stepping stone to a better gig but rather a lifelong path. Fifty-five percent of the state's children (200,900 in all) live in a household with at least one low-wage worker.

While most such workers in West Virginia are white, African-Americans are more likely to earn low wages. The rates are 23 and 31 percent, respectively. Fifty-six percent of low-wage workers are women. Younger workers are more likely to earn low wages than those in their prime. Rates shoot up again for workers 65 and older. Still, nearly half of all workers over 35 have low-wage jobs.

One major factor affecting wage levels is, unsurprisingly, educational attainment. Fully 44 percent of those without high school diplomas earned low wages. For high school graduates and those with some college, the rate dropped to 28 percent. Rates of low earners dropped to 12 percent for people with associate's degrees and less than 10 percent for those with a bachelor's degree or more.

One obvious policy change to raise earnings and our state's abysmal statistics would be to put more resources into affordable post-secondary education rather than unproductive tax cuts. Indeed, cuts enacted over the last 10 years were more than enough to pay tuition and fees for a public college education for every student in the state.

It's pretty clear that anything that helps people move from low to living wages - or keeps people from sinking lower -would strengthen West Virginia's economy, boost demand for goods and services provided by local businesses, and help increase the state's chronically low workforce participation rate.

Some other steps in that direction include:

*Protecting West Virginia's Medicaid program. This federal-state partnership provides care to nearly one out of three West Virginians, including 170,000 people from working families earning under 138 percent of the federal poverty level. It also supports thousands of jobs in health care and other sectors. Losing that would be a huge hit to the state's economy and drive thousands of West Virginians into deeper levels of poverty and misery.

*Enacting a refundable state earned income tax credit (EITC). So far 29 states and the District of Columbia have enacted such credits to help people build assets, pay off debts and offset the impact of regressive taxes. The EITC is a proven tool to fight poverty, increase labor-force participation and help workers in low-wage jobs afford necessities. This is no radical idea - recently, the WestVirginia Bankers Association came out in support of a state EITC.

*Protecting and enhancing child care assistance. Child-care assistance is crucial to helping low-income families maintain employment, stay off public assistance and have higher earnings. Without assistance, it is simply unaffordable, forcing workers to choose between child care and a job. Increasing the eligibility level for families from 150 percent to 200 percent of the poverty line could reduce the "cliff effect," which discourages parents from advancing in their jobs and careers.

*Raising and indexing the minimum wage. In 2014 West Virginia passed legislation to increase its minimum wage to $8.75 per hour, $1.50 more than the $7.25 federal rate. That was a step forward but is still not a living wage. It's high time for another hike, which could be phased in over several years and indexed to the rate of inflation.

*Preserving and expanding early childhood education and voluntary home visiting programs. Evidence suggests there is a critical period in early childhood, roughly equivalent to the first 1,000 days of life, which can make a huge difference in cognitive, emotional, social and physical development. These in turn can impact health and economic well-being across the lifespan.

Bottom line: Workers in low-wage jobs constitute a large and important segment of West Virginia's population. These are the people who do some of the most important work in our communities, such as caring for children and the elderly. The steps we take to help them improve their economic status is critical to ensuring a better future for all West Virginians.

(This appeared as an op-ed in Sunday's Huntington Herald-Dispatch.)