The Districts Dime

Paid Family Leave: Especially Good for Residents East of the River and DC’s Small Businesses

December 12th, 2016 | by Ilana Boivie

 

Paid family leave—adopted in an initial vote last Tuesday by the DC Council—is poised to make a big difference in the lives of workers, while also strengthening DC’s economy. The benefits will be broad, but especially helpful to some. Low-income communities of color will see tremendous gains in economic security and public health from having paid leave to care for themselves, a new child, or an ill family member. And small businesses will benefit from being able to provide a benefit to their workers that many currently cannot.pfl

Under paid family leave, workers will be able to take 8 weeks of paid leave to bond with a new child, 6 weeks to care for an ill relative, and 2 weeks for workers for a personal medical need.

UPLA Will Benefit Residents East of the River

Paid family leave will benefit two-thirds of working District residents, those who work in the city for a private-sector business.[1]

pfl-chart-2Workers who live east of the Anacostia River stand to benefit the most from the legislation. The program would replace 90 percent of wages for the lowest-paid workers, to make sure that people living on tight budgets can actually use the paid leave benefits available to them.[3] This means that working residents from Wards 7 and 8 will see a higher percentage of their wages replaced while taking leave.

Beyond that, paid family leave will improve public health, especially by enabling parents to be with their newborns. More new mothers are likely to breastfeed when they have paid leave, which benefits the health of both mother and baby in numerous ways. In DC, only 58 percent of low-income infants are breastfed, compared to 78 percent overall.[4] Based on California’s experience, paid family leave could cut nearly in half the difference in the breastfeeding rate between low-income infants and infants overall in DC. Paid family leave also reduces infant mortality,[5] which remains high in Wards 5, 7, and 8.[6]

UPLA Will Benefit Small Businesses

UPLA is designed as a social insurance program, which means that all employers—despite their size—can benefit. This is especially helpful to small businesses that otherwise are unable to afford to provide these benefits. This is the same problem that small businesses have faced when trying to provide health insurance coverage—the smaller the employer, the smaller the “risk pool” that the insurer must cover, so the cost per person is much higher.[7] Because all private sector employers in the District are covered under UPLA, the risk pool is much greater, which lowers the cost for everyone. This levels the playing field for smaller employers to be able to offer the same benefits as their larger competitors, at the same price.

Overall, paid family leave is an investment in the city’s most vulnerable residents and smallest employers, which will make DC a more attractive place to work and conduct business.

The City Council takes a final vote on the bill on December 20, and then it goes to the Mayor for her signature. Because of the many benefits associated with paid leave, DCFPI urges the City Council to and Mayor to pass UPLA quickly.

 

[1] The bill does not cover Federal workers, DC government workers, or DC residents who work outside of the District.

[2] http://dmgeo.dc.gov/sites/default/files/dc/sites/dmgeo/publication/attachments/DC-Workforce-System.pdf

[3] Those making 1.5 times the minimum wage or less are eligible for benefits that cover 90 percent of their wages. The program replaces 50 percent of wages higher than that level, up to $1,000 per week.

[4] http://nccd.cdc.gov/NPAO_DTM/LocationSummary.aspx?statecode=55

[5] Jody Heymann, Amy Raub, and Alison Earle, “Creating and Using New Data Sources to Analyze the Relationship Between Social Policy and Global Health: The Case of Maternal Leave,” Public Health Reports, Vol. 126.3, Sep. 2011.

[6] http://dccouncil.us/news/entry/economic-and-policy-impact-statement-universal-paid-leave

[7] For example, in a 1,000 person organization, for one person to come down with cancer might be costly, but the cost per person is not all that much higher. For one person to come down with cancer in a three person organization, on the other hand, the cost per person skyrockets. Insurance companies hedge against this, and thus charge a higher rate to smaller organizations to cover their exposure.

 

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A Broken Foundation: Affordable Housing Crisis Threatens DC’s Lowest-Income Residents

December 8th, 2016 | by Claire Zippel

The disappearance of low-cost housing in the District is leaving the city’s extremely low-income households financially on edge and poses serious risks to the ability of families to afford enough food, for children to go to school ready to learn, and for adults to get and keep a job. Yet only a fraction of the city’s substantial investments in affordable housing is reaching the households in greatest need.

DCFPI’s latest report, A Broken Foundation: Affordable Housing Crisis Threatens DC’s Lowest-Income Residents, outlines the severe housing challenges faced by the city’s extremely low-income households (those with incomes below 30 percent of the area median, or $32,000 for a family of four). Using data from the US Census Bureau, the report finds:

  • 26,000 extremely low-income DC households spend more than half their income on rent. This includes one-fifth of all children in the District.
  • 62 percent of extremely low income renters face this severe housing hardship, up from 50 percent a decade ago.
  • About one third of these renters cannot afford rent of more than $200, yet only 9 percent have housing at that price. And while almost no extremely low-income renters can afford to pay more than $800 a month in rent, a majority do.

under-30-percent-charts-05

The worsening affordable housing crisis is creating serious challenges in all aspect of extremely low-income residents’ lives. Paying a large share of income for housing leaves many families financially on the edge, putting them at high risk of getting evicted, moving frequently, or becoming homeless, and often forcing them to cut back on groceries and put off medical appointments. Families without affordable housing spend $150 less per month on food than others. Children in severely rent burdened families or in overcrowded conditions are more likely than others to fall behind in school, and drop out.

By contrast, affordable housing provides a strong foundation for families. Research shows that affordable housing reduces harmful instability, improves families’ ability to meet their basic needs, and increases their ability to succeed: children who grow up in affordable housing earn more as adults.

Yet local housing resources are not well targeted to the households in greatest need, despite the strong evidence that affordable housing is critical to the health and success of extremely low-income families. While 77 percent of the DC renters in need of affordable homes are extremely low-income, only 39 percent of subsidized apartments the city has assisted in recent years are within reach of these households.

To ensure that DC’s extremely low-income residents have a stable place to live and a foundation for success, the city should direct a greater share of the District’s housing production to the lowest-income households, expand rental assistance through the Local Rent Supplement Program, and preserve the city’s remaining housing affordable to extremely low-income residents.

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Ban Credit Screening for Job Applicants

December 5th, 2016 | by Ilana Boivie and Linnea Lassiter

Being unemployed can mean getting behind on bills, which can lead to a lower credit score. But having a bad credit score can then make it hard to get a job, because employers often check a job applicant’s credit before making an offer. That kind of trap is unfair to DC residents looking for work. Fortunately, the DC Council will vote tomorrow on legislation to prohibit employers from asking about a job applicant or current employee’s credit history. That would help many DC residents find and maintain employment in the District just when they need it most.

fair-credit-history-post-graphAsking about a job applicant’s credit score creates problems for the DC residents who already face a tough job market. District residents without advanced education are finding it harder and harder to get a good job. All of the wage growth in DC in the last 35 years has gone to people with a college degree; other residents have actually seen their wages fall, adjusting for inflation. In addition, nearly one-third of residents with a high school degree or less are underemployed—either unemployed, working part-time involuntarily, or too discouraged to look for work—while the rate for those with a Bachelor’s degree or higher is just 5 percent.[i]

Another group harmed by employment credit checks are formerly incarcerated and other justice-involved DC residents. People with criminal records, particularly returning citizens, already face extreme barriers to employment. Most have either no credit or bad credit, making employer credit screenings an additional barrier for this population.

People with bad credit scores shouldn’t face added hurdles to getting a job, especially since low credit is not a direct measure of job worthiness. It’s hard to imagine why an employer would not want to hire a qualified applicant simply because of their credit score.

This is important because a low credit score is often just a reflection of someone going through a period without adequate income. Low-income families face regular challenges to pay their bills, and can easily fall behind financially.[ii] So, a lower income worker may have a poor credit score despite trying to make good financial choices. In addition, those with low credit scores are likely to experience greater financial difficulties in other areas—for example, being approved for credit or purchasing a car or a home—so holding down a job is even more critical in getting them back up on their feet financially. This is also true for those trying to get their lives back on track following incarceration or involvement with the criminal justice system.

Because this bill would go a long way in helping some of DC’s most vulnerable workers find and maintain work in order to adequately support their families, DCFPI urges the Council to adopt it.

 

[i] DC Fiscal Policy Institute, 2015. Two Paths to Better Jobs for DC Residents: Improved Training and Stronger Job Protections.”

[ii] USA Today. “Demographics weigh on credit scoring.” March 31, 2007.

 

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DC Should Take Steps to Reduce Gender and Racial Wage Gaps

November 30th, 2016 | by Ilana Boivie

When an employer asks a job applicant, “What are you earning at your current job?” that seemingly innocuous question actually contributes to the wage gaps between men and women, and between black and white workers. Women and black workers in DC earn less than white men, so using someone’s salary at one job to set their pay at a new job serves to lock those gaps in place.  That’s why it’s a good thing that DC is considering a bill, the Fair Wage Amendment Act of 2016, to stop employers from asking this question.

This would help decrease wage gaps in DC. Women working full-time are paid just 86 percent of a man’s median wages in DC.[i] The city’s racial pay gap is even more staggering. The median hourly wage for white workers in DC was $33.43 in 2015, compared with just $17.37 for African-American workers.[ii] While this is explained in large part by educational differences, that alone does not explain the racial pay gap.

workerhandsThis is where it can be helpful to ban an employer’s knowledge of a prospective employee’s prior earnings. For example, when starting a new job, a 5 percent pay increase would generally be seen as a relatively large boost. But if a woman taking that position had been underpaid by 15 percent in her previous job, she still would be underpaid by 10 percent in her new position.

An individual’s prior pay does not affect his or her ability to do a particular job, and so it should not factor into the prospective employer’s wage offer to that individual. Instead, the offer should be based on the employee’s particular skill set and how that fits into the company’s existing pay scale and bottom line. For this reason, many jurisdictions are looking to ban employers from asking prospective employees about their earnings history. Massachusetts recently became the first state to do so,[iii] and New York City banned the practice at city agencies.[iv] Similar laws are currently being discussed in Colorado, New York state,[v] New Jersey, and Pennsylvania.[vi]

Such a change can make a big difference. Since adopting this and other practices to reduce the gap, Google has virtually eliminated gender pay gaps at the company. A Senior Vice President at Google recently wrote that “by paying for the role, not the person, you start with a clean slate and mitigate any bias…In other words, you correct the pay bias that exists in society.”[vii]

Because this legislation could go a long way in reducing the city’s racial and gender pay gaps, DCFPI urges the City Council to pass the Fair Wage Amendment Act.

 

[i] The American Association of University Women. “The Fight for Pay Equity: A Federal Road Map.” September 2016. http://www.aauw.org/files/2016/09/Washington-DC-Pay-Gap-2016.pdf

[ii] Estimates from the Economic Policy Institute based on data from the Current Population Survey.

[iii] The New York Times. “Illegal in Massachusetts: Asking Your Salary in a Job Interview.” August 2, 2016.

[iv] The New York Times. “To Help Close the Wage Gap, de Blasio Tells Agencies to Stop Asking about Applicants’ Past Pay. November 4, 2016.

[v] Time. “How Banning Employers from Asking About Salary History Could Help Close the Wage Gap.” August 11, 2016.

[vi] The Washington Post. “More State, City Lawmakers Say Salary History Requirements Should Be Banned.” November 14, 2016.

[vii] The Washington Post. “How the ‘What’s Your Current Salary?’ Question Hurts the Gender Pay Gap.” April 29, 2016.

 

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In DC, Many Things to Be Thankful For

November 22nd, 2016 | by Ed Lazere

While we at the DC Fiscal Policy Institute spend most of our time advocating for budget and policy choices to reduce income inequality and expand economic opportunity, we feel that this time of year, we should share how thankful we are for many things the District does to help its residents.

thanksgivingIncome and racial inequality are enormous and growing challenges in this city, but DC’s leaders have adopted a number of policies aimed at reducing disparities. Here are just some of the recent policies for which we are thankful, and that inspire us to push the city to do even better.

  • $15 Minimum Wage and Paid Sick Leave: The District is one of a small number of jurisdictions to adopt a $15 minimum wage. We’ll reach that by 2020, when the federal minimum wage may still be $7.25. On top of that, everyone who works in the District gets paid sick leave (including time off to deal with domestic violence), which starts accruing the first day on the job. That doesn’t happen in many places around the country.
  • Close to Universal Health Care Coverage: 15 years ago, when DC General Hospital was closed, the District created its own health care program, the Healthcare Alliance. It provides insurance to anyone under 200 percent of the poverty line (about $40,000 for a family of three), who doesn’t get insurance from a job and doesn’t qualify for Medicaid or Medicare. For years, DC has had one of the highest health insurance coverage rates in the nation.
  • Tax Policies to Help the Working Poor: DC has the largest state-level Earned Income Tax Credit in the nation. The DC EITC targets residents who work but have low earnings, putting up to $2,000 into the pockets of a family with two children each year. It lifts many families out of poverty, improving their stability and giving parents the resources they need to help their children succeed. Thanks to this and other tax policies, the taxes paid by low-income DC residents are second lowest in the nation.
  • A Plan to End Homelessness: The District adopted a plan in 2015 to eliminate chronic homelessness and otherwise make homelessness rare, brief, and non-recurring. We have not fulfilled the plan yet, but substantial progress is being made. This year, for example, the District has new funding to help 380 chronically homeless residents move into a permanent home of their own.

Anyone who follows the DC Fiscal Policy Institute knows that we have a lot to say about policies that are imperfect or incomplete, including some mentioned above. Next week we will return to advocacy, but today we are thankful.

Happy Thanksgiving!

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