The Districts Dime

$15 Minimum Wage Initiatives Gain Momentum In DC and Around the Country

July 29th, 2015 | by Ilana Boivie

Last Wednesday was an exciting day for those advocating to increase local minimum wage rates around the country. From the West Coast to the East, gains were made to bring the wage floor closer to a living wage—including a proposed ballot initiative in the District. The actions come amidst a growing body of research that finds that increasing the wage floor at a moderate pace can raise wages for low- and moderate-income workers without resulting in job cuts.

All in that single day, the following gains were made:

  • In DC, the Board of Elections approved placing an initiative on the November 2016 ballot to raise the city’s minimum wage to $15 per hour by 2020, at a rate of about $1 per year. After that, the wage rate would increase with the rate of inflation. In addition, tipped workers’ pay would increase to $15 per hour by 2025. (Currently, tipped workers in the District are paid a minimum wage of just $2.77 per hour, as long as tips make up the difference between this and the city’s minimum wage.) The initiative will appear on the ballot if supporters collect roughly 23,000 valid signatures.
  • In New York City, the Fast Food Wage Board voted unanimously to recommend that fast food chain restaurant workers’ wages be raised to $15 per hour by July 2021. The decision now rests with the State Labor Commissioner to either accept, reject, or modify the measure.
  • In California, the University of California announced that it would be raising the minimum wage to $15 per hour by October 2017 for all direct and contract employees working more than 20 hours per week.

Cities that have already passed $15 minimum wage laws include Los Angeles, San Francisco, and Seattle.

DC has recently increased the city’s minimum wage—to $10.50 on July 1 of this year, and to $11.50 in July 2016—which means that some 64,000 city workers will see an increase in their standard of living by next summer. But these increases, while notable, do not go far enough. A full-time job at $11.50 pays just $24,000 a year. The actual living wage needed in the District is about $15 for an individual, and over $20 for a family of four, according to the Massachusetts Institute of Technology.

Research shows that minimum wage increases also help workers making a bit more than the minimum wage. This is because employers largely want to keep their same wage structure in place, and retain quality employees. The Economic Policy Institute, for example, estimates that if the federal minimum wage were increased to $12 per hour by 2020, in addition to the 28.4 million workers who would see an increase because they currently make less than $12, another 6.7 million American workers above that wage will also likely receive a raise.

Low-wage workers are finding it more difficult to make ends meet than ever before. Raising the minimum wage would go a long way to helping working class residents in DC and other communities provide for their families independently without having to rely on government assistance.

Stay tuned to the District’s Dime for more updates on minimum wage efforts around the country.

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DC Needs Plan to Help Medicaid Beneficiaries Work Through Eligibility and Enrollment Issues

July 28th, 2015 | by Wes Rivers

DC is facing a big tech glitch which could disrupt access to health coverage for thousands of Medicaid beneficiaries’ through next spring, unless quick action is taken. As a result of the glitch, many residents will have to complete a long and complex form and bring it in person to one of DC social services eligibility centers, which already face overcrowding and other challenges. DC’s health officials should move quickly to create temporary ways to work around the tech issues and limit the need to do paper work and in-person visits to the service centers. Without action, it is likely that many residents will unnecessarily lose health coverage.1-13-15 DCAS

The District is updating its outdated computer system for Medicaid and other public benefits. It holds great promise for making Medicaid and other programs easier to apply for, including allowing Medicaid beneficiaries to renew online through an automated process – without filling out paper work or coming into a service center. These “passive” renewals started in January 2015, and about half of beneficiaries are able to get through the process without taking additional steps.

However, a technology glitch in the system will not allow passive renewals to continue until late next spring. Starting in January, anyone who wants to renew their Medicaid benefits will have to fill out a 17-page paper form. That means that the Economic Security Administration (ESA), which manages the service centers that process public benefits, will see a large uptick in the number of people and amount of paper work coming in. In the past, influxes of paperwork and people at ESA have led to:

  • Client confusion, especially since many have not had to renew in person over the last two years
  • Long wait and processing times at the service centers
  • Unsecure and lost documents during processing at service centers
  • Wrongful termination of benefits and gaps in health coverage

Technology glitches are bound to happen in a big IT rollout, but it is the District’s responsibility to ensure that those eligible for Medicaid keep and maintain their health coverage. This means creating work-arounds for beneficiaries that limit traffic at the services center. A couple of options include:

  • Eliminating unnecessary eligibility requirements in other public benefit programs that increase traffic at ESA – including the DC Healthcare Alliance six-month face-to-face interview requirement. Data show that the requirement is a huge barrier to keeping eligible residents enrolled and unnecessarily increases foot traffic at service centers.
  • Taking up federal options to confirm someone’s Medicaid eligibility based on participation in other programs. For example, if the District knows that a resident is on SNAP or food stamps, they can use that to automatically confirm the resident is likely eligible for Medicaid.
  • Enlisting community health centers more in the eligibility and enrollment process. Getting more of the process done outside of the service centers will limit congestion and processing problems.

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DC Should Seize the Opportunity to Strengthen Inclusionary Zoning And Generate More Affordable Housing

July 23rd, 2015 | by Claire Zippel

An opportunity is coming this fall to improve a DC program that creates affordable housing in new market-rate developments. The Zoning Commission will consider recommendations to modify the Inclusionary Zoning (IZ) program to produce more low-cost housing and at prices affordable to more DC households. We hope the Commission will take assertive steps to enable this important program to better meet DC’s growing affordable housing needs.

Inclusionary zoning harnesses DC’s strong housing market to create low-cost units in market-rate apartment and condo developments throughout the city. It works by allowing new residential buildings to be larger than normally allowed by zoning rules. In return for the extra square footage (called “bonus density”), up to 10 percent of the building is set aside as affordable housing.

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IZ has many positive benefits. It creates low-cost housing in high-cost neighborhoods, where access to public transportation, good schools, retail amenities, and job opportunities are likely to be best.  And it does so without requiring tax dollars. About 770 IZ units have been built or will soon be coming on line, with hundreds more planned, and the number will grow given record-high levels of building permits in recent years.

But there are ways to ensure that Inclusionary Zoning does as much as possible to address DC’s growing housing needs.

  • Ensure IZ serves the low income families who need it most. Due to its current design, fewer than 1 of 5 IZ units have gone to residents with incomes below 50 percent of the median for the metropolitan area, or $49,150 for a family of three. The rest are affordable to households at 80 percent of area median income, or $61,200 for a family of three. Yet the families most likely to struggle to afford housing in DC are at the lower income level.

An advocacy campaign, of which DCFPI is a part, hopes that half of all future IZ units will be affordable to families earning below $49,150. A preliminary report by the Bowser administration to the Zoning Commission agreed that IZ should better serve low-income residents. Several Zoning Commission members have asked the administration to look into even stronger affordability scenarios. A DC Council resolution passed this year also calls for strengthening IZ’s affordability.

  • Get more affordable units out of each IZ project. Setting aside a greater portion of IZ buildings will increase the number of affordable units the program produces. This may mean allowing buildings to be larger or denser, so that the low rents of IZ units are balanced by more market-rate space. Members of the Zoning Commission have asked the Bowser administration to examine how that could work given other zoning rules, and we hope all parties come up with a solution that gets as much affordable housing out of IZ as possible.

With encouraging signs from many interested parties, we are hopeful that in the future IZ will produce more affordable units that low income families sorely need in DC’s high-cost market.

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Feds Give States Options to Cover Housing-Related Services with Medicaid

July 22nd, 2015 | by Wes Rivers

At a time when the District is working to combat chronic homelessness, the federal government has offered a great opportunity to use Medicaid — a health program that comes with federal funding — to support services that help homeless residents establish stable housing. The federal government recently issued guidance on how DC and states can use Medicaid to pay for housing-related services, because of the evidence that stable housing leads to better health. The District should move quickly to take advantage of this opportunity to expand programs like Permanent Supportive Housing, which puts chronically homeless residents into their own apartment with supportive services.

The new federal guidance focuses on how to use Medicaid to pay for housing-related services for people with disabilities and older adults, as well as services for people experiencing chronic homelessness. States can broadly use Medicaid for three kinds of housing-related services.

  • Transitional services: including screening for barriers to successful tenancy, identifying resources to cover the costs of deposits and utility set-ups, and development of housing support crisis plans.
  • Sustaining services: including linkages to community resources, assistance with housing recertification process and securing required documentation, such as identification.
  • Collaborative activities – including partnerships, agreements, and coordination between the state Medicaid agency and housing organizations and providers.

The District’s Permanent Supportive Housing (PSH) program provides many services like these. It places homeless residents with chronic health conditions and other barriers into housing and then provides services to address those issues. There is lots of evidence that PSH not only improves the health of participants, but also improves the fiscal health of the community at large. PSH participants are better able to get to the doctor and keep up with prescriptions, are more likely to stay healthy and housed, and are less likely to go to the emergency room. This lowers the District’s costs for both homeless services and health services.

Using Medicaid to expand PSH in DC makes a lot of sense, since the federal government covers 70 percent of DC’s Medicaid costs and since many of those who are chronically homeless are also eligible for DC Medicaid. Beyond that, expanding PSH could help the District reduce the millions spent by Medicaid for unnecessary health costs last year, related to uncoordinated care, avoidable hospital visits, and emergency room use for non-emergencies.

The District is making progress in seeing how services under Medicaid and in Permanent Supportive Housing could overlap, but more can be done. Medicaid already covers most health services in Permanent Supportive Housing for people with a severe mental illness. Starting this year, substance abuse is also covered under Medicaid and should have many of the same benefits. DC should now take up options offered by the Feds to use Medicaid for housing-related services as its next step to creatively use Medicaid to combat chronic homelessness.

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The President Can and Should Boost the Pay of Low-Wage Federal Contract Workers

July 21st, 2015 | by Ilana Boivie

Federal contracting contributes to DC’s wide income inequality, but changes can be made by the federal government to boost the wages for these workers, both in the District and throughout the nation, a new report finds.

While the District is one of the most economically successful cities in the nation, it is also one of the most economically unequal places to live and work in America. Federal contracting work exacerbates this problem, according to “How the U.S. Government Is Making Washington, DC the Capitol of Inequality,” coauthored by DCFPI and Good Jobs Nation.

Capitol of InequalityThe report finds that:

  • Federal contracting is a major source of jobs in the District of Columbia, with $21.2 billion in contracts supporting approximately 85,000 jobs—or 13 percent of all jobs in the District.
  • Nearly one-third of those jobs—24,500—pay less than $20 an hour, the wage needed to meet the basic expenses for a family of four. And a substantial number of jobs created by federal contracts pay as low as $11 an hour, essentially a poverty-level wage.
  • At the other end of the income scale, many federal contract workers make well above the average wage. Some 12,600 federal contract employees in DC make over $120,000 per year.

A look at the Senate Dining Room’s workforce illustrates how federal contracting exacerbates the city’s economic divide. The restaurant’s workers were once directly employed by the federal government, and earned living wages as well as health care and retirement benefits. Then in 2008, the government outsourced its food service operations to a private corporation, which promptly slashed pay and benefits for new hires. Jobs that once paid living wages with full benefits now pay just over $10 per hour with no benefits.

In order for contract workers to adequately provide for their families, their wages and benefits must increase. Yet currently, federal contracting firms have the opposite incentive—to depress wages in an effort to lower their prices when bidding for contracts.

To that end, the President can issue an Executive Order granting contracting preference to companies that pay at least the living wage for the local region. Establishing this preference would remove the motivation for companies to pay the lowest wages, and instead offer an incentive to increase the wages of their lowest paid workers, who need it the most.

The President himself has declared that “nobody who works full-time should ever have to raise a family in poverty.” The issuance of an Executive Order to boost contract workers’ wages would go a long way to ensuring just that, and would help to re-establish the federal government as a model employer, rather than one that exacerbates income inequality.

Such an action would not only improve the standard of living for some 24,500 workers in the District of Columbia, but will also help thousands more federal contract workers throughout the nation.

To read the full report, click here.

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