Families at Work

Houston Conference on Children June 15, 2005

Don Baylor Policy Analyst Center for Public Policy Priorities Celia Hagert Policy Analyst

Introduction

• Family Security Index – “Making It” • Tough Choices Report • Families at Work Need: – Good Jobs – Pathway to Better Jobs through Education – Work Supports (Child Care, Nutrition/Cash/Health Benefits) – Asset Building (Savings, Financial Literacy) • Of Note in the 79 th Legislature • Next Steps

Family Security Index

• Alternate Measure of Family Economic Security (vs. “Federal Poverty Level”) • Based on the Cost-of-Living (Housing, Health, Food, Child Care, Transportation, Miscellaneous) • 27 MSAs, 8 Family Types • Compares Wages Necessary to Meet Basic Needs vs. Actual Wages (as Percentage of FPL) • Family Security Portfolio = Wages/Benefits, Work Supports, Private Assistance

• Alternate measure of family economic

security (vs. “Federal Poverty Level”)

• Based on the cost-of-living (housing,

health, food, child care, transportation, miscellaneous)

• 27 MSAs, 8 family types • Compares the gap between Center for Public Policy Priorities www.cppp.org

• Alternate measure of family economic

security (vs. “Federal Poverty Level”)

• Based on the cost-of-living (housing,

health, food, child care, transportation, miscellaneous)

• 27 MSAs, 8 family types • Compares the gap between Center for Public Policy Priorities www.cppp.org

Texans at Work

• FSI: Families Need Twice to Three Times FPL in Income just to Pay for the Basics • One-Third of Working Families are Low-Income (1.2 million) • 46 Percent of Children Live in Low-Income Families (1.5 million) • 59 Percent of these Families have Earnings that Place them above the Official Federal Poverty Level • 200% of FPL = $32,180 for a Family of Three in 2005

Tough Choices

• So, What Does it Mean to Earn so Little?

• Tough Choices Conducted in-depth Interviews with 6 Families with Income Below 200% of FPL: – Urban/Rural – One - and Two - Parent/Adults without Children, – Racially/Ethnically Diverse • Family/Employment History; Difficulties Making Ends Meet; Social Services (Public and Private) used; and “Social Capital” (Help from Family and Friends)

Tough Choices

• Hardships: Housing/Utilities, Transportation, Food, Child care, Crises • “Earning More, Keeping Less” Phenomenon • Coping Strategies: Two Jobs/Odd Jobs, Public/Private Assistance, Reliance on Friends/Family, Short-Term Loans/Pawn Shops • Consequences: Never get Ahead; no Savings (Treadmill Effect); Stress Center for Public Policy Priorities www.cppp.org

Tough Choices Families

• 6: Report Trouble 1) Affording Housing Costs; 2) Making Ends Meet Due to Emergencies or Unanticipated Expenses; 3) Stress and Emotional Hardship Caused by Constant Money Worries • 5: Report Working More than One Job or Combining Regular Employment with Odd Jobs to Piece Together Enough Earnings to Pay the Bills • 4: Have Unpaid Medical Bills or have Postponed Medical Care Because they can’t Afford it • 3: Report Unpaid Child Support • 2: Have Children under 18 who Contribute Earnings from their Jobs to Augment the Family’s Income

What Help do Working Families Need?

• Good Jobs and Higher Wages (Workforce/Economic Development) • Pathway to Better Jobs through Education (Public Schools, Community Colleges) • Work Supports (Child Care, Nutrition/Cash/Health Benefits) • Asset Building (EITC Outreach, Savings Opportunities, Financial Literacy) Center for Public Policy Priorities www.cppp.org

What is Economic Development?

• Incentives (Cash-based, tax-based)?

• Mega projects?

• Free the Markets?

• Workforce Development, Community Development, or Asset Development?

• Education and Training?

• Minimum Wage?

Of Note in the 79

th

Legislature: Work Supports

• 78 th Cuts: What got Restored, What Didn’t • Medicaid/CHIP (see “Children’s Health Care and More”) • Bill to Repeal TANF Full-Family Sanctions Failed • Bill to Allow Drug Felons to Receive Food Stamps Failed • Child Care Subsidies for Working Families CUT from 87,000+ kids served now t0 84,000+ by 2007 Center for Public Policy Priorities www.cppp.org

Of Note in the 79

th

Legislature: Workforce/Economic Development

• Enterprise Fund: Accountability & Reporting • Employment Training Investment Assessment (Skills Development Fund Increased) • Minimum Wage Bills—Failed • Community College Cuts Restored • Workers Compensation Reform Center for Public Policy Priorities www.cppp.org

Of Note in the 79

th

legislature: EITC

• HB 401 Requires the Attorney General to Inform Child Support Obligors of “VITA” Services; Health and Human Services Commission Required to Provide EITC Educational Materials, Tax Forms, and VITA Site Information to HHS Clients • Despite some Good Effort, no Bill Restricting the Activities or Fees of Paid Tax Preparers or Refund Anticipation Loans Center for Public Policy Priorities www.cppp.org

Of Note in the 79

th

Legislature: Financial Literacy

• HB 900 Requires the Texas Workforce Commission to Distribute Financial Literacy Materials to their TANF and Workforce Clients • HB 492 Requires High Schools to Incorporate Financial Literacy Instruction into One or More Courses that are Required for Graduation Center for Public Policy Priorities www.cppp.org

Of Note in the 79

th

legislature: Individual Development Accounts

• Bills filed (HB 2450/SB 1538) to Establish/Fund Statewide Individual Development Account Program • Didn’t Pass Despite Unanimous, Bipartisan Support (Amended to HB 2233, Died on Unrelated “Point of Order” on Last Day of Session) • Groundwork Laid to Advocate for IDA Program During the Next Session Center for Public Policy Priorities www.cppp.org

Of Note in the 79

th

legislature: Predatory Lending

• Industry-backed “Payday” Loan Bill (HB 846) Defeated by CPPP/Consumer/Religious Coalition • Bill would have Tripled Payday Loan Interest Rates Allowed under Texas Law

What’s a payday loan?

A payday loan is a short-term, high-interest loan that some low-income Texans rely on when they have trouble paying their bills between paychecks. These storefront lenders charge exorbitant interest rates — sometimes as high as 800 percent — in addition to high “rollover” fees that extend the loan when borrowers can’t repay it on time. Payday loans take advantage of low-income families desperate for fast cash and can trap borrowers in a spiral of debt.

Center for Public Policy Priorities www.cppp.org