A Fair Wage for Human Services Workers: Ensuring a government funded $15 per hour minimum wage for human services workers throughout NYS

December 9, 2015. A new report prepared by the FPWA, Human Services Council and FPI, documents the current state of the nonprofit sector providing State-funded human services and discusses the implications of the Governor’s proposed $15 an hour minimum wage. The groups support inclusion of the nonprofit sector workers in the wage increase and make the case for increased State funding in human service contracts.

More than 200,000 human services workers across NYS are the driving force behind services like afterschool programs, child welfare, early education, services for older adults, public assistance programs, and many others vital programs.  Even with full-time hours, their current wages do not meet the basic needs of individuals and families in most areas of the State; low-wage human services workers are often eligible for the same benefits as the clients they serve.

  • Despite being a highly skilled workforce, the human services sector has one of the highest prevalence of low-wages in the private sector, behind food service and retail.
  • Women make up 82 percent of the statewide workforce; people of color account for 50 percent of human services workers in the State.
  • Human services workers are highly educated with two-thirds of workers having some college education and close to half holding bachelor’s degrees or higher.

The Federation of Protestant Welfare Agencies, Fiscal Policy Institute and the Human Services Council are leading a robust statewide coalition of nonprofit providers to call for Governor Cuomo to:

  • Raise the minimum wage to $15 per hour for all workers in New York State, including human services workers.
  • Amend government human services contracts to fund the wage increase.

PDF of Full Report

PDF of Press Release

No Permanent Extension of Business Tax Credits Without Permanent Extension of EITC/CTC Credits to Working Families

December 7, 2015. Senator Charles Schumer joined with leading anti-poverty advocates today to insist that Congress not permanently extend business tax credits without first making permanent tax credits to working poor families. The improvements to the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) that were enacted several years ago are extremely important to millions of working families across the country, including nearly 1.5 million children in 755,000 New York families. Yet these improvements are scheduled to expire in 2017—and if they do, more than 1.1 million New Yorkers will be pushed into or deeper into poverty as a result.

“The Earned Income Tax Credit and the Child Tax Credit provide vital support to millions of hard working and often struggling fellow Americans. In the emerging tax extenders deal the bottom line is that we ‎must make permanent these critical programs that do so much to boost economic opportunity. If Congress allows the Earned Income Tax Credit and the Child Tax Credit to expire, more than one million New York families will fall into poverty. That is why I am urging my colleagues in Congress to take action and make sure the provisions in these two tax benefits are made permanent in the upcoming tax legislation,” said Senator Charles Schumer.

The groups called on Congress to seize the opportunity this year to make the EITC and CTC improvements permanent and prevent millions of working Americans from falling into poverty. No other issue affecting so many struggling working families and their children is before Congress the rest of this session. The groups urged the members of the New York delegation to do everything they can to make these vital provisions permanent this year.

“Each year we track hardships experienced by low-income New Yorkers struggling to stay out of poverty. In 2015, over a third of the city’s low-income working families reported falling behind on their rent, nearly half (48 percent) had less than $500 in savings in the case of an emergency, and one in five could not afford subway and bus fares,” said David R. Jones, President and CEO of the Community Service Society. “The EITC and the Child Tax Credit are the two most effective federal tools for lifting working families out of poverty. Making these crucial tax credits permanent, and expanding the EITC to provide greater benefits to younger workers and tax filers without children, rewards work and contributes to strengthening low-income neighborhoods and the local businesses that serve them.”

“We know that nearly 50 percent of New Yorkers are just getting by or finding it difficult to do so,” said Jennifer Jones Austin, CEO and Executive Director of the Federation of Protestant Welfare Agencies. “We also know that the EITC is an anti-poverty policy with demonstrated effectiveness in helping to drastically reduce poverty in New York City. We call on members of Congress to support this vital work support policy and bring much needed relief to people struggling to make ends meet in New York and throughout the country.”

“The Earned Income Tax Credit allows working families and individuals to make ends meet. It has proven to be an effective tool in expanding opportunity across the country. Reducing the benefit would be detrimental to our economy. Working class people need these dollars to pay for basic needs like rent, food, and utilities. It is exhausting to think that we have to fight to keep something so obviously useful in place,” said Allison Sesso, Executive Director of the Human Services Council of New York.

“There is simply too much at stake in this debate for us to remain silent. We need to make sure that the improvements made to the EITC and CTC are made permanent. If these provisions are allowed to lapse over 500,000 children, 30,000 veterans and 1.1 million struggling New Yorkers overall will be pushed deeper into poverty and that is unacceptable,” said Ron Deutsch, Executive Director of the Fiscal Policy Institute.

“CHCF knows all too well the struggles of the families with whom we work. They are the faces of the working poor and like many Latino families in our most vulnerable neighborhoods, they make up 25% of those in the Latino community living in poverty. To weaken vital work incentives like EITC and CTC is the equivalent of abandoning families who are trying their best to work, provide for their loved ones and climb their way out of poverty. On a larger scale these incentives bring a revenue stream into communities that desperately need them. EITC has already proven to assist by lifting families out of poverty and improve outcomes for those eligible for the tax credit. This is not the time to go backwards, our families and communities cannot afford it and they have worked hard for it,” said Grace C. Bonilla, President/CEO, The Committee for Hispanic Children & Families, Inc.

“While poverty is difficult for anyone, the impact on children can be permanently damaging,” says Kate Breslin, President and CEO of the Schuyler Center for Analysis & Advocacy. “Children, whose brains are just developing, need good nutrition, stability, and high-quality early learning experiences to grow and develop, but the odds are against them if they are poor. 42% (1,725,873) of New York children live in low-income families and 47% (804,292) of children in low-income families have at least one parent who is employed full-time, year-round. Together, the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) act as a force multiplier to help children and working families escape poverty, build assets, and improve their long-term health and academic achievements.”

“On Chanukah we’re called to bring light into a world that needs it. Our country is suffering from an unsustainable chasm between rich and poor, with far too many of our fellow citizens living in poverty. The EITC and CTC are among the most effective anti-poverty programs in our nation’s history. As a Reform rabbi, I am raising my voice at this time to fulfill my tradition’s call to speak and act for justice by lifting working families out of poverty with dignity,” said Rabbi Rachel Timoner, Congregation Beth Elohim, Brooklyn, Union of Reform Judaism.

PDF of Press Release

Business profits in New York State have grown much faster than wages since 2001

December 1, 2015. In a new analysis, the Fiscal Policy Institute finds that business profits per worker in New York State increased by 61% from 2001-13, while labor compensation per worker has risen by only 34%, and the typical worker received wage increases of 25-29%, much less than inflation.

James Parrott, the Institute’s Deputy Director and Chief Economist stated: “These data confirm once again that most workers in New York have not been sharing in the fruits of the state’s economic growth over the past decade-and-a-half. An effective antidote to this disturbing disparity would be a sustained increase in the state’s minimum wage such as that proposed by Governor Andrew Cuomo.”

PDF version of complete brief.

Fact Checking the Empire Center-American Action Forum Analysis of NY’s Proposed $15 Minimum Wage: Flawed Methods Produce Erroneous Results

November 19, 2015. James Parrott, Deputy Director and Chief Economist of the Fiscal Policy Institute, and Paul Sonn, General Counsel and Program Director of the National Employment Law Project, released this policy brief fact checking the Empire Center/American Action Forum report Higher Wages, Fewer Jobs. The report predicts significant job losses if Governor Cuomo’s proposal to increase New York’s minimum wage to $15 is enacted.

The Empire Center/American Action Forum report uses outdated economics that ignores both the troubling gap between wage and business profit growth in New York and the reality that low-wage business practices force New York’s taxpayers to subsidize low-wage employers to the tune of billions of dollars annually. James Parrott

Extend Tax Credits to the Poor

October 12, 2015. The following op-ed by Ron Deutsch appeared in the Times-Union.

Millions of Americans go to work each day, sometimes balancing multiple low-wage jobs, and yet they still struggle to make ends meet for themselves and their families. The fact is, far too many hardworking Americans slip into poverty each year. I see this firsthand in my role at the Fiscal Policy Institute.

We do, however, have two powerful and effective tools that encourage work and help lift working families out of poverty by ensuring that they get to keep more of their hard-earned dollars to pay for essentials like groceries, reliable transportation, and child care. These proven tools are the federal Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). And they work—in a single year, these credits lifted 9.4 million Americans out of poverty, including 5 million children. In our state, the credits lifted 307,000 children and 597,000 New Yorkers overall out of poverty.

But important provisions of the EITC and CTC will expire in 2017 unless Congress acts. Fortunately, there is a critical opportunity this fall for Congress to make these provisions permanent.

Currently, Congress is considering whether to extend or make permanent various tax provisions, including tax breaks for businesses.  Congress should not consider making any business tax breaks permanent without also doing the same for the EITC and the CTC provisions that benefit millions of hardworking families. Both the EITC and CTC have enjoyed bipartisan support over their history, and it’s time for Congress to once again demonstrate support for these crucial tax credits. We simply can’t afford to leave America’s hardest working families and communities behind.

If Congress lets important provisions of these tax credits expire, more than 50 million hard-working Americans, including 25 million children, stand to lose a crucial piece of their family budgets. In our state, 755,000 working families and over 1.4 million children would lose all or part of their tax credits.

Significant research tells us the effects of the EITC and CTC are long-lasting. Children in families who receive a boost from policies like the EITC and CTC are healthier, do better in school, and are more likely to go to college and earn more as adults. This means today’s investment in these tax credits goes far beyond the hardworking Americans who receive them; our economy and our children will reap the benefits for years to come.

A single mother with two children who works full time at the federal minimum wage would lose her entire Child Tax Credit. That’s money that could have put food on the table, gas in the car, and school supplies in her child’s backpack.

Most of our upstate cities have horrendously high child poverty rates, some higher than 50 percent. The EITC and CTC are a lifeline for many of these families.

I and many other organizations in New York that are combatting poverty are asking our lawmakers to save key provisions of these tax credits.

While they’re at it, our legislators should work to close the glaring hole in the EITC for very low-income working childless adults that both means they are virtually taxed into poverty and causes young workers without kids to miss out on the tax credit entirely.

The EITC and CTC not only help individuals living in poverty, but they put much needed federal dollars back into local economies.

In 2012, the Earned Income Tax Credit put about $4 billion into the New York State economy and more than $122 million into the Capital Region area alone. This not only helps poor families but small businesses as well.

We are a nation that values hard work. Every family deserves the chance to work toward a brighter future; the EITC and CTC are important components of making this a reality for more of our community members.

FPI-NELP Response to NYS Business Council Statement on Gov. Cuomo’s $15 Minimum Wage Proposal

October 8, 2015. The New York State Business Council’s statement on the Governor’s proposal to raise New York’s minimum wage to $15 by 2021 leaves out several “inconvenient” truths:

1.     A phased-in minimum wage increase will boost the purchasing power of roughly 3 million low-wage New York workers, pumping that increased consumer spending into local businesses and jobs all across the state. Above all else, small businesses need customers; a minimum wage increase will provide them.

2.     A higher wage floor benefits businesses because workers will stay of the job longer and be more productive; turnover costs will go down and customer service will improve.

  • There is a growing recognition on the part of businesses and institutional investors that higher wages are key to reducing turnover, improving customer service, and enhancing profitability.[1] Several large employers including Walmart, Target, Aetna, IKEA and the Gap are starting to raise wages as a result.
  • A recent study from the Purdue’s tourism management school concluded that the fast-food industry could accommodate a $15 an hour minimum wage through savings related to reduced turnover and small price increases not much greater than recent experience.[2]

3.     The Business Council ignores the fact that a high proportion of low-wage workers are paid so little that they qualify for one or more forms of public assistance. In effect, taxpayers end up subsidizing low-wage employment practices, and in New York this amounts to $13 billion annually in public assistance costs that goes to working families whose wages are too low.[3]

  • The minimum wage increase would save New York taxpayers and the state budget hundreds of millions of dollars in reduced public assistance spending.

4.     Over 800,000 New Yorkers work but are officially below the federal poverty line, and a much larger number do not have wages sufficient to meet basic family budget needs.

  • Higher wages would lift thousands out of poverty and improve life opportunities for thousands of children in low-income families across the state.

5.     Even in lower-cost regions of like Buffalo and Rochester, a single worker will need over $15 an hour by 2021 to meet basic living costs, according to the Economic Policy Institute’s Family Budget Calculator, adjusted based on projected inflation through 2021.   In higher cost regions like Long Island, a single worker will need over $22 an hour by 2021 — and workers supporting children need even more.

6.     The Governor’s proposal calls for a gradual phase-in of the minimum wage increase. Employers will have ample time to adapt to the increase and, since it would be across-the-board, no individual business would be at a competitive disadvantage.

The average New Yorker knows a minimum wage increase would be beneficial to the state’s economy; that’s why two recent public opinion polls showed sizable majorities of New Yorkers – 62% (Quinnipiac) and 59% (Siena) – support Governor Cuomo’s proposal for a $15 minimum wage.

Speaking recently in New York City, Nobel laureate economist Paul Krugman said the increase in New York’s minimum wage to $15 an hour would be good for the state’s economy, and that a growing body of management literature has documented the business success of companies that choose to pay higher wages rather than pursue a low-wage business model.

In a similar vein, more than 200 leading economists have endorsed a $15 minimum wage, finding that raising the minimum wage “to $15 an hour by 2020 will be an effective means of improving living standards for low-wage workers and their families and will help stabilize the economy. The costs to other groups in society will be modest and readily absorbed.”[4]

For more background on Governor Cuomo’s $15 minimum wage proposal, see
Fact Sheet | Governor Cuomo’s Call for Raising New York’s Minimum Wage to $15 Statewide

PDF Version

________________

[1] Lauren Weber, “Why Fund Managers Want Better HR,” The Wall Street Journal, September 8, 2015.

http://www.wsj.com/articles/why-top-fund-managers-want-better-hr-1441749764

[2] Christopher Gunn and Thomas Michl, “Higher Wages Serve Up Better Economics for Workers and NY,” Oneida Dispatch, August 18, 2015. http://www.oneidadispatch.com/opinion/20150818/guest-column-higher-wages-serve-up-better-economics-for-workers-and-ny

[3] Ken Jacobs, Ian Perry, and Jenifer MacGilvary, The High Public Cost of Low Wages, Poverty-Level Wages Cost U.S. Taxpayers $152.8 Billion Each Year in Public Support for Working Families, University of California Berkeley Center for labor Research and Education, April 2015. Not included in the Berkeley report but incorporated in the $26 billion cited in the text above is the $1 billion annual cost of New York State’s Earned Income Tax Credit.

[4] http://www.sanders.senate.gov/newsroom/press-releases/sanders-introduces-bill-for-15-an-hour-minimum-wage

Need for Federal Action to Address Puerto Rico’s Fiscal, Debt and Economic Crisis

September 25, 2015. James Parrott testified before the New York City Council today regarding three resolutions calling on Congress and the President to take action to address the Puerto Rican fiscal-debt-economic crisis. The resolutions deal with the issues of bankruptcy authority, Federal health care financing, and amending the Jones Act that has significantly raised shipping costs to and from Puerto Rico. Parrott’s testimony discusses the importance of Federal action given the governance constraints imposed on Puerto Rico by its status as a “territory,” and he makes the case for a comprehensive strategy to address the Puerto Rican crisis, including the need for a broad restructuring of the island’s economy.

Governor Cuomo’s Call for Raising New York’s Minimum Wage to $15 Statewide

September 10, 2015. FPI and the National Employment Law Project have again teamed together on a background brief supporting Governor Cuomo’s announcement today proposing a statewide $15 minimum wage. The brief includes demographic data on the 3 million New York workers who would be directly affected by the proposal, along with a summary of the economic arguments in support of a higher New York minimum wage.

The Importance of a $15 Wage Floor for New York’s Nonprofits

August 17, 2015. This op-ed by James Parrott, FPI’s deputy director and chief economist, and Jennifer Jones-Austin, CEO and executive director of the Federation of Protestant Welfare Agencies, appeared in City & State.

New York’s leaders should build on the historic recommendation of the Fast Food Wage Board appointed by Gov. Andrew Cuomo and begin moving toward an across-the-board $15-per-hour wage floor. A growing number of major cities around the country have already enacted, or are considering, a $15 floor. Legislation has been introduced in Washington for a national $15 wage floor by 2020, and several states are also moving in that direction. People are waking up to the fact that years of wage stagnation for most workers has unfairly limited opportunities for millions and hampered economic growth.

The 250,000 workers in New York’s nonprofit sector providing essential human services under government contracts deserve a wage boost. Over 80 percent of these workers are women, most are not represented by a labor union, and nearly two-fifths have at least a 4-year bachelor’s degree (twice the share as in fast food).

Yet half of this workforce makes less than $15 an hour. That’s not nearly enough to provide for basic family budget needs in any part of our state. Like fast-food workers, the earnings of many human services workers are so low that they qualify for public assistance.

There is one essential difference, however, between nonprofit human services and other low-wage workers: Since nonprofits provide services under government contracts, government needs to increase contract funding to enable nonprofit employers to meet a higher wage floor.

It makes good fiscal sense for the state to increase human services contract funding to raise the pay of low-paid nonprofit workers. High employee turnover will decline, yielding hiring costs savings and improved service quality. After all, many of these government-funded services are intended to help low-income families get back on their feet and to better care for their children and other family members. Improved delivery of these essential services will save taxpayers in the long run, as will the reduced use of public assistance by nonprofit workers.

New York City is already making significant progress toward an increased wage floor. Under Mayor Bill de Blasio’s initiative, the city took an important first step in this direction in its fiscal year 2016 budget when it increased funding of human services to enable nonprofit contractors to provide their workforce with an $11.50-per-hour wage floor, a level influenced by the lowest pay step for direct city employees. The Career Ladder Project, spearheaded by the Federation of Protestant Welfare Agencies and the Fiscal Policy Institute, is continuing to work with the city to raise this wage floor to $15.

The recent city budget also included a 2.5 percent cost-of-living increase, the first since the start of the 2008-09 recession. The Human Services Council had pushed for a greater cost-of-living increase to make up for several years of human services budget cuts.

At the state level, there have been modest cost-of-living increases for the past two years but nothing has been done to establish a wage floor for nonprofit service workers that is higher than the current state $8.75 minimum wage. The Federation of Protestant Welfare Agencies and the Fiscal Policy Institute are committed to building a statewide coalition to push for and fund a $15 wage floor.

Many family, youth and senior services are provided by nonprofits under county contracts. However, in recent years when hardships have increased and poverty has risen in many parts of New York, the funding for state and county human services has been reduced. Because counties are limited by the property tax cap, the campaign will seek to have the state increase assistance to county governments to support a $15 wage floor in local human services contracts.

The Fast Food Wage Board reached the right conclusion. Now, it’s up to Cuomo and the Legislature to affirm the positive value of a higher wage floor by broadening the benefits of a better wage for all workers, and to provide the contract funding so that dedicated nonprofit workers providing critical human services are able to share in these benefits.

Letter to Wage Board on $15 Minimum Wage for Fast-Food Workers

June 26, 2015. James Parrott, deputy director and chief economist, authored this letter to the Fast Food Wage Board to support testimony he previously presented to the Board.

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