Families at WorkFamilies at Work

Houston Conference on ChildrenJune 15, 2005

Don BaylorPolicy Analyst

Celia HagertPolicy Analyst

Center for Public Policy Priorities

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 79th 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

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

• 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

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

Center for Public Policy Priorities

www.cppp.org

• 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

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?

Center for Public Policy Priorities

www.cppp.org

• 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)

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 79th Legislature: Work Supports

Center for Public Policy Priorities

www.cppp.org

• 78th 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

Of Note in the 79th Legislature: Workforce/Economic Development

Center for Public Policy Priorities

www.cppp.org

• Enterprise Fund: Accountability & Reporting

• Employment Training Investment Assessment (Skills Development Fund Increased)

• Minimum Wage Bills—Failed

• Community College Cuts Restored

• Workers Compensation Reform

Of Note in the 79th legislature: EITC

Center for Public Policy Priorities

www.cppp.org

• 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

Of Note in the 79th Legislature: Financial Literacy

Center for Public Policy Priorities

www.cppp.org

• 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 

Of Note in the 79th legislature: Individual Development

Accounts

Center for Public Policy Priorities

www.cppp.org

• 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

Of Note in the 79th legislature: Predatory Lending

Center for Public Policy Priorities

www.cppp.org

• 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.