Michigan a ‘comeback state’ — for whom?

With much talk about Michigan as a “comeback state,’’ it’s important to delve a little deeper to answer the question – a comeback state, for whom?

It’s certainly not a comeback state for Lori, an older worker with a part-time retail job in the Lansing area. Like many others, she struggles with an income that barely covers the bills.

According to a report by the Economic Policy Institute, inflation-adjusted income in Michigan doubled for those at the very top – the top 1% — while falling a bit for the rest of us between 1979 and 2007.

Even with the recovery from the Great Recession, EPI finds that between 2009 and 2011, more than 90% of economic growth was captured by the top 1% in Michigan.

Lori is definitely among the 99%. Although she’s a college graduate, she’s been unsuccessful in finding full-time work.

“I’ve been looking for full-time for forever,” she says. “It’s awful. No one wants to give you more than 30 hours.”

Lori worked both full-time and part-time jobs while raising her children. She’s now single and, since 2007, she has worked part time as a sales associate in retail.

Like most other retail work, the wages are nearly impossible to live off. In fact, retail sales is one of the 10 occupations in Michigan with the largest number of workers, yet the median wage does not lift a family of four out of poverty.

As if being unable to save for retirement or emergencies isn’t stressful enough, the threat of foreclosure also hangs over Lori’s head. If it was not for her income tax refund, she said she would probably lose her house altogether.

When asked about what kind of position she would like to have if given the choice, she replied: “It is so beyond caring whether I enjoy it or not. All I care about is making enough money to survive.”

Lori’s story is not unlike many others in this state. A lack of stable employment and secure wages keeps so many teetering on the brink of survival, while a small number of others experience the positive side of the growing income inequality gap.

When it comes to natural beauty, we certainly are a land of plenty. Hopefully one day we can say that about the economy too. Until this lopsided Michigan economy is not so lopsided, “comeback” is the wrong word to use in representing 10 million people.

– Meghan Muffett, communications intern

Ramp up pressure on Unemployment Insurance

“I agree with you, I want to do it, now make me do it.”  ~ President Franklin D. Roosevelt to Sidney Hillman and other labor leaders after his election in 1932.

“I don’t think there is a great sense of pressure on our members.”  ~ Deputy Whip Rep. Tom Cole, R-Okla., responding to a question about renewing long-term Unemployment Insurance benefits, 2014.

The U.S. Senate passed a bill to extend Emergency Unemployment Compensation Monday evening with bipartisan support and with benefits retroactive to Dec. 28 when the program expired. Yet U.S. House leaders show little interest in bringing it up for a vote.

The complaints from House leadership are that the bill is not paid for and the retroactivity would create too great of a challenge to state Unemployment Insurance offices. However, the Senate bill is paid for and the chief of unemployment insurance operations in Nevada (which led the country in unemployment for more than four years) has said his office is up to the challenge.

Since 2007, Michigan’s unemployment rate has exceeded 7%. In February, the rate was 7.7% with 363,000 Michigan workers still jobless, a significant number having looked for work for more than six months.

Michigan‘s continuing need is one reason that several members of Michigan’s Congressional delegation have taken the lead in demanding renewal of the program. The House version of the Senate bill was introduced by U.S. Rep. Dan Kildee Monday.

It is important that Michigan’s Republican delegation put pressure on their leadership to take up the bill in the House. Many of them represent districts in which there are a large number of workers who are out of work. Those workers and their families will depend on the long-term benefits if they still have not found work after six months.

If you live in the district of any of the Michigan congressional districts below, please call your members of Congress and ask them to tell Speaker of the House John Boehner that Michigan workers are still in hardship and to bring Rep. Kildee’s bill up for a vote. There needs to be that great sense of pressure that Rep. Cole says is missing.

  • Benishek, Dan: 202-225-4735
  • Huizenga, Bill: 202-225-4401
  • Amash, Justin: 202-225-3831
  • Camp, Dave: 202-225-3561
  • Upton, Fred: 202-225-3761
  • Walberg, Tim: 202-225-6276
  • Rogers, Mike: 202-225-4872
  • Miller, Candice: 202-225-2106
  • Bentivolio, Kerry: 202-225-8171

– Peter Ruark

Attorney general needs to move on

Attorney General Bill Schuette continues his fight to harm Michiganians by pursuing frivolous lawsuits against the Affordable Care Act.

First he fought to have the law declared unconstitutional and lost — the U.S. Supreme Court ruled the ACA does not violate the Constitution. Now he is fighting to end the premium tax credits for more than 144,000 Michiganians who have so far qualified for them.

Nearly 87% of those who have enrolled in a health plan in Michigan are eligible for premium tax credits to help them pay their insurance premiums. Why would he want to harm more than 144,000 people in his state — his neighbors, his friends, his constituents?

Attorney General Schuette joined a lawsuit that would eliminate premium tax credits for low- to moderate-income Michiganians. He argues because Michigan deferred to the federal government to operate its health insurance Marketplace rather than establishing its own, Michigan residents do not qualify for premium tax credits. According to the attorney general, the tax credits are not authorized in the law for those states that do not establish their own Marketplaces.

Yet both the debate surrounding the ACA and the law itself assumed premium tax credits would be available in all states. Congressional intent is very clear. All of the Congressional Budget Office estimates assume premium tax credits would be available in every state regardless of whether the state or federal government operates the Marketplace.

If premium tax credits are eliminated, many will be forced to forgo their newly acquired healthcare coverage and be forced to return to being uninsured. A central purpose of the Affordable Care Act is to make affordable healthcare coverage available to nearly every American. Without tax credits, coverage is simply unaffordable.

It is time for Mr. Schuette to uphold the Affordable Care Act, the law of the land, and to act on behalf of his constituents and their well-being.

– Jan Hudson

Healthy Michigan Plan enrollment opens April 1

The Department of Community Health has announced open enrollment will begin for the Healthy Michigan Plan on April 1. This long-awaited announcement is great news for Michigan’s low-income uninsured residents.

Starting next week, adults (ages 19-64) in families with incomes below 133% of the federal poverty level (up to $15,521 for an individual or $31,721 for a family of four) who are not currently eligible for Medicaid or Medicare, and not pregnant, will be able to apply for the comprehensive coverage offered by the Healthy Michigan Plan. Citizenship, or lawful admittance to the U.S., is also required.

Healthy Michigan Plan enrollment will be open all year long, unlike the Marketplace www.healthcare.gov, which has designated open enrollment periods and where the initial enrollment period will close on March 31.

Applications for HMP are available online (www.michigan.gov/mibridges or www.healthcare.gov), by phone, or in-person. For the fastest eligibility determination, the Department is advising applicants to use the MIBridges system (www.michigan.gov/mibridges) where eligibility determinations may be returned in a matter of minutes. Department of Human Services local offices are expected to extend their hours to accommodate those who would like to apply in person.

This program is Michigan’s expansion and modification of the Medicaid program as provided in the Affordable Care Act. It is a credit to Michigan policymakers who passed legislation creating the program and permitting Michigan to accept the federal funds available for this program. Numerous states have refused to accept the federal funds to expand Medicaid, leaving their lowest-income residents uninsured and with no options.

Recognizing the low incomes of the enrollees, the HMP includes comprehensive benefits which may not otherwise be available to this population including dental, hearing, and vision benefits in addition to the services required by the ACA. Enrollees will be required to pay co-pays for some services and those with incomes between 100% ($11,670 for an individual, $23,850 for a family of four) and 133% FPL will be required to pay an income-based contribution of 2% for their coverage. Together, the payments cannot exceed 5% of the family income. Participation in healthy behaviors will provide the opportunity to reduce both the income-based payment and the co-pays.

A fact sheet is available on the League’s website for more information.

The implementation of the Healthy Michigan Plan provides the opportunity for those who work, are least paid and uninsured to gain healthcare coverage and peace of mind.

– Jan Hudson

EITC expansion would keep workers out of poverty

President Obama’s 2015 budget rightly seeks to expand the Earned Income Tax Credit to more workers — particularly childless workers. The current EITC rules are unfair to low-wage workers who aren’t raising children, including noncustodial parents. Those workers receive such a small EITC that they can be literally taxed into poverty, or driven deeper into poverty.

By far, the largest share of the EITC goes to those in poverty who work and have children. The EITC is a refundable credit for low-income working families and has been successful at encouraging certain people to take jobs, particularly single mothers. The EITC promotes work and reduces the need for public assistance.

The EITC expansion seeks to incentivize work for three groups whose participation rate in the labor force has declined steadily over the last decade: minority men without a college education, single women working low-wage jobs, and workers with disabilities.

A Michigan minimum wage childless worker employed full time earns around $15,000. That’s 133% of the federal poverty level and, according to Making Ends Meet in Michigan$6,500 short of the amount required for a single childless worker to meet their most essential needs like housing and transportation.

Under current EITC rules, this worker would be ineligible for the EITC, because they made too much money. Under the president’s proposal they would qualify for an EITC of $470, serving to offset a low-wage income and help with expenses such as car repairs needed to remain in the work force.

The president’s proposal would double the maximum credit for childless workers to about $1,000, increase the income levels at which the EITC phases out to about $18,070 for single childless workers, and $23,570 for childless married taxpayers filing jointly, and make the credit available to workers beginning at age 21 as opposed to age 25, nearly doubling the total number of childless workers receiving the EITC.

The most common occupations among those who would benefit from the proposed expansion of the EITC are low-wage retail and food service workers, three quarters of whom live in households with incomes below 150% of the poverty line. And 470,000 childless workers in Michigan would benefit directly from President Obama’s planned expansion of the EITC.

– Jason Escareno

 

Sequestration hits Michigan housing

Some 3,000 fewer low-income households in Michigan — including seniors, those with disabilities and families with children — used housing vouchers to rent private housing in December, compared with a year ago, according to new estimates from the Center on Budget and Policy Priorities.

That’s the fallout from across-the-board federal sequestration cuts, which started nearly a year ago. The projections were based on new Department of Housing and Urban Development data.

Nationally, the Housing Choice Voucher Program (sometimes known as “Section 8″) was cut by nearly $1 billion. In Michigan, 50,432 families used vouchers in December, down nearly 6 percent from December 2012, the Center estimates.

“These cuts come at a particularly bad time,’’ writes CBPP Senior Policy Analyst Douglas Ross. “The number of renter households paying unaffordable housing costs is at historic highs.’’

Ross cites a new report by Harvard’s Joint Center for Housing Studies, which warns that what’s known as “severe cost burdens” are particularly alarming in the aftermath of the Great Recession. High costs are measured by those who have to pay more than half their income for housing.

In Michigan, unemployment remains high and the harsh winter is expected to strain available help to cover high heating costs, further adding to the difficulty of many families struggling to meet basic needs.

The federal deal announced in December, the Murray-Ryan budget agreement, offered partial relief from sequestration in 2014 and 2015, Ross notes. That will allow restoration of about half of the 70,000 vouchers cut nationwide this year.

That means there will still be ground to make up. Policymakers must provide sufficient funds in 2015 to full reverse the damage to the voucher program from sequestration.

– Judy Putnam

 

Raise Michigan raises hope

The possibility of a long-overdue increase to Michigan’s minimum wage is on the horizon with the kickoff of the Raise Michigan campaign to put the issue before voters on the fall ballot.

If successful, it will raise Michigan’s $7.40 an hour wage minimum wage to $10.10 over three years and index it to inflation. It also includes a gradual increase of the $2.65/hour “tipped” wage for restaurant servers.

With so many problems to report on – rising income inequality, growing number of low-income working moms and shrinking windows of opportunity for our young people – it’s good to be able to talk about a positive solution.

Raising the wage would reduce the state’s poverty rate, decrease reliance on state assistance and boost local economies.

An increase would boost the incomes of nearly 1 million Michigan workers. Despite oft-repeated statements from opponents to the contrary, only 13% of that group are teens. Most are 20 and over and many are parents. In fact, 15% of all children in the state have a parent earning the minimum wage.

The proposal will index it to inflation. Without indexing, the minimum wage loses purchasing power over time. Since 1968, the minimum wage has lost more than 30% of its value, despite a few increases along the way.

Make sure to stay informed on this important development. There’s much work ahead – the campaign has until May 28 to collect nearly 259,000 valid signatures and there will be many volunteer opportunities. Make sure to connect at www.raisemichigan.com.

– Gilda Z. Jacobs

EITC is perfect vehicle for the governor

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Gov. Rick Snyder unveils his fourth executive budget Wednesday and worthy of applause is the fact that he has rejected the across-the-board rollback of Michigan’s personal income tax.

The governor indicated in his State of the State address last month that he wants a tax cut but one that is targeted to working families — those “hardworking Michiganders who get up every day and pack their lunch and go to work.”

The good news is that there is a vehicle already in place to deliver exactly what the governor is seeking: the Michigan Earned Income Tax Credit. As a new fact sheet from the League shows, the tax credit is one of Michigan’s most effective tools for supporting working families and reducing poverty.

Using the $100 million the Snyder administration has targeted for tax relief to increase the EITC would help the very workers the governor wants to help, and it would boost the economy. That could lift the EITC from 6% of the federal credit to 11% of the federal credit. For a working mom with four growing boys, like Paula Fekken of Traverse City, that would mean $300 more for car repairs and other necessities to keep her on the job.

A new report by the Center on Budget and Policy Priorities documents the benefits from state EITCs: They keep working parents on the job and children out of poverty.

Unfortunately, the income tax rollback is gathering steam in the Legislature with a Senate hearing. The tax cut fever is driven by higher-than-expected revenues, nearly $1 billion over three years. It’s a strong election-year temptation as GOP lawmakers look to defend their records for the damage done to working families and seniors in the Big Tax Shift of 2011.

Yet, as the League testified at the Senate hearing last month the income tax rollback disproportionately benefits upper-income households and threatens Michigan’s fragile recovery. In fact, $3 of every $5 would go to those in the top 20% of income.

Increasing the EITC or spending the higher-than-expected revenue to begin restoring Great Recession cuts to education and other key services would also be better economy-boosting routes than the across-the-board income tax cuts.

Either choice would help the governor reward hard-working folks in Michigan.

– Gilda Z. Jacobs

Rolling back progress

The Senate Finance Committee Wednesday approved a bill to reduce the state’s personal income tax rate from 4.25% to 3.9% by 2017, a move that would reduce state revenues by up to $874 million when fully implemented in Fiscal Year 2018.

While the purely political appeal of a tax cut during an election season is obvious, the League testified, based on a recently released report, that the risks to Michigan’s economy far outweigh any benefits. Low- and moderate-income workers will see little in return while the wealthiest taxpayers would benefit the most. (more…)

Early reading critical

Michigan is losing ground on a key benchmark in its long-term goal of expanding its educated workforce. The state is among only six that showed no improvement in reading proficiency among fourth-graders over the decade between 2003 and 2013, according to a just released Data Snapshot from the Annie E. Casey Foundation.

Almost seven of every 10 Michigan fourth-graders did not demonstrate reading proficiency in 2013—up 1 percentage point from 2003 while the national average dropped by 4 percentage points, according to the review of national test results across the states. Just over half (53%) of all fourth-graders in the best state, Massachusetts, scored below proficient in reading compared with almost four of five Mississippi fourth-graders. (more…)

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