Lack of earned leave hurts Minnesota families

Looking back on my childhood, I see that I was blessed. Whenever I was sick, my mom was able to take a sick day and care for me. But what about my peers whose parents did not have earned sick leave?

For many children across Minnesota, this worry is a reality. When they get sick, their parents are not able to stay home with them because they work in jobs that don’t offer earned sick leave. Often, the families least likely to afford time off without earned leave are also the least likely to have it.

We’ve talked about the importance of the ability to earn paid sick time and how it’s good for the economy, and a report from the Minnesota Department of Health takes an in-depth look at who has access to various forms of earned leave, with particular emphasis on sick leave. It finds that when Minnesota employees have access to earned paid leave, there is a positive impact on their earnings, health, productivity and economic security.

Currently over one million – or 4 out of 10 – Minnesota workers lack earned sick leave, and low-income workers who can least afford to take time off work are also the most likely to not have paid time off. Nationally, less than 40 percent of low-income workers have access to earned sick leave, and only 5 percent of private-sector low-income workers have access to paid family leave, according to the report.

Access to and participation in various forms of earned leave also vary greatly by race. For example, while 60 percent of white Minnesota workers have access to sick leave, only 50 percent of Black and 40 percent of Hispanic Minnesota workers have this benefit. This disparity likely reflects the fact that people of color are more likely to be working in low-paying jobs that lack any paid leave. Taking maternity leave, which is generally unpaid, is also correlated with race. While almost 75 percent of white working mothers in the U.S. took maternity leave after their last childbirth, mothers of color are much more unlikely to take time off with a new child. Only a little over 60 percent of Black and Hispanic working mothers took time off after having their last child.

Access to paid leave also varies by industry and employer. Only about 35 percent of service workers in Minnesota have access to earned sick leave. This contrasts with workers in the state and local government sector, 89 percent of whom have earned sick leave, or employees at private companies, at 61 percent.

Workers without earned sick time or family leave have tough choices to make. Do they go to work sick? Will they be able to stay home to care for a newborn? Those who do not have earned leave can potentially lose their jobs if they take time off work to care for a sick child, take an elderly parent to the doctor, or because they are ill themselves.

The effects of lack of access to earned sick leave are clear. There have been just under 3,000 reported foodborne illnesses in Minnesota over the course of nearly a decade. Many of these illnesses could have been minimized had these workers had some form of earned leave to recover quickly, instead of “toughing it out” at work so that they did not lose wages. With earned leave in place, workplaces would be healthier.

The Department of Health’s report also shows that employers benefit from providing earned sick leave. Earned leave can improve employee morale and retention, and helps recruit more skilled laborers. In addition, it reduces the costs due to lost labor and widespread company illness when employees work while sick.

The health and business benefits of earned leave are being increasingly acknowledged by policymakers. Minneapolis recently passed a sick leave requirement. They join five states, one county, 26 cities, as well as the District of Colombia that have laws so more workers can earn sick leave. As the Department of Health report shows, earned leave is both good for workers and good for business.

-Zack Eichten

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Workers across the state get a raise today, but often still can’t make ends meet

Today many Minnesota workers will receive a raise. That’s due to the final scheduled minimum wage increase to $9.50 for large employers (and $7.75 for small employers and young workers).

In 2014, Minnesota policymakers enacted a long overdue increase to the state’s minimum wage. Since then, the minimum wage has seen scheduled, incremental increases to bring it up to $9.50 this year. Starting in 2018, the minimum wage will increase based on inflation (commonly called “indexing”), so that it better keeps up with the cost of necessities, like rent, food and gas.

The minimum wage is an important tool to set a wage floor among all workers so that more workers across the state can better make ends meet. In fact, this climb to $9.50 is estimated to boost the incomes of about 325,000 Minnesotans. The minimum wage increase is also an important racial equity measure, as almost one in three Hispanic workers in the state and about one in five black workers will see higher wages.

However, for many Minnesotans, the wage boost might not be enough. The Minnesota Department of Employment and Economic Development calculates that a single, full-time worker needs to earn $14.46 an hour to earn a living wage and cover their basic needs. A Minnesota family with two earners (one working full-time, one working part-time) and one child needs to earn $17.57 an hour.

Minnesota’s minimum wage for large employers is currently the ninth highest minimum wage among the states and D.C., but this ranking will drop. Other states are implementing scheduled steps toward higher minimum wages, including $15 an hour in several places. While Minnesota’s minimum wage increase was crucial, policymakers can and should do more so that those who work hard can support themselves and their families.

-Clark Biegler

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Missing MinnesotaCare provision could have moved the needle on one of the state’s glaring racial disparities

Final negotiations over the Health and Human Services (HHS) budget ended without the inclusion of an important proposal that could have addressed one facet of the ugly racial inequities that have sat in the legislative spotlight since the release of Census data last September. Unfortunately, a plan to expand access to affordable health care in Minnesota failed to make it into the final supplemental budget bill. Making MinnesotaCare available to more working Minnesotans could have narrowed racial gaps in health insurance coverage because people of color are more likely to lack coverage through their employers.

About two-thirds of working Minnesotans receive health insurance through their employers, but there are drastic racial differences. About three-quarters of non-elderly white Minnesotans are covered by an employer-based plan, compared to less than half of the state’s people of color. This disparity exists nationally but is worse in Minnesota.

This disparity is clearly seen in the health insurance coverage rate for Minnesotans earning 200 to 275 percent of the federal poverty guidelines (FPG), or $24,000 to $33,000 for a single individual. In this income range, Minnesotans of color are more than twice as likely to lack health insurance compared to their white peers, and are more than five times as likely to lack coverage compared to Minnesotans earning more.

For working people whose employers do not offer health insurance, MinnesotaCare is an affordable health care option. It provides high quality insurance with low out-of-pocket costs and sliding-scale monthly premiums. Prior to 2014, Minnesotans earning 200 to 275 percent of FPG qualified for MinnesotaCare. A task force on health care financeGovernor Mark Dayton and the Senate all have proposed re-instituting eligibility. That could have narrowed the racial inequities in health insurance coverage rates, and the cost to do so would very likely be paid for (possibly entirely) with federal dollars.

MinnesotaCare is also an important health insurance option for entrepreneurs, which has implications for equity, too — the number of businesses owned by people of color in Minnesota increased by 53 percent from 2007 to 2012, even as the overall number of businesses in Minnesota shrank slightly over the same period.

The evidence is clear: our current health insurance system leaves out people of color at an alarming rate. This missed opportunity to bridge our state’s racial disparities by expanding access to MinnesotaCare should be taken up when the Legislature reconvenes next year.

-Ben Horowitz

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Deferred action for parents would improve income and well-being of children and families

Expanding access to a more stable legal status to eligible undocumented immigrants would benefit both the families involved and our economy overall. A recent report from the Migration Policy Institute and the Urban Institute explains how the implementation of Deferred Action for Parents of Americans (DAPA) would improve the financial, psychological and overall well-being of the 10 million people across the U.S. living in households with a DAPA-eligible adult.

DAPA is part of a proposed 2014 executive action by President Barack Obama that would provide temporary work authorization and protection from deportation for parents of U.S. citizens and lawful permanent residents. An estimated 3.6 million unauthorized parents are eligible for DAPA; they have 4.3 million children, 85 percent of whom are U.S. citizens. In Minnesota, an estimated 27,000 unauthorized parents are eligible for DAPA.

In addition to raising their families in the U.S., DAPA-eligible parents have been contributing to and investing in their communities for many years. Seven of every 10 of them have lived in the U.S. for at least 10 years. But they still have significantly lower incomes than U.S.-born Americans and other immigrants. When controlling for other demographics, DAPA-eligible men make 16 percent less per year and DAPA-eligible women make 7 percent less than their counterparts who are lawful permanent residents. MPI estimates that if these parents gained work authorization through DAPA, median family annual incomes would increase by 10 percent, benefiting both their families and their communities and lowering the poverty rate among these families.

Enacting DAPA could provide DAPA recipients with better access to education that would open doors to higher wage jobs and further increases in their incomes. DAPA recipients’ earnings are lower in part due to their limited education and lack of fluency in English. More than half of DAPA-eligible parents have less than a high school education, and 8 in 10 are not able to communicate fluently in English, potentially limiting their earnings and their abilities to access services for their children.

Protection from deportation provides additional benefits for families and children. It would reduce the daily stress and fear associated with the parent’s status, and would enable these parents to be more present in their children’s lives. Family income also would be more stable and reliable.

The MPI report concludes that implementation of DAPA “has the potential to substantially improve the incomes, and living and well-being standards for a sizeable number of unauthorized immigrant families whose children are overwhelmingly U.S. citizens and legal permanent residents.” DAPA-eligible parents and their families recently experienced a setback when the U.S. Supreme Court announced a 4-4 split decision which effectively continued a nationwide delay of DAPA. If this delay is lifted, DAPA will improve the lives of millions of immigrants and their families, as well as our local and national economies.

-Clare Speer

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In Minnesota, full-time workers of color three times as likely to be poor

Most people believe that full-time work should empower somebody to fill their fridge, fill their gas tank and start putting some money in the bank. That belief is less likely to match reality if you are a worker of color in Minnesota.

A new analysis from PolicyLink and the University of Southern California Program for Environmental and Regional Equity shows that working Minnesotans of color were 50 percent more likely to be considered “working poor” in 2012 than they were in 1980. Over the same time frame, the percentage of white working Minnesotans in the same category actually decreased.

PolicyLink defines the working poor as those who are working full time and whose household income is less than twice the federal poverty guidelines. That’s because the federal poverty guidelines generally fall short of describing what a family actually needs to make ends meet. For example, a single parent with a child who earns 200 percent of the federal poverty guideline, or about $32,000, falls $1,700 to $30,000 per year short of what it takes to meet a basic-needs budget in Minnesota depending on their county of residence.

Bar graph depicting the increasing disparity in the percentage of adults who are working poor by race.

Source: PolicyLink/PERE National Equity Atlas analysis using IPUMS; details, including a further breakdown by race and ethnicity, are available at the National Equity Atlas.

When you’re working hard but aren’t paid enough to make ends meet, the results of one misfortune can quickly compound. For example, if your car breaks down and you haven’t got the cash on hand to fix it, you might miss work. At best, the missed hours and auto repair bill may require temporary sacrifices like skipping a few meals. At worst, a missed workday can mean losing your job, likely sending your family into a downward economic spiral.

The impact of living on the economic margins is well-documented in social research. When keeping a roof over your head is a daily struggle, toxic stress accumulates and can even impact children’s brain development. On the other hand, when families’ economic resources increase, children are more likely to succeed in school and, later, in the workforce.

We must do more to make sure hard work pays off by improving job quality standards and supporting low-wage workers so that they can climb into the middle class, regardless of where their economic journey started. If Minnesota’s economy is going to continue to thrum at a level that makes it one of the strongest in the nation, we need to address structural racism, institutionalized in many cases by policies that governed (and in some cases, still govern) the workplace, the housing market, the criminal justice system and other elements of our society.

While there are no quick fixes that will mend these gaps in our economy, there are important steps we can take. PolicyLink has long researched and advocated for policies that would move the country towards a more equitable economy. Closer to home, Minnesota’s own Voices for Racial Justice tracks proposed legislation that would specifically address equity issues in our backyard.

Over the past year, more policymakers recognized the need for focused and direct attention to racial equity. They took a step in the right direction by funding initiatives in this year’s supplemental budget that specifically address racial equity. For further progress to be made, Minnesota’s conversation about building an equitable economy needs to continue — and we need to make sure that the people invited to the table represent the diverse strengths and backgrounds of our state.

-Ben Horowitz

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Five takeaways from state’s July Economic Update

The state received a note of caution – with revenues on track but lower projected national economic growth – in the recent July Revenue and Economic Update from Minnesota Management & Budget (MMB). Here are our top takeaways:

1. FY 2016 ended with revenues slightly ahead of projections. State revenues in FY 2016 were $230 million, or 1.1 percent, higher than projected in the February 2016 Economic Forecast. The largest portion of these higher than expected revenues are from the corporate franchise tax, due to both higher payments and lower than projected refunds.

2. Lower national economic growth projected for 2016 and onward. Economic growth is now expected to slow to 1.9 percent, with slightly higher growth in 2017 to 2019. The start of 2016 showed some of the weakest economic growth in the past few years, due to several factors, including a struggling manufacturing sector and weak global economic growth.

July economic update projections

3. It’s not all doom and gloom. Despite the lower projections, the U.S. economy is showing some positive signs, like higher consumer spending and greater housing activity. And despite last month’s vote by the United Kingdom to leave the European Union (often referred to as Brexit), national economic projections for the U.S. are still solid.

4. Economic forecasters are confident in their projections of economic growth. They only give a 20 percent chance for a more pessimistic scenario where a short recession is spawned by slower productivity and a deep decline in consumer and business confidence. They also assign a 15 percent probability to a more optimistic scenario where higher productivity and foreign growth boost the national economy.

5. The economic update is an important reminder that economic projections can swing. While they are only one factor in the state’s budget outlook, the weaker economic growth projections in the July update hint at smaller state budget surpluses.

-Clark Biegler

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New report shows how out of reach housing costs are

A report from the National Low-Income Housing Coalition, Out of Reach 2016, shows that workers need to earn almost twice the minimum wage to afford a fair market two-bedroom apartment in Minnesota.

The National Low-Income Housing Coalition calculates the “Housing Wage,” or the amount a household needs to earn to rent a fair market unit while not spending more than 30 percent of their income on housing. Minnesota’s Housing Wage for a two-bedroom unit is $17.76 an hour.

In some parts of Minnesota, the Housing Wage is even higher. In several counties, including Hennepin, Ramsey, Anoka and Chisago, a full-time worker needs to earn $19.75 an hour to afford a fair market two-bedroom apartment.
housing costs meme-01

The Minnesota Housing Partnership provides a county-level look at how many hours a minimum-wage worker would need to work to afford housing. Even with the upcoming increase to $9.50 an hour for large employers, a minimum-wage worker needs to work 53 to 83 hours a week year round, depending on where they live, to afford a two-bedroom apartment.

When housing takes up such a large share of families’ incomes, they can’t afford other basic needs like transportation or child care, families may have to live in substandard or dangerous housing, or workers can’t afford to live where the jobs are.

Policy choices can play an important role in more Minnesotans affording the housing that meets their needs, both by increasing the supply of affordable housing and ensuring more Minnesotans have good-paying jobs.

In the 2014 Legislative Session, Minnesota policymakers gave minimum-wage workers in the state a long overdue raise. Later this summer, the minimum wage in Minnesota will be $9.50 an hour for large employers, and will be indexed to inflation in future years so that working Minnesotans can better keep up with the cost of housing and other basic needs.

Legislative sessions that fall in even-numbered calendar years, like the one that just ended, are typically bonding years where capital projects like affordable housing are funded. Unfortunately, this session policymakers could not come to an agreement on a bonding bill. They did add funding for affordable housing in the 2016 supplemental budget, including $500,000 for rental assistance for exploited women and children, and $750,000 for a statewide workforce and affordable housing program.

But there’s more that can be done. Policymakers should continue to make progress so that all Minnesotans can afford the basics, including stable housing.

-Clark Biegler

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U.S. Supreme Court decision halts expanded economic opportunity for immigrants

Today’s disappointing decision from the U.S. Supreme Court halts proposed actions to expand opportunity for an estimated 3.9 million unauthorized immigrants across the nation, including 30,000 in Minnesota.

The U.S. Supreme Court announced a split 4-4 ruling today, leaving the nationwide delay of President Barack Obama’s 2014 executive action in effect. The U.S. Supreme Court currently has an empty seat due to Justice Antonin Scalia’s death earlier this year, making the possibility of split decisions much more common.

In November 2014, Obama introduced an executive action that expanded Deferred Action for Childhood Arrivals (DACA) and created the new Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA). These would allow undocumented immigrants who came into the country as children, as well as parents of U.S. citizens or lawful permanent residents, to request relief from deportation and receive work permits that would last for three years. However, a lawsuit brought by 26 states, and upheld by the U.S. Supreme Court today, prevented those actions from going into effect.

The executive action sought to recognize the contributions these residents make to their local communities and economies, and would keep families together who already call the United States their home. Obama’s action also would provide an economic boost by strengthening the country’s workforce, as young people who grew up here could advance their educations and careers, and workers could increase their earnings through jobs that better match their skills. As a result, it’s estimated that full implementation of DACA and DAPA could improve the Minnesota economy by $1.7 billion over 10 years.

Obama’s executive action would be a common-sense way to provide a more stable status to immigrants living in our communities. Next steps for the executive action to proceed are unclear at the moment, but it is possible that the U.S. Supreme Court could schedule the case for another argument when it has a full court of nine justices again.

-Clark Biegler

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Smart policy interventions can shrink racial disparities: national mortality rates edition

When researchers looked at mortality rates of younger Americans across the country, they found that policy choices are shrinking the health-based inequities that exist in our society. Their findings remind us that we’ve come a long way in the struggle for health equity, while also impelling us to continue working to ensure that someday, someone’s zip code and skin color won’t play a role in determining their life span.

Mortality rates measure the share of people in a group who die within a given time period. After looking at the way those rates changed over time, the authors found that income still matters — our youngest boys are still more likely to die in the poorest places in America — but the disparity in mortality rates between rich and poor counties for some groups has been cut nearly in half.

For example, the researchers found that in 1990, 2.38 out of every 1,000 boys ages 0 to 4 in the country’s richest counties died within three years. Over the next 20 years, that three-year mortality rate shrank to 1.32. Meanwhile, the youngest boys in the country’s poorest counties had a mortality rate of 4.49 in 1990; in 2010, it had dropped to 2.39.

Graphical depiction of mortality rates described in this article.

Source: “Mortality and Inequality: The Good News From a County-Level Approach” by Janet Currie and Hannes Schwandt

America made similar equity gains across racial lines, too, but the data contain a chilling reminder of how important race remains in our country: black boys living in the wealthiest parts of America are still less likely to make it to adulthood than white boys living in the nation’s poorest counties.

The authors of the study point out that over the past 20 years disparities shrank as public investments in health and well-being increased. In that time span, the United States increased the availability of affordable health insurance for pregnant women and children through Medicaid and the State Child Health Insurance Program (SCHIP), helped Americans with low incomes stock their fridges through federal food aid, and supported families’ efforts to make ends meet through strengthened tax credits for working families.

Minnesota has been a national leader on many of these fronts — for example, by crafting innovative paths towards affordable health insurance. Such investments are now paying dividends represented by actual human lives, and show that America (and Minnesota) can narrow racial and income disparities when we make smart policy choices.

-Ben Horowitz

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Jobs, economic development top supplemental spending

While the House and Senate put forward very different visions around how to use the projected $900 million surplus this session, legislators put together a supplemental budget bill (House File 2749) in the last days of the legislative session that had a net general fund impact of $182 million for FY 2017, providing the largest funding boost in economic development. The total impact of the bill increases to $233 million in FY 2018-19. This budget bill includes $26 million in FY 2017 and $67 million in FY 2018-19 in tax cuts in its state government provisions. The Legislature also passed a tax bill totaling $257 million in FY 2017 and $544 million in FY 2018-19.

FY 2016-17 Supplemental Budget General Fund Proposals (Net General Fund Changes)
Governor House Senate Conference Agreement
Jobs and Energy $129 million $12 million $189 million $75 million
State Government $51 million -$10 million $36 million $45 million*
E-12 Education $61 million $0 $59 million $25 million
Public Safety $65 million -$793,000 $43 million $25 million
Environment and Agriculture $11 million $2 million $27 million $7 million
Higher Education $76 million $0 $48 million $5 million
Health and Human Services $86 million $0 $51 million $0
Transportation $15 million $260,000 $1.8 million $0
Tax Cuts and Aids to Local Governments (House File 848) $140 million $999 million $283 million $257 million
Total $635 million $1 billion $738 million $440 million
*This total includes the tax cut provisions in the supplemental budget bill.

In the budget bill, policymakers put the most additional resources towards jobs and economic development, where they allocated $75 million in FY 2017. Providing access to broadband for Greater Minnesota was a priority expressed by the House, Senate and governor, and about half of the funding in this area ($35 million) is for that purpose. Only $5 million can go to underserved areas, defined as areas where households and businesses have internet speeds slower than the state’s 2026 goals. Policymakers also set aside up to $500,000 for areas with significant low-income populations. The final funding for broadband is much closer to the proposed House figure of $15 million than the governor’s and Senate’s proposals of $100 million and $85 million, respectively.

The final equity agreement includes important provisions that work to move the needle on the state’s economic disparities. Policymakers dedicated $35 million in FY 2017 and $35 in FY 2018-19 for equity initiatives such as:

  • $6.9 million in grants for the Latino, Somali, Southeast Asian, and American Indian communities to address educational, employment, and workforce disparities, and to support youth; and
  • $1.5 million to promote high-wage, high-demand nontraditional jobs for women.

Policymakers invested $25 million of the surplus in E-12 education. The House and Senate agreed to fund one of the governor’s highest priorities, voluntary pre-kindergarten, with $19 million in FY 2017. The education provisions also include funding to support development of teachers and proper placement of support staff to help improve students’ learning environments, as well as for early education and equity aid funding changes. Much of these funding increases are made possible through savings resulting from a loan refinancing option for some school districts.

Policymakers invested $5 million in higher education, with $2 million for the state grant program, which lowers the cost of college for low- and moderate-income students, and $500,000 for colleges and universities to narrow gaps in college education attainment between students of color and white students.

While the House and Senate found agreement in many areas of the budget, the transportation and bonding discussions proved to be less productive. For the second year in a row, policymakers failed to pass a substantial transportation bill due to disagreements on which transportation investments the state should make and how they should be funded. Last year, policymakers passed a transportation budget that maintained the status quo, but there was no funding allocated this year. Legislative sessions in even numbered calendar years like this one are also typically “bonding years,” where policymakers pass a capital budget bill that invests in our state’s infrastructure, such as roads and buildings. Policymakers this year were unable to pass a bonding bill during the legislative session.

There is discussion that policymakers will return to the Capitol this summer to pass bonding and transportation budgets.

We discuss more of the health and human services and tax details elsewhere on our blog. In health and human services, legislators agreed to some important investments in mental health and Medical Assistance. They also missed critical opportunities to improve MinnesotaCare, expand access to affordable child care, and support struggling families through the Minnesota Family Investment Program. The tax bill includes several provisions that make working families its priority, including nation-leading improvements to the Working Family Credit, and expansions of the Child and Dependent Care Credit.

The House and Senate passed the supplemental budget bill Sunday night.  It now is in the governor’s hands where he has the power to sign, veto, or line-item veto this supplemental budget.

-Clark Biegler

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