While 2016 U.S. Census data shows an overall slight decline in Washington residents living below the poverty line, a closer look at the numbers demonstrates persistent economic challenges of households and families with low incomes. Kids, especially children of color, are most likely to grow up in households with low incomes.
Check out our new infographic, “A Look at the Economic Well-Being of Washingtonians with Low Incomes,” for additional Washington state data.
Click here or on graphic to see to full PDF.
A closer look at the data shows that in Washington state:
- One in 17 residents (nearly 6 percent) live in deep poverty, defined as 50 percent of the federal poverty line (a $10,080 annual income for a family of three).
- Nearly two in five kids (more than 37 percent) live in households with low incomes, defined as 200 percent of the federal poverty line ($40,320 for a family of three).
- Economic disparities persist for kids of color. Sixty-six percent of Latino children, 57 percent of American Indian and Alaska Native children, and 57 percent of Black children live in households with low incomes.
Poverty can impede kids’ success in school, their overall health, and the stability of their family. This data underscores the importance of investing in policies to ensure that all of Washington’s kids and families can thrive.
Raising incomes for low-wage home care workers would help strengthen our state economy, according to our new report, How Raising Incomes for Low-Wage Workers Boosts the Economy: A Study of Washington State’s Home Care Workforce. The report shows that if policymakers raise the base hourly wage of home care workers to $15, workers would be better able to meet the costs of basic needs for themselves and their families, leading to increased economic activity in the state.
Home care workers play an essential role in the lives of tens of thousands of Washington’s seniors and people with disabilities – providing assistance with activities of daily living such as dressing, eating, and getting to and from medical appointments. In Washington, state-paid home care workers are compensated through the Medicaid program and either contract directly with the state as individual providers or provide services through private agencies.
With an average hourly wage of $12.82 and a field of work that tends to be part-time because of fluctuating client needs, a typical individual provider home care worker makes $10,540 a year — below the federal poverty line for an individual, and less than half the poverty line for a family of four. This is far from sufficient for a person, let alone a family, to cover the cost of basic needs such as food, housing, and transportation.
Raising the base wage for home care workers to $15 per hour would provide an annual increase of $2,200 to the more than 81 percent of workers who currently make less than that per hour. (1) This would go a long way toward helping these workers better make ends meet.
Further, using REMI, a geographically-specific economic analysis tool, to model a wage increase for individual provider and agency-based workers, our analysis showed that:
- The additional spending that would result from these workers’ wage increases would generate $180 million in total economic stimulus annually in communities throughout Washington state – through both the projected spending by home care workers and the resulting money that businesses, individuals, and communities would acquire as a result of these workers’ increased spending.
- This economic stimulus would increase private-sector employment. As a result of this ripple effect of spending, private sector employment in Washington state would be projected to grow by more than 800 jobs annually through 2020.
- Every $1 the state invests into a $15 base wage for home care workers making less than that will lead to a $4 economic stimulus. Given half the cost of home care wages are covered by the federal government through Medicaid, this form of economic stimulus is a smart investment of state resources.
During the 2017 legislative session, legislators can help strengthen our state economy and the well-being of home care workers and their families by approving the proposed wage increases of individual provider home care workers (and a corresponding increase for agency-based home care workers as provided in the agency parity law), which were recently negotiated as part of a collective bargaining agreement. Further, this increase is not just good for the well-being of home care workers; it's also good for the economy. With this in mind, policymakers must continue to take steps to ensure that all hardworking Washingtonians make enough money to not just make ends meet, but to be able to get ahead.
1. This calculation is based on actual wage data for the state’s more than 34,000 individual provider home care workers. Given contract parity mandates that wage increases for individual providers must also be applied to agency-based workers, this calculation is also applied as an estimate to the state’s more than 15,000 agency-based workers.
This is the second in a series of schmudget blog posts about property taxes in Washington state and the role they play in funding basic K-12 education.
By Kelli Smith, policy analyst, and Andy Nicholas, associate director of fiscal policy
Complying with the state Supreme Court’s McCleary mandate to develop a dependable source of revenue to fund our K-12 schools should be lawmakers’ top priority when they gather in Olympia early next year. Lawmakers must not waste time promoting non-starter proposals like “revenue-neutral property tax levy swaps” that would generate none of the additional resources needed to build the education system our kids need to thrive.
Under its 2012 McCleary decision, the Washington State Supreme Court ruled that it is the state’s duty to fully fund basic K-12 education. Yet school districts in our state have for years been relying on local property tax levy dollars to provide students with the basics that the state is supposed to be providing – such as textbooks, school supplies, transportation, salaries for teachers and nurses, and other essentials. Because of this, the court ruled that the state is failing in its paramount duty to fund education for all of Washington’s schoolchildren.
To be clear, the court did not rule that local levies have to be reduced or eliminated. These levies can be kept in place to support the multiple services our schools provide beyond a basic education, such as after-school clubs and advanced placement programs.
But opponents of providing new forms of revenue to pay for schools have been promoting the idea that local levies must be reduced or eliminated in order to fulfill the requirements of McCleary. And instead of finding equitable and dependable new sources of revenue to fulfill their duty, these lawmakers are fixating on revenue-neutral levy swap proposals. As we wrote previously, these swaps are complex shell games involving increases to the state property tax levy and decreases to local school districts’ levies. They generate no new resources overall.
Funding the basics can and should be accomplished with additional state revenue. In fact, in his July 2016 brief to the court, the state attorney general, who represents the legislature and the state government in the McCleary case, points out the various ways the legislature could fully fund basic education. The brief references numerous revenue proposals including taxing high-end capital gains, modifying a damaging law that restricts property tax revenue growth to a maximum of 1 percent per year, eliminating wasteful corporate tax breaks, and increasing the state property tax levy.
The McCleary ruling is an enormous opportunity for policymakers to get to work on building a world-class education system for all of Washington’s children. The current levy swap proposals are intended to distract the legislature from making the most of this opportunity. Our kids will only get the education they deserve when lawmakers refocus on generating significant new tax revenues from equitable sources.
Although the newest state revenue projections anticipate a modest increase in available tax resources in the coming years, that uptick is minuscule compared to the billions of additional dollars needed to fund schools in Washington state.
In its September forecast, the Washington State Economic and Revenue Forecast Council projects that state tax revenues will increase, relative to the previous forecast, by $336 million (0.9 percent) for the remainder of the current two-year budget cycle ending in June 2017. In the next budget cycle, for 2017-2019, the council projects that state tax resources will increase by $134 million (0.3 percent). (1) These increases are largely attributable to higher-than-expected revenues from the sales tax and taxes on the sale of real estate.
Despite this boost in tax revenues, the council’s projections show that our state rainy day fund and other reserves will remain dangerously low at the end of the current budget cycle. They also show total budget reserves will be at about $1.8 billion by June 2017. That’s approximately 9.5 percent of annual state spending on public services, far below the 15 percent cushion that many economists and public finance experts recommend to ensure that schools, health care, and other important investments can be maintained when a recession or other state emergency strikes.
Lawmakers can’t depend on modest growth in existing tax resources to build the world-class education system that Washington’s kids will need to compete in this 21st century economy. To fulfill their obligation to our schoolchildren as mandated by the state Supreme Court, lawmakers must focus on raising additional new revenues from equitable sources.
1. The revenue numbers reflect total state-only Near General Fund + Education Legacy Trust Fund + Opportunity Pathways Account
The new U.S. Census data shows that the number of Washington residents living below the poverty line declined 1 percent between 2014 and 2015. This welcome news is tempered by the fact that the data shows that hundreds of thousands of Washingtonians remain in poverty, with communities of color struggling the most. Given this, policymakers need to look beyond the immediate headlines touting our progress and make smart investments in creating a thriving economy that works for all of us.
The newly released Census data shows that in Washington state:
- More than one in eight people (12 percent) live below the poverty line. This is down from 13 percent in 2014. For a family of three, the poverty line is defined as earning less than $20,160 per year.
- Nearly one in seven children (15 percent) live below the poverty line. This is a decline from 17.5 percent in 2014.
- Deep disparities by race and ethnicity persist. More than 24 percent of American Indians and Alaska Natives, 23 percent of Black people, and more than 20 percent of Latinos live below the poverty line.
- Although median household income continued to increase, when adjusted for inflation, median household income remains at 2007 levels despite the rising costs of meeting basic needs.
This new data demonstrates how much more work there is to do to create a state economy with real pathways out of poverty and toward economic security. But it still doesn’t tell the whole story. Consider the fact that a single parent raising two kids in the state needs to make at least $59,000 to cover the costs of meeting all basic needs, including housing, food, child care, and transportation. (1) That means, beyond what the Census data tells us, families making three times as much income as those living at the official federal poverty level are also struggling to making ends meet.
Legislators must remember this big picture reality when they consider the policies they will advance in the 2017 legislative session. They must work to not only alleviate and prevent poverty throughout our state, but also to ensure that all Washingtonians can get ahead.
Voters and policymakers have the opportunity to take steps in the November election and the 2017 legislative session to help families get on the road to economic stability. Increasing the statewide minimum wage, ensuring access to paid sick leave, restoring funding to the Temporary Assistance for Needy Families program, and funding the Working Families Tax Rebate can all help provide greater economic security for Washington residents.
In Washington state, a single parent with two kids working full-time at a minimum wage job has an income below the federal poverty level and far below what’s needed to meet the rising costs of basic necessities. (1) Raising the statewide minimum wage to $13.50 through Initiative 1433* on the November ballot will help change this and is an important step toward ensuring that all of Washington’s kids and families have the opportunity to thrive.
A higher wage would help reduce poverty – something that is desperately needed right now. Child poverty in Washington increased nearly 30 percent between 2008 and 2014, with an additional 59,000 children growing up poor, according to KIDS COUNT. Even more troubling, only 31 percent of Black children, 31 percent of Latino children, and 26 percent of American Indian and Alaska Native children live in economically secure households (which is defined as 200 percent of the federal poverty line, or a $40,320 income for a family of three).
Raising the minimum wage to $13.50 would improve the lives of these struggling Washington families. More than 360,000 Washington kids currently live in families where one or more parents make less than $13.50 per hour. (2) The proposed minimum wage increase would make a big difference for these families, providing an additional $700 per month for the average worker to help make ends meet.
Further, raising the wage would increase the incomes of tens of thousands of families of color who are disproportionately likely to struggle economically as a result of historically racist policies that have excluded them from opportunities for jobs, education, homeownership, and more.
By helping hundreds of thousands of Washington families lift themselves out of poverty, a $13.50 minimum wage would strengthen the economic and social well-being of Washington’s kids and families in three key ways:
Helping Kids Do Better In School
Children who experience instability at home because of poverty have a harder time concentrating at school. This can undermine children’s progress in the earliest stages of their education by impeding their cognitive, social, and emotional development. In fact, research demonstrates a significant gap in kindergarten readiness between children who grow up in poverty compared with kids from families with moderate and high incomes.
If parents are earning higher wages, they have a greater ability to feed their family, pay the bills and rent, and maybe even afford enriching activities for their kids. As a result, their children are more likely to thrive at school.
The economic security of families is critical to the health of kids. The lack of a safe, economically stable home can create toxic levels of stress for parents and kids. In fact, high-stress events experienced in childhood – including sustained economic hardship – are linked to poor health later in life, such as obesity, alcoholism, and depression.
Because higher wages allow parents to put food on the table, a higher minimum wage can also help combat childhood hunger. Currently, more than 13 percent of Washington kids go hungry because their parents can’t afford to buy enough food, and those rates are even higher among children of color. Additionally, minimum wage increases have been shown to correlate with fewer babies born at low birthweights, one of the earliest indicators of the health of the next generation.
Strong Families and Homes
As mentioned previously, parents living in poverty can have heightened stress levels if they’re worried about paying rent and bills each month or having trouble dealing with unexpected costs, such as car repairs. This stress can detract from the necessary time and mental capacity for parents to fully engage with – and develop strong attachments to – their kids. Compromised parenting influences children in both the short term and the long term. Children who grow up in poverty are more likely to enter the child welfare system. And adversity experienced as kids can make transitioning to adulthood difficult.
Creating environments for kids to thrive requires policies that improve the well-being of parents and children. A higher wage for hardworking parents who make the minimum wage is a great investment in the strength of entire families and households.
The passage of Initiative 1433 would give more families the ability to improve their well-being. Indeed, it would allow more of Washington’s kids to have the chance to succeed in school, to have a healthy start in life, and to have their basic needs met. Raising the wage would help us build a better future for all of us.
*Authors’ Note: The scope of this analysis focuses solely on the minimum wage component of Initiative 1433. The other component of I-1433, which provides sick and safe leave, also offers significant benefits to kids and families. For analysis on how a sick leave policy would strengthen the well-being of Washington’s families and communities, please see this recent press release published by Children’s Alliance and this report by the Economic Opportunity Institute.
1. The 2016 federal poverty line for a family of three is $20,160. The Massachusetts Institute of Technology’s “Living Wage Calculator” estimates a single parent with two kids needs to earn $59,550 in order to cover costs of basic needs in Washington state.
2. Economic Policy Institute analysis of Current Population Survey, Outgoing Rotation Group public use microdata 2014.
In the fall of 2015, Community Council of the Blue Mountain Region – in collaboration with Sherwood Trust, Walla Walla County Department of Community Health, and Blue Mountain Community Foundation – partnered with the Budget & Policy Center to launch a community-driven, results-focused process to create a more prosperous region. Now we are proud to release Building a Better Blue Mountain Region, a report summarizing this collaborative effort and highlighting a new, innovative way to support community-driven solutions.
The Blue Mountain Region includes Walla Walla and Columbia counties in Washington state and the northeastern part of Umatilla County in Oregon. It is home to a diverse and growing population and economy, and it is known for its higher education system, wineries, agriculture, and small-business community.
We used the Budget & Policy Center’s own Progress Index framework as a starting point for identifying local data that could tell a preliminary story about the region’s well-being. The story that emerged from the data revealed areas for improvement in the community as well as bright spots upon which to build. For example:
- The Blue Mountain Region ranks high for overall quality of life and has a strong healthcare infrastructure;
- Economic hardship is high throughout the region, especially among the Latino population, which is driving population growth;
- Among residents born outside of the United States, those who have obtained citizenship have greater economic security than residents who are non-citizens, and they have lower rates of economic hardship than their peers born in the United States; and
- Education outcomes – like kindergarten readiness, reading ability by the end of third grade, and high school graduation rates – vary considerably by race, ethnicity, and district/school, but many schools perform better than the state average on these important indicators, offering the opportunity to learn what is working for students.
Community Council and its partners used Budget & Policy Center data to hold two "data walks" – events where members of the community review and discuss what the data says about them – with Blue Mountain region residents. The attendees of these events were asked to discuss what the data in the infographics meant to them, answering the following questions: Does the data align with their understanding of the community? What conditions in the community explain why the data looks the way it does? How do residents want the story emerging from the data to change? And, what strengths does the community possess to change the story?
The conversations that took place during the data walks were dynamic and inspiring, giving Community Council insight into the ideas and aspirations of residents. It also gave the project partner organizations a better sense of the network of individuals and organizations they can tap into to achieve community-driven progress. [See pages 22-23 of the report for a summary of the data walk discussions.]
Thanks to feedback from the participants in the first data walk, project partners made the second data walk more accessible. It was held in the evening so people who work during the day could attend. A Spanish interpreter and bilingual materials were offered so more members of the Latino community could be part of the conversation. It also provided free childcare.
The partner organizations are now using the information gathered from the conversations at these two events in strategic planning efforts for the Blue Mountain region. With the data and the initial conversations as a guide, they plan to continue conversations with a growing network of residents to create a community-driven vision for the improvement of the well-being of the region and its people.
And at the Budget & Policy Center, this collaboration with our partners in eastern Washington marks a new way of doing our work. We recognize that data is much more powerful – and a better tool for developing and advancing effective public policies – when it is shaped by the stories of the people it represents. Building data walks and other community engagement tools into our research ensures that our analysis is informed by and accountable to the people and communities behind the numbers. They are the people and communities whose well-being we seek to ensure in our work to create a just, prosperous, and equitable Washington.