NC Budget and Tax Center

Women and the Economy

Support for Paid family leave advanced in the U.S. Senate yesterday, as lawmakers heard testimony on its benefits in a key Children and Families Subcommittee hearing on Capitol Hill.

During the hearing—which was requested by U.S. Senator Kay Hagan—North Carolina business owners, advocates, and representatives of working families made the case for why paid family medical leave policies benefit both employees and businesses. Such programs allow workers to recover from a serious illness or care for a sick loved one or new child without risking their job or the income they need. The hearing renewed a call for a universal family and medical leave insurance program that doesn’t shoulder all the burden of cost on employers.

Currently the Family and Medical Leave Act is the only federal law designed to help working people succeed both as providers and caregivers. It leaves out 40 percent of the workforce and guarantees only unpaid leave, which millions cannot afford. Only 12 percent of U.S. workers have access to paid family leave through their employers, and less than 40 percent have personal medical leave through an employer-provided temporary disability program. This means millions of workers who develop serious health conditions, have seriously ill family members or become parents are forced to choose between providing care or having the income they need to cover basic expenses.

In North Carolina, 77 percent of mothers with children under 18 work, and 44 percent of workers have no access to paid sick days, let alone paid family medical leave. Low-income workers have it even worse off and are often given no flexibility in their work schedules at all.

Two North Carolinians testified at the hearing. Jeannine Sato is a resident of Durham, NC and member of NC MomsRising. Sato’s previous employer denied her extended leave after the birth of her first child. She said:

We are human – to pretend that people don’t get sick and that they don’t give birth just doesn’t make sense….Families should have the opportunity to care for their loved ones without the risk of losing their jobs or falling into poverty…. America needs to step up and join the rest of the industrialized world in offering paid family leave in order to be competitive and humane.

Read More

NC Budget and Tax Center, Poverty and Policy Matters

With a new school year approaching, many local school boards across North Carolina will join an effort to help end childhood hunger. For the 2014-15 school year the nation-wide Community Eligibility Program (CEP) allows high-poverty North Carolina schools to eliminate collecting school meal applications and offer breakfast and lunch to all of their students at no charge.

One in five American schoolchildren can’t count on getting enough nutritious food at home, which can have a negative impact on a student’s academic performance and development. Ensuring that children show up in classrooms each day fed and ready to learn increases the chances of students being more focused, attentive, and engaged.

At least 36 school systems across North Carolina have confirmed their plans to adopt CEP for the upcoming school year. (See map below) Some local school boards plan to adopt CEP district-wide while others will offer a universal meal program in selected schools within their district.

Slide1

A big kudos goes to these school systems that will adopt CEP next year. This serves as a positive step in helping ensure that all North Carolina students are afforded a high-quality, enriching education.

A listing of all North Carolina school districts and individual schools that are eligible for community eligibility for the 2014-15 school year can be found via the NC Department of Public Instruction website.

NC Budget and Tax Center, Uncategorized

This week has already featured several prominent pieces on North Carolina’s unemployment insurance cuts with the final assessment that many jobless workers have likely been harmed and a more balanced approach to trust fund debt based on evidence not ideology was needed.

On Sunday, the New York Times featured a piece by Justin Wolfers of the Brookings Institution that made clear the evidence just isn’t there to support claims made that North Carolina is experiencing an economic boom and job growth resulting from the unemployment insurance cuts. And while he correctly points out that there is too little evidence to draw conclusions about what is happening in the economy, Wolfers fails to acknowledge that the harm to jobless workers from the cuts is significant enough to raise alarm.

Yesterday, Jared Bernstein of the Center on Budget and Policy Priorities followed up in the Washington Post by highlighting this very fact: there has been very real harm from the cuts created for jobless workers who now have fewer weeks to find a job in a labor market with too few and fewer dollars to meet basic needs, as the Budget & Tax Center documented in our recent report.

And then the Economic Policy Institute released a report looking across the country at states that cut unemployment insurance benefits. The report concludes that these decisions were not fiscal in nature but political and have had no appreciable impact on labor force improvements and been completely lopsided in their approach, effectively requiring jobless workers to pay employer’s debt. Here are a few of their key findings that are illustrative for North Carolina:

  • States with solvent unemployment insurance trust funds (the funding mechanism for the unemployment insurance system paid into by employers) before the Great Recession were less likely to borrow from the federal government.  A states’ experience was not a differentiating factor for states borrowing activities.
  • States that remained solvent had not cut UI-dedicate state taxes nearly as deeply as did other states during the 2001-2007 period of recovery and expansion.
  • Eight of 35 states chose to address their unemployment insurance trust fund debt with cuts rather than taking a balanced approach. What most of the eight states share is a recent history of not supporting safety-net programs not more drastic fiscal challenges.
  • Across the eight states, unemployed workers lost an average $252 per week of curtailed benefits just so states could save roughly nine cents per covered worker per week in UI-state taxes.
  • There was no visible improvement in state labor market outcomes—when looking at employment-to-population ration—following cuts to UI duration.

Bottom line from all this national attention, North Carolina policymakers made the wrong choice and jobless workers are being hurt as a result.

NC Budget and Tax Center

Budget writers announced over the weekend that the Senate and House leadership agreed to a basic framework for a final budget deal. That framework includes a pay raise for teachers averaging roughly 7 percent and further cuts to the Medicaid program that provides health insurance and long-term care to children and adults who are poor, disabled, and elderly. There is no question that other vital programs and services will be cut due to a lack of adequate funding, resulting from lawmakers’ choice to make room for unaffordable tax cuts for the wealthy and profitable businesses in 2013.

While the full details of the final budget deal will not be released until this afternoon at 1:30pm, below are five things we expect to be true in the final budget deal: Read More

NC Budget and Tax Center

Last week as the Budget & Tax Center released its analysis of the impact of unemployment insurance changes on jobless workers one year later, the Department of Commerce Employment Security Division announced that the unemployment insurance debt will be paid down early.

The resolution of the debt in August 2015 rather than November 2015 will mean that employers will no longer have to pay an additional federal tax that resulted when the Trust Fund came due for the following year. That federal tax represented the primary contribution employers were making to address the debt that was created as a result of tax cuts that they received in the 1990s and the historic job loss of the Great Recession.

As we wrote about in our report released last week, the vast majority of the savings that allowed for this accelerated repayment came from benefits cuts that primarily have reduced the maximum available weeks and the average weekly benefit amount. Both of these changes have hurt jobless workers as they have fewer dollars to make ends meet and continue their job search.

BTC - Changes to UI Benefits

Moreover, because jobless workers have fewer dollars to spend in local communities, these cuts have a ripple effect in local economies. Estimates suggest in this recession and recovery that for every $1 of unemployment insurance payments, $2 in economic activity is either sustained or generated. Each month the fewer dollars for jobless workers is impacting their spending and ability to participate in local economies twofold.

This economic impact and the harm to jobless workers and costs to the state to help these families in other ways are reason enough for policymakers to change the most harmful aspects of current law. By delinking the number of weeks from the unemployment rate to 26 weeks like the majority of states offer and by changing the benefit calculation formula to the two highest quarters of previous earnings while also seriously reforming the state financing of unemployment insurance through a forward financing model, the system can be put back into balance and the debt can still be repaid.