Aug. 29, 2013

Aug. 29, 2013

LBP releases a new report; ACA lowers insurance premiums; the income gap overshadows the race gap; 40 percent of U.S. unemployed have been without a job for more than six months; and Louisiana has the third highest combined sales tax rate in the nation. 1 percent - The inflation-adjusted change in the typical Louisiana worker’s wages from 1979 to 2012. (Source: State of Working Louisiana 2013)

State of Working Louisiana 2013
Wages for the typical Louisiana worker are virtually the same today as they were in 1979, on an inflation adjusted basis, and the percentage of working-age adults who are participating in the workforce is at a 30-year low. Those are two of the key findings in a new report, State of Working Louisiana 2013, being released today by the Louisiana Budget Project. The report also finds that a steady loss of jobs in manufacturing and government is one reason Louisiana’s unemployment rate is creeping steadily upward after years of being well below the national average. Read the full report by clicking here and read a news release that summarizes the major findings here.

Affordable Care Act lowers insurance premiums for small firms by 6 percent
Workers at firms employing fewer than 100 workers are expected pay almost 6 percent less in premiums in 2016 under the Affordable Care Act than without the health care reform law, according to a new study by the nonprofit Rand Corp. Nationally, average premiums for equal plans would cost $5,837 with the Affordable Care Act in effect and $6,192 without it — a $355 savings. “The rate-shock concerns were overblown,” Christine Eibner, a senior economist at Rand Corp., told USA Today. “It’s likely the effect will be small.” The Kaiser Family Foundation reports almost 60 percent of American adults under age 65 are covered by employer-sponsored plans, making it by far the most common way people get health insurance.

Growing income achievement gap overshadows race
When Martin Luther King Jr. gave his “I Have a Dream” speech a half-century ago, black children lagged their white peers in school by more than three years, while poor children fell behind their wealthy peers by about a year or so. Fifty years later, the test-score gap between poor and rich children is more than 50 percent larger than the black-white achievement gap. The Hechinger Report explains one of the likely causes of the expanding class gap is the country’s widening income inequality. Parents in the top quintile of income in the U.S. (households earning at least $102,000 in 2011) spend more than double what parents in the second quintile (earning at least $62,000) spend on trips for their children. That doesn’t mean poor families aren’t investing in their children. In fact, poor families spend a higher percentage of their paychecks toward their children than their wealthier counterparts.

Nearly 40 percent of unemployed Americans out of work for more than six months
Long-term unemployment is a grim reality for 4.2 million Americans. As the Urban Institute reports, the high rate of long-term employment — more than 36 percent of the unemployed have been out of work for six months or more —  results from employers hiring too slowly to make up for the tremendous job losses during the Great Recession. Long-term unemployed workers are more likely to be minorities, impoverished, disabled, unmarried and less educated. The consequences of long-term unemployment include loss of income, declining mental and physical health, low academic achievement for children in families with long-term unemployed parents, strained public services and low tax revenues.

Louisiana’s combined sales tax rate third highest in the nation
Louisiana’s combined state and local sales tax rate is the third highest in the nation, according to the conservative Tax Foundation, which ranks states according to their combined sales taxes because “a state with a moderate statewide sales tax rate could actually have a very high combined state-local rate compared to other states.” Louisiana appears to fit that definition perfectly.  The state’s 4 percent statewide sales tax is one of the lowest in the nation. But the average local sales tax rate (4.89 percent) is the highest in the nation — partly due to Louisiana’s generous homestead exemption. While Louisiana’s combined sales tax rate is higher than all of its neighboring states, the gap is not wide enough to entice most consumers to cross state lines in search of a bargain.

1 percent - The inflation-adjusted change in the typical Louisiana worker’s wages from 1979 to 2012. (Source: State of Working Louisiana 2013)