Tuesday, October 27, 2015

Tuesday, October 27, 2015

The Elephant in the Room; Tipping into poverty; Borrowing from Mom and Dad; and Food aid cut “undermines human dignity”


The Elephant in the Room
The Senate Finance Committee met on Monday to examine Louisiana’s health care budget. Amazingly, they managed to make it through the entire three-hour meeting without saying “Medicaid expansion,” even though the facts are clear that expansion would save the state millions and help stabilize hospitals. Kevin Litten with nola.com reports:


Many of the Senate Finance committee members’ questions for staffers and DHH officials had to do with looking for cost savings, including the possibility of eliminating so-called “optional” parts Louisiana’s Medicaid program — things that the federal government will help fund if the state requests it. But those programs include things like hospice, pediatric day health centers, and prescription drugs for adults — all of which the members indicated they had no stomach for eliminating. Sen. Fred Mills, R-Parks, wondered whether DHH officials could return with some suggestions for cost savings. “If you were tasked by this committee to come up … with ways to save money internally as an agency and a strategic plan, could you present this to us?” Mills asked. DHH Secretary Kathy Kliebert said that one of the top priorities for DHH is “being able to have a more stable funding system for the hospitals.”


In an interview following the meeting, Mills said that Medicaid expansion has come up “eight or nine times” and those discussions went nowhere. So Monday’s meeting was designed more to educate members about the costs.”It’s been there, done that and until there’s new leadership, why keep having the discussion until the new administration comes in,” Mills said.


Continued delay on Medicaid expansion hasn’t just cost the state tens of millions of dollars in potential savings that could have helped balance the budget, but has also needlessly increased human suffering. Worse, it has likely resulted in death, as the tragic story of Jenny Steinke of Idaho illustrates:  the 36-year-old died in September from asthma, which could have been easily managed if she had health coverage. But she was uninsured and stuck in the “coverage gap” because Idaho, like Louisiana, refused to help her. “Death by poverty,” her mother-in-law called it.


Tipping into poverty

David Cooper with the Economic Policy Institute takes a look at how waiters and waitresses fare in states that require a $7.25 an hour minimum wage versus those–like Louisiana–that allow workers to be paid the tipped-minimum of $2.13 an hour. While rates of poverty among non-tipped workers are similar in the two groups of states, wait staff in $2.13 states are much more likely to live in poverty:


The poverty rate among waitstaff and bartenders is dramatically lower in states where tipped workers must be paid the regular minimum wage as a base wage than in states where restaurants can pay tipped workers a base wage less than the full minimum wage. Federal law permits restaurants to pay tipped workers a base wage of $2.13 per hour so long as the weekly total of their tips plus the base wage is the equivalent of a week’s salary at the minimum wage. If not, restaurants are supposed to make up the difference, although this requirement is difficult to enforce and there is considerable abuse.  


In the states where restaurants are permitted to pay waitstaff and bartenders the federal tipped minimum wage of $2.13 per hour, 18 percent of these workers are in poverty…The poverty rate of waiters and bartenders is much lower in the seven states that require restaurants to pay waitstaff and bartenders the regular minimum wage regardless of tips: in these states, it is nearly 8 percentage points lower than in the $2.13 states…Because the poverty rates of non-tipped workers do not vary between the three groups of states, differences in tipped minimum wage policies are likely driving the substantially different poverty rates of waitstaff and bartenders.


Borrowing from Mom and Dad

Presidential candidate Donald Trump likely drew little sympathy when he told a crowd in New Hampshire that he didn’t always have it easy. His dad made him a “small loan of a million dollars” to get him started in real estate, and he had to pay it back with interest! But gaffes aside, Trump’s comment reflect something deeper and more troubling about wealth in America. The Washington Post’s Emily Badger has details:


Disparities in intergenerational wealth transfer in America are a significant part of the gap between the haves and have-nots. They’re also an important piece of lingering racial inequality in America. A 2011 Urban Institute study found that black families and Hispanic families are five times less likely to receive large gifts and inheritances than white families. Other studies have suggested that between 10 and 20 percent of the vast black-white wealth gap in America can be explained by differences in wealth transfer. Today high-earning black households have, on average, less wealth than low-earning white ones. And black students are more likely than white ones to graduate with debt. Inheritances are part of how historic forms of discrimination are passed on to young generations today. A black family, for instance, that was denied a chance to buy a home in the 1950s is a lot less likely to pass on wealth to a grandchild who needs a down payment to buy a home today. Not surprisingly, home-ownership rates for blacks remain about 30 percentage points below whites…And here we’re talking about the consequences of needing a lot less than a million dollars. For many, the alternative to lacking money isn’t getting it from dad. It’s not having it at all.


Food aid cut “undermines human dignity”
Jeanie Donovan with the Jesuit Social Research Institute and Jane Remson, director of the Bread for the World New Orleans, don’t mince words in their letter to the Advocate criticizing the state’s recent decision to limit food assistance for unemployed adults:


The stated rationale for the decision, that it will encourage and increase self-sufficiency, is misguided and draconian. The decision ignores economic realities in the state, especially in economically depressed parishes. It also ignores the responsibility of the government to protect, rather than undermine, human dignity and human life…Economic recovery has been most pronounced in the southern portion of the state, while in central and northern Louisiana, the economy has been stagnant. In three parishes in the Mississippi Delta, for example, the unemployment rate is still in the double digits. In 31 of the state’s 64 parishes, the unemployment rate still is more than 7 percent, which is above the threshold the Federal Reserve established as a measure of significant economic progress.


Number of the Day
18 percent – Rate of poverty for waiters and waitresses in states that allow a $2.13 an hour tipped-minimum wage, compared to 10 percent in states that require $7.25 (Source: Economic Policy Institute)