End the shutdown

End the shutdown

The current government shutdown is now the longest in American history, and the economic ripple effects are threatening to become a wave. U.S. Rep. Cedric Richmond, writing in a guest column for the Advocate, outlines the pain it’s causing for federal employees in Louisiana, and how funding for a border wall could divert funds meant for hurricane protection:

Of the more than 800,000 furloughed federal employees, 5,858 of them are Louisianans working without pay. Many workers live within tight budgets and are now being held hostage. Imagine having to decide whether to pay your car note or buy urgent medication, or your pay for rent or child care. It is immoral to put so many people in financial binds when many of them also have families to provide for. There are millions of Americans who rely on vital government services and are currently at risk because of the shutdown. What is even more painstaking for Louisiana residents is that the president’s wall could take necessary funds away from the West Shore Lake Pontchartrain Hurricane Protection Project — funds already allocated to Louisiana in the 2019 fiscal year budget.

The New York Times’ Jim Tankersley reports that the average federal employee has missed out on $5,000 in total wages since the shutdown began, and that each day of the shutdown means another $200 million in unpaid wages – money that’s not circulating through the economy in grocery stores, restaurants and housing lenders. The White House’s own economists are now predicting it could lead to an economic contraction.

(T)he administration now calculates that the shutdown reduces quarterly economic growth by 0.13 percentage points for every week that it lasts — the cumulative effect of lost work from contractors and furloughed federal employees who are not getting paid and who are investing and spending less as a result. That means that the economy has already lost nearly half a percentage point of growth from the four-week shutdown. (Last year, economic growth for the first quarter totaled 2.2 percent.)

 

Louisiana should invest in experienced teachers
Starting salaries for new teachers in Louisiana are above the national average. But teachers quickly lose ground to their peers in other states as their careers advance: Louisiana ranks 17th in the nation for how it pays first-year teachers, but 37th in overall teacher pay. The Advocate’s Will Sentell reports on when the pay drop-off starts and what is causing it:

“I believe in the past, possibly over the past 7-10 years, local school boards have focused on maintaining and increasing their pay scales on starting teacher salaries,” Shane Riddle, legislative and political director for the Louisiana Association of Educators, said Tuesday in an email. The drop-off starts in about the fifth year of teaching, Riddle said. That means periodic increases for teachers in Louisiana are not keeping pace with Southern states and others, he said.

One reason more experienced teachers make less: other states offer a bigger reward for advanced degrees than Louisiana does.

Keith Courville, executive director of the Associated Professional Educators of Louisiana, said salaries start falling behind here partly because teachers have less incentive to earn advanced degrees. “We have a culture in our state of not valuing higher education attainment,” he said. Courville said that, when he was a teacher, he spent two years investing in a master’s degree that only resulted in a $500 per year raise. “If you look at raw calculations it was not worth it in terms of how much money you spent,” he said. “Even states with starting salaries lower than us you might get a $5,000 raise once you get a master’s degree,” Courville said. “So they are above us once you get the master’s degree.”

Teachers in Louisiana are supposed to receive half of any increases in annual state aid for public schools through the Minimum Foundation Program. However, as LBP’s Neva Butkus reports, funding for the MFP has remained stagnant for the better part of a decade.

 

Working-family tax credits work for working families
The Earned Income Tax Credit and the Child Tax Credit together increased the incomes of 29.1 million Americans in 2017, according to analysis of new Census data by the Center on Budget and Policy Priorities. These important credits, which support working families, lifted 8.9 million people above the poverty line, including 4.8 million children. While these credits offer a powerful direct benefit to the families that claim them, they also come with other benefits not reflected in the numbers:

Even these figures likely understate the credits’ anti-poverty effects. That’s because while boosting incomes directly, the EITC also encourages work, raising people’s earnings. This additional anti-poverty effect, which isn’t part of Census’ poverty reduction figures, nearly doubled the number of people that the EITC lifted out of poverty in families with a single mother aged 24-48 without a college degree in the 1990s, researchers find. Also, a growing body of research links income from these tax credits to better infant health, improved school performance, higher college enrollment, and projected increases in earnings in adulthood. As a result, the tax credits may reduce poverty not only in the near term, but also in the next generation.

 

Majority of Americans support raising top tax rate to 70 percent
Rep. Alexandria Ocasio-Cortez’s proposal to increase the nation’s top marginal tax rate to 70 percent are not as ‘radical’ as some of her critics claim. A new Hill-HarrisX poll shows that a majority of Americans support the freshman congresswoman’s idea, including a surprising 45 percent of Republican voters. The Hill’s Matthew Sheffield reports:

Women support the idea by a 62-38 percent margin. A majority of men back it as well, 55 percent to 45 percent. The proposal is popular in all regions of the country with a majority of Southerners backing it by a 57 to 43 percent margin. Rural voters back it as well, 56 percent to 44 percent. Increasing the highest tax bracket to 70 percent garners a surprising amount of support among Republican voters. In the Hill-HarrisX poll, 45 percent of GOP voters say they favor it while 55 percent are opposed to it. Independent voters who were contacted backed the tax idea by a 60 to 40 percent margin while Democratic ones favored it, 71 percent to 29 percent.

 

Number of the Day
$653 million  – The economic impact 34 Louisiana Primary Care Association (LPCA) health centers had on the state in 2017. These centers serve uninsured and medically underserved populations in Louisiana. (Source: Louisiana Primary Care Association)