The Invest in Louisiana policy conference is happening in nine days. Click here to get your tickets if you haven’t already registered!
A temporary reprieve for Medicaid recipients
Medicaid recipients are sent letters when it is time to annually renew and provide information to the state. If they do not respond in 30 days, they are automatically kicked off the rolls. This policy has been temporarily suspended, as the Louisiana Department of Health works to ensure no qualified recipients are auto-unenrolled. Sam Karlin of The Advocate has more:
The new eligibility system installed last year was set to drop 75,000 people from the Medicaid rolls because of the automatic closure feature for people who needed to renew their coverage annually. About a quarter of those people had disabilities, half were “children and families” and a quarter were adults who gained coverage through an expansion of the government-sponsored health insurance, (Medicaid Director Jen) Steele said. Before the suspension, enrollees had 30 days to respond to requests for annual renewal information before they automatically lost coverage. The move will not affect the wage check system, which kicks people off Medicaid if they don’t respond to requests for wage information within 10 days, said LDH Spokesman Bob Johannessen. … The auto-closure feature is suspended only for people whose annual renewal took place in July and August of this year, Steele said, adding “it appears” they failed to respond to their renewal letters.
And on that note, the Medicaid program turned 54 on Tuesday. Happy birthday Medicaid!
The Black homeownership crisis
Decades of racist housing policies have created large racial gaps in home ownership and wealth attainment. The Great Recession exacerbated this problem, and while most minority groups have slowly recovered from the housing crash of 2008, black home ownership has continued to decline and has hit an all-time low in 2019. The Urban Institute’s Caitlin Young has a new blog that sheds light on this crisis:
Black homeowners have been the slowest to recover from the Great Recession, and their homeownership rate has decreased to below precrisis levels. Choi’s research demonstrates that there would be 770,000 more black homeowners if the homeownership rate recovered to its precrisis level in 2000.
The gap between white and black homeownership is now so large, that white high school dropouts are now more likely to own a home than college educated African Americans.
Although homeownership rates increase as educational attainment increases for both black and white Americans, white high school dropouts have a homeownership rate of 60.5 percent, compared with 56.4 percent for black college graduates. … Student loan debt was mentioned as a potentially significant contributor to the growing gap between black and white homeownership. Of all racial groups, African Americans have more student loan debt, and African Americans with a college degree are five times more likely to default (PDF) on their student debt than white Americans. These inequalities in the shouldering of the student debt burden may therefore also be contributing to the widening homeownership gap, as those who carry or default on student debt are less likely to meet mortgage lending credit standards.
Baby bonds may solve racial wealth gap
While millions of white families in the mid-20th century were able to take advantage of the G.I. bill, qualify for a 30-year-mortgage, and benefit from the booming economy, minorities were barred from accessing many of these resources. Flash forward to 2019, and one can see these racist policies have helped create a massive wealth gap between white and black families. As of 2016, the median net worth of a white household was $171,000, while the median net worth of a black household was $17,600. This gap has significant repercussions: Black families must take out more loans for their kids to attend college, they have less money to retire on, and unexpected large expenses like medical bills could send them into bankruptcy. Several Democratic presidential candidates have rolled out proposals to address the problem, which were then analyzed by the Center for American Progress. U.S. Sen. Cory Booker’s baby bonds proposal is the clear winner, as David Leonhardt of the New York Times reports:
They would do far more than any of the other policies to reduce the racial wealth gap. In Booker’s version, each newborn would receive a savings account of $1,000. As much as $2,000 would be added in each successive year (with poorer families receiving the maximum), until the child turned 18, after which she or he could use the money for college or a home purchase, among other things. The version that the calculator analyzed is broadly similar to Booker’s and would reduce the white-black wealth gap by 24 percent over the next four decades. None of the other four policies would reduce it by more than 10 percent. The proposal with the second biggest effect is one that would increase retirement savings for workers whose employers don’t offer retirement benefits. The other three ideas would all have a modest effect on the wealth gap: debt-free college and student-loan cancellation; a crackdown on predatory lending; and tougher enforcement of anti-discrimination laws in housing.
Underemployment data shows minorities are benefitting less from economy
Disaggregating labor market data by race and gender is vital to determine the true status of the economy. The Hamilton Project of the Brookings Institute’s new blog makes the case for studying underemployment data, and including part-time workers looking for full-time work as well as those who want full-time work but have not looked in the last four weeks in the metric of “underemployed.” Ryan Nunn, Jana Parsons, and Jay Shambaugh of The Hamilton Project discuss why underemployment is an important metric when determining how certain demographics are faring in the economy:
(T)he unemployment rate misses the full extent of labor market distress. This omission is especially important during economic downturns and for black and Hispanic workers. The underemployment rate is also helpful for determining the amount of labor market slack that remains once the unemployment rate has fallen to a low level. A focus on the unemployment rate alone would have suggested that the labor market experience of black workers was improving in 2010 when the underemployment measure showed deterioration, and an exclusive focus on unemployment would also have missed the particularly sharp deterioration of conditions for Hispanic workers in 2007–8. Examining patterns in underemployment is a partial remedy. However, the Bureau of Labor Statistics does not release a seasonally-adjusted monthly series for individual racial groups making underemployment rates less useful for real-time analysis to understand turning points in the business cycle. Still, much can be learned from these data to better understand how well the labor market is functioning for all workers.
Number of the Day
770,000 – The number of additional homeowners today had homeownership among African Americans recovered its pre-Great Recession levels. (Source: The Urban Institute)