economic security « Washington Policy Watch

December 20, 2011 • 10:11 am 1

Washington’s best-in-the-nation minimum wage protects paychecks, boosts economy

On January 1^st, Washington’s minimum wage will increase by 37 cents to $9.04 per hour, in line with a voter-approved law that provides for raising the minimum wage as the cost-of-living goes up. That bump – making Washington’s the best state minimum wage in the nation – will help increase consumer spending at local businesses and protect jobs that are critical to economic recovery.

“A strong minimum wage is especially important for Washington’s working people, families and economy, since low-wage positions are projected to add significantly more jobs than high-wage occupations in the coming years,” said Marilyn Watkins, Policy Director at the Economic Opportunity Institute.

The Washington State Employment Security Department recently projected the top twenty occupations expected to have the greatest increases in employment numbers between 2008 and 2018. Of those twenty occupations, more than half are low-wage positions.

“The increase in Washington state’s minimum wage to $9.04 on January 1, 2012 is the best economic news we have had for workers in low wage jobs in two years,” said Jeff Johnson, president of the Washington State Labor Council. “This increase will keep many workers out of poverty and keep stores open on Main Street.”

While critics of the minimum wage point to older research to back up their dire economic claims, the newer, more sophisticated studies show minimum wage increases have no statistically significant effect on employment. Research also shows that raising the minimum wage increases the income of low-wage workers and leads to reduced turnover, which means employers spend less on hiring and training new employees.

But even a strong minimum wage is not enough to live on. In 2011, a full-time minimum wage worker in Washington will earn just over $18,000/year. Although enough to keep the family of three above the federal poverty threshold, it is not enough to cover basic daily expenses – such as transportation, childcare and housing – in most areas of Washington state.

Washington’s law, passed in 1998 by a two-thirds majority of Washington voters, raised the minimum wage and tied all future adjustments to cost of living increases. Seven other states – Colorado, Montana, Ohio, Oregon, Arizona, Florida and Vermont – will also increase their minimum wage on January 1^st.

A full analysis of Washington’s minimum wage increase titled “Washington’s minimum wage standard: Protecting workers and families during tough economic times” is available online.

Filed under: minimum wage, economic security, low-wage positions, low-wage workers, Minimum wage

December 16, 2011 • 8:17 am 0

Women’s economic security at risk from widening wage gap, lack of benefits

Washington's Working Women 2012 (2.5MB)

A widening gender wage gap, declining workplace benefits, and state budget cuts are putting Washington’s women at risk for more economic instability and poverty in 2012, according to a new report from the Economic Opportunity Institute, Washington’s Working Women 2012.

Women continue to earn less than men overall – and the gap is widening. In 2010, women brought home just 63% of men’s monthly earnings – an average difference of nearly $1,900. That ratio is worse than 1991, when women made 65% of men’s average monthly pay.

Declining workplace benefits are also endangering women’s economic security. In 2010, Washington firms were less likely to offer every type of workplace benefit than in 2002.

In 2002, 76% of firms provided health insurance to full-time employees; just 54% provided the benefit in 2010.
In 2002, 60% of firms offered retirement benefits to full-timers, down to 36% in 2010.
In 2002, 56% of firms offered sick leave to full-timers, down to 44% in 2010.

Part-time workers – the majority of whom are women – are also less likely to receive every type of benefit. In 2010, just 15% of businesses provided retirement benefits, 22% provided vacation and 11% offered health benefits to part-time workers.

The private sector began to show signs of recovery in 2010, but many of the jobs gained were in the male-dominated sectors of manufacturing, wholesale trade and software publishing. And as state budget problems compound, public sector cuts have hit women particularly hard. Between February 2010 and October 2011, 6,000 jobs in public schools were cut – 74% of which were held by women.

All of these factors have contributed to more Washington women – and their children – living in poverty. In 2010, Washington women were more likely to live in poverty than men, with more than 1 in 7 females (14.5%) living below the poverty line. And two-thirds (63%) of children in single-parent families live below 200% of poverty. Women will continue to struggle to achieve economic security until employers and policymakers take adequate steps to reduce gender gaps in earnings, access to benefits, and likelihood of experiencing poverty throughout life.

Across the country – and in Seattle – advances have been made or proposed to help increase worker economic security. Ultimately, building a better work environment for women will also contribute to a stronger economy for Washington.

Filed under: state economy, economic security, equal pay, gender gap, women

August 26, 2011 • 7:00 am 0

Eliminate the Social Security caregiving penalty to boost women’s economic security

By Tatsuko Go Hollo, EOI Intern

Women have long been identified as society’s caregivers, and there’s plenty of research to back that up. Not only do women spend twice as much time as men caring for members of the household, but nearly three quarters of elder care is performed by women.

Unfortunately, much of this caregiving is unpaid, which can result in disproportionate economic insecurity among women. You might have heard of this referred to as the “motherhood penalty” or “caregiver penalty.”

This penalty affects women’s ability to obtain full-time work, maintain consistent employment and receive benefits through employers. It also reduces the amount of Social Security benefits a caregiver receives in older age. Because so much of this work is unpaid, caregivers have a shorter history of wage work.

This penalty is obvious in the Social Security benefit calculations, as Social Security benefits are based on an average of wages collected over 35 years. For people who spend periods of time out of the workforce to raise children or care for a vulnerable family member, those years are counted as ‘zeros’ in the benefit formula. This results in a lower overall benefit, which is reflected in the lesser benefits received by women over 65 compared to men of the same age.

One alternative to help mitigate this penalty is to provide a credit for time spent caregiving. For example: for each year spent raising children, a parent could eliminate one year – up to a total of five years – from the 35 year averaging period. This means benefits would be calculated based on a 30 year average, offering stay-at-home parents a higher benefit and more economic security in older age.

This idea isn’t novel, as a similar method of calculating benefits is used for disabled beneficiaries. However, it is an approach that could boost Social Security’s already powerful ability to keep women out of poverty. It’s also an approach that deserves more consideration from policymakers who are committed to ensuring Social Security is most effective in providing the economic security it promises.

This blog post is part of the #HERvotes blog carnival.

Filed under: retirement security, disability, economic security, retirement security, social security, women

August 4, 2011 • 9:02 am 4

The real value of Washington’s minimum wage

By EOI Policy Intern Tatsuko Go Hollo

The minimum wage just isn’t worth what is used to be. A recent news article points out that while the minimum wage has seen modest increases over the last several decades, inflation has led to a drop in the value of those wages.

In fact, the minimum wage is now worth less than it was worth in the 1950s. Had the federal minimum wage kept pace with inflation, today’s rate would be $10.39, a far cry from the actual rate of $7.25. Many families of minimum wage workers rely on those wages for more than half of their income. With the value of the minimum wage decreasing, these working individuals can afford less of what they need to support their families.

So what does this mean for Washington? Washington state boasts the best minimum wage in the country at $8.67, meaning low-wage earners are able to afford more of what they need. This is especially important for Washington women and people of color, as both groups are disproportionately represented among minimum wage earners nationally.

Additionally, as minimum wage workers typically spend all of their earnings, that money goes right back into our economy. Consumer spending is critical for economic recovery, especially in Washington, where a significant portion of our general fund revenue is generated from sales tax.

Ultimately, a strong minimum wage benefits not only working Washingtonians, but also contributes to a functional economy- something we all value.

Filed under: minimum wage, economic security, Minimum wage, washington state

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Washington’s best-in-the-nation minimum wage protects paychecks, boosts economy

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