Too Many People Working Too Many Hours Without Overtime Pay

August 28, 2014

Some years ago, I worked for McDonald’s Corporation. So I recall well the last time the Department of Labor updated its overtime rules. Let’s just say, McDonald’s and its retail-business lobbying partners got pretty much what they wanted — freedom to deny overtime pay to many more workers.

This is one, though not the only reason that average compensation in private-sector jobs like food preparation, sales and a category the Bureau of Labor Statistics labels “office and administrative support” has barely increased since 2001.

Retiring Senator Tom Harkin and eight Democratic colleagues have introduced a bill to restore overtime rights to about 35% of salaried workers — the main type that employers may legally require to work overtime without overtime pay.

But DOL doesn’t need new legislation to update the rules or to close what Harkin refers to as a “loophole” — the very thing McDonald’s and collaborators wanted.

President Obama has, in fact, directed Labor Secretary Tom Perez to “modernize and streamline” the rules. And Perez clearly has an overhaul in mind, though he’s not ready to say when we’ll see it.

This is one of those rulemakings that’s going to get lots of comments — and lots of behind-the-scenes input, as well as very public efforts to shape opinion. So I thought a brief summary of the current rule and what we may expect might be helpful

Overtime Basics

The Fair Labor Standards Act has always required employers to pay some, but not all of the workers on their payrolls one-and-a-half times their regular wage when they work more than 40 hours a week.

Those who don’t qualify are mostly salaried workers, though some who get paid on a fee basis may also be exempt. All are, by definition, “white collar” workers whose primary duties fall into one of five categories — executive, administrative, professional, computer and outside sales.

Deciding who’s exempt from the requirement involves a two-part test, except for the outside sales people. The first is a compensation threshold. Anyone below it qualifies for overtime pay.

The current threshold is $455 a week — slightly under the federal poverty line for a four-person family. At its peak, in 1970, it was $1,071, in inflation-adjusted dollars, the Economic Policy Institute reports.

For a relative few, clearing the threshold is the end of it because their salaries put them into the “highly-compensated” category — currently a minimum of $100,000 a year.

For the majority, there’s a second test intended to identify employees whose primary duties involve management, supervision, other exercises of “discretion and independent judgment” and/or high-level professional expertise.

The rules specify the sorts of duties that meet the test for each of the categories. But here’s the kicker. The current rules, unlike their predecessors, don’t say how much time an employee must spend on them.

So, for example, an assistant manager at a fast food restaurant who spends virtually all her time working shoulder-to-shoulder with crew members could be exempt under the “executive” duties test so long as she created their work schedules and made recommendations — not necessarily decisions — about hiring and firing them.

What the Department of Labor May Do

Virtually everyone expects DOL to propose an increase in the salary threshold. It’s already got a range of recommendations to choose from — from $960 on the low end to $1,222 on the high end, among those I’ve seen.

The Senate Democrats’ bill would phase in an increase to $1,090 a week and then index it so it would automatically rise with consumer prices — a feature economists Ross Eisenbrey and Jared Bernstein earlier recommended to DOL.

Most speculators think DOL will reinstate the time allocation part of the duties test that its predecessor effectively eliminated in 2004 — or some variation thereof.

In fact, Perez has already said he wants to deal with the “loophole” that allows employers to exempt workers who spend virtually no time on the primary duties the current rule sketchily defines.

He may look to the Senate Democrats’ bill for a model. It would narrow the loophole by converting a former 50% “rule of thumb” to an absolute test. In other words, employees could be exempt only if they spend at least half their time on those primary duties.

One labor lawyer speculates that DOL may instead (or also) tighten up the definitions of the types of jobs that may be exempt.

Job Killer or Job Creator?

The National Retail Federation’s Senior Vice President for Government Relations says that the as-yet unseen proposal “if implemented, would have a significant job-killing effect.”

We hear somewhat similar, though subtler alarm bells from other spokespersons for affected businesses. The head of labor law policy at the U.S. Chamber of Commerce, for example, says that the prospective rule changes will “make employees more expensive.”

He draws a parallel to increasing the minimum wage, which the Chamber earlier claimed “destroys jobs.”

The opposite seems more likely. When Congress passed the Fair Labor Standards Act, during the depths of the Great Depression, it included the overtime requirement in part because employers would then find it cheaper to hire more workers than to pay those they had extra money to work extra hours.

That’s how labor economist Daniel Hamerish, among others, thinks the plan Obama sketched out will work. “I would argue it’s a job-creation program,” he told reporters at the Washington Post.

This and much more before we’ve seen anything approaching a formal proposal. So we’ve got a lot of backing-and-forthing to look forward to.

Meanwhile, Happy Labor Day to all of you who don’t have to work, with or without overtime pay.

 

 


Another Round in the Debate Over Who Is Truly Homeless

August 25, 2014

The National Alliance to End Homelessness has again raised objections to the proposed Homeless Children and Youth Act — the formal title of a pair of bills now pending in Congress.

As I earlier wrote, they would expand the definition of “homeless” that controls uses communities may make of their federal homeless assistance grants.

They would, among other things, extend eligibility to homeless children and youth if they’re living doubled up with friends or relatives or in a cheap motel, just as they’re already eligible for services from public schools that receive funds under another part of the same law.

Families and children could become eligible in other ways as well, as could youth who are out in the world by themselves, without a “fixed, regular, and adequate nighttime residence.”

NAEH argues that federal funds for homeless people can’t even meet the needs of those already eligible. “Tens of thousands of families and unaccompanied youth go unsheltered every night,” it says, “because there is not enough money to serve them all.”

No one, I think, would say otherwise. Funding for homeless assistance grants has remained virtually flat since Fiscal Year 2010. And they will get either no increase or a very small one when Congress gets around to agreeing on funding for the upcoming fiscal year.

NAEH also notes egregious under-funding for programs the U.S. Department of Health and Human Services administers for unaccompanied youth who’ve run away from home or are homeless for other reasons.

These programs, plus HUD’s serve barely 14% of these youth now, according to the Alliance’s estimates.

But NAEH goes further. “[M]ost people in doubled up households are not homeless,” it says. And the HEARTH Act, which governs HUD’s homeless assistance program, already covers those who are.

Some of them are people who’ll have no place to stay at the end of two weeks. Others are those who’ve fled — or urgently need to flee — the place they’ve been living because of domestic violence or some other dangerous situation, if they don’t have the resources or networks to move into other housing.

For the rest, NAEH says, the answer is HUD-funded rental assistance. But, it continues, there’s not enough money for that either. Indeed.

Only about one in four very low-income households receives rental assistance, according to HUD’s latest (somewhat outdated) assessment. And the prospects for the remainder are dismal.

In fact, we may be looking at a loss of even more than the 72,000 or so housing vouchers local agencies retired to deal with the across-the-board cuts in 2013, the Center on Budget and Policy Priorities reports.

Like as not, the agencies will also have to keep more public housing units vacant because they won’t have the funds to make essential repairs.

So NAEH is right in saying that we need a significant increase in funding for affordable housing.

What divides the Alliance from the large coalition that supports the bills is its view that we need to preserve the current restrictive definition of “homeless” so that “the very limited resources” available remain “dedicated to children, youth, and families who are without any housing at all.”

It essentially pits their needs against those of families and youth who are living doubled up. The proposed legislation, it says, “asks people living on the street and in shelter to compete with them.”

Not really. The bills would merely allow communities to include services for the newly-eligible families and unaccompanied youth in the plans they must submit to receive homeless assistance grants — and prohibit HUD from denying them grants merely because it has other priorities.

The larger issue, I suppose, is whether we should draw a bright, white line between families who are living with Aunt Suzy one month and a charitable friend the next and those who’ve exhausted such options.

Should we put families living in motels through two extra weeks of acute anxiety and stress before we offer them HUD-funded rapid re-housing, knowing they won’t have enough money to stay where they are?

And do we really want young people who’ve left their families, been kicked out or aged out of foster care to bounce from one couch to another when we know this puts them at risk of abuse, problems (or worse problems) in school and more?

NAEH apparently feels we must because the Homeless Children and Youth Act doesn’t increase funding.

The National Association for the Education of Homeless Children and Youth vehemently disagrees. It’s “nonsensical,” the Association says, to define a problem by the funding currently available to address it.

That just gives policymakers “an unrealistic view of the scope of the problem.” Congress “needs to know who and how many people are without housing in order to define effective solutions,” NAEHCY contends.

This seems to me as incontrovertible as what NAEH says about insufficient federal funding for both homeless and affordable housing programs. Yet Congress already knows more than enough to know it’s short-changing them.

Amending the HEARTH Act to include doubled-up families, motel-dwellers who can’t afford their rooms, couch-surfers and others precariously and perhaps unsafely housed would give communities more flexibility to develop plans based on their own assessments of local needs.

But until we have a Congress that’s prepared to spend more on our safety net, every dollar spent on the newly-eligible will be a dollar less for other homeless people — at least so far as federal dollars are concerned.

That much, I think, NAEH is right about. Whether dollars spent to keep doubled-up families and the rest from joining the already-eligible on the streets or in shelters is another matter.


More Earnings May Not Mean Less Hardship

August 20, 2014

Everyone with even a passing interest knows that the Census Bureau’s poverty thresholds are far too low — in part because they’re based on a long-outdated spending pattern.

The Urban Institute’s Molly Scott has a more fundamental objection. “All our national poverty statistics,” she says, “reflect economic poverty.” In other words, they measure total household income — both earnings and payments from programs like unemployment insurance and SSI.

The Census Bureau’s Supplemental Poverty Measure also includes the value of some near-cash benefits, e.g., SNAP (food stamps), housing subsidies, home energy assistance.

But Scott has something quite different in mind than a better version of our poverty measure. “The problem,” she says, is that “the arbitrary poverty line is a bad measure of material poverty, the amount of hardship people experience meeting their basic needs.”

People both above and below the poverty line often struggle to get through the month. The only difference between them is “the mix of resources they use and the costs associated with work,” Scott says.

She gives us two hypothetical single mothers in the District of Columbia. Both have two school-age children. They live next door to each other, so the rent on their apartments is the same. They both have minimum wage jobs. The difference is that one works part time, the other 60 hours a week.

The part-time mom’s family gets a larger SNAP benefit because the household’s income is lower. She’s somehow managed to get a housing voucher — again because her income is extremely low.

At the same time, her transportation costs are lower, presumably because she doesn’t work every day. And she doesn’t have to pay for child care because she works only while her kids are in school.

The end result is that her gross income is much lower, but her family is actually somewhat better off. Probably still facing struggles, but not actually in the hole, like the family headed by the other mom, whose earnings put them nearly $10,000 above the federal poverty line.

The moral of this story is that policymakers — and others — who champion work requirements and other strategies “to get people to work more” are often actually looking for more ways to minimize spending on programs that help poor people make ends meet.

We may spend less, but achieve little or nothing to alleviate hardship, as Scott’s time-and-a-half working mom’s situation shows.

Scott’s conclusion is more cautionary than prescriptive. “[W]e need to make sure our policies and programs do more than swap out subsidies for low-income wages that won’t change people’s quality of life.”

She refers to “real ladders of opportunity and supports along the way.” Which is all very well and good, but we need to do something about those low-wage jobs as well — and about supports for people who, for various reasons, can’t climb a ladder into a genuine living wage job.

For our single mothers in the District, that would be a job paying $32.95 an hour, assuming full-time, year round work. This would give them an annual income nearly three and a half times higher than the poverty line for their families — and about $1,950 more than the median for all households in D.C.

We’ve got bills in Congress that would raise the floor the “ladders of opportunity” rest on. There’s the long-stalled minimum wage increase, of course, but also a pair of bills that would, among other things, ensure that workers don’t get shorted if they’re sent home early or required to work for awhile and then again later because their employers go in for “just-in-time” scheduling.

We’ve got bills that would guarantee most workers some time off with pay so they could stay home when they were sick or for other compelling reasons, e.g., childbirth, an ill family member who needs care.

We’ve even now got a bill that would help ensure that some of the 26 million or so workers employed by federal contractors get paid what they earn.

And, of course, President Obama has used his pen — or as some Republicans say, disregarded the Constitution — to both raise their wage floor and better protect them against wage theft, as well as some other prohibited labor practices.

But the mighty pen can’t boost federal funding for child care — the second largest item in the living wage budget for our D.C. single-mother families. It can’t do anything about the cost of housing, which, as you might expect, is the largest.

And it’s highly doubtful Congress will either — any more than it will raise the minimum wage or pass all the other bills that would somewhat improve the financial circumstances of low-wage workers.

What’s more frustrating, in a way, is that there is no silver bullet — or round of silver bullets — ready for policymakers to fire, if they choose. Material poverty seems to me even more complex than plain vanilla economic poverty.

Which isn’t an argument for doing nothing. There’s a lot that can be done, much of which we already know. It is an argument, however, as Scott implies, for rejecting out of hand solutions that rely solely on getting more people into the workforce.

 

 


Bills Would Bring Income Support for Low-Income Seniors and People With Disabilities Into the 21st Century

August 18, 2014

Nearly 8.4 million poor and near-poor people in this country depend, at least in part, on SSI (Supplemental Security Income) benefits to make ends meet. Most are people under 65 who have severe disabilities, but roughly 2.1 million are seniors.

SSI benefits are extremely low — currently a maximum of $721 a month for individuals and $1,082 for couples, when both spouses qualify. They’re the only source of income for more than half the people who receive them.

This is one, though probably not the only reason that the poverty rate for working-age adults with disabilities is more than 16% higher than the rate for those without them.

It’s also probably one reason that nearly one in seven seniors lives in poverty, according to the Census Bureau’s latest Supplemental Poverty Measure report.

Bills introduced in Congress would improve the financial circumstances of many SSI recipients — and in several ways. They’d also enable more low-income seniors and people with disabilities to qualify.

The maximum benefit would still inch up annually, based on increases in the consumer price index the Social Security Administration uses.

But the bills, as their title suggests, would restore SSI by updating and then indexing to a consumer price measure the dollar amounts of three provisions that haven’t been adjusted for a very long time — in two cases, not since the program was created in 1972.

The bills would also wholly eliminate a provision that may deter friends and family members from lending a helping hand — and penalizes beneficiaries when they do.

Further explanation of some pretty complicated stuff.

Exclusions. SSI benefits are adjusted down from the maximum based on two types of income SSI recipients may receive. But in both cases, the adjustments begin only if the income exceeds a certain amount. This is known as an exclusion.

One exclusion applies to income earned from work. At this point, it’s $65 a month — about nine hours at the federal minimum wage. Any earnings above the amount reduce benefits at a rate of 50 cents for every dollar earned.

The proposed Supplemental Security Income Restoration Act would immediately raise this exclusion to $357, nearly restoring the value it originally had.*

It would thus also restore the incentive to work, when possible. So it would, among other things, encourage recipients to see whether they could “graduate” from SSI by engaging in substantial gainful activity.

The second exclusion applies to certain other types of income, e.g., retirement benefits, interest on savings or some combination thereof. It’s currently $20 a month. Anything more reduces benefits on a dollar-for-dollar basis. The bills would initially raise this exclusion to $110.

Assets. To become — or remain — eligible for SSI, a senior or severely disabled person can have no more than $2,000 in savings or other resources that could readily be converted to cash, e.g., a life insurance policy, heirloom jewelry (unless the recipient wears it). The asset limit for couples is $3,000.

Neither limit has been adjusted since 1989, when dollars went a whole lot further than they do now.

The very low limits pose significant problems. From one perspective, they exclude people who genuinely need the benefits. From another, they keep SSI recipients from saving enough to cope with all but the most minimal emergencies.

As a benefits coordinator at Bread for the City notes, moving costs alone may exceed the limit. So it can keep recipients stuck in housing they can’t afford — or perhaps in supportive housing they no longer need.

She also notes the perverse incentive to spend down savings, even on things not needed — and also to rapidly spend down the lump sum back-payments the SSI program frequently makes because the approval process tends to be slow.

The bills would increase the asset limits to $10,000 for an individual and $15,000 for a couple. Then, as I said, they would annually rise to preserve their real-money value — just as the exclusions would.

In-Kind Support and Maintenance. Some very complicated rules apply when recipients don’t pay the full costs of their food and shelter, with or without SNAP (food stamp) benefits and housing assistance.

Even the Social Security Administration finds the rules “cumbersome to administer” — and both burdensome and intrusive for recipients.

Basically, SSI benefits are reduced, up to a third, when recipients live with someone else and don’t pay their full share of food and housing costs. Exceptions here if the someone else is a spouse or the recipient a minor-age child.

But when the child turns 18, the benefit cuts kick in — and they come on top of any cuts due to income exceeding the exclusions.

Benefits are also reduced if, for example, a friend or relative pays a utility bill — or buys some groceries when, as so often happens, SNAP benefits run out before the end of the month.

The SSI Restoration Act would repeal this part of the law — and with it, the unintended undermining of what we like to think of as America’s family values.

I don’t suppose I need to tell you that the bills are going nowhere in this Congress. But perhaps they’ll spur some movement toward reforming a good program that sorely needs revisions to bring it into the 21st century.

* The value would have been fully restored, with a little extra if Congress had passed the SSI Restoration Act last year, when it was introduced in the House. This is also true for the general income exclusion.

 


What Kind of Education Will Ex-Offenders Come Home With?

August 14, 2014

“Everybody comes back from prison with an education,” said the Urban Institute’s Jesse Jannetta at a recent briefing. The issue is what s/he’s learned. It could be that society doesn’t care or how to stay safe by linking up with a gang. New ways to get drugs perhaps.

On the other hand, it could be employment-related skills, including basic literacy. Educating inmates pays off, according to a RAND corporation meta-analysis of findings from previously-published studies.

Correctional education, as the researchers call it, isn’t a silver bullet. But it’s worth the investment — not only, as they conclude, because it reduces the extraordinary costs we collectively pay for putting so many people in prison, but because it can mean a genuine second chance for those who are released.

Basic Facts and Figures

About 2.2 million people are in our country’s prisons and jails. More than 70,000 return to their communities each year. And more than 40% of those released from state prisons, which house the vast majority, are back behind bars within three years.

There are various reasons so many ex-felons go back through the revolving door. Inability to get a steady, legal job is a big one.

Much has rightly been made of employers’ refusal to even consider hiring people with a criminal record. But it’s also the case that a large number of returning citizens lack even the minimal qualifications employers commonly look for.

Education and Basic Skills

The figures RAND had to work with are quite old — as are the figures cited above. The most comprehensive I’ve found reflect the results of a 2003 survey conducted by the National Center for Education Statistics.

Well over a third of the adults assessed lacked a high school diploma or the equivalent. Some weren’t even close. Nine percent had dropped out before starting high school.

Larger percents lacked full competency in the basic literacy skills one needs to cope with everyday tasks, e.g., reading instructions, understanding and filling out a job application, balancing a checkbook.

Below basic scores on these ranged from 16% for “prose literacy,” i.e. understanding a piece of written text, to 39% for quantitative literacy. On the other hand, considerably larger percents scored in the intermediate range for the two non-quantitative types of literacy NCES tested. So we see both opportunities and challenges here.

What’s missing, however, are skills needed to perform everyday tasks on a computer — and as of this year, to take the GED exams. Former prisoners return “digitally illiterate,” the director of the District of Columbia’s Office on Returning Citizens said at the briefing.

Also missing are skills required for certain types of jobs, e.g., auto repairs, construction, food preparation. We do, however know, that about 56% of state prisons and all but 6% of federal prisons offered some type(s) of vocational training when NCES did its study. And RAND’s analysis folds them in.

Correctional Education Pay-Offs

The numerous studies RAND reviewed indicate that former inmates who’d participated in a correctional education program were 13% more likely to get a job than those who hadn’t.

The odds seem considerably higher for those who’d had vocational training than for those who’d had only academic education — 28%, as compared to 8%. But there weren’t enough vocational training-only studies to make this difference statistically reliable.

There were, however, enough studies to make reliable conclusions about the effects of correctional education programs on recidivism.

The good news is that inmates who’d participated in such programs had a 13% lower risk of winding up back behind bars than those who hadn’t. The not-so-good news is that their risk was 30%.

One can chalk this up in part to employers’ reluctance to hire people with criminal records, qualifications notwithstanding. Participants at the briefing mentioned other factors as well, e.g., relapses into substance abuse, trauma, the need to generate an immediate cash flow in order to meet family obligations.

Homelessness is probably also a factor. One in five released prisoners becomes homeless immediately or shortly after returning to the community, according to the National Alliance to End Homelessness. They face additional obstacles to employment, e.g., no fixed address, no way perhaps to take a daily shower, limited, if any access to a computer.

RAND nevertheless finds that correctional education programs yield cost-savings. Comparing the highest estimated per participant cost to the lowest cost of his/her incarceration, it concludes that the reduced recidivism rate saves $5 for every $1 spent.

This, as the report notes, is overly conservative because it doesn’t include the financial and other costs to the victims of crime or any costs to the criminal justice system, except the jails and prisons.

Nor, as the report doesn’t note, does it include the human costs to returning citizens who go back through the revolving door — and to their families, including children, who are likely to have already suffered harms due to the prior prison term.

Similar arguments can be made for community-based programs that provide education and training for returning citizens who missed out while they were imprisoned — either because they couldn’t get into a program or because they didn’t care to at the time.

Another topic for another day.

 

 


If Not Congressman Ryan’s Super-Block Grant, What?

August 11, 2014

Bashing Congressman Paul Ryan’s super-block grant, as I did, might have left the impression that I think the safety net is just fine — or rather, would be if it were adequately funded and Temporary Assistance for Needy Families overhauled.

In fact, I think some of his starting premises are accurate. And the more thoughtful Opportunity Grant bashers I’m familiar with think so too.

The safety net does need “repair,” as he terms it. Benefits are, in some cases, structured so as to create sharp cliffs, i.e., abrupt losses of support when recipients’ incomes rise even slightly.

Federal assistance is generally “fragmented.” Most is targeted to one specific need — food, housing, health care, etc. And targeting may vary even for one need.

However justified, the targeting has created administrative burdens for both public agencies and the nonprofits they engage, through grants and contracts, to deliver services to low-income people.

At the same time, it often causes the intended beneficiaries no end of grief because they have to apply here for this, there for that — and document some things here, others there. Then they have to do it all over again if their circumstances change — a periodically, no matter what.

All this, of course, assumes they know what aid they might be eligible for. Many don’t, as people plunged into poverty by the Great Recession know well.

So how could we make the safety net more efficient and more friendly to both people in poverty and people on their way up and out? The Center for American Progress offers some answers.

Encourage states to make choices that will reduce bureaucracy. These choices come in several flavors.

One is for states to use the flexibility they already have to align eligibility standards across multiple programs and then use the information collected for one to automatically enroll qualified people in others.

States are already moving in this direction. For example, 38 states and the District of Columbia have integrated their intake and eligibility determination processes for Medicaid and SNAP (the food stamp program).

Another, specifically for SNAP, is to use certain standard deductions in determining income eligibility, rather than calculations based on actual itemized costs.

Still another, reported by CLASP in its brief on an initiative to help states streamline their work support programs, is to eliminate eligibility and verification requirements that aren’t required by federal laws or rules.

Adopt “no wrong door” approaches. The basic idea here is that people seeking help can get linked to any and all assistance they’re qualified for on a single website or at a single location, e.g., a center operated by a public agency or community-based organization.

CAP cites the Benefit Bank and two other national nonprofits that collaborate with local organizations to provide one online “door” for screening and applications.

An award-winning project called VITA Plus takes a different approach. It uses the Volunteer Income Tax Assistance sites that the Internal Revenue Service funds to screen clients for benefits they could be eligible for, in addition to the tax credits VITA volunteers conventionally help clients claim.

Smooth remaining benefits cliffs. As CAP observes, policy changes and program innovations at the federal level have already reduced — or in some cases, eliminated — the unintended penalties families incurred as they moved from welfare to work.

Health insurance is a prime example — and would be even more if recalcitrant states would expand their Medicaid programs as the Affordable Care Act envisions.

A this point, residents of 26 states and the District can transition directly from Medicaid to subsidized health insurance policies — generously subsidized if their incomes tip them just over the ACA-established Medicaid limit.

There are additional opportunities. For example, the U.S. Department of Agriculture permits states to postpone downward adjustments of SNAP benefits for five months when families move from welfare to work. Only 20 states do so now.

Loss of childcare subsidies is another cliff states have the flexibility to smooth.

Reduce reporting and recertification requirements. Agencies obviously must at some intervals — and in some manner — make sure that people enrolled in safety net and other means-tested programs are still income-eligible.

But requiring beneficiaries to recertify frequently creates cliffs for the many low-wage workers whose earnings go up and down according to the irregular schedules employers often impose.

And when workers must show up in person, with reams of paper — and wait until someone gets around to seeing them — they may lose work hours. Even their jobs perhaps. Needless to say, such requirements also create hardships for frail seniors and people with disabilities.

Once again, states can streamline their bureaucracies and make life easier for beneficiaries at the same time. And once again, some already do.

Now, as CAP hastens to say, these improvements are only “a piece of the puzzle to provide a hand up” to people in poverty.

And the improvements themselves will require public investments. Smoothing cliffs, for example, will require funding to extend benefits up the income scale.

Streamlining access to benefits will require investments to strengthen technological capacities, e.g., heavy-duty computer systems, online screening and applications tools, programs that talk to one another.

But we clearly don’t have to throw the baby out with the bathwater, as Ryan’s super-block grant would do.

NOTE: I’m painfully aware that this post fails to do justice to the initiatives — or even types of initiatives — that public agencies and nonprofits have undertaken, along the lines that CAP recommends. This alone is proof, if any were needed, that the federal government hasn’t imposed “cookie cutter” management or stifled civil society.

 

 

 


New Rule Shows Need to Rename DC’s Rapid Re-Housing Program

August 7, 2014

The District’s Department of Human Services has issued another emergency rule* for its rapid re-housing program — formally named the Family Re-Housing and Stabilization Program. The notice says that the agency intends to make this one permanent.

It’s got me wondering what DHS has in mind for its rapid re-housing program — and what we should have in mind. Here’s why.

DHS has, in the past, looked to rapid re-housing as its main tool for getting homeless families out of the DC General shelter quickly so as to free up space for more. That has never worked out as planned, but it’s still apparently reflected in the agency’s budget for the upcoming fiscal year.

The budget assumes only 150 families at DC General and allocates no funds whatever for hotel rooms if this assumption proves egregiously over-optimistic.

So you’d think that DHS would give its all to make rapid re-housing an attractive option for homeless families — and to get all takers rapidly re-housed. You’d also think its recent experience with the Mayor’s 500 Families in 100 Days campaign would have made an imprint.

I’m thinking here about how the campaign managed to identify something pretty close to the targeted 500 acceptable units landlords would rent to families with only short-term housing subsidies.

Lots of outreach by nonprofits that had relationships with potentially willing landlords. Efforts to acquaint them with rapid re-housing — something hopeful parents couldn’t always do on their own. Reassurances that reportedly included promises of financial help if tenants defaulted.

Yet the FRSP rule instead requires homeless families to find suitable units, sign leases for them and actually move in within 30 days.

As a fallback, they can attempt to prove they’ve done their best to find a unit that a landlord will rent to them at a rate consistent with the applicable affordability standard — and one that can pass inspection.

Only then can the service provider they’ve been assigned to offer them a unit that’s already been identified as suitable and available, assuming such exists. The rule makes no provision for maintaining an inventory of units.

The burden on homeless families is consistent with what the emergency rule says FRSP will do — “provide District residents with financial assistance for purposes of helping them become rapidly re-housed” (emphasis added).

Staying re-housed is a whole other matter. DC Fiscal Policy Institute analyst Kate Coventry notes that families must initially pay 40% of their rental costs, rather than the 30% that’s used for public housing and indefinite-term housing vouchers — and more generally, as the maximum for housing affordability.

Families will then become responsible for increasing shares of their rent every four months, when their provider decides whether they’re still eligible for rapid re-housing. Or at the very least, their ability to pick up a bigger share will be a factor.

This is consistent with initial eligibility, as the rule defines it. Only families providing information leading to “a reasonable expectation” that they “will have the financial capacity to pay the full amount at the end of the FRSP assistance period” can qualify.

So in one respect, shifting the rent burden to them at four-month intervals might seem reasonable, especially because they’ll get no subsidy at the end of a year — unless their need for further assistance is “caused by extraordinary circumstances.” What those might be the rule doesn’t say.

We can assume, however, that merely lacking enough money to pay the rent won’t suffice. So a reality check seems in order.

Families who’ll get top priority for FRSP are those in a publicly-funded shelter or transitional housing and those who’ve been designated Priority One because they have no safe place to spend the night.

A large majority of those at DC General are enrolled in the Temporary Assistance for Needy Families program. This means they are dirt poor and relying, at least officially, on benefits that wouldn’t begin to cover rental costs in the District.

By way of reference, the maximum monthly benefit for a family of three will probably be about $438 come October. A modest one-bedroom apartment costs, on average, roughly $1,240 a month, according to the U.S. Department of Housing and Urban Development’s fair market rent calculations.

So a family that’s relying on TANF would have to rapidly bootstrap its way up the income scale to avoid becoming homeless again when its FRSP subsidy expired. And I do mean up. A full-time minimum wage job would leave the parent in our three-person family with about $305 for expenses after s/he paid the rent on the FMR apartment.

In short, FRSP, as now designed, may rapidly re-house homeless families. But it shouldn’t lay claim to stabilization. And though the name still does, the new rule doesn’t.

DCFPI’s comments on the new rule observe that the one it replaces defined the purpose of the program as “assisting … [families] to obtain and remain in a new rental unit.”

Now “and remain” is gone. And the rule is utterly silent on services that might help some rapidly re-housed families become stably housed, though one infers they will receive case management of some sort.

Arguably, even a year (or less) in a reasonably decent private apartment is better than enduring conditions at DC General. But respite from shelter isn’t what rapid re-housing is supposed to be about.

It’s undoubtedly all that some families need to get through a bad patch, e.g., an injury that sidelined the breadwinner for awhile, an over-long break between contracts.

And it’s altogether possible that some other families will overcome barriers that have made them unable to afford market-rate rents for a long time. But I doubt we’ll find all that many of them at DC General — or entitled to shelter, if it’s freezing cold, because they’re designated Priority One.

And I suspect DHS shares these doubts. How else to explain the retreat from the goal of stabilization?

* Unlike ordinary rules, emergency rules become effective immediately, rather than after the public has had an opportunity to comment. The District’s Administrative Procedures Act says they are for occasions when “the adoption of a rule is necessary for the immediate preservation of the public peace, health, safety, welfare, or morals.”

 


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