Extending Unemployment Benefits Won’t Help All Jobless Workers

Looking back on my post about the expiring federal unemployment insurance benefits, I realized I’d left out important parts of the picture.

One is the growing number of workers who’ve been jobless more than 99 weeks — longer than the maximum for benefits even when both federal programs were in full force.

The other is that lots of workers who lose their jobs through no fault of their own can’t get UI benefits at all.

In 2010, for example, only 44% of these workers got any benefits from their state programs, according to a recent brief from the Urban Institute.

The brief documents what we probably would have guessed. A very high percentage of the left-out workers are “disadvantaged,” e.g., blacks and Hispanics, single mothers, teens and young adults.

Both blacks and Hispanics are also unusually likely to be among the long-term unemployed, another Institute brief tells us.

We know from other sources that single mothers were far more likely to be jobless and actively looking for work last year than married mothers — or the labor force as a whole. This was also true for the 16-24 year old age group.

The disadvantaged workers are less likely than others to get UI benefits because states have eligibility rules that tend to exclude them.

These, in some cases, are related to the workers’ disadvantages in the labor market.

Virtually all states, for example, have minimum earnings requirements. The time period they use varies, but the earnings threshold will always disadvantage low-wage workers whose jobs weren’t ongoing and full-time.

Workers who got jobs through temporary agencies are often out of luck — even if they put in a full day, every day.

Only 22 states will provide benefits for workers who have to quit for reasons most of us would find compelling, i.e., domestic violence, the need to care for a sick or disabled family member.*

Not surprisingly, single mothers seem to fall into this group, though the Institute’s report isn’t altogether clear on this.

Many are also left out in the 23 states that won’t provide benefits for workers who are looking for a new job that isn’t full time. We know anecdotally that single mothers may have no alternative because they can’t afford the high costs of child care.

The Recovery Act gave states a financial incentive to eliminate such barriers in their UI programs.

Thirty-nine states and the District of Columbia adopted the first and only partial payment option — or already had it on the books.

But only 34 states and the District took the minimum three actions that netted them the full amount they could receive.

Just one and the District went for the fully battery. Still barriers for disadvantaged workers in both jurisdictions, however.

Some states have since tightened up their requirements — this rather than raise the imprudently low UI taxes they’d decided to collect from employers.

The end result is a patchwork of coverage.

But there are only five states in which more than half of all jobless workers got UI benefits in 2010. And only one — Alaska — where the rate topped 60%.

* Eleven other states will provide benefits for workers who quit because of domestic violence, but not because of a family member’s illness or disability.

How Unaffordable Is Child Care for Low-Income Parents?

A bunch of things got me wondering about child care costs. How unaffordable are they for low-income parents who don’t have the benefit of subsidies?

The annual survey reports by the National Association of Child Care Resource and Referral Agencies are the best source of data on affordability I’ve found.

So I pulled figures from the latest report — most of them for 2009. Then did some calculations of my own — or more precisely, told Excel to do them.

Here’s a summary of key results, plus some Google gleanings about impacts.

Single Mothers Earning the Median

Single-mother families have average incomes significantly lower than families with two parents present. So I began my number crunching with them.

Lots of figures to enter. So I stuck with the costs of center-based care. It’s generally more expensive than care in a home setting, but also more frequently used.

NACCRA gives us breakouts for the median income of single-mother families in each state and the District of Columbia. Also the cost of care for infants and for four year olds as a percent of the median income .

Say a single mother needed child care for one of each. In 20 states and the District, she’d have had to pay more than two-thirds of her income if she earned the median.

Even in the lowest-cost states, nearly half her income would have had to go for child care.

In 30 states and the District, child care for only an infant would have consumed at least a third of her income.

Minimum Wage Workers

Things get worse, of course, for minimum wage workers — even if they work full time, year round, as many don’t.

But say we’ve got a minimum wage worker who does. In 26 states and the District, his/her entire pretax income would have been less than the costs of child care for the infant and four year old.*

Costs of care for the infant alone would have consumed more than half the full-time, year round minimum wage in 33 states and the District — and more than two-thirds in 14 states, plus the District.

Child care was unaffordable even for families with two full-time, year round minimum wage workers. For the two kids, they would have had to pay more than half their gross income in 27 states and the District.

In only one state — Mississippi — would they have had as much as two-thirds of their income for everything else a family needs.

So What’s a Poor Parent to Do?

According to the latest (not very recent) figures from the U.S. Department of Health and Human Services, roughly 39% of poor children eligible for federally-funded child care subsidies received them in 2006.

Eligibility here means that they were under 13, unless they had special needs. And their parents were either working or participating in education or training activities.

An additional 23% of eligible children in families with incomes between 101% and 150% of the federal poverty line also received child care subsidies.

Which leaves us with some 38% of poor and near-poor children whose parents worked — or were working toward work — without subsidized care.

As the National Women’s Law Center observes, some parents can rely on their parents or other relatives for child care. Somewhat more low-income parents than others do. But for a variety of reasons, many can’t.

And, as I hope I’ve demonstrated, many can’t afford child care at market rates. So what do they do?

Some, mostly moms, choose not to work. Better financially to have one parent out there earning and the other at home with the kids.

Others work part-time or in shifts, barely seeing each other awake for days on end.

And single mothers?

Some of them also decide they can’t go on working. They turn — or return — unwillingly to the Temporary Assistance for Needy Families program. It’s a stopgap solution because TANF is time-limited. But it solves the child care problem for awhile.

One homeless mother says she worked nights while her kids slept in the car parked where she could keep an eye on them.

Surely we could do better for children, their parents and our economy. To say this would involve some reordering of priorities in Congress is an understatement.

* The federal minimum wage increased by 50 cents an hour in July 2009. This produced minimum wage increases in most states and the District. For my calculations, I used the post-increase rate.

Not Such a Happy Day for Millions of Single Mothers

An old post of mine on the plight of single mothers gets into my top-10 viewed list week after week. So Mother’s Day seems like a good time to check on how they’re doing.

One thing we know for sure is that there are more of them than there used to be. Much head-shaking — and finger-wagging — from the conservative family values types.

Yet far from all single mothers had their children without benefit of clergy. About 55% are separated, divorced or widowed, according to an update from Legal Momentum.

Still, more women are having children outside of marriage. Some are in committed same-sex relationships who can’t get married in the states they live in. Some are content to live in domestic partnerships with the men they love — at least, for the time being.

Many, I would guess, don’t see marriage as a smart economic move — at any rate, not marriage to the fathers of their children.

Some single mothers are surely doing fine — economically, at least. Juggling household and parental responsibilities with a full-time job is tough, even if income isn’t a problem.

And even if an employer provides generous paid sick and family leave. As of 2010, only 58% of private-sector employees had access to any paid sick leave at all. Whether they could use their leave to stay home with a sick child or thrash out a day care problem is unclear.

The bigger story, I think, is that a large percent of single mothers aren’t doing fine by any economic measure. In 2010, says Legal Momentum:

• Two-fifths of all single-mother families were poor, according to the very low thresholds the Census Bureau uses.
• The poverty rate for single-mother families was nearly three times greater than for the population as a whole — 42.4%, as compared to 15.1%.
• At any given time, about two-thirds of single mothers were employed outside the home, but only two-fifths of them were employed full time, year round. A quarter were jobless the entire year.
• The median average income for single-mother households was less than $25,000 — actually only $24,487, according to one of the Census Bureau’s many data tables.
• A third of single mothers spent more than half their income for housing — the U.S. Department of Housing and Urban Development’s standard for a “severe housing cost burden.”
• Not surprisingly then, three-quarters of homeless families were headed by single mothers.

There’s no simple explanation for these sorry figures.

Legal Momentum mentions delinquent child support payments. Only a third of single mothers received any child support in 2010, and for them, the average was $300 a month.

A number of other factors Legal Momentum cites are work-related. They include scarce employment — still the case now — and occupational segregation in low-wage “women’s work,” e.g., home health aides, restaurant wait staff.

Closely related are our very low minimum wage rates, even in the 18 states that have set rates higher than the federal minimum — still a mere $7.25 an hour and losing purchasing power all the time.

Another work-related factor is unaffordable child care, which can eat up a huge chunk of income — more than many single mothers can earn.

Still another factor is our unemployment insurance system, which tends to exclude people who work part-time or intermittently, especially in low-wage jobs.

All these factors reflect public policies — some more directly than others.

Pride of place, for Legal Momentum, is our “restrictive and stingy welfare program,” a.k.a. Temporary Assistance for Needy Families.

I’ve frequently vented about problems built into the TANF law and regulations, often drawing on briefs Legal Momentum has issued.

The single-mother poverty brief I’m using here captures one aspect of ending welfare as we knew it. While about two-thirds of single mothers received food stamps in 2010, barely more than a quarter (27.1%) received cash assistance from TANF.

The cash left them and their children desperately poor. Maximum benefits for a family of three were below 30% of the federal poverty line in all but eight states — and above 50% in none.

About half of all mothers today will spend at least some time as the sole custodial parent. If today is typical, nearly a quarter of all mothers are in this situation.

We could make a happier Mother’s Days for millions of them, if the political will were there.

No further comment necessary, I trust.

How Much Does Single-Mother Poverty Cost Our Nation?

My posting on the plight of single-mother families prompted commenter Glenda to ask a really good question: “Do you have any data … on our total public costs to continue to support single mothers living in poverty rather than investing in helping them to get educated and become self-sufficient?”

I replied as best I could at the time. But I’ve decided the issue is worth a deeper dive, especially because the whole matter of government spending on programs for low-income people has become a major focus in many states — and, of course, on Capitol Hill as well.

The short answer to the question is that I don’t know of any study that has compared the relative costs of the benefits that, to a limited extent, sustain poor single mothers with the costs that would be involved in enabling them to fully support themselves and their children.

There are, however, some studies that can help us look at one side of the cost question.

For example, we have some data on what the federal government spends to help support single-mother families. Two sociology professors report that, in 2006, federal expenditures due to “father absence” totaled $98.9 billion. A quick look at the expenditures shows that “father absence” is another way of characterizing single-mother families.

As the authors note, the estimate is actually a fraction of total costs. It doesn’t include costs borne by state and local governments, e.g., what states spend on federal-state “partnership” programs like Temporary Assistance for Needy Families, Medicaid and subsidized child care.

Nor do the estimates include the long-term indirect costs due to the negative effects of growing up fatherless. Many, though probably not all of these are the same as the long-term costs of child poverty.

A team of economists produced a report on these in 2008. Basically, they reviewed the research on the relationships between child poverty and three major cost areas — earnings, propensity to crime and quality of health in adulthood. They put these together with estimated costs of the latter two and projected all the figures out over the total number of poor children in the U.S.

Bottom line was an estimated $500 billion per year cost — nearly 4% of what was then our entire gross domestic product, i.e., the total value of all the goods and services produced in the U.S. This too was explicitly a conservative estimate.

Though the team didn’t assess the cost-effectiveness of specific anti-poverty policies, they did conclude that “investing significant resources in poverty reduction might be more cost-effective over time than [they] previously thought.”

Note the use of the term “investing” here. The same word Glenda used. The thought behind the word seems to me clear and appropriate. Pay some money now because you expect it will yield returns beyond what you spent.

In this case, you put funds into programs that will lift as many children as possible out of poverty — thus, in the long run, increase productivity and reduce public costs.

I flag the word because Senate Minority Leader Mitch McConnell (R-KY) preemptively trashed on the President’s use of it in his recent State of the Union address. “With all due respect to our Democratic friends, any time they want to spend, they call it investment,” he told the anchor on Sunday Fox News.

Seems to me that it’s possible to distinguish smart investments from spending that won’t be offset by benefits to our economy and the well-being of the American people. I should think that policymakers of all stripes would concur on some of the basics.

A review of the spending cuts proposed by the Republican-dominated House Appropriations Committee suggests otherwise. One seems especially relevant here — the large cut in funding for state and local employment training programs. This, along with the other major cuts, passed in the House last Saturday.

Under the just-passed bill, total funding for these programs would be just 53% of what Congress approved for Fiscal Year 2010 — and again as part of the current continuing resolution. It would be just 49% of the President’s proposed budget for Fiscal Year 2011 because he requested an increase.

So we would “save” about $1.4 billion or $1.6 billion, depending on which measure you want to use. (The former is more accurate, though Republicans understandably prefer the latter.)

The National Skills Coalition says we should factor in appropriations customarily made in advance of the new fiscal year. These would bring the total cut to somewhat over $2.97 billion. Some smaller, more narrowly-targeted workforce development programs would be totally defunded — or nearly so.

Consider what McConnell favors instead of these investments — a permanent extension of all the Bush-era tax cuts. This, according to the nonpartisan Congressional Research Service, would cost an estimated $3,402 billion for the first 10 years.

The permanent extension bill just proposed by self-proclaimed deficit hawks Mike Pence (R-IN) and Senator Jim DeMint (R-SC) would presumably cost even more because it would wholly eliminate the estate tax.

You can pay for a lot of job training and education for all those billions — and have plenty left over for other endangered programs that would also help single moms become fully self-sufficient.