How to Narrow the DC Income Gap: Some First Steps

As I recently wrote, the DC Fiscal Policy Institute has issued an eye-opening report on income inequality in the District of Columbia.

It’s got some recommendations for narrowing the income gap between the richest and the poorest. No revolutionary attack on “the system” that’s enriching the top 1% at the expense of the rest of us.

Instead some modest, politically-feasible our steps our local government could take right now to lift the incomes of some portion of the bottom 20% — now, on average, well below the poverty line.

With two limited exceptions, the recommendations address policies and programs already in place. As so often in the District, it’s the funding that’s wanting — and for the most part, will be wanting if the DC Council approves what Mayor Gray has proposed.

Bigger budgets for the initiatives would help achieve three objectives.

Help Residents Prepare for Living Wage Jobs

One initiative DCFPI cites is the recently-established workforce intermediary pilot. When/if implemented, the intermediary would get training programs better tailored to local workforce needs and then refer qualified candidates to employers.

Mayor Gray’s Fiscal Year 2013 proposes $1.6 million to “fully fund the creation of the pilot.” Unclear, at least to me, whether this means we’d have an ongoing, fully functional intermediary.

The second initiative is the unfolding redesign of the Temporary Assistance for Needy Families program. Participants are to get in-depth assessments of their strengths and needs, then be linked to appropriate services and a broader range of work-preparation opportunities than was previously available.

The problem here, as I (and others) have mentioned before, is that the current law calls for a phase-out of cash benefits for long-term participants who’ve had no opportunity to benefit from the improvements. It also fails to carve out needed exemptions, as federal rules allow.

Unfair and very unwise, given all we know about the lifelong disadvantages children suffer when they grow up in poverty.

Address Housing Concerns

The “concerns” here are budget cuts to the District’s main affordable housing programs.

One — the Housing Production Trust Fund — was all but gutted last year, stalling numerous projects to develop and preserve housing that low and moderate-income residents could afford.

The other — the Local Rent Supplement Program — provides housing vouchers residents can use to rent apartments on the open market.

It would need regular budget increases just to keep pace with rising rents. It hasn’t gotten them and now reportedly has a shortfall that could leave more than 500 households with no more rental assistance.

The Mayor’s proposed budget addresses the shortfall — by once again raiding the Trust Fund. Says he’ll put the money back if revenues come in substantially higher than projected. Well, he agreed to something similar last year. And the Trust Fund got zip.

Make Work Pay Better

DCFPI focuses on the District’s living wage law, which establishes a higher minimum wage requirement for employers that benefit from District government contracts and/or various types of financial assistance worth $100,000 or more.

The law, DCFPI says, needs to be more strictly enforced, suggesting that the District has finally gotten around to enforcing it at all. DCFPI also recommends expanding the law. No details here.

Other Work-Related Needs

The DCFPI recommendations are, as I said, very modest. And with the exception of affordable housing funding, they’d help only those in the bottom fifth who work or potentially could work if properly trained.

Even for this group, the District could — and should — do more. But the Mayor doesn’t see it that way.

For example, as the Fair Budget Coalition notes, child care programs have been cut by more than $20 million in the last five years. The Mayor’s proposed budget cuts an additional $5.7 million from child care subsidies.

Without funding to increase provider reimbursement rates, low-income parents with little kids may have no choice but to stay home.

Funding for basic adult education has also been cut. Two years ago, programs funded in part by local taxpayer dollars served only 8% of need — this when more than one in three  D.C. adults is functionally illiterate.

How many aren’t working because they can’t read even well enough to fill out a job application? How many are stuck in part-time, minimum wage jobs because they can’t pass the GED exams?

How many more will be stuck if the Council approves the Mayor’s proposed $950,000 cut for adults and family education?

One Response to How to Narrow the DC Income Gap: Some First Steps

  1. […] I earlier wrote, it proposes a handful of policy changes that would produce higher wages for workers and potential […]

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