Beefs Against Eliminating the Tip Credit Wage Need Heavy Dose of Salt

July 14, 2016

The restaurant industry, less its large fast food component has led the charge against any increase in the tip credit wage — and so, of course, against proposals to eliminate it.

We saw this again — and its relative success — when the DC Council, with the Mayor’s consent decided to raise the tip credit wage to just $5.00 an hour by 2020, rather than run the high risk that voters would approve $15 an hour for all District workers local labor laws can cover.

Seems that the Council hearkened, as it has in the past to the metro area restaurant association, the members it rallied and some tipped workers they’d panicked, if not coerced into testifying.

We’ve been round this barn before. And we’ll go round it again — perhaps as soon as next year in the District and almost surely elsewhere. Perhaps even in Congress, given the draft Democratic party platform, though a wipe-out of the tip credit wage nationwide seems a distant prospect.

Here then, as promised, are the tip credit supporters’ major arguments — and why we should take them with a heavy dose of salt.

Supporters of the extremely low tip credit wage claim that restaurant workers are already doing just fine. The National Restaurant Association, for example, says that median wait server earnings range from $16 to $22 an hour.

No doubt some servers make a pretty good living. Here in the District, we’ve got a restaurant where a meal costs as much as $275 per person, drinks not included.

Even a teetotaling party of four would conventionally add $220 to the bill. Assuming the person who waited on them got the whole tip, as we shouldn’t, s/he’d earn many times the minimum wage.

Servers at pricey restaurants are obviously not typical. The median hourly wage for tipped wait servers in the District was $9.58 an hour, according tothe latest Bureau of Labor Statistics estimate.

This, say the National Employment Law Project and Restaurant Opportunities Council United, includes tips. If so, nearly half the tipped wait servers earned less than needed to lift a three-person family over the federal poverty line, assuming (again, as we shouldn’t) a full-time, year round job.

Restaurant spokespersons also claim that employees will earn less if not paid the tip credit wage because customers won’t leave tips anymore — the old “harm those intended to help” argument we usually hear when the issue is a minimum wage increase.

Yet wait servers and bartenders in states that have no tip credit wage still generally receive tips, NELP and ROC United report. They, in fact, earn 20% more than those in states with the lowest federally-permissible tip credit wage — and 12.5% more in states that, like the District, have a higher tip credit wage.

Those who reported the highest median tips worked in San Francisco, which hasn’t had a tip credit wage in at least 25 years. So customers clearly don’t give up tipping — or even, it would seem, scrimp on tips — when they know that all the extra they pay goes to the people who serve them.

Business interests don’t dwell overmuch on how eliminating — or even raising — the tip credit wage would erode workers’ bottom lines, however. It’s their own bottom lines they focus on.

Policymakers get an earful about very low profit margins — how restaurant owners barely make out as it is, how small businesses (which many sit-down restaurants aren’t) will fold if their labor costs rise.

Here again, we can look to states with no tip credit — assuming, as I think we can, that employment indicates industry growth.

Restaurants and other businesses in what the Bureau of Labor Statistics terms the leisure and hospitality sector have expanded more in non-tip credit states than others, the Economic Policy Institute reports.

The National Restaurant Association sees no reversal of the trend ahead. On the contrary, it projects a 10.1% increase in California’s restaurant employment over the next 10 years. The Nevada industry can look forward to needing 12.9% more workers, lack of a tip credit wage notwithstanding.

Here in the District, elected officials got another warning. Businesses that can’t pay sub-minimum wages anymore will move to Virginia, where they still can — and pay only $7.25 an hour to non-tipped workers too.

How likely does that seem for restaurants, bars, hair salons and the like? They believe their customers will travel long distances, rather than patronize conveniently-located competitors? They believe they won’t have to compete with suburban business that have developed loyal customers?

But I suppose it’s fair to imagine that some businesses couldn’t turn a profit if they had to pay all workers at least the minimum wage. Perhaps they need to change their business model — charge somewhat higher prices, for example, or tack on a service charge, as some restaurants already do.

Or they could automate functions now performed by human beings. Industry spokespersons say that’s exactly what restaurants will do — another harm to those intended to help. But they’ll invest in labor-reducing technologies anyway if they can afford to.

Chili’s, often cited as a warning, has put tablets on tables for customers to place their orders in nearly all the restaurants it operates, not only those in the relatively few states with no tip credit wage.

But say some businesses truly can’t survive if they have to pay workers more.That would mean job losses, as industry spokespersons say. But it could also mean new job openings.

Customers, after all, won’t start cooking all their meals that home because the restaurant they’ve frequented closed — or start cutting their own hair. And former tip credit workers in businesses that cope will have more to spend. That could mean job openings in other retail businesses.

In any event, we’ve got a matter of principle here — the same that applies to all labor standards, e.g., workplace safety rules, prohibitions against wage theft.

Speaking of minimum wage increases generally, Professor David Howell refers to “[t]he moral, social, economic, and political benefits of a much higher standard of living from work.”

We should, he argues, weigh these against prospective job losses — even if we know for sure that a higher wage floor would cause them, as in this case we don’t.

And if some businesses fold because they can’t turn a profit if they have to pay workers $15 an hour, we ought, I think, to ask ourselves how much that matters when the alternative is a policy that enables exploitation.

 


DC Mayor and Council Preempt One Fair Wage for All

July 11, 2016

We in the District of Columbia like to pride ourselves on how progressive our community is. But it’s behind the curve now on an issue that directly affects nearly 29,000 local workers — those whom employers can pay far less than the minimum wage.

The draft Democratic Party platform supports an end to the sub-minimum, i.e., tip credit, wage. That would extend nationwide a policy already in force in seven states. The DC Council instead chose to merely increase the wage to $5.00 by 2020 — even less than the Mayor had proposed.

All our elected officials knowingly preempted our chance as constituents to decide whether all workers our labor laws can cover* should get paid at least $15 an hour — one fair wage, as it’s commonly called.

Let’s just say they know not only which side their bread is buttered on, but who butters it — restaurant owners represented by the local affiliate of the National Restaurant Association and other business owners for whom the Chamber of Commerce purports to speak.

I’ve written about the tip credit wage before, but for those new to the issue, here’s what it is and a summary of what’s wrong with it.

How the Tip Credit Wage Works

Employers in most states and the District may pay workers who regularly receive tips a much lower cash wage than the regular minimum. They must fill in any gap between the tip credit wage, plus tips a worker receives and the regular minimum.

So, for example, owners of sit-down restaurants in the District, along with hotel owners and other businesses like hair and nail salons must now pay their tipped employees $2.77 an hour, no matter what.

If their workers receive at least $8.73 an hour in tips, they’re home free. If not, they must add to paychecks enough to equal $11.50 an hour.

At best then, customers subsidize employers’ labor costs, though most believe they’re just rewarding workers who’ve served them.

Why the Tip Credit Wage Doesn’t Work

A common complaint — amply documented — is that most workers subject to the tip credit wage earn very little. That, in theory, is  a problem with the minimum wage itself. In practice, however, workers may not get as much as they’ve earned — or even know they’ve been shorted. Several reasons for this.

First off, workers may not know how much they’ve received in tips. Consider, for example, a wait server who’s rushing from one table to another. How’s she supposed to keep track of tips, when so many now are added to credit card bills?

Second, employers may legally do several things to deny workers the full amount they receive in tips. They may deduct processing charges for tips added to credit card bills. They may put all tips into a pool and divvy them up among tipped staff, based on some formula they’ve established.

Third, the tip credit system virtually invites abuse. For example, we know of cases where employers have siphoned off tips from the pool to ramp up pay for non-tipped workers. In other cases, employers have required tipped employees to do a lot of work they don’t receive tips for while still basing their whole pay on the sub-minimum.

In still others, employers simply don’t fill in the gap between the sub-minimum wage, plus tips and the regular minimum. More than one in ten workers in tipped occupations reported total hourly wages below the federal minimum, according to White House economists and the U.S. Department of Labor.

The Labor Department has said it knows of at least 1,500 recent cases of wage theft associated with the tip credit wage. But there are surely more.

The provision that requires employers to ensure that tipped workers earn at least the full minimum wage is difficult to enforce, the White House report says. And the Labor Department has nothing like the resources to investigate as broadly as seems warranted.

This seems also the case in the District, where a coalition of local and national organizations recently called for, among other things, “proactive, increased enforcement” of worker protection laws. But the office responsible for enforcing them won’t have enough staff.

As things stand now, both the federal and local wage and hour enforcement agencies depend largely or solely on complaints filed by workers and organizations representing them.

But workers hesitate to complain because managers can readily retaliate — if not by firing them, then by reducing their hours or putting them on shifts that yield paltry tips.

Wage theft isn’t the only thing tip credit workers could, but often don’t complain about. A survey of restaurant workers found very high rates of sexual harassment — and twice as many in tip credit states as others.

More than half felt they had to put up with it because they’d lose tips — and perhaps their jobs — if they didn’t.

In short, what’s to like if you’re not a business owner who profits, legally or otherwise, by paying your workers the tip credit wage?

The owners and associations that represent them say tipped workers should and do like it and that eliminating it would harm not only them, but the local economy.

I’ll take up their arguments in a followup post — in part because we may not have heard the last of them, whatever happens nationally in November.

* Only Congress and federal agencies can set wages for federal employees and workers employed by federal contractors. The draft Democratic Party platform addresses both — the former with a $15 an hour minimum wage and the latter with an executive order “or some other vehicle.”

 


Not Enough Money for Low-Income DC Residents, But Tax Cut for Wealthy Unchanged

May 26, 2016

As you local readers probably know, the DC Council passed a budget for the upcoming fiscal year last week. Some changes in what the Mayor had proposed for programs that serve low-income residents.

The DC Fiscal Policy Institute’s overview of the budget confirms what I’d expected. Mostly, a bit more here, a bit more there. No more for some critical priorities. And less for at least one. (The one large, new investment it cites — for new family shelters — isn’t part of the budget proper.)

I suppose we’ll be told that the Council did its best with what it had to work with. I don’t know because I don’t know nearly enough about the funding needs and prospective impacts of every program and service the budget covers.

But I do know that the Council could have had more revenues to work with. It had only to postpone — or better yet, repeal — the tax cuts prior legislation has made automatic whenever revenues rise above the estimate used for the latest budget.

The triggers have already reduced otherwise available revenues by many millions of dollars — dollars the Council could have used to shore up under-funded programs.

So much water under the bridge. And as the Chairman, who likes those triggers says, the revenues lost from cuts not yet triggered couldn’t have been used for the new budget. But the Council could have had them to spend as early as next fiscal year — and thereafter.

All tax cuts are not created equal, of course. Some on the pending list will benefit residents who’ve got enough income to owe taxes, but not a lot.

The second cut on that list, however, is a higher threshold for the estate tax. The most recent revenue forecast indicates that it will lock in soon, DCFPI’s latest account of the trigger impacts says.

So henceforth, no assets a deceased resident leaves to heirs will be taxable until they’re worth $2 million — twice the current minimum.

As things stand now, this will be the first of two estate tax cuts. The second — and considerably larger — will raise the threshold to the same minimum as applies to the federal estate tax, currently $5.45 million.

Why the District should embrace a regressive measure gained in a crisis by Congressional Republicans who could never be elected here baffles me.

True, the Tax Revision Commission recommended parity with the federal threshold, including the ongoing upward adjustments for inflation. But the Council could have taken a pass, just as it has on the revenue-raisers in the Commission’s package.

The District will forfeit $18.8 million next fiscal year alone, according to DCFPI’s estimate. And for what?

Not so that more money can pass to charities tax free. Bequests to them are already exempt. Not so that surviving spouses will have more to live on, since what passes directly to them will also still reduce the value of what counts toward the threshold.

Not even necessarily what other heirs wind up with, since a will-maker can give them as much as $14,000* each or the equivalent every year while still alive — again reducing the value of what’s potentially taxable afterwards.

The estate tax giveaway won’t just make larger investments in programs that reduce hardships for poor and near-poor residents unnecessarily difficult. It will increase income inequality in the District by giving the rich more, as well as denying the poor supports and services that help close the income gap from the bottom.

And the gap will grow from one generation to the next in part because of the way the taxable value of assets is determined. Essentially, it’s set at their value when the person bequeathing them dies.

So heirs pay capital gains taxes when they sell the assets for more, but no tax on how much the assets’ value increased between the time they were purchased and the time inherited.

And, of course, heirs don’t have to sell them. They can pass them along to their heirs, compounding the revenue loss — and wealth at the top of the income scale.

The estate tax then is a way of partly recouping the loss and, at the same time, averting a rollback to the inordinate wealth concentration of the Robber Baron days.

The higher the threshold, the less an already-shaky control on income inequality can do. And the gap between the richest and poorest District households is already very large — larger, indeed, than the DCFPI analysis I’m linking to shows because it doesn’t drill down to the top 1%.

Their incomes averaged well over $1.9 million in 2012, the latest year I’ve found figures for. This, recall, is income for a single year, not also what could readily be converted to income.

Now, no one — not even Bernie Sanders — is talking about taking so much from the rich and giving it to the rest that incomes would be equal. Nor is anyone talking about taking all the wealth the rich have accumulated when they die.

The major focus — and DCFPI’s recommendations reflect it — is reducing the gap by lifting incomes at the bottom and making those incomes more sufficient for basic needs, e.g., by ramping up investments in housing they can afford.

Not all income-lifting measures would require the District to spend more public funds. But some surely will, including workforce development and (you knew I was going to go here) reforms in the rigid Temporary Assistance for Needy Families time limit policy.

Leaving the estate tax threshold where it is won’t give the District as much more tax revenue as it needs. But the giveaway isn’t chump change either.

And it’s got nothing going for it, except a hugely successful and duplicitous PR campaign. Surely Councilmembers know better. And I’d like to think their donors not only know better, but want better for our community.

* This is the current threshold for the federal gift tax, which will rise over time to keep pace with inflation. The District has no gift tax.


Why So Many People at Risk of Hunger in DC and Nationwide?

May 19, 2016

We may all be Washington, D.C., as the Mayor’s slogan implies, but we’re not all sufficiently fed. In fact, 90,900 (13.8%) of us don’t always have enough food for an active, healthy lifestyle because we can’t afford it, according to Feeding America’s latest Map the Meal Gap report.*

The “us” here includes 29,820 children (nearly 26%) of those living in the District in 2014, the most recent year Feeding America could get data for. They’re not necessarily underfed, but they live in food insecure households and so are, at the very least, at risk of hunger.

Troublesome as these figures are, they’re better than those for the prior two years — especially 2013, when the food insecurity rate for all District residents was 15% and, for children, 30.5%.

On the other hand, the child food insecurity rate is 5% higher than the national rate, though the overall rate is slightly lower.

What can we tease out to explain such relatively high food insecurity rates in the District? First off — and this is true everywhere — families with children are more likely to be hard up for food money than families without them.

They’re still short, even with SNAP (food stamp) benefits and other federally-funded nutrition assistance, e.g., WIC, free or reduced-price school meals. Or so it seems.

Here in the District, nearly three-quarters of food insecure residents have incomes below 200% of the federal poverty line — the threshold Feeding America uses because the District has taken advantage of an option that allows residents with incomes this high to have their eligibility for SNAP considered.

Doesn’t mean they’ll all qualify. Their income, after deductions must still be no greater than 100% of the FPL But broad-based categorical eligibility, as the option is called, does seem to make a difference.

For children, Feeding America uses 185% of the FPL — the maximum income for WIC and reduced-price school meals. By this measure, somewhat over two-thirds of food insecure children qualify for nutrition assistance.

The flip side of these figures, of course, is that a quite high percent of food insecure District residents, including children have household incomes too high for any federally-funded nutrition assistance.

Both those aided and those not face a problem that the Feeding America report is really about — what it calls the meal gap, i.e., the difference between the per-meal cost of food and what individuals and families can afford.

It does some complex number-crunching to arrive at the gap — or more precisely, gaps. The end result for the nation as a whole is $2.89.

The meal gap in the District is notably higher — $3.49 per meal or more than $73 a week, assuming three meals a day, every day, as Feeding America does. This surely goes a long way toward explaining the high food insecurity rates.

On the one hand, as I’ve said, many food insecure District residents have incomes to high to qualify for SNAP, which would supplement their own budgets.

The city is also home to residents who’ve got incomes well below the threshold, but don’t qualify because they’re undocumented immigrants — or documented, but haven’t lived in the country long enough.

On the other hand, those who do qualify won’t have enough to cover the costs of reasonably healthful meals all month long. A parent with two children, for example, can get at most $511 a month — or about $1.87 per meal for each family member.

Closing the local meal gap would have cost roughly $56 million two years ago — and more than $24.5 billion nationwide. That’s a lot of money. Which tells us why Feeding America maps the gap.

The organization, as you may know, supplies food to a national network of food banks. Some of the food comes from federal agencies, it says. The rest — and far greater portion — comes from private-sector sources, e.g., food processors, grocery chains and monetary donations it uses to buy food.

The banks, in turn, channel the food to nonprofits that serve prepared meals and/or distribute groceries to poor and near-poor people in the area they serve. They too may get food from private-sector sources and buy more, using cash or cash-equivalent donations.

And they may get some from the Emergency Food Assistance Program — a variable mix that the U.S. Department of Agriculture parcels out to state agencies and they, in turn, to the banks and/or community action agencies.

Here in the District, 132 pantries, dining rooms, other programs that serve meals and/or snacks and the DC Central Kitchen, which prepares meals for some of them, depend in part on what they receive from the Capital Area Food Bank.

Narrowing the meal gap will obviously require more food — and more money to not only buy it, but distribute, store, prepare and deliver it.

We surely can’t look to this Congress, though we can hope it doesn’t widen the gap. That’s what House Republicans would do if they succeeded in converting SNAP to a block grant, as their budget plans have repeatedly envisioned.

It’s what their latest plan would probably do, even without the block grant, because it puts a tighter squeeze on non-defense programs that depend on annual spending choices. This already-shrunken part of the budget includes WIC, parts of TEFAP and several sources of funds for free or low-cost home-delivered meals.

Highly doubtful we’ll see the cuts this year. But it’s obvious that the meal gap will remain — and probably grow, as it already has — without more public funds to shrink it.

* The food insecurity rates Feeding America reports for states and the District are slightly higher than those USDA reported. This apparently is because the agency uses two-year averages to compensate for the relatively small size of its survey sample.


Homeless DC Families Push Total Count to Record High

May 11, 2016

The just-released report on last January’s one-night homeless count in the Washington area may deliver a shock to even those who’ve followed the homeless family crisis in the District.

The count identified more homeless families than in any year since the Metropolitan Washington Council of Governments first reported them separately.

The number of homeless individuals who had no children in their care ticked down again. But the increase in adults and children counted as family members was so large as to push the homeless total up to the highest level since the counts began.

Highest Homeless Total in Thirteen Years

The count found 8,350 homeless people in the District — 1,052 more than only a year ago. This represents an increase of 14.4%.

Looking back to 2004, when the District, like other communities that receive homeless assistance grants, first had to conduct one-night counts, the total increased by nearly 43.3%.

Far More Homeless Families

The count identified 1,491 homeless families — 360 more than in 2015, making for an increase of 31.8%. The new number is about two-and-a-half times as many as in 2008, when the recession first set in and the count reports began including the family number.

The homeless families included 1,945 adults and 2,722 children they were caring for, representing increases of 36.2% and roughly 31.9% respectively.

The total number of homeless persons in families, as the report refers to them, was thus 4,667. This is twice as many as in 2004 — and an increase of about 154.2% since 2008, the lowest count on record.

About a quarter of the persons were adults no older than twenty-four — about the same percent as last year, but a higher raw number. These so-called transition age youth account for about 60% of the increase in adult family members counted.

Count of Homeless Singles Dips Again

The number of homeless singles, i.e., those who don’t have children with them, declined from 3,821 in 2015 to 3,683 this year. The new number is also somewhat lower than the counts for 2013 and 2014, but not by much.

We clearly had more homeless singles when the Great Recession hit and in the years immediately thereafter. Since then, the numbers dropped and then rose again, though not markedly. The differences may have more to do with count conditions, e.g., weather, than the homeless population.

Continuing Downward Slide for Chronically Homeless Singles

Among the singles were 1,501 in the chronically homeless subgroup, i.e., people homeless for a long time or recurrently and with at least one disability.

The District’s goal, like that of the U.S. Interagency Council on Homelessness, is to effectively end chronic homelessness by the end of 2017. It seems unlikely to achieve that. But it’s well on the way. The count identified 92 fewer chronically homeless singles than in 2015 — the fewest then since 2011, when the numbers began steadily dropping.

So we’ve got a clear downward trend, as we don’t for any other subgroup the report breaks out — except, more recently, veterans, who often have disabilities and so get counted as chronically homeless. Shows again what money can do.

Not Quite So Many Young Homeless Singles

Also among the singles were 201 transition age youth — a few more than in 2015, when communities first had to report them separately. But they’re still a small fraction of this vulnerable age group.

As is generally the case with homeless people counted as singles, some may have a spouse or other partner. Neither the count nor the homeless services system recognizes families who’ve got no children with them, as I’ve remarked before.

Perhaps Not That Many More Recently Homeless Families

The District attributes the increase in homeless families to the undeniable shortage of affordable housing in the city, but not only that.

It also cites an “increased demand for stable housing assistance that is brought to bear on the homeless system” and the recent reversion to the long-standing policy of granting shelter to homeless families year round, instead of only when they’re at risk of freezing.

What this suggests, though I doubt it means to is that the District probably under-reported homeless families in the recent past because some knew not to seek help when they needed it and so had no records in the information management system used for the counts.

That, of course, merely means that District policymakers — and everyone else concerned — has a better fix on the crisis now. But not the whole of it.

Always More Homeless People Than Counted

As I usually say when citing homeless figures based on counts, they understate the number of people who have no home of their own.

This is partly because the counts must used the limited definition of “homeless” that the U.S. Department of Housing and Urban Development must use for its homeless assistance grants.

So they include homeless people in shelters, transitional housing and places “not meant for human habitation,” e.g., cars, subway stations, underpasses.

But they don’t include everyone living doubled up with friends or relatives because they can’t afford housing or those making do in cheap motels, unless they’ll become homeless, according to HUD’s definition, within two weeks.

And the counters have no way of finding them or knowing that. Nor are they likely to find everyone who’s unsheltered. The count, recall, is partly a one-night search.

And homeless people don’t all cluster together in places where they’re easily found — understandably, since the District and other communities have taken to clearing out such places and taking whatever belongings the owners can’t swiftly remove.

Many homeless people don’t want to be found for other reasons — especially those who are minors, since they’d be either returned to the homes they fled or relegated to foster care. Perhaps also parents who justifiably fear losing their children.

All the more reason the DC Council should feel an even greater sense of urgency to invest more in affordable housing, including both the permanent supportive type and locally-funded housing vouchers.

And an even greater sense of urgency to change Temporary Assistance for Needy Families policy, lest even more families become homeless by next January.


Childcare Costs a High Barrier to Access for Low-Income Kids in DC and Nationwide

April 28, 2016

Picking up where I left off, access to child care is one of the big issues facing parents and policymakers. Low-income children, especially the youngest apparently don’t have equal access to the sort of care that would give them more equal opportunities during the rest of their lives.

So how might we parse access?

In one sense, it obviously means having enough slots in childcare centers, home-based and publicly-funded programs for all children whose parents want them there.

The slots must also, of course, be for their children’s age group and where parents can get their kids to them fairly quickly and at a reasonable cost.

But an age-appropriate slot in a conveniently located program will mean nothing if the parents can’t afford it. Nor if the program doesn’t provide care during the hours they themselves can’t.

We know how costly unsubsidized child care is nationwide and in each state, plus the District of Columbia, which racks up the highest costs of all.

Care for an infant in a local daycare center, for example, cost, on average, $22,631 last year — more than what a single parent, working full time, year round at a minimum wage job earned. Only about $4,790 less for a four-year-old.

The parent is technically eligible for a voucher. But the priority list for awards casts doubt on whether she could get one.

Even if she could, finding a slot could be hard because the District’s reimbursement rates are so low that providers either won’t accept children with subsidies or limit the number they will — a long-standing problem the District still hasn’t remedied.

The District also, however, has Early Start — a spin-off from Head Start for infants and toddlers in families with incomes no higher than the federal poverty line, plus some who may have more, but not enough to get by.

Little hope for poor parents here, it seems. The program enrolled only 12% of eligible children, according recent Census data.

For somewhat older children, the District has Head Start — an enrollment figure reportedly over 100% of those eligible. It also has pre-K programs in its public school system. These, of course, are also free.

But none of the programs operates on weekends or during evening and nighttime hours, when low-income parents must often work. Nor during summer months. So the programs may be accessible, but they don’t fully meet the need.

I’ve focused on the District, but we see generally the same problems in communities across the country — except, of course, for wealthy enclaves. Head Start and Early Start don’t provide nighttime care for children anyplace, for example.

Last year, child care was the single largest family expense, Care.com reports. But that’s only for parents who could scrape up the money — an average nationwide of about $9,775 a year for just one child in a center.

Obviously an access barrier for many others, unless they got vouchers to subsidize child care.The main federal funding sources subsidized care for only 15% of eligible children in 2012, the latest year we’ve got reliable figures for.

More recent figures from CLASP suggest that the gap between need and access has grown since, though we don’t — and to my knowledge, never had — a hard number for this.

We do, however, know that low-income parents must often make do with makeshift arrangements — sometimes parking a child with a relative, sometimes with a neighbor, sometimes just where they can keep an eye on their kids or not even that.

Most such arrangements may keep children safe, fed and the like. But they probably don’t provide the early learning experiences that a high-quality childcare program does. Money isn’t enough for that, but it’s the foundation.


Bowser Budget Shorts Vouchers, Leaves Huge Affordable Housing Gap

April 7, 2016

The National Low Income Housing Coalition reports that the District of Columbia has only 40 apartments affordable and available to rent for every 100 extremely low-income households and only 30 per 100 for the deeply low-income.

ELIs have incomes no greater than 30% of the area median — at most, $32,600 for a four-person family in D.C. For DLIs, the maximum is 15% of that median.

The NLIHC figures actually understate the affordable housing shortage here because the area includes well-off communities beyond the city line. Several years ago, the District’s own median was 23% lower.

Even so, clearly a yawning “housing gap” — a shortage of more than 30,600 units two years ago, when the Census Bureau conducted the survey NLIHC used.

It helps explain why nearly two-thirds of the District’s ELI households and nearly three-quarters of the DLI subset had to spend more than half their income for rent, plus utilities — commonly (and aptly) referred to as a severe housing burden.

The gap also, of course, helps explain why the District had so many homeless individuals and families — and still does, though we’ll have to wait a bit for new hard numbers.

The report confirms what everyone has known for a long time. The District sorely needs more housing that’s affordable for its lowest-income residents. And the District government must invest local tax dollars to create it — and preserve what remains.

The Mayor’s budget includes another $100 million for the Housing Production Trust Fund, which helps finance both construction and preservation, though not exclusively for ELIs and DLIs.

But developers can’t afford to build or renovate housing for them without an ongoing source of funds to help pay operating costs. That’s why the District also needs enough housing vouchers of the sort that’s attached to specific units — so-called project-based vouchers.

At the same time, it needs more tenant-based vouchers — those that make up the difference between what low-income people can afford and the market-rate rent of units landlords will lease to them.

Don’t look to the federal government to fund more vouchers. The current budget at best barely sustains those already in use. And the District hasn’t gotten anything like the number of vouchers it needs for many years.

That’s why its policymakers created the Local Rent Supplement Program — a source of vouchers modeled on the federal.

The DC Fiscal Policy Institute has raised concerns about proposed funding for LRSP in next year’s budget. There’d be only enough more to provide affordable housing for some 200 formerly homeless individuals and families, it says.

These would be tenant-based vouchers. They would replace some of the short-term vouchers individuals and families have through rapid re-housing and/or enable either or both to move from permanent supportive housing because they no longer need such intensive services.

The Mayor proposes no additional funds for the project-based type. How then could the Production Trust Fund actually produce more affordable housing for ELI residents — let alone the subcategory NLIHC has created?

The Fund, by law, is supposed to spend 40% on ELI housing every year. It hasn’t always in the past. But the head of the Housing and Economic Development Department said she’d ensure it did. And the latest awards seem to confirm that.

But developers may not respond to all the new opportunities the Fund will create if the Bowser administration can’t assure them of the ongoing subsidies project-based vouchers provide.

This isn’t the only problem with the significantly smaller LRSP increase the Mayor proposes. If all the tenant-based vouchers go to residents in rapid re-housing and/or PSH, there’ll be none for the ELIs and DLIs with housing burdens that put them at high risk of homelessness.

NPR recently profiled a single mother who’d just narrowly escaped eviction, but can’t rest easy because her monthly rent is about $335 more than what her job pays.

She knows that she should move the family to a more affordable place. but even the no-bedroom apartments she’s found rent for barely less than what she makes.

She applied for a housing voucher eight years ago. The family is now “1,000 something” on the DC Housing Authority’s waiting list, she says. There are about 40,000 families behind her. And there would be more if DCHA hadn’t closed the list three years ago.

The problem NLIHC documents is hardly unique to the District. The shortages it documents are actually larger nationwide, as are the severe housing burdens. We can, I think chalk this up partly to investments of local funds.

But that’s hardly a source of comfort to District families who can barely come up with the monthly rent and money for the electricity bill — or who can’t, but manage to stay housed, heated and the like by putting off first one and then the other.

These families are obviously one loss of working hours or other new strain on their budgets away from homelessness — or just one more late rent payment.

The District may rapidly re-house them. But few will be able to pay full rent when their short-term subsidies expire — or find an apartment they can afford. And the proposed budget would by no means fund LRSP vouchers for all that will need them to remain securely housed.

The Mayor has embraced the goal of making homelessness a rare, brief, one-time experience in the District. So it’s perplexing to see that she’s proposing a smaller real-dollar increase for LRSP than budgeted in any recent year but one.

Not much of the “fair shot” her budget promises for those residents on the waiting list and the severely housing-burdened who aren’t because they couldn’t apply.

 


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