Author Archives: Shawn McMahon

Data is History

If one had the time, she/he could probably tell the history of women since 1980, when President Carter recognized women’s history week, through 35 years of data and research studies. Modern women’s history is in part the history of creating new information to create a wider “circle of concern,” and to soften old, ossified notions of how women are faring, and what women can be.

The past two decades have produced generations of more accurate measures of financial well-being. Demand for metrics is broad-based, coming from advocates, progressive decision makers, and a public increasingly expecting to see numbers driving policy change and demonstrating impact. Both supply and demand of metrics have also increased in response to the advent of social media, which have created an expectation that pithy professional and political information will be regularly dispatched and responded to by political leaders, opinion leaders, advocates, academics and constituents. What used to be true for academics is now true for policy professionals: Publish or perish. This new compulsion is a curse to those who fear obsolescence, and a blessing for those on the lookout for new ways to break through the noise, to overcome “issue fatigue” and old conceptions of poor and poverty.

Over its 50-year history, WOW has sometimes led and sometimes joined the field in equipping those who care about women and families. In 1996, the Self-Sufficiency Standard became one of the first well-being measures developed within the American non-profit sector. WOW subsequently published the Elder Economic Security Standard Index (Elder Index)—a  measure of the incomes older adults need to meet their basic needs, protect their health and age in their own homes—and the Basic Economic Security Tables Index (BEST Index), a contemporary investigation of the annual income and savings workers require for economic security across the lifespan. These budget standards ask and answer questions about what basic needs are and how much income modern households need. They can also be used to answer any number of questions so many of us want to answer in helping women, questions about “good jobs,” economic development, gender equity, the cost of abuse, public assistance programs, personal development, etc. Such questions lie at the intersection of so much good work and good data being produced by our sister women’s organizations and researchers across the country. It should also be noted that the Obama Administration’s recent devotion to data and drive to answer such questions is historic (see executive orders, the DOL Women’s Bureau, Middle Class in America).  

Frankly, sometimes women’s history month can seem passé, like on old concept, like more noise. But if we want women and families to continue to occupy a small portion of decision makers’ minds, we need to better arm ourselves with improved understanding of security challenges and facts on the ground, to better reflect the realities of more and more kinds of women, and to connect data to the personal narratives of those who suffer insecurity and petition for policy responses.  

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Tax Reform and Wiser Deficit Reduction over Ham-Fisted Sequestration

In releasing his 2016 budget, President Obama declared that he is “not going to accept a budget that locks in sequestration going forward.” The president has instead recommitted his Administration to investment, and has proposed several family-friendly policies—tax reform, early education, childcare, higher education, etc.—intended to boost investment and growth.

The President’s tax credit proposals, in particular, should be popular on Capitol Hill. The efficacies of the Earned Income Tax Credit (EITC) and Child and Dependent Care Tax Credit (CDCTC) are widely recognized, and their incidence is well understood, which makes them two of the least controversial anti-poverty measures available to policy makers.

The Administration proposes to double the Earned Income Tax Credit (EITC) for workers without custodial children, and increase the maximum credit to approximately $1,000. This addresses the tax code’s historic neglect of households without children. WOW estimates that this change would increase the resources of a minimum wage ($7.25 per hour) worker by approximately $475 per year, an effective wage increase of approximately 3%.

The President’s budget would also increase the Child and Dependent Care Tax Credit (CDCTC) for middle-income families. This change would most help parents of young children. Those paying children’s care expenses would be able to claim twice as much as they can currently, as much as $6,000 per child for children five or younger; the credit rate would rise to 50 percent for some families; and the maximum credit rate for middle income families would move from 20 percent to 35 percent. The proposed changes would reduce the taxes of a family with two workers earning $10.10 per hour and two young children by approximately $465 per year.

Importantly, the changes would similarly benefit those earning average 2013 wages for a wide range of professions, such as food prep workers and construction workers, because these and other proposed changes to the tax code are aimed at a large swath of the population which includes the approximate 44% of Americans, the majority of them women, who lack economic security incomes and may be susceptible to financial crisis or poverty.     

While national debt will continue to be a threat, a failure to invest and reinvest can be a larger threat to intermediate- and long-term solvency—just ask the small business owners or homeowners that budget hawks claim to think of every day. The Administration budget’s several prudent investments in workers, future workers, families, infrastructure and defense should become part of a bipartisan commitment to replace ham-fisted sequestration.

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Is USA.gov’s ‘Help for Difficult Financial Times’ about Emergencies or Economic Security? Or Neither?

I recently had occasion to visit USA.gov’s Help for Difficult Financial Times webpage. It’s a remarkable portal which addresses a wide range of personal finance issues under the headings Unemployment, Jobs, and Training, Family Support, Housing, Health Care and Insurance and Debt and Credit. Intentionally or not, the information and links available at ‘Help for Difficult Financial Times’ largely reflect the federal government’s current role in Americans’ lives and the Administration’s foci—employment, health care, childcare and early education, disaster relief, housing relief.

 

Frankly, the site could benefit from a better title, and, at very least, an introduction which suggests a use other than help in hard times. “Help” and “difficult financial times” is expressive, impactful language, and may help the page’s information reach those in crisis. But the title suggests these resources are for those currently in need of and looking for help, and for use in extraordinary circumstances. Even if the nation weren’t still recovering from a housing crisis and record unemployment, there would still be millions who could and should benefit from these resources. There is not a worker or household finance manager who cannot benefit from the site’s convenient information on jobs, education and training, mortgages, business loans, nutrition, health insurance, etc. Hopefully the landing page’s title does not express someone’s concern that government information, expertise and programs be utilized only by those suffering “genuine” financial distress.

 

The site can also benefit from an improved framing of the information presented. True, the webpages are in some degree cobbled together from help and resources available on disparate government webpages, but it all adds up to something. The pieces may not (yet) constitute a comprehensive economic security toolbox, but they are a good start, and go some distance in defining economic security. Why not be explicit and advise the site’s visitors that workers, families, households should understand, plan for and work toward security, and pay attention to (nearly) all of the security fundaments presented? The federal government should not be helping a family survive only by helping them patch the current hole. They should be actively prompting the family to think comprehensively and often about how they can achieve their definition of security and not be waylaid by the inevitable next difficult financial time.

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Can’t Afford to Work?

A recent CNN Money article, Moms: ‘I can’t afford to work, introduces the reader to a suburban Maryland mother who states that the high cost of employment—commuting, clothing, childcare—make working infeasible. Her decision to give up her career raises questions: When does it actually become too expensive for a spouse or partner to work? When do expenses such as childcare and transportation become greater than a second after-tax income? It turns out that for the typical two-worker American household, having as few as two children can tip the scales.

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