Good Jobs & Economic Security
Defining Economic Security Income
For retirees and others not in the workforce, basic needs include housing, food, basic transportation, healthcare and household items. For worker households, security wages must cover basic health, safety and work-related costshousing, utilities, food, transportation, childcare, health care, household items and taxes. Wages must also allow families to protect themselves from poverty by saving for retirement and emergencies, and to, if desired, build wealth by saving for education and homeownership. These definitions of economic security allow realistic benchmarking of wages, job quality, well-being and a wide range of current and prospective public policies. For almost two decades, WOW has developed innovative measuresthe Self-Sufficiency Standard, the Basic Economic Security Tables (BEST) Index and the Elder Economic Security Standard Index (Elder Index) to define the income individuals and families need to pay for basic needs and save without public or private assistance.
Defining Good Jobs
A good job is first and foremost defined by its economic security income, which allows an individual or family to pay for basic needs and save without government or private assistance. But job quality is not defined solely by wages. Job quality is also defined by the employment-based benefits and workplace practices that recognize workers as members of families and communities. According to WOWs Basic Economic Security Tables (BEST), access to health insurance, a 401(k) retirement plan and unemployment insurance can decrease a family of fours economic security income requirement by more than $5,000 per year. Worker economic security can also be markedly improved by workplace flexibility, such as sick days and flexible scheduling, needed to take care of health and family needs and protect the public from illness. WOW is an active member of local and national campaigns to require employers to offer workers paid sick days and schedule flexibility, to expand and strengthen the Family Medical Leave Act and to expand eligibility for unemployment insurance.
Employment-based benefits such as insurance, a retirement plan, and access to unemployment insurance (UI) and paid leave are critical to many workers pursuit of economic security. Such benefits can turn a moderate wage into an economic security wage. Access to retirement benefits, UI and employer-based health insurance can save a family of four in the US about $5,000 a year. WOW works to improve access to employment-based benefits through national and state advocacy and by demonstrating the economic impact such benefits can have on working families.
Public Assistance and Social Insurance
Few federal income and work support programs, also known as public assistance programs, have changed substantially over the years. However, their capacity to keep participants out of poverty is often affected by budget battles and shrinking inflation-adjusted assistance values, including threats to eliminate them or consolidate their funding into block grants which would allow states to divert federal funding from state assistance programs. Assistance programs such as Temporary Assistance to Needy Families (TANF), the Supplemental Nutrition Assistance Program (SNAP), Medicaid, childcare assistance, workforce development programs and Meals on Wheels are pawns in annual Congressional debates over revenues and appropriations. WOW research and advocacy helps protect working support programs by contributing to debate, urging action and keeping our partners informed of developments.
Congress established the federal minimum wage in 1938, and it has since become a critical component of the US economy. Nearly 4 million Americans earn the minimum wageor less, as tipped workers are legally paid a subminimum wage and many others, such as home health aides, are excluded from the law. Women are 50% more likely than men to earn the minimum wage. The federal minimum wage has never been indexed to keep up with inflation and does not provide enough to meet basic needs. In fact, if the minimum wage had kept up with inflation since its creation, it would be approximately 50% higher than it is today. WOW’s Basic Economic Security Tables (BEST) demonstrate that a single parent with two young children would need to work more than three full-time minimum wage jobs to achieve basic economic security for her/his family.
Employer groups often contend that a mandatory minimum wage reduces employment and stunts economic growth, but a growing body of research shows that greater income equality is correlated with growth, and that low-income workers who see increased wages create growth by quickly returning their wages into the economy through spending. WOW advocates raising the minimum wage and indexing it to inflation, and expanding coverage to more workers. WOW works in Washington, DC, and with its state partners, to support and improve federal, state and city minimum and living wage laws by educating legislators, community leaders and the public. WOW also uses its Basic Economic Security Tables (BEST) and Elder Economic Security Standard Index (Elder Index) to demonstrate how the minimum wage measures up against true economic security.
Paid Family Leave
The United States does not have a national system of paid maternity, paternity or family medical leave. This makes it very difficult for workers to juggle their work and family demands, especially during major life events such as the birth of a child or major illnesses. The 1993 Family and Medical Leave Act (FMLA) ensures 12 weeks of unpaid leave to workers who need to provide family care. However, FMLA does not cover all workers. To take FMLA leave, workers must be employed by a company or organization of 50 or more employees, must work at least 1,250 hours per year and must have worked for their employer for at least one year. These restrictionsand the fact that leave is unpaidprevents a great many low-income, moderate-income and part-time workers from taking FMLA leave. A handful of states have improved FMLA by passing their own paid leave insurance legislation. WOW provides research and advocates nationally and within states for paid family leave, and educates employers and policy makers on paid family leaves importance to worker and family economic security.
Many American business, especially the largest corporations, do not offer or guarantee paid sick days to their employees. As a result, millions of workers must either go to their jobs illcreating an additional public health concern for co-workers and customersor stay home without pay and possibly risk losing their jobs. In the absence of national policy, several jurisdictions have passed paid sick days laws. WOW provides research on sick days, advocates nationally, and supports state and city sick days campaigns. WOW also supports the Healthy Families Act, which would guarantee seven paid sick days annually, for workers at businesses with 15 or more employees, to recover from routine illness, care for a sick family member or recover from domestic violence.
Taxes & Tax Credits
Tax deductions and credits greatly reduce effective tax rates, and are among the most important anti-poverty/economic security measures ever enacted.
- The Earned Income Tax Credit (EITC or EIC) is a refundable federal income tax credit for low- and moderate-income working individuals and families. It is critical, because the tax is refundable and tax filers neednt owe taxes to receive the EITC.
- The child and dependent care expenses credit is a non-refundable federal income tax credit which allows families to deduct a percentage of child or dependent care costs from the federal income taxes they would otherwise have to pay. The credit can equal as much as 35% of care expenses, depending on household income.
- The Child Tax Credit is a non-refundable federal tax credit for those with dependent children. The credit is equal to $1,000 per child. If the amount of the Child Tax Credit is greater than the amount of income tax owed, families may be able to claim the refundable Additional Child Tax Credit.
State tax credits are smaller than, and a direct portion of, federal tax credits. State child and dependent care credits allow families a credit of up to, or even above, the full federal credit. Campaigns to create or increase state tax credits, or to make credits refundable, are an important policy front for national and state advocacy groups. WOW works to preserve or expand federal tax credits, and works with our state partners in their campaigns to increase tax credits for families across the country.
Many workers rely on tips for the bulk of their incomea precarious situation which can prevent their meeting basic needs. Tipped workers are found in many of our nations fast-growing service industries, such as restaurants, hotels, nail salons and parking garages; the largest group is waitstaff. Tipped workers have been restricted to a base federal minimum wage of less than a few dollars per hour, with some states requiring slightly higher minimums. Since the tipped worker minimum wage was frozen in 1991, the real value has fallen by 36% in the last 20 years. WOW research found that 90% of adult waitstaff have been earning below the income needed to meet basic needs. Eighty-three percent of those waitstaff are women. WOW conducts and collects research and educates employers and policy makers on ways to improve the overall security of tipped workers.
Workplace flexibility policies and programs such as telecommuting, flexible hours, compressed workweeks and paid leave can make the difference between work and unemployment for many workers negotiating the demands of work and family. Low- and moderate-wage jobs in manufacturing, health care, retail, hospitality, restaurants and tourism are characterized by highly structured work environments and tasks that usually need to be performed at the workplace. While telecommuting may not be an option, low-cost workplace flexibility options in these jobs can include increased schedule control, advance notice of schedules and schedule changes, flexible start and end times and paid sick time. Through research and advocacy, WOW educates workers, employers of low-wage workers and policy makers on the impact and effective implementation of workplace flexibility practices.