Monday marked the enactment of possibly the largest investment for working families resulting from this year’s legislative session.
Governor Culver signed into law an expansion of the Food Assistance program that will reach 26,212 more Iowans who are struggling to buy enough food, either because they are unemployed, underemployed or simply have too low of wages even while working full-time to meet their day-to-day living expenses.
Not only will this program change help to secure almost $18 million worth of food for Iowans, it will provide a needed boost to local economies throughout the state. In the end, this piece of legislation will generate $33 million in economic activity over the next year and for years to come. Now, we just have to let people know that new supports are available to help them!
The labor force grew by 2,900 workers last month. This could be a sign of increased confidence in the market, as more Iowans decide looking for work is a worthwhile endeavor.
I cannot wait for the day when The Iowa Policy Project’s monthly JobWatch headline reads unequivocally, “Nonfarm Jobs Increase for 12th Consecutive Month and Unemployment Remains Steady at 3 Percent.”
Alas, the forecast is still a bit mixed: Iowa is certainly making headway in nonfarm jobs numbers, but we continue to see high unemployment rates.
The good news is pretty good. The number of nonfarm jobs in Iowa increased by 7,300 to 1,474,200 in March. This increase is heartening, though we do have a ways to go. Iowa is still down 16,200 jobs compared to last March.
Then there is that other number: the unemployment rate. The unemployment rate edged upward to 6.8 percent, from 6.7 percent in February and well above the 5.5 percent we saw this time last year. The last time the unemployment rate reached 6.8 percent was July 1986, when the state was recovering from the chronically high unemployment of the early 1980s.
As is usually the case, Iowans are fortunate to be better off in terms of unemployment than the rest of the nation. The national unemployment rate remained steady in March at 9.7 percent.
But there are other clues in these numbers. The labor force grew by 2,900 workers last month and is up by 12,700 over March 2009. This could be a sign of increased confidence in the market, as more Iowans decide looking for work is a worthwhile endeavor.
March marks the third consecutive one-month improvement in nonfarm jobs, and the sixth in the last eight months. Iowa has posted an average gain of 5,100 jobs per month for the last 3 months. We are currently down 54,000 jobs from last decade’s high point (1,528,2000 in November 2007).Continuing this trend would be great… and would start to push us closer to that headline I can’t wait to type.
It is quite possible there is no more heavily spun day on the calendar.
Today is, as we all know, “Tax Day,” the deadline for filing our federal individual income tax returns. It is quite possible there is no more heavily spun day on the calendar. You can’t even find refuge on the comics pages.
Beyond that perspective on the value of taxes in funding essential public services, other useful information also is worth considering today about who pays taxes. Citizens for Tax Justice, in a report this week about tax changes resulting from the recovery, or “stimulus,” legislation signed by President Obama last year, notes the following:
99 percent of working families and individuals in Iowa benefited from at least one of the tax cuts signed into law by President Obama.
Working people in Iowa received $1,115, on average, from these breaks.
These tax breaks benefited working people at all income levels.
For the full report (3-page PDF) click here and for the Iowa-specific summary (4-page PDF) click here.
David Leonhardt of the New York Times and Ezra Klein of the Washington Post (whose blog links to Jon Stewart’s take of the situation on “The Daily Show”) illustrate that lower-income Americans pay taxes, even if others might not want to acknowledge it.
As Stewart suggests, actually getting the facts about who pays taxes — which also include federal payroll taxes and state and local taxes — might not fit the outrage being pushed at a given moment: “Knowing that doesn’t make you as mad, does it?”
The new numbers present some reason for hope for job-seekers — but also show Iowa jobs are falling short of demand. An extension of unemployment benefits in this climate would be important, to help struggling families and the economy.
Iowa nonfarm jobs grew in January, but revised December numbers are far below previous estimates. Nonfarm, or payroll, jobs rose by 4,600 in January to 1,463,400. Though a clear gain, it shows the number of jobs for December was vastly overstated. The January number is 5,400 jobs below the level that had been previously estimated for December.
The unemployment rate showed a slight increase following annual government revisions of employment data, to 6.6 percent from 6.5 percent in December. That December number had previously been reported at 6.6 percent.
The new numbers are the best numbers available, and they do present some reason for hope in what has been a very difficult period for job-seekers.
Over the year, from January to January, we see pretty similar trends to what we’d seen earlier. Iowa lost nearly 40,000 jobs in one year (38,200), and over 40 percent of the loss (16,600) came in manufacturing. These are jobs that traditionally pay better than most and offer health benefits.
It’s always best not to get too swept up in the monthly numbers because they are subject to revision. It’s better to take a step back and view them over time.
What the numbers do illustrate, however, is that Iowa jobs are falling short of demand for work. This yet again emphasizes the need for an extension of unemployment insurance benefits by Congress — both to help families make ends meet when jobs aren’t available and to bolster the economy. Unemployment benefits are spent in local economies, and that helps to create jobs.
About 1 in 5 Iowans would be eligible for direct consumer relief on energy costs in the House climate bill.
Climate change affects everyone, everywhere.
Everyone will have to make changes, but for some it will be more difficult than others. Public policy must recognize this disparity.
Recent negotiations in Copenhagen dealt with climate-change policy ideas that hit poor countries differently from rich.
Unless rich countries provide funds to help implement new energy-efficiency and renewable-energy technology, developing countries will not be able to afford a transition to smarter, cleaner, but initially more expensive methods of producing energy.
Within the United States, we’re going to see higher energy prices by making coal and other fossil fuels account for their environmental and health effects, at least initially. It is not avoidable, and without careful design these policies will affect people differently at different income levels.
While a climate-change bill has not passed the full Congress yet, President Obama last year signed economic recovery legislation that takes some steps, helping low-income people who find it difficult to insulate their homes and upgrade furnaces and other appliances to use less energy.
In that so-called “stimulus” package, the American Recovery and Reinvestment Act (ARRA), Community Action Agencies in Iowa and around the nation received a large boost in funds to ensure that homes of the poorest families use much less energy.
Before, that program spent about $15 million per year on weatherization in Iowa. ARRA added $80 million over three years. The work is currently under way, helping people to weatherize their homes and helping the Iowa economy at the same time.
Climate legislation in Congress can and should do more.
The climate-change legislation passed last June by the U.S. House recognized the difference. Where, higher-income Americans can offset the higher costs of a gallon of gas or kilowatt hour of electricity by installing insulation or combining car trips, such efficiency moves are out of the reach of many Americans at low incomes.
About 1 in 5 Iowans — approximately 579,000 at low incomes — would be eligible for direct consumer relief in the House bill. These payments would compensate for higher expenses for energy and energy-intensive goods and services for those households.
A Senate version of the bill does less directly for low-income citizens, but that bill, passed out of the Environment and Public Works Committee, also makes improvements. It’s something that needs further consideration.
At home and abroad, climate-change policy must recognize the disparity in economic ability to make the necessary changes to save our environment, our resources and our planet.
As these funds cycle through the economy, thousands of jobs are produced or saved, and economic activity benefits Iowans.
American Recovery and Reinvestment Act (ARRA) put millions of dollars into the hands of Iowans who needed money most —Iowa’s recently unemployed. It encouraged states to update their unemployment insurance eligibility (of which Iowa was the first), enabling part-time and low-wage workers to qualify for unemployment insurance (UI).
Unemployed Iowans benefited from ARRA in two key ways: they received an additional $25 per week and they had their eligibility for receiving UI extended significantly. Rather than having just 26 weeks of UI, ARRA extended workers’ eligibility for UI by 47 weeks, to 73 weeks total.
As a result of these two measures, the Iowa economy will have an additional $314.8 million ($82.6 million for the additional $25 in weekly payments and $232.2 million for the extension of benefits) injected into its economy in 2009 and 2010.
As the only source of income for many unemployed workers, UI benefits are spent quickly and locally. Apart from helping the unemployed meet basic needs, UI benefits also help the local economy, maintaining or even increasing the demand for goods and services. Providers of these goods and services end up using these funds to pay their workers’ wages, who in turn, spend their wages on their basic needs. The multiplier effect of the increase and extension of UI benefits, as well as other workforce- related provisions of ARRA produced almost $501.7 million in direct and indirect effects in 2009, and will produce over $314.6 million this year.
As this money cycles through the economy, we estimate over 3,700 Iowa jobs were produced or saved last year, and over 2,200 this year, solely as a result of the UI measures of ARRA.
Clearly, UI benefits are no match for a steady job with a decent wage and benefits. But for the thousands of Iowans who have found themselves without such a job, ARRA has been a lifeline. Moreover, it has helped keep many other Iowans who, but for the stimulus, might have found themselves unemployed, too.
Like Oregon voters, Iowa voters favor a balanced approach to budget challenges.
Iowa could learn something from Oregon voters about taking a balanced approach to budget challenges.
In a victory for fiscal prudence, Oregon voters recently passed two initiatives — Measures 66 and 67 — that upheld their legislature’s decision to use a balanced approach to their budget shortfall.
In Oregon’s case, lawmakers last session made cuts to the budget and raised income tax for the top 3 percent of filers. They also raised the corporate minimum tax from $10 and increased the corporate income tax rate for businesses netting over $10 million a year, and temporarily for most other businesses. As the Legislature already voted last session to use a balanced approach that included trimming the budget and raising revenue, this vote saves Oregonians from further cuts in important services. This is notable for two reasons:
■ Oregon is known for its opposition to raising taxes, having last voted to raise taxes about 80 years ago when it added a state income tax.
• It is one of five states that does not have a state sales tax.*
• It also has a statewide cap on property tax.
• It has a “kicker” law that automatically sends money back to residents when revenues exceed forecasts. Oregon has no rainy day fund.
■ Given the opportunity for a direct vote, Oregon voters chose to retain a balanced approach and raise taxes on themselves rather than make additional cuts that would decrease funding for education, health care and other essential services.
Oregon’s voters truly understand the importance of a balance during difficult economic times.
So, what does this mean for Iowa? For one, the Oregon vote remarkably reflects the results of a survey of Iowa voters last fall.
■ Six in 10 favor some increase in taxes and fees rather than making cuts alone.
■ By the same ratio, Iowa voters believe the wealthiest Iowans — those earning over $250,000 per year — and big corporations pay less than they should in taxes.
The situation is complicated, and Iowa voters recognize that using budget cuts or tax increases alone will not solve our balance problem.
Oregon’s unemployment rate is 11 percent, compared to Iowa’s 6.6 percent. Oregonians understand that a budget has two sides, and a balanced approach to spending and revenue assures a responsible way to protect critical services in difficult economic times.