A Roadmap for Opportunity: It’s Time to Put Iowa on the Right Path

At this critical juncture, Iowa can take the high road to shared prosperity, or go down a dead end.

181009-roadmap-logoIowa can unlock the potential of each individual and allow all workers to share in the fruits of their labor by making public investments in the foundations of a strong economy. Well-resourced schools, access to higher education, decent wages and protections, economic supports, clean water and renewable energy, and a cleaned-up tax system, all can pave the way to opportunities and broadly shared prosperity that Iowans want.

Unfortunately, policy choices have put us on a road that prioritizes corporate profits over worker wages and corporate tax cuts over the public investments that allow for a strong, sustainable economy. We are at a crossroads and our policy choices today and in the near future can either pave the path to economic opportunity in every corner of our state, or create roadblocks to prosperity for everyday Iowans.

Our people-first roadmap offers the way forward. It lays out the evidence-based, responsible solutions to our state’s most pressing issues, pinpointing several stops along the way that would mark progress for our state, such as:

pinCreating the workforce of our future and ensuring our children reach their potential. Iowa can and should ensure K-12 schools receive the funding they need for every child to succeed, no matter where they live. We also must restore our commitment to higher education with more state support, lower tuition, and aid to reduce student debt.

pinBoosting economic security and supports for working Iowans. Giving Iowans’ lowest wage workers a long overdue raise, ensuring workers get paid what they’re legally owed, shoring up our system of compensation for workers who get hurt on the job, and restoring worker rights to collective bargaining can ensure that all Iowa workers are getting a fair deal. Iowans also need a boost in child care assistance, which can make or break the ability of a family to work.

pinRestoring a public commitment to the health and well-being of every Iowan, particularly seniors and people living with disabilities. Reversing the privatization of Medicaid and pursuing cost savings through innovation and efficiency rather than reduced services and worker wages are critical steps to ensuring access to health care for all Iowans — now and in the future.

pinEnsuring clean water and renewable energy for a healthy, sustainable Iowa. We can and must balance the state’s need for clean and abundant water with our agricultural economy by reducing water pollution. Likewise, Iowa should restore its legacy of leadership in renewable and efficient energy in order to create a cleaner, greener state for future generations.

pinCleaning up and restoring balance to the tax code. Right now, Iowa asks the lowest income Iowans to pay a higher share of their income in state and local taxes than those with the highest incomes. We can fix this by cleaning up corporate tax loopholes that squander precious public dollars that could otherwise be invested in shared opportunity for Iowans.

Iowa is at a critical juncture. We can take the high road that leads to progress and shared prosperity, or go down a dead end. The policies in this roadmap provide a clear route to a stronger Iowa. For more detail on each stop on the roadmap, please click here.

SNAP decision could be backward

Clear progress in access to fresh, nutritious foods for children and the disabled in Iowa are at stake in the White House plan for SNAP.

The Trump administration has proposed a 2019 budget with deep cuts and fundamental changes in the Supplemental Nutrition Assistance Program (SNAP). Formerly known as Food Stamps, SNAP every month assures access to food for more than 350,000 Iowans and pumps more than $38 million into the state economy.[1]

The White House proposal would cut of about $213 billion from SNAP over the next decade. About 40 percent of benefits issued to SNAP recipients would be held back by the USDA. Some cuts would go to fund non-perishable food boxes. Other cuts would just reduce access to food for citizens.[2] The budget also would kick some recipients off the program.

Now adults who are not raising children or are disabled have just three-month of food aid over three years. The change raises the age for those who can get food under that provision to age 62. It was formerly 49. The younger adults would get nothing. Also the White House proposal eliminates the minimum benefit, and caps assistance to any household at six people.

These changes would have unfortunate effects on already high levels of food insecurity in Iowa.

An estimated 10.7 percent of Iowans are considered food insecure, meaning they lack consistent access to affordable, nutritious food.[3] SNAP assisted one in eight Iowans in fiscal year 2016. Of those families receiving SNAP benefits, 69 percent have children, and more than 25 percent of benefits go to households with family members who are elderly or disabled. The benefits are not overly generous. In December 2017, Iowa SNAP recipients received just $1.15 per meal.[4]

Food insecurity is correlated with obesity and chronic disease with adults[5] and poses serious threats to child development and school performance.[6] Research has shown that “every $5 in new SNAP benefits generates as much as $9 of economic activity by adults in families to receive benefits.” [7] SNAP spending contributes to local spending and cuts would hurt small grocers in rural Iowa.

Instead of an opportunity to choose nutritious food in the current debit card system, the administration would offer delivered boxes of foods such as canned meats, cereal and shelf-stable milk. The alleged savings from the change ignores the cost of delivery.

There has been clear progress in getting SNAP to provide access to fresh, nutritious foods for children and the disabled in Iowa. For instance, some Iowa communities have piloted a program called Double Up Food Bucks that doubles the value of food dollars up to $10 to purchase fresh produce at farmers markets in order to incentivize healthy eating.[8] Food boxes are a poor substitute for that kind of initiative.

The White House proposal takes Iowa backward on health and food access.

Posted by Natalie Veldhouse, research associate at the nonpartisan Iowa Policy Project. nveldhouse@iowapolicyproject.org

 

 [1] Iowa Department of Human Services, F-1 Food Assistance Program State Summary — January 2018. http://publications.iowa.gov/26363/
 [2] Center on Budget and Policy Priorities, “President’s Budget Would Cut and Radically Restructure SNAP Food Benefits,” February 2018. https://www.cbpp.org/blog/presidents-budget-would-cut-and-radically-restructure-snap-food-benefits
 [3] U.S. Department of Agriculture, “Household Food Security in the United States in 2016,” September 2017. Table 4: Prevalence of household-level food insecurity and very low food security, average 2014-2016. https://www.ers.usda.gov/topics/food-nutrition-assistance/food-security-in-the-us/key-statistics-graphics.aspx
 [4] Ibid, Iowa Department of Human Services.
 [5] Food Research & Action Center, “The Impact of Poverty, Food Insecurity, and Poor Nutrition on Health and Well-Being,” December 2017. http://frac.org/wp-content/uploads/hunger-health-impact-poverty-food-insecurity-health-well-being.pdf
 [6] Food Research & Action Center, “The Connections Between Food Insecurity, the Federal Nutrition Programs, and Student Behavior,” 2018. http://frac.org/wp-content/uploads/breakfast-for-behavior.pdf
 [7] U.S. Department of Agriculture, The Food Assistance National Input-Output Multiplier (FANIOM) Model and Stimulus Effects of SNAP. October 2010. https://www.ers.usda.gov/webdocs/publications/44748/7996_err103_1_.pdf?v=41056
 [8] Iowa Healthiest State Initiative, “Iowa Healthiest State Initiative Expands Double Up Food Bucks Program in Iowa,” May 2017. http://www.iowahealthieststate.com/blog/press-room/iowa-healthiest-state-initiative-expands-double-up-food-bucks-program-in-iowa/

Welcome silence on tax cuts; too much silence elsewhere

It is reassuring that the Governor chose not to grab the tax-cut mantle so strongly.

Against a backdrop of calls for new tax cuts, Governor Branstad in his silence sounded a note of caution.

In fact, the Governor’s apparently final Condition of the State message was notable for several issues that he chose not to address or promote.

Iowans who are vulnerable economically are looking for answers, yet there was no discussion of an increase in the minimum wage, now stagnant for nine years at $7.25, or of protecting local minimums above it.

The Governor offered no guidance for the Legislature and the public for what could happen with health coverage if Congress repeals the Affordable Care Act or imposes new restrictions on Medicaid. These issues could quickly become the most pressing in our state as the Governor prepares to leave office for his ambassadorship to China.

At the same time he encouraged Iowans “to ask the tough questions that challenge the status quo” about services and state commissions, he declined to make the same charge regarding Iowa spending on tax breaks — even though General Fund tax credits have more than doubled in just 10 years, with reforms long past due.

At the same time he set a goal for 70 percent of the workforce to have post-high school education or training by 2025, he was promoting $34 million in cuts in higher education from the current year budget.

At the same time he promoted a House-passed plan to divert General Fund revenues to fund water-quality efforts, he again rejected a long-term, dedicated and growing source of revenue — a three-eighths-cent sales tax as authorized by voters in 2010 — that would not compete with existing needs.
There will be much for Iowans to review in the budget proposals as they make their way through the legislative process, along with issues including public-sector collective bargaining and other big issues affecting working families in the coming weeks and months.

It is reassuring that the Governor chose not to grab the tax-cut mantle so strongly on his way out the door. But he is missing an opportunity to rein in or even reverse Iowa’s runaway spending on tax credits, which has contributed to unmet needs in our state.

owen-2013-57Posted by Mike Owen, Executive Director of the Iowa Policy Project
mikeowen@iowapolicyproject.org

County Minimum Wages Spread their Benefits Widely

Clearly, any action by the Iowa Legislature to roll back county minimum wages would harm workers and local economies in many of Iowa’s most populous counties.

It’s not just four counties that benefit from the higher local minimum wages that go into effect this year. Those four counties — Polk, Linn, Johnson and Wapello — account for a third of all private-sector jobs in the state. And a large number of people holding those jobs live in neighboring counties.

Polk, Linn and Johnson counties are the hubs of metropolitan areas, surrounded by counties where a sizeable share of the workforce commutes to the hub. Those commuters earn higher wages thanks to the county supervisors in the three counties. And they come home to spend those higher wages at local gas stations, restaurants, grocery stores and other retail shops. They hire local plumbers and builders and electricians. In all, at least 12 counties in addition to Polk, Linn and Johnson will see a substantial increase in resident incomes and local purchases as a result of those three county minimum wages.

The map below shows the percentage of lower wage workers in each suburban county who are employed in the hub county with the higher minimum wage.[1] Clearly, any action by the Iowa Legislature to roll back county minimum wages would harm the workers and the local economies in many of the state’s most populous counties.

Iowa 03-BLUE-counties

[1] Lower wage is defined as earnings of $3,333 per month or less. Restricting it to those earning $1,250 or less results in very similar percentages; the lower figure, however, would represent a wage of even less than the current minimum for someone working full time, whereas the county minimums when fully phased in will benefit all those earning under $10.10 (Johnson) to $10.75 (Polk), and some workers above those levels. These earnings cutoffs were the only ones provided in the Census data.

2010-PFw5464Posted by Peter Fisher, Research Director of the Iowa Policy Project

pfisher@iowapolicyproject.org

A new baseline: Drop in number of uninsured Iowans

The new census numbers set a baseline to evaluate the effects of Iowa’s move this year to privatize Medicaid. After sharp declines in Iowa’s uninsured population, it will be interesting to see if declines continue.

Nineteen out of 20 Iowans are now covered by health insurance, thanks in large part to the Affordable Care Act and Iowa’s Medicaid expansion. The latest census data, released today, show that the percent of Iowans who were uninsured dropped from 8.1 percent in 2013 to just 5.0 percent in 2015. While 248,000 Iowans were without insurance in 2013, by 2015 the number had dropped to 155,000.

Only four states have a lower percent of the population without health insurance: Massachusetts, Hawaii, Minnesota and Vermont, plus the District of Columbia.

Across the country, the gap has widened between states that expanded Medicaid and those that did not, as shown below. Twenty-eight states, including Iowa, chose to expand Medicaid eligibility in 2014 or 2015 to families with income up to 138 percent of the poverty level. The uninsured population has declined faster in the last two years in the states that chose to expand.

In Iowa, the 2015 census numbers establish a baseline for evaluating the effects of Iowa’s Medicaid privatization, which took place early this year. It will be interesting to see if the uninsured population continues to decline in 2016.

2010-PFw5464Posted by Peter Fisher, Research Director

pfisher@iowapolicyproject.org

For more on this issue, see:
Census Data Show States Not Expanding Medicaid Falling Further Behind, by Matt Broaddus, Center on Budget and Policy Priorities

Enriching the minimum wage discussion

History shows the minimum wage was meant to be a meaningful policy tool to help working families, not limited to “entry level” work or teens. In fact, efforts to establish the wage came as policy makers were trying to remove young teenagers from the workforce.

The spin against any minimum wage increase — or even having a minimum wage — has become predictable. This should surprise no one. Policy makers since President Franklin D. Roosevelt have battled the same stuff.

A little relevant history might be just what is needed as Iowans consider the arguments for a national, state or even local increase, which passed in Johnson County.

History shows the minimum wage was meant to be a meaningful policy tool to help working families, not limited to “entry level” work or teen wages. In fact, efforts to establish the wage came at the same time policy makers were trying to remove young teenagers from the workforce.

The U.S. Department of Labor website has an interesting paper published almost 40 years ago by a DOL historian, Jonathan Grossman: Fair Labor Standards Act of 1938: Maximum Struggle for a Minimum Wage In it, Grossman relates a story about a young girl’s note to Roosevelt, telling of pay being cut from $11 a week to between $4 and $6 a week. 

To a reporter’s question, the President replied, “Something has to be done about the elimination of child labor and long hours and starvation wages.”

“Starvation wages” are your concern if you expect the wage to be meaningful to a household budget.

Interestingly, Iowa Policy Project research shows what is needed for a household budget. In Linn County, where a very low $8.25 has been suggested by a split task force, a single parent needs to make between $21 and $25 an hour to support a household on a bare-bones, basic-needs budget without public supports. In Polk County, it takes between $22 and $27 for a parent in similar circumstances.

IPP and Economic Policy Institute analysis also show this issue is scarcely about teens. Statewide, more than 4 out of 5 workers affected by an increase to $12 are 20 years old or older. A quarter of them have children. Over half of them work full time. On average, they account for over half of their family’s total income.

County supervisors in Johnson County have taken the baton across generations from FDR, to assure families have a chance. They acted last year to raise the local wage in three steps to $10.10 by next January 1, and they have already taken two steps, to $9.15.

Discussions are moving ahead in Polk County, Linn County and Lee County. Passing a local wage is a significant signal to state leaders that they are through waiting for action. Any county must consider whether the content of its action is significant as well — however bold it may seem to pass local law on this issue, the amount does matter.

And for those who say, “Let the market handle it,” just wake up. Clearly, it does not. As FDR stated in 1937:

The truth of the matter, of course, is that the exponents of the theory of private initiative as the cure for deep-seated national ills want in most cases to improve the lot of mankind. But, well intentioned as they may be, they fail…. (T)hey have no power to bind the inevitable minority of chiselers within their own ranks.

Though we may go far in admitting the innate decency of this small minority, the whole story of our Nation proves that social progress has too often been fought by them. In actual practice it has been effectively advanced only by the passage of laws by state legislatures or the National Congress. [1]

Do we value history? Do we value work? Do we value families? Do we value practical solutions through public policy? We are about to see.

[1] Franklin D. Roosevelt: “Message to Congress on Establishing Minimum Wages and Maximum Hours.,” May 24, 1937. Online by Gerhard Peters and John T. Woolley, The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=15405.

owen-2013-57By Mike Owen, Executive Director of the Iowa Policy Project.

Contact: mikeowen@iowapolicyproject.org

Privatizing Medicaid: ‘Why?’ ‘What?’ and ‘How?’ not yet answered

How we assure health care access to low-income Iowans needs to be the central issue here, not an afterthought.

060426-capitol-swwWhy do we have Medicaid? It’s a simple question with a simple answer. We have Medicaid because if we don’t, there are millions of Americans, and nearly 600,000 Iowans, who will not be able to get health care. Private industry will not provide it.

Why, we must ask, would we turn over to private industry a critical part of our public safety net to business interests that operate with a principal purpose of making money?

How do we assure that services are provided, that our responsibilities are met, if the people running the operation are not answerable to us?

As the legislative Health Policy Oversight Committee meets today about the Governor’s privatization edict on Medicaid, we need to remind ourselves of these basic questions.

When the Governor cannot detail the purported savings and our common sense tells us otherwise, we need an assurance that data will be available — and publicly available — to monitor what is happening with a service that has been accountable and efficient in expanding health-care access to Iowans who need it. We need to know Iowa is not setting itself to repeat problems that have been demonstrated in other states.

What will pass for public oversight after we’ve turned over the keys to private industry?

Over three dozen people and organizations filed comments (available here) with the oversight committee for today’s meeting at the Statehouse. Many have a firsthand understanding of the purpose and practice of Medicaid as we know it, and serious questions of their own about the uncertain world where the Governor is taking us, on his own.

Clearly, many fundamental questions have not been fully vetted through the legislative process, nor given a hearing before the decision was made within the Governor’s Office.

How we assure health care access to low-income Iowans needs to be the central issue here, not an afterthought.

Owen-2013-57Posted by Mike Owen, Executive Director, Iowa Policy Project
mikeowen@iowapolicyproject.org