Agenda - 12-04-2006-7a - Laserfiche WebLink

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a~ ~ Economic Self-Sufficiency The economic growth that has occurred in North Carolina since the 2001 recession has largely bypassed the state's working families. According to a 2005 report from the NC Justice Center, "Failing Jobs, Falling Wages" (by John Quinterno and Elizabeth Jordan), on average North Carolina parents caring for their children must earn $12.32/hour to meet their family's most basic needs. Unfortunately, almost half of North Carolina's families with children are not earning this living wage and women are more likely to be among them. Female-headed households make up only 13% of all North Carolina households but 37% of all households in poverty. Minimum Wage: North Carolina's minimum wage will rise from $5.15 to $6.15 an hour in 2007, thanks to a formidable lobbying effort by some dedicated legislators and by grassroots supporters throughout the state. This significant effort to restore the value of fair pay for hard work will benefit 139,000 workers, the bulls of whom are women. Despite the victory, the minimum wage still buys less than it did in 1968 and is not a living wage. The campaign must begin all over again for an additional raise-and equally important, for indexing the wage to inflation so that its value is maintained over time. Work First/TANF: Welfare reforms of the 1990's successfully decreased North Carolina's welfare rolls, but have not moved families out of poverty. North Carolina's cash assistance program, called Work First, cut its caseload over 73 percent from about 132,000 cases in January 2005 to 32;000 now. This reduction was perceived as healthy during the booming economy of the late 1990s, but showed its dire consequences when the recession began in 2001. Poverty among NC families with minor children went from 15% in 2000 to 19% in 2004, but the Work First caseload continued to drop 25% during that same period. Families are not receiving Work First in spite of their need for help due to three primary reasons: 1) North Carolina's extremely low benefit levels -less than one-fifth of poverty level or $236/month -- do not motivate families to endure the embarrassing and detailed application process; 2) welfare reform's emphasis on requiring families to work regardless of the pay and 3) time limits on the receipt of benefits. Those receiving Work First cash assistance may do so for only two years. They can return to the Work First rolls after being off for a while but will still have a federal life-time limit of five years for assistance. At this time, the program isrn transition because of new federal rules. In July 2006, US HHS issued very restrictive new work requirements for the federal Temporary Assistance for Needy Families Slock Grant, which is the funding source for North Carolina's Work First program. The new rules require states to have more of their cash assistance caseload participating in a narrower range of work activities than previously required. They also do not give states credit for having reduced their caseload by getting previous years' recipients into jobs. The end result is that North Carolina and many other states will likely fmd it very hard to meet the federal work participation requirements and could face financial penalties. A penalty for North Carolina could amount to a loss of $15 million in the first year and more thereafter. The narrowly drawn rules are expected to further reduce the number of welfare recipients, potentially leaving many more low-income families with no source for cash assistance aid. Education and Training: Education is a prerequisite for success in today's service-based economy. While education alone is insufficient to guarantee economic success, it is an essential building block. Yet one-third of the state's low-income working families contain at least one parent who did not fmish high school, nor complete a GED. Some adults are barely literate. More attention needs to be devoted to enrolling adults in community college and job training programs to connect them to occupations that pay a living wage, provide basic benefits, and offer a chance at upward mobility. Earned Income Tax Credit: The problems of workers earning low wages are aggravated by an unfair tax burden. State and local taxes in 2003 took almost 11 percent of incomes of these workers, while the rich were taxed only about nine percent. About 20 percent of all those who filed federal income taxes in the state in 2002 took advantage of the federal Earned Income Tax Credit, which provides refunds of taxes for low-income workers who qualify. This cash credit (available to eligible workers even if they did not pay taxes) is considered 2006-2007 Women's Draft Agenda 16