Economic Progress Institute

October 24, 2016October 24, 2016

Racial and economic equity important to Kennedy Plaza debate

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dsc_8749-600x365-2 — Police in Kennedy Plaza

Rhode Island’s cultural diversity is one of our great assets, but our communities often experience different opportunities to engage and enjoy. If we want our state to be more equitable, we require courageous leadership and intentional investments in racial and economic equity and access.

As organizations committed to racial justice, we feel the issue of race has been missing from the discussion about Kennedy Plaza. We all want to see vibrant community commons that support our economic and community development. But we recognize that strategies like increased policing will continue to disadvantage the poor, especially people of color, and siphon dollars away from social safety net programs that uplift those most marginalized.

New England communities were built with public “commons,” but despite their name these public spaces have always excluded the most disenfranchised: the indigenous people whose land was stolen, the enslaved Africans who quite literally built our communities, and those who did not fit society’s image of proper decorum. This continues today, with increase policing and criminalization of black and brown bodies, those exhibiting impact of addiction or mental illness, and the poor and homeless.

As our allies who are advocating for the homeless pointed out in their excellent “Reclaiming our Public Spaces” report, we cannot simply sweep away the poverty that many don’t want to see. Poverty and homelessness have disproportionate impact on communities of color, in large part because of public policies that exclude particular racial and ethnic groups from the supports that help build wealth and economic stability. Public policies fit together like bricks to shape our society, and our vision for racial justice requires some shifts in thinking. More people with criminal records, out of our workforce and warehoused at public cost, doesn’t help us build the society we envision.

Rather than seeking to invest our resources in short-sighted efforts to remove people we have deemed “undesirable,” let’s make real investments in the type of community supports and assets that eliminate the need for panhandling, support mental health and addiction recovery, and provide living wage jobs for everyone, including those with criminal records. Let’s engage our business community support in increased wages, publicly funded detox and recovery support, development of affordable housing, and compliance with First Source and Ban the Box laws. Let’s provide meaningful, well-paying work opportunities for adults with moderate education, and support public access to skilled training and higher education for our youth. Let’s recognize that amenities like public restrooms, drinking fountains, increased seating, and charging stations will support many types of users. And let’s bring love and compassion to the struggle of all those in our community, even those whose circumstances or behavior might make us uncomfortable.

Mike Araujo, Executive Director, Rhode Island Jobs with Justice

James Vincent, President, NAACP Providence Branch

Chanda Womack, President, Board of Directors, Cambodian Society of Rhode Island

On behalf of the Racial Justice Coalition.

September 13, 2016

More Rhode Islanders have health insurance coverage thanks to health care reform

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New Census data show that the percentage of uninsured Rhode Islanders was 5.7 percent in 2015, half the rate it was in 2013, the year before the Affordable Care Act (ACA) went into effect. In 2014, 7.4 percent were uninsured.

Two new avenues for affordable health insurance made available through the ACA have helped significant numbers of Rhode Islanders gain coverage. First, new Medicaid eligibility for adults (Medicaid expansion) allowed around 60,000 single adults with income marginally above the poverty line to have health insurance coverage.

Second, the new state exchange, HealthSourceRI, provided a pathway to coverage for another 35,000 Rhode Islanders who purchase private insurance. Almost 90 percent of enrollees, those with income below four times the poverty level, quality for federal tax credits to help pay their monthly premium. The majority of enrollees (60 percent) have income below two and half times the poverty level ($29,000) and also receive assistance paying for out of pocket costs including co-pays and deductibles. (Source: HealthSourceRI, Open Enrollment 2016)

According to the Rhode Island Annual Medicaid Expenditure Report for SFY 2015, the federal/state Medicaid program provides health insurance to one in four Rhode Islanders. In addition to the 60,000 newly eligible single adults, 150,000 children and families with lower income and 12,000 children with special health care needs have comprehensive insurance through Medicaid. Seniors (19,000) and people with disabilities (32,000) rely on Medicaid for the services they need to live safely in the community or in a facility when home-based care is not feasible.

“Rhode Islanders should be proud that we are 7th in the nation for the percent of residents who have health insurance coverage”, said Linda Katz, Policy Director at the Economic Progress Institute. “With health insurance, people are more likely to keep up with yearly preventive care visits and people with chronic conditions can get the treatment they need to promote their well-being. Besides the obvious benefits for families and individuals, having a healthy work force is a good selling point for our state. Medicaid and coverage through HealthSourceRI are vital to ensuring that thousands of our residents can afford comprehensive health insurance.”

June 23, 2016June 24, 2016

Significant protections against wage theft passed

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After years of struggle the Rhode Island General Assembly under the leadership of Senator Donna Nesslebush, and Representative Joe Shekarchi have passed a bill that finally makes the scourge of wage theft a crime. Stealing workers’ wages has always been civil offense with serious hurdles from the bureaucracies that were supposed to help. With close consultation with the DLT and Director Scott Jensen and legislative stakeholder meetings, House Bill 7628 and Senate Bill 2475 passed in the small morning hours on Saturday June 18.

These bills will provide for serious penalties including fines and imprisonment for taking from working Rhode Islanders. Perhaps the most significant penalty is the loss of a business license, the bills also empower the director of the Department of Labor and Training to determine compliance. Encouraging responsible reporting and discouraging false claims, the process of private suit has meaningful safeguards in place.

“Too often we see workers awarded a judgment by DLT only to have the employer refuse to pay what is owed,” said Robert McCreanor executive director of the worker advocacy law firm The Rhode Island Center for Justice. With the power to revoke business licenses from offending employers who refuse to comply with its rulings, DLT will be able to compel prompt payment and get more money, more efficiently, into the hands of the worker who earned it. While more work needs to be done to address the growing problem of wage theft, this bill provides an important tool for Rhode Island workers.”

Said Lidia Jimenez a member of Fuerza Laboral, “As a worker that has had their wages stolen, I feel proud that my testimony and that of Flor Salazar helped elected officials understand the atrocities that are committed daily by bad employers who feel that justice will not reach them and take our daily bread. This will help put an end to some of the abuse.” It is estimated by Economic Progress Institute that over $50,000,000,000 per year are stolen from workers’ wages. The process of enforcement historically has been spotty and difficult to apply.

Jeremy Rix who is running for 2nd ward of the Warwick City Council said, “I’m thrilled that the wage theft reforms introduced by Rep. Shekarchi become law. This law will deter many unethical employers from stealing wages, and provide a meaningful path for vulnerable employees to recover their stolen earnings.”

The organizations that have participated in the effort to pass these two vital bills are: Rhode Island Jobs with Justice, The RIAFL-CIO, Fuerza Laboral, and the Rhode Island Center for Justice. Each of these organizations is committed to improving the conditions of Rhode Island’s working people.

June 10, 2016June 10, 2016

Speaker: No minimum wage increase this year

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Speaker Nicholas Mattiello said that though he “is very supportive of raising the minimum wage,” and that Rhode Island “needs to be competitive” with our neighboring states, he has, “heard from the business community” that they need time to absorb the current wage before increasing it again. Mattiello said that the minimum wage has gone up four years in a row and, “I’ve indicated that we’re going to look at it next year.”

Massachusetts currently has a $10 minimum wage and they are going to $11 in 2017. Connecticut has a $9.60 minimum wage and will go to $10.10 in 2017. Rhode Island’s minimum wage of $9.60 will remain in effect until at least 2018, making our state an outlier. Speaking at a community event in Providence last night Governor Gina Raimondo expressed some disappointment that the 50 cent increase in the minimum wage that she had proposed was not in the budget.

Douglas Hall, Director of Economic and Fiscal Policy at the Institute, had this to say:

We are disappointed that the house budget does not include an increase to the state’s minimum wage. Increasing the minimum wage to $10.10 would have raised the wages of 78,000 Rhode Island workers. What businesses in Rhode Island need most are consumers with disposable income–the real ‘job creators’–to buy their goods and services. A $10.10 minimum wage would have given our lowest income workers an additional $27 million in wages. While we are happy to see a slight increase to the Earned income tax credit, the research shows that coupling both an EITC increase with an increase in the minimum wage reduces poverty and boosts the economy.

“And while we hate to see Rhode Island’s minimum wage workers fall further behind neighboring Connecticut and Massachusetts, the real concern is that every year we do not increase the minimum wage, we’re effectively cutting the wages of our lowest income earners, as inflation eats away at their already inadequate wages. More than a quarter of those who would have benefited from an increase to $10.10 have children, and more than a quarter are married. One in five Rhode Island children have a parent who would have seen an increase in wages. Instead, a full-time, year-round worker earning the Rhode Island minimum wage will see the buying power of their $19,960 eroded by inflation. With one in five Americans living in a jurisdiction that’s on a path to a $15.00 minimum wage, Rhode Island families working hard for low-wages are being told they have to wait.”

May 9, 2016May 9, 2016

Rhode Island’s economy needs a workers’ agenda

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This is a really important video.

The Economic Progress Institute‘s Douglas Hall does four things in the video below. First he gives us a basic, overall big picture economic context, then he “drills down further” into the economy of Rhode Island. Then we’ll see, in big pieces, what a “workers’ agenda” might look like before finally recapping some of the good things done in our state towards advancing a workers’ agenda.

Hall gave the talk as an introduction to The State of Working Rhode Island: Workers of Color, that “highlights the many challenges facing Rhode Island workers, showing the many areas where workers of color fare less well than others.” For more info see here.

Douglas Hall, Ph.D, is the Director of Economic and Fiscal Policy at the Economic Progress Institute. The video was prepared from the talk Hall gave at the 8th Annual Policy and Budget Conference on April 26, 2016, and the Powerpoint slides he prepared.

May 4, 2016

Legislators should prioritize Rhode Island workers

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On Friday it was reported in the Providence Journal that Speaker Mattiello’s budget priorities include reducing the estate tax by increasing the threshold for paying the tax from $1.5 to $2 million at an estimated cost of $4.3 million, as well reducing the corporate minimum tax from $450 to $400 at an estimated cost of $3.2 million. Reducing the estate tax and corporate minimum tax will provide little benefit to the overwhelming majority of Rhode Islanders and are not a good use of public funds.

“We hope that lawmakers will not reduce state revenues by over $7 million for tax changes that would benefit a handful of Rhode Islanders and businesses,” said Rachel Flum, Executive Director. “There are many wiser ways to use $6 million to support thousands of working Rhode Islander and to ensure that businesses have the workforce they need to succeed.”

The state increased the estate tax threshold in 2014 effective January 2015, essentially increasing estates exempt from paying the tax from $1 million to $1.5 million and reducing the tax on higher income estates. The estimated revenue from the estate tax in 2014 was $43.6 million, dropping to $34.2 million in 2015, a 20% loss of revenue after the change.

Further increasing the exemption to $2 million would benefit approximately 100 estates, of which 35 would not have to pay any tax at all.

In stark contrast, increasing the EITC to 15% of the federal credit, as proposed in the governor’s budget would put $4.4 million into the pockets of 83,000 working Rhode Islanders. Increasing it to 20% as proposed by bills pending in the house and senate would provide an additional economic boost of $8 million to the direct care workers, servers, salespeople and other Rhode Islanders who earn low to moderate wages. These state investments are then recycled directly into local economies.

“The estate tax is a vital tool for broadly shared prosperity,” added Douglas Hall, Director of Economic and Fiscal Policy at the Institute. “Our analysis shows there is no good public policy reason to reduce state revenue by reducing the tax that is paid by only a small number of heirs of large estates. The state’s priority should be to help struggling working families.”

One such priority is to help working families pay for child care assistance so they can enroll their young children in quality early learning programs and know that their older children are in a safe place after school. A pilot program allowing working families who are receiving child care assistance (income below 180% FPL) to remain eligible as their income rises to over twice the poverty level is set to expire in September, 2016.

As of March 2016, just over 400 children are enrolled in the pilot. Trend data since the onset of the program in October 2013 shows that the pilot has allowed parents to have a glide path to earning higher wages since around half of the families have income between 200 and 225% FPL and half have income between 180 and 200% FPL. It is estimated that making this “exit income” permanent would cost $1.6 million for FY 2016, an investment that not only helps working families but supports the child care sector. And with the lowest eligibility limit for child care assistance in New England, policymakers should also consider increasing the “entry income limit” from 180% FPL to at least 200%.

Just as there are far wiser ways to invest in our workforce, there are wiser ways to help businesses. The Statistics of Income for 2014 shows that 91% of Rhode Island businesses paid the minimum corporate tax, including 8,000 companies with gross receipts that total more than $10 million. Last year companies were given a break – a reduction of the minimum corporate tax by $50, from $500 to $450, taking revenue the state needed to pay for the public services and infrastructure that businesses use and rely on. Another $50 reduction is unlikely to significantly impact individual businesses, while a $3 million investment in workforce training for the 83,000 Rhode Islanders who lack a high school diploma and/or are in need of English language services would benefit all businesses who are looking for workers with basic skills.

April 14, 2016

Making sure we all make it in Rhode Island

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Last year, the General Assembly and the governor took an important first step to help thousands of working families make ends meet by increasing the state’s Earned Income Tax Credit (EITC) — a tax benefit for workers earning $50,000 or less — to 12.5 percent of the federal credit.

As the Ocean State strives to become a place where all families can enjoy our natural beauty while maintaining affordable housing, nutritious food, and a quality education, a further increase to the state’s Earned Income Tax Credit is a common-sense tax policy we should all rally behind. An increased state EITC means 83,000 Rhode Island taxpayers are rewarded for working hard to keep their families afloat.

That is why, for the second consecutive year, we have introduced legislation in the House and Senate to further increase the state EITC to 20 percent of the federal credit. With our legislation, a family qualifying for the maximum EITC will receive a tax credit worth up to $1,248—a significant amount for our struggling working families.

Massachusetts and Connecticut have adopted the refundable state EITC as smart policy to support working families, with refundable credits of 23 percent and 27.5 percent, respectively.

The paychecks of too many Rhode Island workers have fallen behind and our current tax structure does not provide adequate relief. Of the 50 occupations expected to produce the most job openings by 2022, nearly one in four jobs will pay less than $11 an hour, the amount the Economic Progress Institute (EPI) finds a single adult needs to earn to meet his or her most basic needs and less than half of what a single parent of two children requires.

We all benefit from living in a state where hard work is rewarded. An increased EITC helps our workforce but it also helps our local economies. More money in the pockets of working Rhode Islanders means more money in the cash registers of supermarkets, retailers, and other local businesses. The return on investment is large. The Economic Progress Institute estimates that increasing the EITC to 20 percent would not only put $12 million in pockets of working families, but add approximately $15 million to the economy through the multiplier effect. Raising the EITC to 15 percent, as proposed by the governor, would put $4 million in the pockets of working families, and add around $5 million to the economy through the multiplier effect.

With last year’s EITC increase, the General Assembly and the governor took an important step to reduce income inequality in the Ocean State and reward our workers who are doing their best to make it in Rhode Island.

We strongly believe that if you are working, you should not be poor. Raising the minimum wage and expanding EITC is helping those who work for lower wages to get ahead. The very least we can do is increase a common-sense tax credit that helps our hardest workers make ends meet. If we do not, it saps the belief that our state is a place where hard work and persistence can lead to a better life. A state EITC increased to 20 percent of the federal credit is the smartest investment we can make. We can all profit from living in a state where hard work is rewarded, taxes are fairer, and our local businesses thrive.

February 25, 2016February 25, 2016

Undocumented workers pay $33.4 million in RI taxes and they need drivers licenses

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Sen. Frank Ciccone III and Rep. Anastasia Williams introduced legislation (2016-S 2333 / 2016-H 7610) that would allow the Rhode Island Department of Motor Vehicles to issue driving privilege licenses and permits to applicants unable to establish a lawful presence in the United States. The licenses and permit would not be valid for identification purposes as per the Real ID Act, but would be usable only for the purposes of operating a motor vehicle in Rhode Island.

“We need to ensure that all drivers, regardless of their immigration status, are trained, tested and insured when driving on our roads,” said Ciccone at the press conference to highlight this legislation, “This is a safety issue as well as an economic issue. If the worst was to happen and an accident occurs involving an undocumented person driving, our residents and businesses are protected far better if this legislation is enacted as opposed to the current status quo.” (See the full video of the press conference below.)

Under the rules proposed by Ciccone and Williams, those wanting these licenses and permits would have to have no felony convictions, have lived in Rhode Island for two years and provide proof that they have paid taxes.

As for taxes, a report from the Economic Progress Institute (EPI) demonstrates that “Undocumented immigrants contribute more than $11.6 billion to state and local coffers each year, including $33.4 million in Rhode Island, according to a new study released by the Institute on Taxation and Economic Policy (ITEP).”

From the EPI press release:

“The study, Undocumented Immigrants’ State and Local Tax Contributions, also estimates that Rhode Island stands to gain $2.5 million in increased revenue under full implementation of the Obama administration’s 2012 and 2014 executive actions and by more than $7.0 million under comprehensive immigration reform.

“EPI’s Executive Director, Rachel Flum notes that “This report shows that undocumented immigrants are contributing to Rhode Island’s economy through sales, property and income taxes. State law makers should take this into account and approve policies that help these residents live safely in our state until comprehensive immigration reform at the federal level provides a pathway to legal status. Providing driver’s licenses for undocumented residents is one such policy”

“The report found that undocumented immigrants contribute $4.1 million in personal income taxes, $11.1 million in property taxes, and $18.3 million in sales and excise taxes to Rhode Island’s. These tax contributions would be larger if all undocumented immigrants were granted legal status under a comprehensive immigration reform and if President Obama’s 2014 executive action were upheld.

“‘Regardless of the politically contentious nature of immigration reform, the data show undocumented immigrants greatly contribute to our nation’s economy, not just in labor but also with tax dollars,’ said Meg Wiehe, ITEP State Tax Policy Director. ‘With immigration policy playing a key role in state and national debates and President Obama’s 2014 executive action facing review by the Supreme Court accurate information about the tax contributions of undocumented immigrants is needed now more than ever.'”

To view the full report or to find state-specific data, go to www.itep.org/immigration/.

January 29, 2016

Free tax filing and free money available to low-income Rhode Islanders

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Though the big news was that Governor Gina Raimondo announced that she would be calling of an increase in the Earned Income Tax Credit (EITC) and the minimum wage when she presents her budget during the State of the State address Tuesday evening, the press conference where this was announced was to call attention to VITA, a program to help low and modest-income Rhode Islanders file their taxes and apply for tax credits like the EITC. Raimondo said that if the budget permits, she will push that rate higher.

Even people who have paid no taxes are eligible for EITC rebates, meaning families can receive hundreds or thousands of dollars from the government. But to do so, families must file their taxes. VITA (Volunteer Income Tax Assistance) is a program to help people file. “Appointments are highly recommended,” says the webpage on VITA at the You must also bring picture identification for both the applicant and spouse and social security cards for everyone listed on the return.” A list of VITA sites and contact info can be found here.

At the now annual press conference to advertise VITA and the EITC, Governor Raimondo announced her intention to ask that the EITC be raised to 15 percent when she presents her budget. This year the EITC was raised from 10 to 12.5 percent. Connecticut’s program is currently at 30 percent while Massachusetts has just raised their EITC to 23 percent.

The EITC “provides a tax credit and/or refund to people who earn low to moderate wages. The payment is received as part of the end-of-year tax filing period,” says the Economic Progress Institute on their website.

Representative Scott Slater and State Senator Gayle Goldin both praised the announcement that the budget will call for a 15 percent EITC, but both also noted that they have introduced bills and intend to fight to raise the tax credit to 20 percent.

The Governor also announced that she will once again be asking the legislature to raise the state’s minimum wage, which rose to $9.60 this month. Last year the legislature balked at Raimondo’s suggestion for a $10.10 and raised the wage just 60 cents, but also agreed to raise the tipped minimum wage to $3.39 this year and $3.89 next year.

Given that the General Assembly only granted slightly more than half of the minimum wage increase Raimondo included in her budget last year, perhaps the Governor should ask for more than $10.10 this year.

You can watch the relevant parts of the press conference below. The final speaker in the video speaks about the positive effects of the EITC in helping to bring her family out of poverty.

January 26, 2016February 29, 2016

Energize RI brings carbon pricing bill to the House

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New carbon pricing legislation, backed by the Energize RI coalition, was introduced by Representative Aaron Regunberg (D District 4 Providence) in the House chamber on Tuesday. The legislation “is designed to provide incentives for renewable energy use, encourage the development of cleaner renewable energy projects, and create local jobs.”

“The legislation would establish a new Clean Energy and Jobs Fund that will invest in renewables and efficiency and help Rhode Islanders lower their energy costs,” said Energize RI in a press release, “The Fund will be financed by a fee on carbon pollution, beginning at $15 per ton of greenhouse gas emissions, paid by the companies that sell fossil fuels in the state.”

Traditionally, user fees hit members of low income communities hardest, but Douglas Hall, Director of Economic and Fiscal Policy at the Economic Progress Institute, said that this bill addresses that problem head on and to good effect. “This bill does a few things that we at the Economic Progress Institute think are important. A portion of the carbon tax will be passed onto consumers, including lower-income families, in the form of higher prices. The Energize Rhode Island Act addresses this concern, by providing rebates to Rhode Island families and businesses, ensuring they come out ahead. We have seen the incidence analysis of this bill and are confident that lower income Rhode Islanders will be more than protected from additional costs.”

Introducing the bill, Regunberg spoke about the economic, legal and moral responsibility Rhode Island has to take on such an “ambitious legislative proposal.”

“Economically, this is where the world is moving… Rhode Island can either be a follower, and get the least economic benefit from these trends, or we can be a leader for this country.

“Legally, in 2014 we passed the Resilient Rhode Island Act, which obligated our state to reach certain emission reduction goals. Right now we are not on track to reach those goals…

“And morally, we have a responsibility to Rhode Island’s young people, to my generation and to the generations that come after mine… by failing to enact significant climate legislation, we are condemning the babies who are born today at Women and Infants to a dangerous future.”

Small business owner Joseph Fernandes saw the issue from an economic point of view. “If you were to attempt to open a business today in many parts of our state, you would find yourself facing a whole new set of barriers that didn’t exist for my parents. You would be faced with the burden of having to pay for costly flood insurance premiums that will only grow higher. Climate change means your business is always vulnerable to an extreme weather event that could permanently close you down.”

The Energize RI Coalition sees their efforts as complementary to other state programs dealing with climate and energy. Ken Filarski of Filarski Architecture said the the clean energy sector of our economy is one of the fastest growing in the state. “This sector is already growing at a rate that is stronger than the rest of Rhode Island’s economy, supporting over 10,000 jobs and adding 1,600 more by the end of the year. Passing this legislation means more funds to install solar panels, insulate houses, and implement other energy efficiency measures. It means more Rhode Islanders working in a field that has proven itself to be both profitable and sustainable.”

More details from the press release:

2016-01-26 Energize RI 01 — Douglas Hall

“An economic impact study by Regional Economic Models, Inc. (REMI) estimated that the legislation would create a net growth of 1,000 to 2,000 new jobs in just the first two years of the program. It also noted that Rhode Island spends more than $3.1 billion annually on fossil fuels, nearly all of which flows out of the state, since Rhode Island does not produce these fuels itself. Incentivizing Rhode Islanders to switch from out-of-state fossil fuel sources to local renewables and efficiency will help keep more of that money in Rhode Island and protect the state from the volatile market swings that often affect these fuel prices.

“The legislation establishes that 25 percent of the fees collected for the Clean Energy and Jobs Fund would be used for climate resilience, energy efficiency, energy conservation, and renewable energy programs, to be administered by the state infrastructure bank created through legislation last year. Thirty percent would be used to provide direct dividends to employers in the state per full-time employee, and 40 percent would be used to provide direct dividends for every single state resident. Employees and residents would receive their funds via tax credits, or direct checks for those not required to file taxes.

“According to the coalition’s research based on average energy use data, the program will not increase energy costs for the average Rhode Island family and businesses In fact, by paving the way for a transition to an energy independent economy, the policy will reduce costs for all Rhode Islanders in the long term. In the short term, the average Rhode Island household receives a net gain from the rebate. Even higher-income households will have an average net cost of only $25 per year toward the Clean Energy and Jobs Fund.”

Energize RI is a coalition of advocates from business, environmental and faith communities. Speaking from a faith perspective was Beth Miham, a member of Channing Memorial Church in Newport and a former board member of Interfaith Power and Light for a number of years.

January 25, 2016January 25, 2016

CFED Report: Rhode Islanders still struggling, especially with homeownership

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New data released today by CFED (the Corporation for Enterprise Development), a national partner of Rhode Island’s Economic Progress Institute, shows that too many Rhode Island families remain economically vulnerable. Smart public policies that create opportunities for families to save and make investments in their future prosperity pay huge dividends for all of us. The Assets and Opportunity Scorecard, now published annually, shows Rhode Island ranked 35^th overall in Outcomes, despite ranking 8^th overall in the Scorecard’s Policy measures.

Doug Hall, Director of Economic and Fiscal Policy at the Economic Progress Institute isn’t surprised by these findings: “We see the economic vulnerability of Rhode Island families in wage and income data (as shown in our recent State of Working Rhode Island: Workers of Color report). Until Rhode Islanders have good jobs that pay economy-boosting wages, they won’t be able to set aside savings or invest in homes or businesses.”

Across five main issue areas, Rhode Island fares in the middle of the pack in four issue areas (Financial Assets and Income, Businesses and Jobs, Education, and Health Care) but nearly dead last for Housing and Homeownership.

Rhode Island’s outcome indicators point to a number of areas where improvements need to be made to improve the financial security of Ocean State families. Rhode Island scores very poorly (40^th or worse) in 14 areas, including 8 indicators for housing/homeownership:

Income inequality (46^th out of 50 states and the District of Columbia)
Business value by race (44^th)
Underemployment Rate (40^th)
Homeownership rate (46^th)
Homeownership by race (50^th)
Homeownership by income (51^st)
Homeownership by family structure (50^th)
Delinquent mortgage loans (49^th)
Affordability of homes (43^rd)
Housing cost burden – homeowners (46^th)
Housing cost burden – renters (45^th)
Uninsured by race (45^th)
Uninsured by gender (49^th)
Average college student debt (46^th)

While Rhode Island’s poor performance on housing/homeownership outcomes in the Assets and Opportunities Scorecard is not new, it is striking. Jim Ryczek, Executive Director of the Rhode Island Coalition for the Homeless responds:

“While Rhode Island clearly has much work to do to meet the state’s housing needs, we have significantly increased funding of programs to solve homelessness. We need to match that progress with investments that provide housing options for all Rhode Islanders.”

It is also noteworthy that Rhode Island falls in the bottom 11 rankings in three of the six outcome measures that look at disparities by race/ethnicity. National data show stark disparities in wealth based on race and ethnicity. We know that here in Rhode Island, racial disparities in wages and income are significant. The lack of good state-based data on wealth prevents us from fully understanding these disparities, which in turn prevents us from addressing the challenges with the necessary urgency. Another new report released last week by the Annie E Casey Foundation addresses the need for better data:

“To properly gauge the effects of policies and practices on families’ ability to build assets, we must have the right tools. Data on family assets are meager and difficult to access, particularly for various racial and ethnic groups. The federal government should explore better mechanisms to track that information, such as representative surveys for national and state use with questions on savings behavior and asset holdings or additional questions in the U.S. Census Bureau’s American Community Survey.” Annie E Casey Foundation, Investing in Tomorrow: Helping Families Build Savings and Assets

CFED has been publishing the Asset and Opportunities Scorecard since 2002. It remains a key benchmark in tracking important policy and outcome measures, and highlighting best practices in state policies addressing these areas.

Key policies that Rhode Islanders can adopt to provide greater opportunities for Rhode Island families include:

Increasing the state Earned Income Tax Credit to 20 percent of the federal credit.
Further Increasing the minimum wage.
Providing protections from predatory lending such as payday loans.

These and other measures that boost family incomes will help families set aside savings while investing in assets such as a home.

[From a press release]

January 19, 2016January 20, 2016

A tale of two Brookings reports

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On Friday, the Brookings Metropolitan program released a report, City and metropolitan inequality on the rise, driven by declining incomes in which Rhode Island’s largest and capital city, Providence, emerges as the city with the 5th highest level of income inequality in the nation. A principal cause of this high rating is the erosion of wages (and hence income) for low income workers in Rhode Island, a situation likely exacerbated in Providence. Too many Rhode Island workers continue to feel the ongoing pain of the Great Recession that began more than eight years ago, and (at least officially) ended more than six years ago, experiencing levels of long-term unemployment, and underemployment that erode their financial well-being. The Rhode Island economy isn’t working for these people. Among those currently in the slow lane on the “Rhode to Prosperity” workers of color comprise a disproportionate share, as recently documented in The State of Working Rhode Island: Workers of Color.

On Tuesday, the Brookings Metropolitan program released a report, Rhode Island Innovates: A Competitive Strategy for the Ocean State¸ a report that expertly assesses the Rhode Island economy, using complex sector-based analyses to identify its comparative areas of strength, and some of the challenges that may prevent businesses from choosing the Ocean State as their home. The Brookings study presents several strategies to improve the business climate, noting that “Rhode Island is poised to emerge as a leader on business environment re-engineering.”

To Brookings’ credit, they point in Rhode Island Innovates to the importance of sustaining “good jobs” (which they define as those that “offer livable wages with benefits for full-time workers who have less than a four-year degree”), and they correctly note that the old mantra of “jobs, jobs, jobs” is no longer adequate or appropriate to today’s economic realities. Yet it feels very much like the two Brookings reports each exist in their own spheres. What Rhode Island (and arguably every other state in the nation) needs is an approach to the economy that integrates the needs of its workforce with the needs of the business community. Innovation and growth are important, but unless such growth advances the well-being of Rhode Islanders regardless of age, race and ethnicity, we will remain diminished as a state.

January 15, 2016April 30, 2016

The Estate Tax is a solution, not a problem

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At the 2016 Rhode Island Small Business Economic Summit (Summit), Grafton H. “Cap” Wiley IV told Governor Gina Raimondo, House Speaker Nicholas Mattiello and a room full of government officials and small business owners that “it would be great if we had enough revenue to get rid of the estate tax” or if we don’t have enough revenue, “look at an increase in the exemption.”

“That’s something I’ve got my eye on,” said Mattiello, offering to collaborate with the business community to do something about it.

The idea of reforming the estate tax came out of a previous Summit, said Wiley, and the important thing, he continued, looking towards Raimondo and Mattiello, is that, “you guys are listening.”

“Rhode Island ends up at the bottom of a lot of the ratings of taxes and business climate,” said Wiley, and though he did not specify to what ratings he was referring, two annual business climate rankings, the SBEC (Small Business and Entrepreneurship Council)’s Small Business Policy Index and ALEC (American Legislative Exchange Council)’s Rich States, Poor States, include the mere existence of a state level estate tax as a negative in their questionable formulas for determining a state’s ranking.

The problem, says economist Peter Fisher, is that “the estate tax – which is paid only by the ultra-wealthy – doesn’t affect economic growth.”

Fisher says that Rich States, Poor States author Arthur Laffer, “and his co-authors devote an entire chapter to estate and inheritance taxes, incorrectly tagging them as ‘job killers’ that ‘strangle economic growth.’”

Laffer and company assert that states with an estate tax are losing ‘enormous amounts of accumulated wealth,’ and that this wealth would have created jobs, alleviated poverty, and increased tax revenue, but they fail to explain how this would happen. The wealth held by retirees typically is not the kind of capital normally used in job creation. The wealth that drives prosperity consists of real assets: natural resources, plant and equipment, public infrastructure, human capital, technological knowledge. By contrast, large estates typically consist of real estate, stocks and bonds, mutual funds, and other financial assets which could be located anywhere in the world. The future use of those assets is unaffected by where the person who owned them died.”

So why would Mattiello be so eager to look at an idea that amounts to both failed tax policy and a giveaway to the mega rich? As Bob Plain showed, the last time RI messed with the estate tax, the burden of public services and infrastructure was shifted onto poor and middle class Rhode Islanders, allowing the rich and the mega rich to become richer still. These policies contribute to our ever increasing wealth inequality and pervert our democracy, tilting us ever faster towards an oligarchy represented by the likes of “Cap” Wiley, if we aren’t there already.

Citing an Economic Progress Institute (EPI) fact sheet, Plain wrote, “The clear winners are a small number of wealthy taxpayers whose estates will pay less in taxes and in many cases, nothing at all starting next year. The clear losers are tens of thousands of low- and modest-income Rhode Islanders who will pay more in taxes next year. Unemployed homeowners and renters are among the biggest losers, because they will no longer qualify for property tax assistance and are not eligible for the earned income tax credit (EITC). Many of the lowest-wage workers will also be negatively impacted by the loss of the property tax refund, even with an eventual boost in the EITC.”

“SBEC’s stated mission, says Fisher, “is to ‘encourage entrepreneurship and small business growth,'” but “its lobbying activities reveal a very conservative, anti-government agenda.” ALEC, “is a mechanism by which corporations pay substantial sums of money to draft legislation benefiting them.” Neither group has the interests of state economies or average citizens in mind when they advance their agendas under the guise of “economic research.” These groups are made up entirely of the oligarchic prosperous and their servile, deluded sycophants.

Our gullible state leaders are not searching for real economic solutions to our state’s budgeting issues, they are instead looking for the excuses they need to pass the legislation their corporate masters demand.

To truly help our economy and budget, instead of eliminating the estate tax we should be increasing it.

Also, do yourself a favor and familiarize yourself with Peter Fisher’s website:

December 17, 2015December 18, 2015

White workers weathered Great Recession twice as nice as workers of color

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As bad as the unemployment crisis in Rhode Island was for white workers, it was nearly twice as severe for workers of color.

A new report from the Economic Progress Institute shows that black and Latino workers were unemployed at almost twice the rate of white workers from 2007 to 2014. “The takeaway here is that the worst unemployment situation White workers face is better than nearly the best unemployment situation that Black and Latino workers face,” reads the report.

“The significantly higher rates of unemployment for Latino and Black Rhode Islanders and lower wages for these communities and Southeast Asians – should set off alarm bells for business leaders and policy makers,” said EPI Executive Director Rachel Flum in a press release.

The white unemployment rate topped out at 9.7 percent in 2009, while the black unemployment rate was 17.7 percent that same year and maxed out at 18.1 percent in 2011. The Latino unemployment was even worse with a high of 21.7 percent in 2010 and hovering around a fifth of all working Latinos in Rhode Island from 2009 to 2013.

All three ethnicity’s unemployment rates dropped significantly in 2014, but at 16.2 percent the unemployment rate for Rhode Island Latinos was not only the highest in the nation but also “more than double the national Latino unemployment rate of 7.4%,” according to the EPI.

“This report underscores the need for Rhode Island to pivot towards the worker,” said Anna Cano-Morales, director of the Latino Policy Institute at Roger Williams University, in the press release. “When we do that, we not only maximize our economic potential but we also fully value all Rhode Islanders.”

September 22, 2015September 23, 2015

Change of leadership at Economic Progress Institute

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The Economic Progress Institute (EPI) announced that Kate Brewster is stepping down as executive director. Rachel Flum, the Institute’s long-time senior policy analyst, has been promoted as the new executive director.

The Economic Progress Institute is a nonprofit, nonpartisan organization that works to improve economic security and opportunity for all Rhode Islanders, through research, advocacy and community partnerships. Brewster has been the executive director for 11 years, taking over from her mentor, Nancy Gewirtz, a co-founder of the Institute.

Brewster’s new job will be executive director of the Jonnycake Center of Peace Dale, a community-based organization that provides such basic needs as food and clothing for local residents while also engaging in individual and policy advocacy.

“It is with tremendous mixed emotions that I leave the Institute, an organization that has had a lasting and profound impact on the ability of Rhode Islanders to make ends meet,” Brewster said in a statement. “I am excited to start a new chapter of helping to make sure that people in my local community don’t go to school or to bed hungry.”

Flum, recently chosen as one of “40 under Forty” by Providence Business News, has been a senior policy analyst with the Institute for ten years and has also served as the project manager for the RI Health Coverage Project, a joint initiative of the Institute and RI Kids Count.

“We’re pleased that such a strong leader, with a wealth of knowledge about the issues facing Rhode Islanders, was available on the EPI staff,” said Alan Flam, secretary of the Institute’s board and head of the search committee. “Over the past ten years, Rachel has shown the commitment, talent and vision to lead this organization into the future.”

“We are so grateful for the leadership that Kate has provided for this organization and the people whose lives we work to make better,” said Flam. “The residents of South County are fortunate she will now be working directly on their behalf.”

[From a press release]

September 18, 2015

RI still has highest poverty rate in New England

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The Economic Progress Institute (EPI), based on data released by the US Census Bureau, found that Rhode Island’s poverty rate remained unchanged in 2014, the highest rate in New England.

Among EPI’s key findings, according to Juan Espinoza, Communications and Outreach Associate, are:

One in seven Rhode Islanders live in poverty.

Rhode Island has the highest poverty rate of all the New England states, and ranks 24th in the country.

One in ten white Rhode Islanders live in poverty.

More than one in five African Americans in Rhode Island are poor—twice the rate of white Rhode Islanders

Nearly one in three Latinos in Rhode Island are poor—three times the rate of white Rhode Islanders.

“It is disturbing that so many Rhode Islanders continue to live in poverty.” said Kate Brewster, executive director of the Economic Progress Institute, in a statement. “While there is certainly no silver bullet to address this crisis, one action lawmakers should take to help struggling working families is to continue to increase the state’s Earned Income Tax Credit. This would put more money in the hands of people working at low-wage jobs by letting them keep more of what they earn and would help lift their families above the poverty line.”

According to EPI, “Rhode Island lawmakers increased the state’s Earned Income Tax Credit last year to 12.5 percent of the federal credit from 10 percent. This is expected to put an additional $6 million back in the pockets of over 80,000 working families who live in every city and town in the state. Neighboring states already do more to help low-wage workers through the EITC. Connecticut offers a 27.5 percent state credit and Massachusetts recently increased its state credit to 23 percent. A recent study, documented in the book It’s Not Like I’m Poor, demonstrates that families receiving the tax credit spend it wisely: they pay current bills, including rent, utilities and groceries; they pay off debt; and they invest in their future, for example, by moving to a better neighborhood. Along with helping families get ahead, these purchases and payments boost the local economy.”

The one bright spot is that “the share of Rhode Islanders without health insurance coverage fell sharply from 11.6 percent in 2013 to 7.4 percent in 2014, ranking RI 9th best in the country for having insured residents.” EPI reports that, “recent data released by Healthsource RI shows that the uninsured rate in Rhode Island is even lower in 2015.”

August 31, 2015September 1, 2015

RI family of four needs $71,455 annually says EPI

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Over the weekend the Economic Policy Institute (EPI) released a “Family Budget Calculator” that “measures the income a family needs in order to attain a secure yet modest standard of living.”

To use the “Family Budget Calculator” simply enter your city, state or zip code. The budgets generated “estimate community-specific costs for 10 family types (one or two adults with zero to four children) in 618 locations,” says the EPI, “Compared with the federal poverty line and Supplemental Poverty Measure, EPI’s family budgets provide a more accurate and complete measure of economic security in America.”

Entering “Rhode Island” for two adults and two children brings results for the Providence/Fall River metro area, where monthly costs of living are estimated at $5,955, or $71,455 annually. This includes $913 for housing and $1338 for child care. One adult with no children needs to generate $2,543 monthly/$30,522 annually to maintain a “secure yet modest standard of living.”

Needless to say, many Rhode Island families are not meeting this basic income level. Locally, the Economic Progress Institute launched an online “Cost of Living Calculator” that showed that “Rhode Island’s recent move to raise the minimum wage from $9 to $9.60 is not nearly sufficient… since a ‘single adult without children needs to earn $24,640 a year or $11.85/hour to meet his or her basic needs.’”

The EPI report is one more indication that Rhode Island is not on the right track economically when it comes to working families. Members of the General Assembly need to take note.

The EPI describes itself as “an independent, nonprofit think tank that researches the impact of economic trends and policies on working people in the United States. EPI’s research helps policymakers, opinion leaders, advocates, journalists, and the public understand the bread-and-butter issues affecting ordinary Americans.”

August 20, 2015August 21, 2015

RI doubles amount of money it gives to corporations

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Rhode Island gave away more than $30 million to 18 companies in 2015, according to a new report from the state Division of Taxation. This is almost twice the $14.8 million it gave away in 2014, according to an analysis of that report by the Economic Progress Institute.

The new Division of Taxation report is not a complete list of tax subsidies the state offers. It “focuses on seven tax incentives that were created to help spur job creation and economic development – including sales tax exemptions, corporate tax rate reductions, and motion picture production tax credits,” wrote David Sullivan, the state tax administrator, in the report.

More than 60 percent of the lost revenue identified in the report went to CVS, which enjoys a $19 million “Jobs Development” tax break from the state. CVS also received more than $4 million in additional tax breaks not analyzed specifically in the report. The Jobs Development Act is the biggest corporate subsidy the state offers. In total, it accounted for 76 percent of the lost revenue, or $23 million.

Citizens Bank is the second largest beneficiary of the Jobs Development subsidy, saving $2,978,686 in taxes. A subsidiary of Citizens Bank, Citizens Security, which lists the same address as the bank, also received a $393,038 tax break under Jobs Development Act, which offers a discount to companies with more than 100 employees for every 50 new jobs that last for at least three years.

Fidelity, a Smithfield-based investment firm, received $4,083,791 in tax breaks from Rhode Island, according to the report, and Electric Boat received more than $3,277,000. Woody Allen’s Manhattan-based production company, Perdido Productions, received $3,214,346.63 in film tax credits. Allen filmed his new movie “Irrational Man” in Newport and Jamestown.

The Economic Progress Institute says the report leaves out valuable information for analyzing the data that is required by law.

“While the information provided in the report is important, it tells us nothing about whether these tax incentives have been effective tools for growing our state’s economy. That was supposed to change this year,” according to the EPI press release. “Two years ago, lawmakers recognized the need to understand whether tax incentives are benefiting the economy and enacted the Rhode Island Economic Development Tax Incentives Evaluation Act of 2013. The law requires state analysts to conduct cost-benefit analyses of several of the state’s economic development tax incentives, including the Jobs Development Act and Motion Picture Tax Credit. The law requires the Governor to include recommendations for continuing, modifying, or terminating recently evaluated incentives in her proposed budget. The first set of evaluations were scheduled to be produced by the Office of Revenue Analysis by June 30, 2015 but to date have not been issued.”

The report mentions this as well. “This report is not intended to provide an analysis as to the effectiveness of this or any other tax credit or incentive,” wrote Sullivan in the introduction.

August 19, 2015August 30, 2015

RI cost of living easily outpaces minimum wage

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A “single-parent, with an infant (age 0-1) and a school-aged child (age 6-12) needs to earn $62,693 a year or $30.14/hour to cover the basic expenses required to raise a family in Rhode Island,” says the Economic Progress Institute, (EPI, formerly The Poverty Institute) a nonpartisan research and policy organization dedicated to improving the economic well-being of low- and modest-income Rhode Islanders. “More than one-fourth of that family’s expenses will go towards child care; a whopping $1,446 a month.”

The EPI released this sobering news along with an updated version of its Cost of Living Calculator, designed to provide “a more realistic measure of economic security than the commonly used federal poverty level (FPL) which measures economic security based on the cost of food,” according to a press release. “The Calculator allows users to see what it costs families of different sizes to pay for housing, child care, health care, food, transportation and taxes and then calculates the pre-tax (gross) income they need to meet their expenses.”

Rhode Island’s recent move to raise the minimum wage from $9 to $9.60 is not nearly sufficient says the EPI, since a “single adult without children needs to earn $24,640 a year or $11.85/hour to meet his or her basic needs.”

In addition to the Cost of Living Calculator, the EPI also publishes a “comprehensive ‘Guide to Assistance’ explaining the government assistance programs and community resources available to help individuals and families meet basic needs including food assistance, tax credits, and child care subsidies which can all help lower-wage working families make ends meet.”

“We hope these tools serve to better educate the public and policymakers about the cost-of-living in the Ocean State and the importance of government assistance programs for the large number of Rhode Islanders working in low-wage jobs” said Kate Brewster, executive director of the Economic Progress Institute, in the press release. “Many people often don’t realize they are eligible for help paying for basic needs like child care and food. We encourage Rhode Islanders who are struggling to pay the bills to review the Guide to see if they qualify for assistance.”

June 3, 2015June 4, 2015

A higher minimum wage means better economy for all

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The minimum wage in Rhode Island has risen every year since January 2013 and 2016 will be no different, moving up from $9 to $9.60 per hour. The measure passed on the floor of the state Senate in a 34-3 vote, and will soon be enacted into law. But as each year passes, the income gap in Rhode Island only grows larger, even with the minimum wage increases.

Voting against the increase were Republicans Nick Kettle, of Coventry, Mark Gee, of East Greenwich, and Elaine Morgan, of Ashaway.

A study from 2012 conducted by the Center on Budget and Policy Priorities (CBPP) showed that from the 1970’s to the mid-2000s, the income gap has grown 70 percent. The poorest 20 percent of Rhode Islanders have only received a 11.8 percent raise in their household incomes, while the richest 20 percent have seen their income grow 99 percent.

In Connecticut and Massachusetts, the percentages are even more disconcerting. The poorest 20 percent of MA residents have seen no change in their income since the 1970s, but the richest 20 percent have had a 151.9 percent increase. Connecticut’s poorest residents have even seen a drop in their income by 4 percent since the 1970s, and a 9.8 percent drop in the past decade, more than both Rhode Island and Massachusetts.

How did this even happen? Kate Brewster, the executive director of the Economic Progress Institute, believes that trends have lead to the widening income gap.

“Our economy has shifted so dramatically,” she said. Brewster stated that over the years, Rhode Island has seen a move from the manufacturing to the service industry, as well as a decline in unionization among employees. These factors have lead to a decline in the minimum wage’s value.

Senator Erin Lynch (D-District 31), the sponsor of the legislation, said the move to $9.60 is a step in the right direction, even though she originally wanted $10.10.

“I would have loved for it to be $10.10,” she said. “I think any step forward is a good step forward.”

Lynch also added that even though raising the minimum wage is definitely a part of eliminating income inequality, it’s not the only piece of the puzzle.

“We want to continue moving in the direction we’re moving. There’s no one magic bullet. We’re working on all kinds of different things.”

Other pieces of the economic puzzle include workforce development, access to capital, and education. Lynch believes that those together can help to level out incomes in the state, especially because they will be able to help those who are providing for their families. Outside of the state house, Lynch works as a divorce lawyer, and sees the hardships that low wages can take on the family unit.

“I see a lot of parents. I see a lot of people getting second and third jobs. People are doing what they need to do to support their families,” she said.

Currently, Rhode Island has one of the highest minimum wages in the country, but will soon fall behind states like Massachusetts, California, and Washington, DC, as they move their wages upwards of $10 an hour going into 2016.

“An adult needs close to $12 to meet their basic needs,” Brewster said. “$10.10 would have been great, but $9.60 is better than $9.”

Lynch stated that she will continue working to move the state economy forward. Hopefully that means a brighter, more equal future for everyone in Rhode Island.

“This is home,” Lynch said. “We want to make it the best place it can be.”

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