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Building Toward Economic Mobility in Mississippi: State Profile

April 10, 2012

Filed under: Income & Working Families — Tags: Corporation for Enterprise Development (CFED), Mississippians, Scorecard — admin @ 9:09 AM

A recent report released by the Corporation for Enterprise Development (CFED) illustrates Mississippians struggle to obtain financial security post-recession. The 2012 Assets and Opportunity Scorecard assesses the 50 states and the District of Columbia on different outcome and policy measures related to financial security.

Key Findings:

32 % of Mississippi households live in asset poverty
69 % of Mississippi consumers have a subprime credit
36 % of jobs in Mississippi are low-wage jobs
35 % of homeowners in Mississippi are cost burdened
21 % of people in Mississippi are uninsured
20 % of adults in Mississippi have at least a 4-year college degree

What Can Mississippi Do?

Mississippi can create more viable opportunities for people to build their assets for future investments through a balanced approach. This includes, but is not limited to, enacting tax credits for working families, enhancing protections from short-term predatory lending, funding microenterprise development, providing first-time homebuyer assistance, expanding income eligibility for state programs, and providing access to quality K-12 education.

Over the next several months, MEPC will be sharing information about the Scorecard and promoting policy options for building assets among low-wealth families.

Author: Jessica Shappley, Policy Analyst
Source: CFED, Assets and Opportunity Scorecard, 2012.

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Cuts to Education Will Have Long Term Effects on Mississippi

March 21, 2012

Filed under: Education,Income & Working Families — Tags: education reform, global economy, Mississippi, school districts, State-level K-12 — admin @ 9:00 AM

A publication from the Center on Budget and Policy Priorities, entitled, “New School Year Brings Steep Cuts in Funding for Schools,” illustrates the continuing effects of budget cuts on state-funded services like education. On a national level, many elementary and high schools are receiving less state funding than last year and are now funded at below pre-recession levels.

Key findings from this study:

State-level K-12 cuts have large consequences for local school districts as they have little ability to replace lost state aid on their own. Cuts at the state-level mean that local school districts have to either scale back the educational services they provide, raise more revenue, or both.

Cuts in school funding undermine education reform and hinder the ability of school districts to deliver high quality education, further resulting in long term negative consequences for the nation’s economic competitiveness.

How does Mississippi Compare?

Mississippi falls on the lower end of the spectrum when looking at cuts across the states by the percentage cut with a 12.2% percent reduction in funding per student (see Figure 1). Continuing cuts to Mississippi’s education program will diminish the quality of education of elementary and high schools. At a time when the nation is trying to produce workers with the skills needed to master technologies in an ever-changing global economy, cuts in education funding threaten essential building blocks for future prosperity.

What this means for Mississippi:

In the figure above, many states have managed to increase their funding for education programs. This growth in spending reflects policymaker’s prioritization of education funding despite fiscal stress. While Mississippi is not as affluent as other states, there are still methods that our state can use to gain a greater capacity to invest in programs such as education. These methods include increasing the sales tax base, updating personal income and corporate taxes, and reducing certain tax expenditures.¹Without a balanced budgeting approach that includes raising revenues, Mississippi will be less competitive when prosperity returns.

Author: Francinia D. McKeithan, Policy Analyst/ SFAI Policy Fellow

¹Sara Miller, Revenue Options for Mississippi’s Fiscal Crisis, Updated August 2, 2011

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Dual Enrollment Update and Promoting College Enrollment

March 13, 2012

Filed under: Basic Economic Security,Income & Working Families — Tags: Dropout Recovery Funds, economically secure, educational attainment, Jobs, Mississippians, Wages, Workforce — admin @ 10:33 AM

Recently, Senate Bill 2792, a measure aimed at establishing 5 pilot sites for a high school level dual-enrollment program for students at-risk of dropping out, advanced in the Mississippi Legislature. Dual enrollment programs generally allow high school students to enroll in and receive credit for community college or university courses.

With this legislation, Mississippi’s leaders have put a particular emphasis on placing high school students at-risk of dropping out into dual enrollment programs that allow them to earn credit in 1-year workforce certificate programs at community colleges. Students simultaneously take courses to complete high school and advance in the certificate program.

Advancing beyond high school equivalency is often vital to reaching basic economic security. Regardless of the age of the student, there is a substantial wage difference between adults without a high school degree and those with some college coursework. Below, average wages for different careers are compared to the amount two family types need to be economically secure.

DROPOUT RECOVERY FUNDS CAN INCREASE ADULT COLLEGE READINESS

Opportunities for economic security wages increase when residents advance beyond high school equivalency. Many members of Mississippi’s workforce may need to pursue education beyond a 1-year certificate to access jobs with wages high enough to support a family. It remains important that college workforce and associate degree programs make advancements to become better connected to one another and strengthen wrap around services, so Mississippians can build skills and pursue formal education as needed through their careers.

For working adults without a high school degree, increasing the appropriation for Dropout Recovery Funds can build up GED programs and advance GED recipients into college-level courses.

For more, information on dropout recovery funds, see MEPC’s latest Dropout Recovery Fund fact sheet. To make investments in initiatives like Dropout Recovery and in education across all areas, it is becoming increasingly important to pursue a balanced approach that ensures adequate resources to increase educational attainment and quality now and in the future.

Author: Sarah Welker, Policy Analyst

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5 FUNDAMENTALS OF TANF

February 21, 2012

Filed under: Budget & Tax,Income & Working Families — Tags: low-income children, Mississippi, Poverty, SNAP, TANF — admin @ 8:59 AM

On the national level, there continues to be discussion over the ability of social assistance programs to insulate families from unemployment, underemployment and periods of economic hardship during the economic downturn. A recent Mississippi Public Broadcasting segment explains that many areas of Mississippi have seen increased enrollment in SNAP (formerly food stamps) among families that have never before applied for benefits.

Temporary Assistance for Needy Families (TANF) likewise provides emergency assistance to families with children to cover basics like rent, transportation, food or utilities. The TANF program supplies temporary cash welfare to very low-income families with children that are facing a financial emergency. Today’s post highlights key information on TANF eligibility, enrollment and benefits.

5 FUNDAMENTALS OF TANF IN MISSISSIPPI

Eligibility. In Mississippi, a family with one adult and two children earning less than $458 per month is eligible for TANF assistance. Eligible families must meet work and job search requirements during their participation in TANF. Like most states, Mississippi has a 60-month lifetime limit on family eligibility for TANF benefits.

Enrollment. In late 2011, 12,272 families received support through TANF. Very low-income children make up the bulk of TANF recipients, representing 71% of the overall caseload.

TANF and Poverty. In 2010, 643,880 residents lived in poverty while 25,301 were enrolled in TANF. The TANF caseload equaled 3.9% of the state’s residents living in poverty. Nationally, the number of individuals receiving TANF is the equivalent of 9.5% of individuals living below the poverty line.

TANF and the State Budget. In FY 2010, TANF payments represented 0.1% of the state budget. Mississippi distributed $20 million in TANF support in FY 2010, the bulk of which comes from federal funds.

Benefit Levels. Fourteen states have TANF benefit levels below $300 per month for a family of three. Mississippi is one of these states, and as the chart below shows, Mississippi’s benefit level for a family of three is $170 a month, the lowest in the nation.

The recession brought an uptick in recipients as families turned to TANF during periods of unemployment. However, TANF benefits now cover a smaller share of critical family needs, such as housing or utilities than they did in the late 1990s. As the state and nation continue to face a strained budget environment, it remains important that resources are protected from programs like SNAP, TANF or child care vouchers.

These programs and others that make up the social safety net are instrumental for many families struggling to make ends meet while working hard across Mississippi.

Author: Sarah Welker, Policy Analyst
Sources: U.S. Department of Health and Human Services, Mississippi Department of Human Services, Center on Budget and Policy Priorities, and Urban Institute’s Welfare Rules Data Book.

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Dropout Recovery Funds 101

February 16, 2012

Filed under: Education,Income & Working Families — Tags: Dropout Recovery Funds — admin @ 9:09 AM

Previous posts have focused on the budget requests for Mississippi’s universities and colleges. MEPC is keeping a particularly close eye on the college’s request for Dropout Recovery Funds for the state’s Adult Basic Education (ABE) and GED programs and shares its perspective in a recent Letter to the Editor in the Sun Herald.

ABE and GED programs provide courses with instruction on basic math and literacy skills and advance adults to a GED and high school equivalency. In Mississippi over 350,000 working-age adults lack a high school diploma.

Simply put, increasing the appropriation for Dropout Recovery Funds provides an avenue to enhance the state’s basic skills instruction and move more adults to high school equivalency. Reaching high school equivalency is an important first step for thousands of Mississippi workers because of the close relationship between employment stability, earnings and educational attainment.

However, bolstering ABE/GED programs also needs to include an added emphasis on college-readiness.

Here is why: In 2010, the unemployment rate for Mississippi adults without a high school degree (20.2%) was more than double that of adults who had taken at least some college courses (9.6%). Educational attainment also raises potential earnings for Mississippi workers. In 2010, median wages for workers with some college or an associate’s degree ($28,255) were $11,848 more than adults without a high school degree.

See MEPC’s recently released fact sheet with recommendations for using Dropout Recovery Funds to advance job skills and transitions to college-level courses here.

Recommendations for advancing more low-skilled adults to college-readiness include:

Increasing the Dropout Recovery appropriation in FY 2013 beyond the previous appropriation of $100,000 per college.
Using Dropout Recovery Funds to strengthen comprehensive wrap around support services for adults in ABE/GED courses.
Allocating a portion of Dropout Recovery Funds to hire staff charged with increasing ABE student success and transitions to college.
Enhancing ABE curriculums so courses are imbedded with job skills and introductory content from career tech programs.

Author: Sarah Welker, Policy Analyst

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State of Working Mississippi 2012 Chapter 3: INCOME and POVERTY

February 7, 2012

Filed under: Income & Working Families,Poverty,The State of Working Mississippi 2012 — Tags: affordable housing, disparities, income, median household income, Mississippi, Self-Sufficiency — admin @ 9:14 AM

MEPC’s State of Working Mississippi 2012 series continues with a look at household income over the decade from chapter 3. A post on key findings from chapter 2 illustrated that wages have not changed substantially, and a lack of change in wages relates directly to trends in household income.

Across the Mid South, households earned lower median incomes than did U.S. families overall, but changes from the beginning to the end of the decade were not the same for states around the region. Mississippi households have consistently had less income than households in neighboring states.

After falling from 2000 to 2004, Mississippi’s household income fluctuated around $37,000 for the rest of the decade. Mississippi’s household income of $36,851 in 2010 was $4,500 less than in 2000. Louisiana was the only state in the region to experience an increase in median household income over the decade.

In Mississippi, median household income varies considerably by race. While families of all demographics are having a hard time making ends meet in the current financial climate, a larger portion of African- American households struggle to cover all their basic needs and build wealth for long-term economic security. Income for white households ($46,799) was close to twice the median income for African- American households ($24,838) in the late 2000s.

Hear Ed Sivak, MEPC’s director, speak about disparities in income and employment by race on MPB’s Morning Edition radio interview.

RECOMMENDATION

ENSURE EMPLOYMENT-BASED BENEFITS KEEP FAMILIES HEALTHY AND SECURE

Adults in low-wage jobs that are part-time, seasonal or lack employer-sponsored benefits like health insurance or sick leave will often struggle to meet the needs of their families while working. For many families living below economic security a wide range of work supports are necessary to elevate families toward greater security. Programs and funding dedicated to providing affordable housing, health care, and child care are critical to move people along the path towards basic econnomic security and beyond.

Author: Sarah Welker, Policy Analyst

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State of Working Mississippi 2012 Chapter 1: JOBS

January 26, 2012

The release of MEPC’s State of Working Mississippi 2012 reveals that the 2000s challenged many Mississippi businesses, as well as working adults and their families. Chapter 1 of the report details trends in the state’s workforce, jobs and unemployment.

CHANGE IN EMPLOYMENT BY DECADE

Mississippi’s job losses in the 2000s appear particularly harsh when compared to the growth of the 1990s (see chart). Mississippi’s employment grew by 23.2% during the 1990s, in contrast to a 5.5% decline in the 2000s. The South experienced similar trends of strong job growth during the 1990s; however, the region did not experience the same level of overall decline in the last decade.

The latest data reveals that Mississippi was one of four states with an unemployment rate still above 10% in December 2011.

SHIFTS IN EDUCATIONAL ATTAINMENT AND AGE OF WORKFORCE

The percentage of workers with at least a bachelor’s degree rose to 22.8% during the decade, and 57.1% of the workforce has taken at least some college coursework. Even with gains, the state’s portion of adults with college experience registers below national norms (60.5%). Overall, more than 350,000 working-age adults still lack a high school diploma and college experience.

Older adults now represent a larger share of Mississippi’s workforce. Throughout the economic downturn in the late 2000s, many Americans delayed retirement to build economic security after suffering financial losses. In 2000, 13.3% of Mississippi workers were age 55 or over. By 2010, 18.7% of Mississippi’s labor force was at least 55 years old. In contrast, younger Mississippians now represent a smaller share of the state’s workforce.

RECOMMENDATION: (For full recommendations see complete State of Working 2012).

Increase wrap around supports for adults in adult basic education, job training and post-secondary courses. Strong wrap-around support services are critical for adults returning to school with the hope of gaining skills and moving into higher wage employment. Without these resources, even the strongest students will struggle to meet both the needs of their families and the demands of training. Examples of supports include: transportation vouchers, child care and staff dedicated to helping adults in adults basic education and GED programs transition to college-level classes.

Tomorrow: The SOW 2012 series continues with a closer look at wages by race, gender and educational attainment.

Author: Sarah Welker, Policy Analyst

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INTRODUCING THE STATE OF WORKING MISSISSIPPI 2012

January 25, 2012

Many communities across Mississippi continued to experience persistently high unemployment and underemployment, stagnant wages and economic insecurity. However, the state’s workforce remains resilient and continues to be one of the state’s greatest assets. Understanding how workers, industries and families have been affected over the last decade can lay a foundation for building up the workforce in the years ahead.

MEPC’s latest report, State of Working Mississippi 2012 is a comprehensive piece that looks at key aspects of the economy affecting Mississippi’s workforce from 2000 to the present. Specifically the report:

Inspects changes in critical areas of Mississippi’s economy since 2000 including: jobs, the workforce, wages, income, and state revenue.
Compares information in these areas with trends nationally and among Mid South states.
Examines each of these areas through the lens of race, gender and educational attainment.
Summarizes key takeaways and makes recommendations in each chapter for advancing working Mississippians and their families.

SELECT FINDINGS FROM STATE OF WORKING MISSISSIPPI 2012

TWO RECESSIONS RESULT IN JOB LOSS OVER THE DECADE

In Mississippi, employment peaked in February 2008 and then steeply declined until February 2010. In total, Mississippi lost 76,800 jobs over the two-year period. Mississippi’s job losses in the 2000s appear particularly harsh when compared to the prosperity of the 1990s. Mississippi’s employment grew by almost 25% during the 1990s, in contrast to a 5.5% decline in the 2000s. The Southern region and the United States experienced similar job growth during the 1990s; however, neither the South nor the nation experienced the same level of overall decline in employment in the 2000s.

MISSISSIPPI WORKERS EXPERIENCE LITTLE CHANGE IN WAGES

Many members of the state’s workforce have not seen an improvement in their wages since 2000, as companies were hit hard by two economic downturns, and state and local budgets tightened. The inflation-adjusted median wage in Mississippi grew marginally from 2000 to 2010, from $13.13 to $13.45. The gap between men’s and women’s wages narrowed over the decade, while the wage gap between white and African American workers persisted from 2000 to 2010.

WORKFORCE ADVANCES IN EDUCATIONAL ATTAINMENT

Mississippi’s workforce advanced in educational attainment over the decade, but needs to raise skill levels further to reach national norms. In 2000, 20.8% of the workforce received a bachelor’s degree or higher compared to 22.8% in 2010. Overall 57.1% of the state’s workforce has taken at least some college classes. However, over 350,000 working-age adults still lack a high school degree, and the share of workers without high school equivalency is larger in Mississippi than in the U.S.

Over the next several days we will take a closer look at the key findings and recommendations from each chapter of the report.

Author: Sarah Welker, Policy Analyst

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Part 2: Making Mississippi’s Income Tax More Equitable—The Earned Income Tax Credit

January 13, 2012

Filed under: Budget & Tax,EITC,Income & Working Families,Income Tax — Tags: Earned Income Tax Credit, Federal Poverty Line, income tax, Mississippi, Regressive Tax System — admin @ 10:11 AM

Our first post addressed the increasing gap between the state tax threshold and the federal poverty line. One policy solution that would reduce the effect of the state income tax on the poor is for our state to institute an Earned Income Tax Credit (EITC).

The federal EITC is the nation’s most effective anti-poverty program for working families.¹ It is designed to encourage and reward work as well as offset federal payroll and income taxes. In 2009, it lifted 6.5 million people above the federal poverty line—including 3.3 million children, nationally. Additionally, the federal EITC is refundable, meaning that if it exceeds a low wage worker’s income tax liability, the IRS will refund the balance.

404,394 Mississippians claimed the federal EITC in 2011 which brought an additional $1.5 billion into our state.² A state EITC would reduce the income taxes owed and provide a wage supplement for over 360,000 working families living in or near poverty in Mississippi. Finally, a state EITC that is tied to the federal EITC is automatically adjusted.

The next blog in this series will talk about the estimated cost and eligibility requirements for a state EITC while also describing the work benefits that an EITC could create in our state.

Author: Francinia D. McKeithan, Policy Analyst/ SFAI Policy Fellow

¹EITC Statistics http://www.eitc.irs.gov/central/eitcstats/

²Arloc Sherman, “Stimulus Keeping 6 Million Americans Out of Poverty in 2009, Estimates Show,” Center on Budget and Policy Priorities, September 9, 2009.

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Making Mississippi’s Income Tax More Equitable

January 11, 2012

Filed under: Budget & Tax,Income & Working Families,Income Tax — Tags: Federal Poverty Line, income tax, Mississippi, regressive, Tax System — admin @ 9:08 AM

Mississippi’s state income tax threshold, the amount at which persons start having to pay income taxes, has fallen below the federal poverty line since 2005 (See Figure 1, below).

Each year, the federal poverty line increases due to increases in the cost of living. However, Mississippi’s income tax threshold does not adjust for inflation.

Without adjustment, the gap between the state’s income tax threshold and the federal poverty line will increase annually. In turn, there will be more individuals living below the federal poverty line that will be required to pay state income taxes.

This blog is the first of a series of posts on the state’s tax system. Forthcoming posts will include policy solutions to address the growing regressive nature of the state’s income tax system.

Author: Francinia D. McKeithan, Policy Analyst/ SFAI Policy Fellow

Part 2: Making Mississippi’s Income Tax More Equitable—The Earned Income Tax Credit

Part 3: A State Earned Income Tax Credit – Estimated Cost, Eligibility, and Encouraging & Rewarding Work

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