Let’s Take a Deeper Look at Wisconsin’s Worker “Shortage”

Author: Susan Stanton . Date: September 22, 2017

When Scott Walker ran for Governor of Wisconsin, one of his favorite slogans was “Wisconsin is open for business.” To access Workforce Innovation and Opportunity Act (WIOA) funding, Wisconsin developed a state plan detailing it’s needs, challenges and prospects around employment. The plan highlights an aging workforce, historically low unemployment and a skills gap as key issues for Wisconsin. Recently, the Wisconsin State Journal (WSJ), the state capital’s local newspaper, reported that Wisconsin is on the brink of crisis as it grapples with a growing worker shortage. The article explains that because of low unemployment, an aging workforce and a skills gap, “There just aren’t enough people in Wisconsin” to fill the jobs in the state. The complexities of employment and workforce development require critical analysis and creative problem solving; both the state plan and the reporting on these issues would benefit from looking more deeply at some additional employment challenges in the state.

Just like the state plan, the WSJ article omits any racial analysis. Although, Wisconsin touts an overall unemployment rate of 4.1% which is lower than the national average, the unemployment rate for African American or Black residents of Wisconsin is 10.6% which is higher than the national average and nearly three times the unemployment rate for Whites in the state which is 3.8%. Looking at data for Milwaukee County alone, the most populated county in the state and home to the largest number of residents who are African American or Black, highlights more issues related to unemployment in Wisconsin. Milwaukee County’s unemployment rate for residents who are African American or Black is 12.6%, more than three times the rate of unemployment among Whites which is 3.8%. Unemployment among Latinos in Milwaukee County is 6.8%, nearly double the rate for Whites. (Unemployment data was retrieved from the Bureau of Labor Statistics and the US Census Bureau.) Discussions of unemployment and plans to fill vacancies in the state must incorporate some racial analyses that include not only numbers, but also a discussion of the realities of discrimination in hiring practices and discrimination in the workplace if they are to have any tangible effect on all Wisconsinites.

People that are seeking work are well-positioned to contribute to those discussions. In the WSJ article, perspectives about job vacancies and prospective workers are offered from “dozens of employers, economists, advocacy group experts and state political and economic development officials.” Ideas are shared about the challenges that some employers have finding good candidates, but the essential voices of unemployed people are missing. The article offers limited insights about what it is like for workers to find jobs today and how those jobs and related policies (e.g., the state’s new regulations for receiving unemployment benefits, child support policies and practices, low and abrupt cliffs before losing public benefits) do and don’t allow workers, many of whom are parents, to support themselves and their families. At the Center for Family Policy and Practice, we regularly conduct focus groups with mothers and fathers to discuss issues related to economic security. In addition to issues noted in the article, like low wages and the realities of the child support system, we also hear about other challenges and complexities that some mothers and fathers face. Sometimes jobs have inconsistent hours or hours that aren’t amenable to parenting or single parenting. Sometimes schedules are set with little notice for the employee. Sometimes employees are struggling with low wages, no insurance benefits and a myriad of transportation issues (e.g., extremely long bus rides, bus schedules that do not match shift hours, or jobs that require a car). This “geographical gap” between where jobs are and where people live is amplified by a “transportation gap” in which workers don’t have access to reliable transportation to and from work. When those workers are parents, additional complexities can arise. If these worker-parents are a few minutes late to pick up their children from childcare, they sometimes receive significant financial penalties from child care providers. Employees often face multiple such issues, which minimize the appeal of many $8, $11 and even $15/hour positions. And then, as the article notes, working parents who utilize Medicaid must be mindful of either having a job that offers strong wages and health insurance or not making “too much money” that they then lose health insurance and other public benefits for themselves and sometimes their children. These are examples of just some of the issues prospective workers might face that affect their employment decisions. If Wisconsin wants to grow its economy for all groups of people in the state, it must recognize that there are many adults in Wisconsin (many of whom are people of color and more specifically, people who are Black and live in Milwaukee) in need of employment, and begin to address the challenges that they face as well.

The article also suggests that the “worth” of a human being who is unemployed is in question. Some employers are choosing to offer (and may require) employees to take courses about managing relationships, buying insurance, balancing a checkbook, and saving for retirement. (This for a position that starts at $13/per hour, which the employer acknowledges is not a living wage.) This raises all sorts of questions about what roles employers can and should play in the lives of their employees. In addition to a focus on wages and benefits, employers may want to consider the ways in which the work environment is structured to respect human beings and allow them to thrive at work.

During the coming months, the Center for Family Policy and Practice will continue to disseminate information about economic security challenges faced by mothers and fathers in Louisiana, Georgia, Mississippi and Wisconsin. Many of these parents have very low incomes and are African American. The stories of these parents offer insights into structural changes that federal and state governments can make, but also point to specific policies and practices that employers and co-workers might consider if they are to attract and retain workers from every region and segment of the state’s population.

Clinton’s Child Tax Credit Proposal: Yes, And….

Author: Susan Stanton . Date: October 20, 2016

In its current form, the Child Tax Credit was passed with bipartisan support. In combination with the Earned Income Tax Credit, research suggests that it benefits children “at virtually every stage of life, including improved school performance, higher college enrollment, and increased work effort and earnings in adulthood.” The CTC is a successful policy that benefits many low- and middle-income families. Presidential candidate Hillary Clinton recently rolled out plans to improve the Child Tax Credit (CTC) in ways intended to benefit low- and middle- income families. Overall, she proposed the following changes:

1-Doubling the Child Tax Credit from $1000 to $2000 for children under 5 years old and

2-Extending the benefit to more working families by allowing the Credit to phase-in starting with the first dollar earned rather than starting after earning $3000.

These changes would be funded through other tax policy changes designed to ensure that the “wealthy, Wall Street, and big corporations pay their fair share.” Clinton would also like to see the Child Tax Credit expanded to include families with older children and low-income workers without children.

Structured as a refundable tax credit, this proposal would put money in the pockets of more low- and middle-income parents, including those  that do not owe income taxes. Yet, the CTC and the proposed changes could be altered to more positively and equitably benefit more parents and children—including those most in need. First, the proposal does not address the issues that underlie families’ economic situations and therefore limits its positive impact. For example, continuing to link the Child Tax Credit to dollars earned through employment should draw attention to other job related issues like availability of living wage positions and employment discrimination. Without consideration of these and other underlying issues, the proposed CTC will provide some additional income to more families, but it will not provide meaningful economic stability or relief to the families and parents with the greatest economic need. Plus, in keeping with current federal child support law, the Child Tax Credits of the more than two million mothers and fathers that owe child support debt to the state will be intercepted and retained by the Internal Revenue Service and never reach the child’s household.

Secondly, neither the current Child Tax Credit policy nor Clinton’s proposed changes seem to be mindful of how people are related to each other and how they organize their households (at all income levels).  If this understanding of families’ lives is not integrated into family policy, the result may be additional conflict and economic challenge in the low- and middle-income families it is intended to assist. For some families, the “all or nothing” approach to awarding the Child Tax Credit is reasonable and for other families where the adults have decided they should not be partners, the “all or nothing” approach can create conflict or inequity and have a negative impact on the child.  Currently, the CTC is awarded to the custodial parent unless the other parent can prove that he/she provided more than 50% of the support that year and/or there is agreement between the parents that the parent with less placement should receive the CTC.  The expectation of record keeping and parental cooperation can not only be onerous but can also increase the likelihood of conflict between co-parents that maintain separate households. This is especially significant for families experiencing poverty whose resources are already stretched too far and for families where safety (including domestic violence and other interpersonal violence is an issue).  Don’t hesitate to give the full CTC to a parent who is acting as the sole parent. However, when both parents are working to provide economic security and stability for their children, government policy, and in this case tax policy, should support parents in working toward that goal.

Finally, many children do not live with two parents in the same household all the time.  Sometimes the separate household are established through divorce, and in other families, parents were never married.  In the latter case, roles and responsibilities may or may not be established through the courts. Either way, actual parenting time and economic roles and responsibilities may or may not be accurately reflected in legal documents. As a result, structuring the Child Tax Credit in ways that award the full credit to only one parent based on court documented placement can help create conflict for families where parents don’t live together and therefore don’t live with their children all the time. This can be an especially challenging scenario for parents whose economic security is tenuous and who rely on the money from the Child Tax Credit.

Examining tax policy with an eye toward the economic security of more people is positive. If a goal of the Child Tax Credit is to alleviate the financial pressures of low- and middle-income families, then it is essential that tax and related policies be written from a lens that understands the make-up of families and the circumstances they face. This policy provides an opportunity to recognize all children and their parents, and specifically bring into the circle of concern and support more low-income families of color with children whose parents don’t live together.