Remember that time when Congress almost defaulted on our debt? It may seem like a distant nightmare, but we’re still living with repercussions from the debt ceiling showdown. In order to get Congress to lift the ceiling a year ago, President Obama struck a deal that will cut $2.4 trillion in spending over ten years and formed a Congressional committee that was supposed to recommend ways to cut another $1.5 trillion from the deficit. If the committee failed to come up with the cuts, sequestration would kick into gear, with $1 trillion in cuts evenly split between defense and non-defense spending come January 2. The latter never came to fruition, so we’re now on a collision course with the former.
These automatic cuts, known as sequestration, have (unsurprisingly) become a political hot potato. They’ve even trickled into the campaign trail. But if the cuts move forward, the pain won’t just be political. They’ll hurt everyday Americans—but not across the board. Women are going to shoulder a disproportionate amount of the burden. While the defense lobby has been loudly pushing back on the $500 million to be slashed from its budgets, the $500 million cuts from domestic programs could be devastating, especially for women.
Education will take a big hit, which impacts women in more ways than one. Immediately of concern will be the fact that 100,000 children could get bumped from Head Start’s rolls, out of a total of 962,000. That’s because the automatic cuts will take a $590 million chunk out of federal spending on the program. That comes on top of a huge decline in state financing for the program over the past decade or so—it fell 45 percent, or $122 million. While there have been concerns raised about whether Head Start’s effects actually stay with enrollees, working mothers need more childcare options when they head to their jobs, not fewer. Less than 60 percent of 3-to-5-year-olds are enrolled in an organized childcare or early education program, and just about half of low-income children are. Those numbers can only go down after these cuts take effect.
Speaking of childcare, working mothers who rely on options other than Head Start will also suffer. Assistance for 80,000 kids will dry up after the cuts take effect. The recession has already hammered this spending at the state level. While federal funds had flowed in to support these programs through the stimulus, by the end of 2010 the money had dried up. That meant that thirty-seven states pulled back on assistance in one form or another last year, making families worse off than a decade ago, according to analysis by the National Women’s Law Center.
Women will also, of course, share some of the pain from cuts to other programs like AIDS drug assistance and substance abuse treatment programs. And while these cuts sound bad now, they could actually get worse down the road. While there’s now a “firewall” between defense and non-defense spending to make sure both are equally cut, that disappears after two years. NWLC has warned that this could mean a bigger share of the cuts fall on the non-security programs at that point.
The spending cuts will trickle down in other ways. It’s not just mothers who will find their struggles increasing. Women are the majority of the public sector workforce—and they’ve lost more than their share of those jobs as federal and state spending has been slashed during the recovery. These cuts will only push that trend along. Cuts to Head Start alone will eliminate 30,000 teacher, aide and administrative positions.
Other public sector workers could be hit. If (and when) federal spending is cut from state and local budgets, many may have to eye even more government layoffs. Just after the debt ceiling deal was announced, mayors and governors were already bracing for the cuts to impact their budgets. Budget restrictions at the federal level also mean many agencies will likely have to turn to furloughs, hiring freezes and layoffs.
The sequestration cuts may have morphed into an election-year football, but they have real consequences for Americans who are already struggling to get by. And women, who have really suffered from the sluggish recovery, are going to be hit fastest and hardest. While figures in the millions and billions are hurled like insults from side of the aisle to the other, it’s worth keeping in mind how drastic the real-life consequences will be and who will feel them.
By: Bryce Covert, The Nation, July 30, 2012
On Thursday, President Obama will deliver a major speech on America’s employment crisis. But too often, what is lost in the call for job creation is a clear idea of what jobs we want to create.
I recently led a research team to the Rio Grande Valley in Texas, where Gov. Rick Perry, a contender for the Republican presidential nomination, has advertised his track record of creating jobs. From January 2000 to January 2010, employment in the Valley grew by a remarkable 42 percent, compared with our nation’s anemic 1 percent job growth.
But the median wage for adults in the Valley between 2005 and 2008 was a stunningly low $8.14 an hour (in 2008 dollars). One in four employed adults earned less than $6.19 an hour. The Federal Reserve Bank of Dallas reported that the per capita income in the two metropolitan statistical areas spanning the Valley ranked lowest and second lowest in the nation.
These workers aren’t alone. Last year, one in five American adults worked in jobs that paid poverty-level wages. Worker displacement contributes to the problem. People who are laid off from previously stable employment, if they are lucky enough to find work, take a median wage hit of over 20 percent, which can persist for decades.
To understand the impact of low wages, in the Valley and elsewhere, we interviewed a wide range of people, including two directors of public health clinics, three priests, a school principal and four focus groups of residents. Everyone described a life of constantly trying to scrape by. One month they might pay for the phone, another, for utilities. Everyone knew how long each company would carry unpaid bills before cutting service. People spoke not only of their fear of an unexpected crisis — an illness, a broken car — but also of the challenge of paying for basic needs like school supplies. Many used the phrase “one paycheck away from homelessness.”
Because their parents cannot afford child care, children move among relatives and neighbors. They watch too much TV. They don’t finish their homework. Older children grow up too fast from parenting their younger siblings. As one person observed, “All you think about is which bill is more important.”
Economic stress strains marriages. Parents cannot afford quinceañeras for their daughters. In church youth groups, teenagers ask why they should stay in school if all they can get are low wages.
Many children are latchkey kids. Accidents are frequent; we heard of an elementary school student who badly burned himself in a science experiment, with his older brother watching. Their father couldn’t take time off from work to visit his son in the hospital. Children come to school sick. Parents miss teacher conferences because they can’t afford time off. Type 2 diabetes is a scourge in the Valley. Since Type 2 diabetics can be asymptomatic for years, many don’t buy medicine; as time passes, they become severely ill, often losing sight or a limb.
The director at one clinic, with nearly 70,000 visits a year, estimated that half of its patients had anxiety or depression. Often people can’t get to the clinic because they cannot afford to lose work time or because gas costs too much. When they go, they take their families, because they have no child care.
And yet the Valley is not hopeless. Teachers stay late to help with homework. They make home visits to meet parents. Health clinic employees work overtime. The community organization Valley Interfaith has pushed for training opportunities and living-wage jobs. There is no “culture of poverty,” but the low-wage economy has corrosive and tragic consequences.
Must we choose between job quality and quantity? We have solid evidence that when employees are paid better and given more opportunities within a company, the gains outweigh the costs. For example, after a living wage ordinance took effect for employees at the San Francisco International Airport, in 1999, turnover fell and productivity rose.
Contrary to the antigovernment rhetoric, there is much that the public sector can do to improve the quality of jobs.
A recent analysis by the Economic Policy Institute reported that 20 percent of federal contract employees earned less than the poverty level for a family of four, as opposed to 8 percent of traditional federal workers. Many low-wage jobs in the private sector (notably, the health care industry) are financed by taxpayers. The government can set an example by setting and enforcing wage standards for contractors.
When states and localities use their zoning powers to approve commercial projects, or offer tax incentives to attract new employers, they can require that workers be paid living wages; research shows this will not hurt job growth.
Labor standards have to be upgraded and enforced, particularly for those employers, typically in low-wage industries, who engage in “wage theft,” by failing to pay required overtime wages or misclassifying workers as independent contractors so that they do not receive the benefits to which they are entitled.
Americans have long believed that there should be a floor below which job quality does not fall. Today, polls show widespread support for upgrading employment standards, including raising the minimum wage — which is lower, in inflation-adjusted terms, than it was in 1968. It’s time for the federal government to take the lead in creating not just more jobs, but more good jobs. The job-growth mirage of the Rio Grande Valley cannot be our model.
By: Paul Osterman, Op-Ed Contributor, The New York Times, September 5, 2011