Our Economic Weaknesses Revealed by COVID-19 and What We Can Do - PowerPoint PPT Presentation

Our Economic Weaknesses Revealed by COVID-19 – and What We Can Do about It ECONOMIC OPPORTUNITY INSTITUTE MAY 22, 2020 OPPORTUNITYINSTITUTE.ORG

US least prepared of any wealthy country Unlike peer nations, U.S. lacks: • Universal health coverage • Universal paid leave standards • Strong public support for child care • Strong regulatory and social safety net OPPORTUNITYINSTITUTE.ORG

Crisis exacerbated by policy choices Policymakers have perpetuated: • Growing income inequality • Tax breaks for wealthy + disinvestment in people and infrastructure • Distrust of government • Institutional racism and anti-immigrant policies OPPORTUNITYINSTITUTE.ORG

WA advocates have won strong workplace standards • Strong minimum wage • Paid sick & safe leave • Paid Family & Medical Leave • Overtime protections OPPORTUNITYINSTITUTE.ORG

But rising income inequality leaves many behind Share of Income growth to Top 1%, WA 272% Top 1% Bottom 99% 53% 46% 46% 34% 13% 1945 to 1973 1973 to 2007 2007 to 2015 Source: EPI, The New Guilded Age, 2018 OPPORTUNITYINSTITUTE.ORG

Racial inequity evident in wealth gap Median net worth of households, US 2014 $132,483 $112,250 $12,458 $9,211 White Black Asian Latinx Source: US Census Bureau, Survey of Income and Program Participation, 2014 Panel, Update Nov 2017 OPPORTUNITYINSTITUTE.ORG OPPORTUNITYINSTITUTE.ORG

Single moms and young kids at high risk of poverty WA families in poverty, 2018 43.9% 40.2% 12.1% 11.1% 7.8% 6.3% Washington King All families Married couples, child under 5 Single mom, child under 5 Source: US Census Bureau, American Community Survey 2018 OPPORTUNITYINSTITUTE.ORG

Washington has most regressive tax system of any US state Share of income to state & local taxes in Washington 18% 11% 3% bottom20% middle 20% top 1% Source: Institute on Taxation and Economic Policy, 2018 OPPORTUNITYINSTITUTE.ORG

Biggest source of state revenue is most regressive, on shrinking part of economy State General Fund Revenue 6% 5.5% Other 6% Taxable retail sales as % of state personal income Sin 4% 5% 3.6% 4% Property 3% 14% Other Sales 51% 2% buisness 6% 1% B&O 19% 0% 1979 1983 1987 1991 1995 1999 2003 2007 2011 2015 Source: Washington Economic and Revenue Forecast Council data OPPORTUNITYINSTITUTE.ORG OPPORTUNITYINSTITUTE.ORG

State budget is declining relative to income 6.6% WA General Fund as Share of State Personal Income 7% 5.8% 6% 5.2% 5% 4% 3% 2% 1% 0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: EOI analysis of OFM and BEA data. 2020-21 based on House budget OPPORTUNITYINSTITUTE.ORG OPPORTUNITYINSTITUTE.ORG

OPPORTUNITYINSTITUTE.ORG

OPPORTUNITYINSTITUTE.ORG

OPPORTUNITYINSTITUTE.ORG

OPPORTUNITYINSTITUTE.ORG

Between 2008 and 2011: 64,000 people lost health coverage through the Basic Health Plan, 155,000 on wait list; 180,000 lost dental, vision, podiatry, and other services through Medicaid; 120,000 faced drastically reduced preventive mental health services; 50,000 low-income seniors lost assistance covering prescription drugs; 40,000 seniors and people with disabilities had cuts in the home health; 46,000 women lost family planning services, $23 million cut Maternity Support; 45% reduction in per capita funding for alcohol and substance abuse disorder treatment by 2017, after continuing declines OPPORTUNITYINSTITUTE.ORG

Across the board state cuts: • 23,000 families lost TANF in 2011 • 20,000 who couldn’t work due to disability lost income support • UW tuition increase 75% 2007-2012 • 145,000 eligible students denied State Need Grants 2009-2013 • K-12 class sizes increased • Prisons to parks cut • Thousands of school employees and other public servants lost jobs; those remaining lost take home pay OPPORTUNITYINSTITUTE.ORG

COVID Pandemic: Unemployment is unprecedented New WA UI claims 180,000 170,063 160,000 143,241 140,000 137,605 109,425 128,962 120,000 100,000 100,762 82,435 80,000 60,000 40,000 6,548 20,000 14,154 0 7-Mar 14-Mar 21-Mar 28-Mar 4-Apr 11-Apr 18-Apr 25-Apr 2-May in week starting Source: Washington Employment Security Dept. OPPORTUNITYINSTITUTE.ORG

COVID job losses felt unevenly 1st-time UI claims, Mar1-Apr 18 Information Prof'l & tech Arts & rec Manufacturing Retail Health care Construction Accommodation & food service 0 20,000 40,000 60,000 80,000 100,000 120,000 Source: WA Employment Security Dept. OPPORTUNITYINSTITUTE.ORG

Sampling of occupations applying for UI Taxi drivers & chauffeurs Childcare workers & preschool teachers Hairdressers & stylists Dental hygenists & assistants 0 4,000 8,000 12,000 16,000 Source: WA Employment Security Dept. OPPORTUNITYINSTITUTE.ORG

Lost job = lost health coverage Uninsured in Washington 1,000,000 14% 892,247 900,000 12% 800,000 11.5% 10% 700,000 521,764 600,000 502,324 8% 467,734 500,000 6.7% 6% 400,000 6.6% 6.2% 300,000 4% 200,000 2% 100,000 0 0% 2018 2019 2020 pre-COVID-19 2-May-20 number percentage Source: https://www.ofm.wa.gov/sites/default/files/public/dataresearch/healthcare/healthcoverage/COVID-19_impact_on_uninsured.pdf OPPORTUNITYINSTITUTE.ORG

Newly unemployed lost their insurance 54.2% 51.8% uninsured Employment-Based Insurance 10.7% 10.2% pre-COVID 2-May Source: WA Office of Financial Management OPPORTUNITYINSTITUTE.ORG

Washington paid leave minimums PAID SICK & SAFE LEAVE PAID FAMILY & MEDICAL LEAVE • At least 1 hr for every 40 hrs • 12 to 18 weeks worked • Eligibility: 820 hours work in • Full pay via paycheck past yr • Enforced by Dept. Labor & • Social insurance program Industries, Seattle, Tacoma • 90% to 60% pay • C.b.a. or employer policy may provide additional • Apply at paidleave.wa.gov OPPORTUNITYINSTITUTE.ORG

What about undocumented immigrants? • Undocumented people have been left out of federal relief packages – but they are more likely to lack health insurance • Testing and treatment for COVID-19 will not count against you in public charge test • ICE won’t make arrests at health facilities • Advocates are pressing for a Washington Worker Relief Fund OPPORTUNITYINSTITUTE.ORG OPPORTUNITYINSTITUTE.ORG

Washington can raise progressive revenue Tax Reductions Revenue 2017-2019 Fiscal Year Average % Reduction in Taxes* Decrease/Increase B&O $ 8,751,681,000 $ 4,375,840,500 25% $ 1,093,960,125 Sales $ 21,488,340,000 $ 10,744,170,000 25% $ 2,686,042,500 Property $ 5,108,989,000 $ 2,554,494,500 25% $ 638,623,625 Total Decrease in Revenue $ 4,418,626,250 New Taxes Tax Description Revenue Income Tax above $1,000,000 Millionaire Tax $ 4,203,964,350 SB 6017 - Executive Compensation Tax, amended to start at $137,700 CEO Tax $ 853,356,867 Estate Tax SB 6581, amended to include % of charitable contributions $ 16,855,785 Inheritance Tax $ 517,280,967 1% Intangible Property Tax on Property in Excess of $1 billion Billionaire Tax $ 4,415,000,000 Total revenue from new taxes $ 10,006,457,969 Net Revenue with universal B&O decrease $ 5,587,831,719 Anticipated Drop in Annual Revenue $ 2,000,000,000 Net Revenue with universal B&O decrease after Drop in Revenue $ 3,587,831,719 OPPORTUNITYINSTITUTE.ORG

We can make a new world from the ashes of COVID 19: • Expand grants for child care and small business recovery • Guarantee universal health coverage and affordable access to care • Include immigrant workers and families • Push for strong state stimulus – NO to austerity • Rebuild economy to promote equity, worker power, small businesses and resiliency OPPORTUNITYINSTITUTE.ORG