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For a more prosperous, equitable, sustainable and inclusive Ohio |
Still no take-off in Ohio’s job market
The chart above and the following statistics, based on the latest seasonally adjusted payroll numbers released March 28 by the Ohio Department of Job & Family Services, highlight changes in the Ohio job market since 2001…
We’re settling in -
Our Cleveland office has a new address and phone numbers:
3631 Perkins Avenue Suite 4C-East
Cleveland, Ohio 44114
(216) 361-9801 voice (216) 361-9810 fax
Who needs a raise? - For 68 years the minimum wage has been an important part of an economy that works for all. Recently, the federal government has allowed the minimum wage to wither in value. It is now lower, in real terms, than at any other point in more than fifty years. This new study examines a proposed initiative to raise the Ohio minimum wage to $6.85 an hour by 2007 with annual cost-of-living-adjustments thereafter. We find that the policy would bring us in line with economically vibrant states, benefit 719,000 workers, reduce poverty, ensure that inflation does not eat away low-wage workers’ paychecks and send a message that Ohio values its working families.
Ohio Could See Job Growth, Cleaner Energy, by Exploring Creative Policies -
Working with the Apollo Alliance, Policy Matters released a groundbreaking new report describing successful state-based clean energy solutions. New Energy for the States chronicles scores of proven clean energy solutions that are working in states across America. From clean power sources to fuel efficiency to smart growth, the new report highlights the best clean energy policies our states have enacted. Go here to read the report.
Coming Up: Inequality Matters: two chances to hear about the growing economic divide – and how to fix it - Join us on Monday April 10 from 4:00 – 5:30 p.m. at Cleveland State University’s Levin College of Urban Affairs on 1717 Euclid; or at 8 p.m. that evening at Mac’s Backs ~ Books on Coventry, 1820 Coventry Rd in Cleveland Heights. Both events will feature discussion of the new book Inequality Matters, which exposes the growing concentration of wealth and suggests remedies. Miles Rapoport, President of Demos and James Lardner, Senior Fellow at Demos will speak at both events, and the CSU forum will also feature Mittie Olion Chandler, Associate Professor and Director, Urban Child Research Center, Levin College of Urban Affairs. Our own Pam Rosado will moderate both discussions. Both events are free; registration is encouraged at CSU.
Credit Where It’s Due: The Earned Income Tax Credit in Ohio - In 2003, more than 769,000 Ohio families received the federal Earned Income Tax Credit (EITC), a refundable tax credit for workers in families that make less than $37,263. The average EITC in Ohio was $1,720, bringing more than $1.3 billion into Ohio communities. However, more than 65% of Ohioans receiving the EITC (500,000 families) went to a paid preparer and more than 60% of those families bought high-interest, refund-anticipation loans (RALs), costing Ohio families more than $100 million. This report details how an Ohio EITC credit and better regulation of loans would further help families receive their full refunds.
Public Benefits at Ohio Employers: An Initial Analysis - The Ohio Department of Job and Family Services issued a report on February 24 itemizing how many employees and their families use public benefits at 40 Ohio employers that appeared most frequently in the department’s data. Policy Matters, which had sought such data, reviews some highlights, finding that the state is paying about $90 million a year to cover Medicaid costs for these 40 employers, and that roughly seven percent of Wal-Mart employees – and even more of their children – have to rely on Medicaid. It’s important that the state help working families access basic needs, but what responsibilities do employers have? Read more here.
Revised Figures Show Somewhat Better Job Growth in 2005, But a Recent Lag - Revised figures from the Ohio Department of Job & Family Services show that Ohio added 29,300 jobs during 2005, a greater number than shown previously. Unfortunately, such gains did not continue in December and January. Manufacturing employment, the source of most of the state’s job losses during the decade, has failed to gain traction. Read more on our JobWatch page.
That’s all!
The Policy Matters Ohio Team
In 2003, more than 769,000 Ohio families received the federal Earned Income Tax Credit (EITC), a refundable tax credit for workers in families that make less than $37,263. The average EITC in Ohio was $1,720, bringing more than $1.3 billion into Ohio communities. However, more than 65% of Ohioans receiving the EITC (500,000 families) went to a paid preparer and more than 60% of those families bought high-interest, refund-anticipation loans (RALs), costing Ohio families more than $100 million. This report details how an Ohio EITC credit and better regulation on loans would further help families receive their full refunds.
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For 68 years the minimum wage has been an important feature of American policy. It is part of the public structure we need for a successful economy that works for all of us – an economy that values work, offers a more level playing field, and better protects those who play by the rules. The minimum wage, however, has been allowed to wither in value and is now lower, in real terms, than at any other point in more than fifty years.
In Ohio, a coalition of workers, unions, community organizations and other citizens is seeking to put an initiative on the November 2006 ballot that would raise the Ohio minimum wage to $6.85 an hour by 2007 with annual cost-of-living-adjustments thereafter. This paper provides insight into how many workers could be affected by raising Ohio’s minimum wage above the federal and indexing it. It finds that the policy would benefit 719,000 workers, bring many workers to a level that actually could bring a small family out of poverty, have substantial benefits for workers already earning more than $5.15, and ensure that inflation does not quickly erode the value of low-wage workers’ paychecks.
Restoring Ohio’s minimum wage to a level comparable to what it was in the past would again send a message that Ohio values its working families, and would send our state back toward the economic high road.
Conclusion and Recommendations
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April 2005 report Out of the Basement, where we analyze a proposal to raise the wage legislatively to $7.15.
Revised figures show somewhat better job growth in 2005, but a recent lag
The chart above and the following statistics, based on the latest seasonally adjusted payroll
numbers released March 7 by the Ohio Department of Job & Family Services, highlight changes in the Ohio job market since 2001…
By Charu Gupta
For as long as she can remember, Tameko Brown has been in financial straits.
The 32-year-old biochemistry stockroom manager makes about $30,000 a year.
She had her first child at age 18, and is now the single mother of four.
This qualifies her for the Earned Income Tax Credit, the anti-poverty program for families making less than $37,000.
Brown’s EITC return typically falls in the ballpark of $1,500 — an amount the feds would send in about three weeks.
But for years, no one at H&R Block told her that.
Instead, they offered her advances on her refund. And Brown always accepted.
“It meant ‘Wow! I can go home with some money today?’ I was excited,” she recalls.
At first, Brown didn’t realize that fees and interest would consume about $300 of her refund.
She caught on to all the extra charges her second year, but still took the deal, thinking it was preferable to waiting on the IRS.
Basically, Brown was paying to borrow her own money.
But as one- or two-week loans, these so-called rapid refunds are hardly beneficial.
Watchdog agencies like the National Consumer Law Center call the practice a scam.
Tax prep agencies prey on low-income families’ need for fast cash, and effectively transfer money the government intends for the working poor to multi-million-dollar corporations.
Out of the more than $30 billion available through earned income tax credits each year, the NCLC estimates that, in 2004, American taxpayers gave up nearly $1.6 billion through tax prep and loan fees in exchange for “refund anticipation loans,” or RALs.
In Ohio alone, which gets more EITC dollars than all but seven other states, more than 60 percent of EITC-eligible taxpayers who went to paid preparers also took out RALs — costing them nearly $40 million in loan fees, according to Policy Matters Ohio.
Late last year, H&R Block agreed to a $62.5 million settlement in four class-action lawsuits, spanning 23 states, including Ohio.
The complaints alleged that the company’s “instant refunds” were in fact loans that sometimes featured interest rates as high as 750 percent — amounts never disclosed to clients.
Outside the H&R Block office in the Lee Harvard Shopping Center on the East Side, a large poster touts an “Instant Money Refund Loan.”
In much smaller print at the bottom, it says that the loan comes with an interest rate. And those who don’t qualify for instant money can instead apply for an RAL.
The fine print is all about disclosure — a reasonable step required by many states, but hardly one that’s going to eliminate the problem of low-income taxpayers signing up for RALs anyway, says Chi Chi Wu, a lawyer with the National Consumer Law Center.
The commercial tax preparation industry consistently lobbies lawmakers to prohibit the IRS from offering free filing services, Wu says.
So the real problem of RALs lies with politicians in Washington.
Though tax prep companies market RALs, they’re not in the business of making the loan.
That falls to federal banks, which aren’t subject to state regulatory laws and can charge any interest rates they want.
The partnership between tax prep agencies and federal banks is a profitable one.
“It would take Congress or regulatory agencies to do something about this,” Wu says. And as a result, the IRS is one of the only federal agencies not allowed to develop free software for citizens.
The closest the IRS comes is the misleadingly named “Free File.”
Negotiated by the commercial tax preparation industry, Free File appears on the IRS’s Web site but then links to software available for purchase and commercial tax prep firms, like H&R Block and TurboTax.
Some taxpayers can qualify for free filing services, but they might also be tempted with an RAL.
In October, Sen. John Ensign (R-Nevada) inserted comments into the Congressional Record in favor of Free File and the commercial tax preparation industry.
Ensign argued for an amendment that would keep the IRS from creating its own filing software or e-filing programs “at taxpayers’ expense,” as this would “needlessly duplicate the resources and investments of the private sector.”
Last year alone, Ensign received $21,000 from commercial banks, and the finance industry was among his top 10 contributors.
Wu says Ensign’s comments were intended to warn the IRS not to consider free online filing at the federal level, unlike the many local and state governments that already provide the service.
In February, the California attorney general filed another lawsuit alleging that tax prep behemoth H&R Block had violated 15 state and federal laws while marketing and providing its instant refunds to low income families.
Repeat phone calls to H&R Block’s media relations department were not returned.
The IRS provides support to free volunteer income tax assistance (VITA) sites, and has been doing so for the last 20 years.
Volunteers are trained in tax law, then certified by the IRS.
But with a small budget, this program can hardly compete with the million-dollar marketing campaigns of big guns like H&R Block.
That’s why it took Tameka Brown more than seven years to find one in Cleveland. Earlier this year, Brown was listening to AM radio and the words “free” and “filing” caught her ear.
Brown now shakes her head as she looks back on all those years she paid to get her own money a few days early. “When you look at it, that’s bill money you just gave away,” she says.
The Ohio Department of Job and Family Services issued a report Feb. 24 itemizing how many employees and their families use public benefits at 40 Ohio employers that appeared most frequently in the department’s data. The report covered Medicaid, food stamps and cash assistance in 2004 and 2005. Policy Matters Ohio, which had sought such data, reviews some of the highlights in a new report. Among the findings:
–The state of Ohio is paying about $90 million a year to cover Medicaid costs for these 40 employers.
–These 40 employers account for nearly one in 12 of those receiving family and children s Medicaid coverage in Ohio.
–Roughly 7 percent of Wal-Mart s Ohio employees were receiving Medicaid in 2005. A greater share of families with Wal-Mart employees was receiving Medicaid once you include children who receive benefits when their parents do not.
Read about our efforts to obtain such data:
A Threat to Public Records Access – 10/06/2005
ODJFS to Produce Employer Data – 10/21/2005
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