Economic growth? Nation- and statewide only some are reaping the benefits
Despite national economic growth, including lower unemployment, a (once) booming stock market, and a modest decline in the poverty rate, new research from Prosperity Now shows that economic growth is inequitably distributed. Low- and moderate-income families have not shared in the benefits of broad-based economic growth.
Tuesday, February 6 marked the release of the 2018 Prosperity Now Scorecard. Issued annually, the Scorecard is a comprehensive resource for data on household financial health and policy recommendations to help put everyone in our country on a path towards prosperity. It ranks all 50 states and the District of Columbia across five issue areas: Financial Assets & Income, Businesses & Jobs, Homeownership & Housing, Health Care, and Education. The Scorecard also separately assesses states on the strength of policies to expand economic opportunity. The Scorecard is accompanied by a main findings report titled “Whose Bad Choices? How Policy Precludes Prosperity and What We Can Do About It?”
The Scorecard found scant evidence that federal and state governments were willing to embrace policies that would enable families, particularly those most struggling, to achieve financial security. On the contrary, the Scorecard main findings report shows how national discourse about economic policies reinforces false beliefs about who deserves to reap the fruits of our national labor. Without help from wealth-building policies, most low- and moderate-income individuals, particularly people of color, find themselves falling farther behind.
Overall, Indiana ranked 31st in the nation, a slight improvement from 2017 when it ranked 32nd. Vermont ranked 1st for the third consecutive year while Mississippi ranked 51st for the seventh consecutive year. Indiana’s ranking reflects the state’s uneven record of adopting wealth-building policies and other outcomes, such as income poverty, homeownership, educational attainment, and health insurance coverage.
Adopting “bad” policies and/or failing to adopt “good” policies impacts financial security outcomes. The Scorecard highlights policies, such as “Will the state’s minimum wage be at least $15 per hour by 2023 or is indexed for inflation?”, “Does the state protect against payday lending?”, and “Does the state require employers to offer paid medical, family, or sick leave?” The Indiana General Assembly has not adopted any of these recommended policies—and financial security outcomes reflect this.
In Indiana, 28 percent of jobs pay below the federal poverty level, income poverty is 2.4 times higher for households of color than for White households, and 20 percent of households have zero net worth. Raising the minimum wage would greatly help working families, particularly families of color, to achieve financial security and grow their nest eggs.
Two bills introduced in the 2018 Legislative Session would have raised the state minimum wage, which, currently, is the same as the federal minimum wage of $7.25 per hour; however, both died in the Senate upon missing the deadlines for committee hearings. SB308 (Minimum Wage) would have raised the wage to $11.31 per hour, as well as eliminated the tip credit in determining the minimum wage ($2.13) paid to tipped employees. SB121 (Minimum Wage) would have increased the minimum wage in correspondence with indices of consumer inflation (i.e. wages were set to increase to $15 per hour by 2021). The Scorecard also notes that Indiana hasn’t adopted a refundable state Earned Income Tax Credit (EITC) or Child Tax Credit (CTC), exacerbating financial insecurity for working families.
Indiana’s lawmakers missed a number of opportunities to adopt wealth-building policies necessary to pave the path towards prosperity for all Hoosiers regardless of socioeconomic status. As the Scorecard data reflects, missed opportunities to adopt wealth-building policies are negatively impacting Hoosier families and communities as they are, increasingly, excluded from our nation’s aggregate economic gains.
Dig dipper by viewing the Scorecard and its interactive tools on their website.
About Prosperity Now
Prosperity Now (formerly CFED) believes that everyone deserves a chance to prosper. Since 1979, we have helped make it possible for millions of people, especially people of color and those of limited incomes, to achieve financial security, stability, and, ultimately, prosperity. We offer a unique combination of scalable practical solutions, in-depth research, and proven policy solutions, all aimed at building wealth for those who need it most.