While the Metro Boston’s regional economy has been growing robustly since the Great Recession, not everyone has benefitted equally from that growth. Participation rates for people with a high school degree are 12 percentage points lower than the rates for those with a bachelor’s degree, and trending downward. The unemployment rate for workers who are Black is nearly 7 percentage points higher than the rate for workers who are White, and the Latino rate is nearly 5 points higher. The unemployment rate for people with a disability is more than 10 percentage points higher than for people without a disability.1
A good job can be defined as employment that respects workers’ rights, provides opportunity for upward mobility, ensures safe working conditions, pays a living wage, is free from any type of discrimination or harassment, and provides meaningful benefits. Well-paying jobs represent the difference between economic security and financial instability, and studies show that good jobs have a direct tie to educational attainment opportunities among families and the ability to live in healthier homes and neighborhoods.2
MAPC’s work on income inequality seeks to advance policies that improve the economic vitality of all by supporting financial independence for residents, beginning with those who have the greatest economic needs in our region.
MAPC Regional Indicators, State of Equity: Making a Good Living. http://www.regionalindicators.org/topic_areas/7#making-a-good-living, 2017. ↩
In the Metro Boston, workers without college degrees, communities of color, and workers with a disability are disproportionately under-employed and unemployed. Many workplace policies continue to put up artificial barriers for employees in these demographics. Policy shifts could have a profound impact on employees who are often underpaid and working in inflexible situations. Additionally, Criminal Offender Record Information (CORI) forms continue to be a barrier for individuals who enter or return to the workforce after a criminal case. It is not only an employment barrier, but can also limit an individual’s eligibility for certain state assistance programs and their economic independence and socio-economic mobility. More attention is paid to CORI reform under the goal.
Implement a paid family and medical leave program.
A current proposal in the Legislature would allow employees who are eligible under the current Massachusetts Parental Leave Act and federal Family and Medical Leave Act to take paid time off to recover from a serious illness or injury, to care for a seriously ill or injured family member, or to care for a new child. If passed, the legislation would provide critical financial security for employees who need to serve as a caretaker, extend the length of leave available to employees, and ensure that workers can keep their jobs once they return from leave.
Paid Family and Medical Leave has the potential to improve outcomes particularly for women, minority and low-wage workers. These populations are less likely to receive wage replacement when they take time off to attend to a personal illness or to care for a family member;1 they are also more likely to cut back on spending, dip into savings, and apply for public assistance since they cannot go without pay23. Employees without paid leave are also more likely to leave the workforce, which stifles professional growth and exacerbates wage inequality4.
Rodriguez, Nicole. “How Paid Family and Medical Leave Impacts Working Mothers.” Massachusetts Budget and Policy Center, 13 Sept. 2017, massbudget.org/report_window.php?loc=how-paid-family-and-medical-leave-impacts-working-mothers.html ↩
U.S. Department of Labor. Family and Medical Leave in 2012: Technical Report https://www.dol.gov/asp/evaluation/fmla/FMLA-2012-Technical-Report.pdf, 2014 update. ↩
Cantor D, Waldfogel J, Kerwin J, et al. Balancing the Needs of Families and Employer: Family and Medical Leave Surveys. Rockville, MD: Department of Labor, 2000. ↩
It’s About Time: Costs and Coverage of Paid Leave in Massachusetts (2016), University of Massachusetts, Boston Center for Social Policy and Center for Women in Politics and Public Policy. ↩
Increase the minimum wage to $15 per hour, and tie the increase to inflation.
Under the Fair Labor Standards Act (FLSA), the federal minimum wage for covered non-exempt employees is $7.25 per hour effective July 24, 2009. Many states also have minimum wage laws. Where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher minimum wage rate. The minimum wage in Massachusetts is set at $11.00 per hour.1
The declining value of the minimum wage is one of the primary causes of wage inequality between low- and middle-income workers. The minimum wage should be increased to $15 an hour over a reasonable period of time, and it should be tied to the consumer price index thereafter to ensure that wages remain stable. In addition, the state should require companies to pay tipped worker $15 an hour and create exceptions to the minimum wage law to allow for an adjusted wage for employees between the ages of 16 and 18.
Improve technical employment opportunities for women and people of color
Women and people of color are under-represented in the fields of Science, Technology, Engineering and Math (STEM) and in the construction industry. Many of the Commonwealth’s newest jobs are in the technology field, but we need to create a greater talent pipeline between educational institutions and the workforce. Many programs throughout the Commonwealth provide mentoring opportunities for young women interested in STEM and Building Trade Skills and we should better connect employers to these potential employees. Additionally workforce development training opportunities should be located near transit and should have flexible childcare opportunities.
In July 2017, Governor Baker signed the Pregnant Workers Fairness Act, which prohibits workplace and hiring discrimination related to pregnancy and nursing and requires employers to provide reasonable accommodations for expectant and new mothers in the workplace.
In December 2017, Boston City Council signed an Ordinance on Equity in Opportunity for City Contracting, which mandates active outreach to businesses owned by people of color and women, it requires all requests for proposals issued by the City of Boston include a rating of diversity and inclusion plans as evaluation criteria, and it creates a quarterly reporting requirement so that city government can hold themselves accountable.
Increase access to business ownership and employment/financial independence
Small business creation is usually heralded as an opportunity for Americans to pursue their entrepreneurial spirit and provide jobs for their community. Unfortunately access to state and local resources to start a business are not necessarily available to everyone. Whether prospective entrepreneurs face bank loan discrimination, speak a foreign language, face difficulties with talent retention or lack financial resources, the region needs to do more to increase local business ownership. We must incentivize the creation of small businesses and support objectives aimed at worker development.
Recapitalize the Workforce Competitiveness Trust Fund
The Workforce Competitiveness Trust Fund, operated out of the Commonwealth Corporation, invests in programs that train and place unemployed or underemployed workers. Between 2007 and 2011, the Fund supported 31 partnerships, serving more than 6,700 youth and adults.1 The Fund supports individuals who might rely on public benefits, have health problems or disabilities, or who haven’t completed school. The Fund provides support to residents for employment opportunities, but works with Massachusetts businesses to secure employees. The fund used to receive $18 million but its funding has dipped in recent years and was just $1 million on the FY18 budget. The legislature should fully fund this important program and restore its previous funding levels.
Create technical assistance programs and revolving loan funds that provide access to capital for small businesses.
Massachusetts established the Small Business Technical Assistance (SBTA) program in 2006 in order to help small businesses succeed in underserved communities in the commonwealth, particularly low- to moderate-income communities and communities of color. The program provides funding to not-for-profit grantees, largely consisting of Community Development Corporations (CDCs) or Community Development Financial Institutions (CDFIs), who then offer a range of technical assistance (TA) and financial services to small business clients. The entrepreneurial and employment opportunities supported by the SBTA program helps reduce deeply entrenched economic disparities that put traditionally underserved populations at risk for worse economic and health outcomes. This program should be funded with an investment of at least $2 million.
Create technical assistance and small business development programs for worker-owned cooperatives.
Worker-owned cooperatives are companies owned and managed by employees who share decision-making powers and who control the profits produced through their labor. According to a recent study, about 60 percent of new cooperatives worker-owners since 2010 are people of color and nearly 70% are women.1 Cooperatives provide an alternative to traditional corporations in many regards not least of which is that profits remain with the worker-owners and more likely in the surrounding community. The state and municipalities can help cooperatives form by establishing a startup or bridge financing program (e.g., revolving loan fund) that includes technical assistance or space that helps the cooperatives establish themselves.
Melissa Hoover & Hilary Abell, Project Equity and the Democracy at Work Institute. The Cooperative Growth Ecosystem: Inclusive Economic Development in Action, 2016. ↩
The unemployment rate for workers who are Black is nearly 7 percentage points higher than the rate for workers who are White, and the Latino rate is nearly 5 points higher.
Facilitate intergenerational wealth transfer among low- and middle-income families.
According to the Federal Reserve Bank of Boston’s 2015 Report titled The Color of Wealth, “Nonwhite households have only a fraction of the net worth attributed to white households. While white households have a median wealth of $247,500, Dominicans and U.S. blacks have a median wealth of close to zero. Of all nonwhite groups for which estimates could be made, Caribbean black households have the highest median wealth with $12,000, which is only 5 percent of the wealth attributed to white households in the Boston MSA [Metropolitan Statistical Area].”1
This economic data demonstrates that barriers to employment and business ownership, as well as homeownership, have real consequences on an individual’s ability to save money, own assets and pass them on to their families. We must pass legislation and support programs that facilitate low-income and middle-income households to accumulate wealth and assets.
Federal Reserve Bank of Boston. “The Color of Wealth in Boston.” Federal Reserve Bank of Boston, 25 Mar. 2015, www.bostonfed.org/publications/one-time-pubs/color-of-wealth.aspx. ↩
Increase the Earned Income Tax Credit and expand its eligibility.
The Earned Income Tax Credit (EITC) is a benefit to working families earning low- to moderate-incomes (individuals earning less than $15,000; families with children earning less than $50,000).1 The EITC should be increased, so that more people can take advantage of this important benefit. Research shows that the EITC has increased employment, boosting long-term earnings and future retirement benefits.2 The benefit should also be expanded to include individuals who meet the income requirements but don’t have children, and should be based on personal instead of family income.
MA Department of Revenue, Earned Income Tax Credit. http://www.mass.gov/dor/individuals/filing-and-payment-information/guide-to-personal-income-tax/credits/earned-income-credit-eic.html ↩
Massachusetts Budget and Policy Center, Massachusetts’ Earned Income Tax Credit and the Current Proposal for Increase and Reform, July 2013. http://www.massbudget.org/reports/pdf/FactsAtAGlance_MA-EITC-Increase_SWMProposal_NEW.UPDATE_7-27-2016.pdf ↩
Pass legislation aimed at curbing the “Cliff Effect” for individuals and families receiving state benefits.
The “Cliff Effect” occurs when an individual or family receiving state benefits sees a sharp decline in those benefits as income increases. While many state benefit programs currently have an income or employment requirement, benefits generally decrease as income increases. The unintended result is either a disincentive toward economic mobility or a person working harder, with less financial stability. Program assistance should be tapered as individuals or families increase their incomes, rather than cutting off assistance at particular income levels. The state should also pass legislation that lifts the welfare benefit cap for families who have a child while receiving state assistance. Massachusetts is one of only 17 states that still have a cap on children conceived while a family is receiving welfare assistance. The family cap excludes approximately 9,400 children in Massachusetts, and this has a tremendous impact on the health and welfare of those children and their families.1
Enact Tenant First Right to Purchase options for multi-family buildings.
Residents can experience displacement as residential buildings are sold to new ownership. This can be particularly harmful for properties that have provided affordable homes for households earning low- and moderate-incomes. A Tenant First Right Purchase Option protection, when adopted by a municipality, would stipulate that owners of residential properties must provide current tenants an chance to purchase the property at a fair market price and terms before the owner can transfer the property to a third party.[^35] Although potentially complicated to establish, successful programs have integrated a low-interest loan option, making the first right purchase option an avenue to homeownership and wealth creation for low- and moderate-income families.
Nonwhite households have only a fraction of the net worth attributed to white households. While white households have a median wealth of $247,500, Dominicans and U.S. blacks have a median wealth of close to zero.
BEST PRACTICE
Improve financial literacy programs for low-income households
In 2016, Mayor Toni Harp of New Haven launched the Financial Empowerment Commission with the vision of building financial stability and knowledge amongst New Haven low-income residents. This initiative was enabled by a planning grant called the “Next Generation Financial Empowerment Grant” from the Cities for Financial Empowerment Fund (CFE Fund). To develop recommendations, the Mayor appointed a community advisory group to the collect and share insights on the financial lives of New Haven residents. Based on the findings from the advisory group, the commission chose two target populations that would most benefit from financial empowerment interventions.
• Low-wage households earning less than 200% of the federal poverty guidelines, and focus on those earning less than 100% of the guidelines.
• The re- entry of formerly incarcerated individuals into the community.
The Commission was tasked with drafting recommendations for a strategic plan identifying short and long term goals and implementation strategies. The recommendations included building a financial empowerment network with community based organizations to connect and identify individuals in the target populations and referring them to services and resources. Also, creating a Financial Empowerment Center that would be staffed with a full-time financial coach/ counselor. With these recommendations the Mayor and Commission hope to foster a culture of financial empower for both the target populations and all residents of New Haven.
