Analysis

Yes, Eliminating DC’s Tipped Wage Would Reduce Poverty

This week, polls opened for early voting in Washington, D.C. This season’s campaign has been contentious when it comes to Initiative 77, a ballot measure that would gradually phase out D.C.’s tipped minimum wage, currently $3.33 per hour, and replace it with a unified minimum wage by 2026. The National Restaurant Association has come out hard against it, and signs opposing the measure have appeared in high-end dining establishments across the city.

The trouble is, there isn’t much actual information beyond the signage—and the information being shared isn’t backed by research.

D.C.’s overall minimum wage is $12.50 per hour, and will increase to $15 by 2020. By law, employers have to ensure that tipped workers make that amount as well—by combining the base wage of $3.33 with their tips—and if workers’ wages are too low, employers are required to supplement them. In practice, employers often fail to do this. Research by the Economic Policy Institute found that recent Department of Labor investigations of close to 9,000 restaurants resulted in workers receiving nearly $5.5 million in back pay because of tipped wage violations.

Low wages have left many tipped workers struggling to make ends meet. Roughly 1 in 4 D.C. bartenders, servers, manicurists and pedicurists, and shampooers made $11.71 per hour or less in 2017*—well below a living wage in the district. D.C.’s tipped workers are also nearly twice as likely to live in poverty compared to the city’s overall workforce.

The concerns with the tipped wage go beyond just money—the power dynamics of the tipping system allow discrimination and inequality to flourish. One study showed that black servers receive tips that average 15 percent to 25 percent less than white servers, and in D.C., tipped female workers are twice as likely as tipped male workers to live in poverty. It also paves the way for sexual harassment: 1 in 7 sexual harassment charges filed with the Equal Employment Opportunity Commission are in the accommodation and food service industry.

D.C.’s tipped workers are nearly twice as likely to live in poverty

In contrast, research shows that the eight states without a tipped minimum wage have higher average earnings and lower poverty rates among tipped workers, without hurting their employment rates. Specifically, in equal treatment states, tipped workers’ median earnings are 14 percent higher and the growth of restaurants and restaurant employment is more robust compared with states that use the federal minimum tipped wage of $2.13 per hour. Research also suggests that abolishing the tipped minimum wage may be particularly advantageous for women, as the average wage gap for women tipped workers in equal treatment states is one-third smaller than the wage gap for women tipped workers in states that maintain the federal tipped minimum wage.

While the evidence is clear on the positive impacts for D.C.’s lower-wage tipped workers, the District’s high-end restaurant and bar scene, with its higher-paid workforce, has been the center of attention during much of the debate, with figures ranging from Mayor Muriel Bowser to Chef José Andrés voicing concerns that the unified minimum wage will lead to higher prices and lower pay.

It’s tough to envision that high-end establishments’ well-off clientele, wine-and-dine lobbyists, and company-credit-card-wielding business travelers will suddenly become highly price-sensitive if the cost of a meal rises slightly. And any increase would likely be relatively small: Labor costs only account for an average of 30 percent of restaurant operating costs, and businesses absorb higher minimum wages through reductions in costly turnover and increases in productivity. It’s also unlikely diners would compensate for higher prices by offering a smaller gratuity: data on tipping show that tipping behavior in equal treatment states is virtually indistinguishable from tipping behavior in states that have different minimum wages for tipped workers.

What’s more, this focus on D.C.’s high-end establishments misses the bigger picture. Not only is the district home to many restaurant workers who struggle to make ends meet—even after tips—but one-fifth of D.C.’s tipped workers aren’t in the restaurant industry at all. Many valets and manicurists, for example, don’t earn 20 percent on top of an expensive meal, but the Department of Labor allows their employers to pay them D.C.’s $3.33 per hour base wage as long as they “customarily and regularly” receive $30 or more per month in tips.

Initiative 77—which 70 percent of voters support—would reduce poverty and increase economic security among tipped workers in the district, as well as better protect them against discrimination, wage theft, and sexual harassment. The effects would be particularly powerful for women and people of color. Chipping in a little more for craft cocktails and small plates at happy hour seems like a small price to pay.

* Note: At the time these data were collected, the minimum wage in Washington, D.C. was $11.50 per hour.

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Analysis

The U.N. Just Published a Scathing Indictment of U.S. Poverty

The United Nations has released a scathing report on poverty and inequality in the United States. The findings, which will be presented to the U.N. Human Rights Council on June 21, follow an official visit to the United States by Philip Alston, the U.N. special rapporteur on extreme poverty and human rights, to investigate whether economic insecurity in the country undermines human rights.

The conclusions are damning. “The United States already leads the developed world in income and wealth inequality, and it is now moving full steam ahead to make itself even more unequal,” the report concludes. “High child and youth poverty rates perpetuate the intergenerational transmission of poverty very effectively, and ensure that the American dream is rapidly becoming the American illusion.”

The U.N. explicitly lays blame with the Trump administration for policies that actively increase poverty and inequality in the country. “The $1.5 trillion in tax cuts in December 2017 overwhelmingly benefited the wealthy and worsened inequality. The consequences of neglecting poverty and promoting inequality are clear,” it concludes. “The policies pursued over the past year seem deliberately designed to remove basic protections from the poorest, punish those who are not in employment and make even basic health care into a privilege to be earned rather than a right of citizenship.”

“The $1.5 trillion in tax cuts in December 2017 overwhelmingly benefited the wealthy and worsened inequality”

In December, Alston visited seven locations throughout the country—ranging from Los Angeles’s Skid Row neighborhood to rural Alabama, West Virginia, and Puerto Rico—to meet with people experiencing deep poverty, along with experts and civil society groups.

In an interview with TalkPoverty ahead of the release, Alston characterized the United States as an outlier among the developed world.

“If you said to most Americans, ‘Look at what country X does to its ethnic minority or to a particular religious minority’ … your average American with any knowledge of that situation is going to shake her head and say, ‘This is a disgrace,’” Alston said. “But of course there’s a direct parallel in the United States and it affects not just a small ethnic minority but a very large racial group of African Americans in particular, where they just come out worse on every possible indicator and policies are clearly designed to hit them harder.”

Alston described meeting “people who had lost all of their teeth because adult dental care is not covered by the vast majority of programs available to the very poor,” and people in Puerto Rico “living next to a mountain of completely unprotected coal ash, which rains down upon them bringing illness, disability, and death.” In Lowndes County, Alabama, the U.N. found cesspools of sewage that flowed out of dysfunctional (or nonexistent) septic systems, which has led to a resurgence in diseases that officials believed were eradicated. A recent study found that more than one-third of people surveyed in Alabama tested positive for hookworm—a parasite that thrives in areas of poor sanitation, which has not been well-documented in the United States since the 1950s.

The reactions to the visit from the Trump administration and Republicans in Congress ahead of the report have ranged from indifference to hostility. Alston requested meetings with House Speaker Paul Ryan and a range of Republican committee chairs—all of whom declined the request. Senators Cory Booker, Bernie Sanders, Rep. Terri Sewell, and Elizabeth Warren’s staff, on the other hand, all met with Alston. Alston also got a mixed result from the Trump administration. While some agencies were cooperative, “the Justice Department … basically refused all requests to meet and that was pretty striking. It’s not the sort of thing that normally happens on a mission like this,” Alston says.

The Human Rights Council oversees human rights protection around the world. Though the United States is an elected member of the council, it doesn’t have the friendliest relationship with the body. President George W. Bush boycotted the council at its founding in 2006 (a decision the Obama administration later reversed), and U.N. Ambassador Nikki Haley has been a relentless critic of the council under Trump. Notably, the United States and Cuba are the only countries in North America not to offer standing invitations from the Human Rights Council.

As for the odds that the report will force the administration to change course, Alston was not hopeful. During the visit, “The U.S. was visibly debating what to do with $1.5 trillion [in tax cuts]. And its proposals in relation to those living in poverty was essentially to cut back on existing benefits in order to help fund the tax reforms. That made for a pretty dramatic contrast for the approach that I have found elsewhere.”

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Take Action

The Trump Administration Is Splitting Up Families at the Border. Here’s What You Can Do About It.

Last weekend, many Americans were overwhelmed with a torrent of news about the United States’ immigration system: There was the release of the ACLU report that documents years of abuse against children held in detention, the shooting of Claudia Patricia Gómez González by a Border Patrol agent, and the realization that a new Trump administration policy is resulting in the separation of children from their parents at the border.

Twitter, in particular, was ablaze—first with pleas of #WhereAreTheChildren, then with frustration directed largely at Ivanka, and finally with outrage over the new “zero tolerance” prosecution policy that has already separated more than 1,300 children, some as young as infants, from their parents.

Tweeting—especially in an administration that decides much of its public policy on Twitter—that #FamiliesBelongTogether is a good place to start if you want to help change. But here are three more ways you can join the fight:

1. Know the Facts

There has been a lot of misinformation in the past week—some of which was well-intentioned, but potentially harmful to immigrant children. So make sure you know the basics.

Family separation is not a law—it is a Trump administration policy.

President Trump has tried to shift blame onto Congressional Democrats by tweeting that they need to end the “horrible law” that is causing family separation. But the practice of splitting up families at the border is the direct result of this administration’s “zero tolerance” policy to criminally prosecute anyone who is caught crossing the U.S. border, including families who are seeking asylum. While parents are transferred to the custody of the U.S. Marshals Service to be criminally prosecuted, imprisoned, detained, and perhaps deported from the country, their children are taken into government custody and held with little or no contact with their parents.

Tellingly, the Department of Homeland Security is not only separating families that are being prosecuted for illegally entering the country, but also families that are requesting asylum at official ports of entry—that is, parents who are doing exactly what the administration is saying it wants them to do.

The Trump administration is deliberately prosecuting parents and separating them from their children in order to deter other families from coming to the U.S. to ask for asylum—something they are fully and legally eligible to do.

Many of the families being separated today have fled extreme violence and abuse to seek asylum in the United States

The right to seek asylum has long been recognized by international and federal law. That is why an increasing number of families, many of whom are fleeing extreme violence and abuse in the Northern Triangle countries of Central America, have taken the treacherous journey north to seek asylum protections in the United States. New analysis by the Center for American Progress shows that the extreme violence in Honduras, Guatemala, and El Salvador—and in particular the rates of homicide against women and girls—remains alarmingly high. The Trump administration is deliberately prosecuting parents and separating them from their children to try and deter them from coming to the United States to ask for asylum—which these families are legally eligible to do.

2. Join the National Day of Action for Children

Outraged by what’s happening to these children and their parents? Join the fight to end family separation by participating in the National Day of Action for Children planned for today, Friday, June 1. Actions will be taking place in locations across the country, as well as online.

If you attend, make sure to share photos, videos, and digital content with the hashtags #FamiliesBelongTogether and #KeepFamiliesTogether. 

3. Sign and share with your friends petitions to end family separation

We have the power to call for an end to this wrongful policy. Let’s continue building enough public pressure until we see a change. Please consider signing the ACLU’s petition to the secretary of homeland security to end family separation today.

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Feature

The Fight Against Cash Bail Is Officially Mainstream

Two weeks ago, Google announced that it would no longer allow bail bond providers to advertise on their platform. The company pointed out that the $2 billion bail bond industry profits off “communities of color and low-income neighborhoods when they are at their most vulnerable,” and said its decision will help protect users from “deceptive or harmful products.”

Google credited an odd arrangement of organizations for helping them with the decision, including the Essie Justice Group, a collective of women seeking to end mass incarceration, and Koch Industries, a multinational conglomerate run by the richest oil tycoons in the country.

Facebook announced later that day that it would also ban bail bond ads, but that the details were “still being worked out.”

Aside from predictable backlash from bail bond providers, the joint decision has been relatively uncontroversial. The bail bond industry is, truthfully, about as scummy as it gets. Bail bondsmen require clients who can’t afford bail to pay a non-refundable portion of the bail they owe (usually about 10 percent), and even after they meet all their court appearances and the money is returned, the clients get nothing back—and they’re often charged loan fees that accrue after their case is resolved, pushing them further into debt. The practice is so despised that the United States and the Philippines are the only two countries in the world that even allow for-profit bail businesses to exist.

It’s not yet clear how effective blocking these ads will be. However, Google and Facebook’s decision is significant not for the effect it’ll have, but for what it represents: The movement to end cash bail has built enough momentum to get two of the largest companies in the world on its side. Behind the tech giants’ decision is an army of grassroots groups leading local movements to end bail—and their weird, cutting-edge, creative methods of gaining popular support.

*           *           *

One of the most persistent myths about America’s justice system is that defendants are innocent until proven guilty. In practice, the opposite is true: Defendants are assumed guilty, jailed, and only released before trial if they can afford to pay their bail.

Around 70 percent of the more than 700,000 prisoners in America’s jails have not been convicted of a crime. Most are in jail because they can’t afford to pay for their freedom, and they weren’t lucky enough to be released on “recognizance,” or without bail. In New York, only 1 in 10 defendants can afford to pay bail at arraignment. The rest are forced to await their trial behind bars, which can sometimes last years.

Defendants are assumed guilty, jailed, and only released before trial if they can afford to pay their bail

Even just one or two days in jail can have life-altering consequences. Ezra Ritchin, director of operations at The Bail Project and the former director of the Bronx Freedom Fund, an organization that pays bail for New Yorkers who can’t afford it, says, “A lot of the things you see in our justice system happen in those first few days.” If people don’t show up for work the next day, they could lose their job. If they’re homeless and don’t sign in for a shelter, they could lose their housing—and if just one family member doesn’t sign in because they’re in jail, their whole family could be living on the street. The first few days are also when people are most likely to die in jail, including by suicide, and it’s when inmates are most likely to be the victim of physical and sexual abuse.

Prosecutors use the threat of jail to force people into accepting plea deals, even if they’re innocent. More than 90 percent of New Yorkers who can’t afford bail will end up pleading guilty, even if they didn’t commit a crime, simply because they want to go home.

“You’re sitting in jail, and you’re told that if you maintain your innocence, then you have to stay in jail and wait it out,” explains Ritchin. “But if you plead guilty, you get to go home to your family and your community.”

Like all instruments of mass incarceration, bail takes the heaviest toll on black and brown communities. Black people are already much more likely to be arrested than their white counterparts for the same crime—up to 15 times more likely for certain low-level offenses like marijuana possession. They’re also less likely to be able to afford to pay for their freedom. The median bail for felony convictions is around $10,000, which is more than what most black women who can’t pay their bail made in the entire year before they were incarcerated. But even smaller bonds for misdemeanors are out of reach for most defendants: A 2012 report found that even when bail was set below $500, a majority of New York City defendants—almost 90 percent of whom are black or Hispanic—couldn’t afford it.

The Bronx Freedom Fund started out of the Bronx Defender’s Office in 2007, where public defenders witnessed firsthand the devastating effects of a system that incarcerates people for not having enough money. The Freedom Fund pays bail for people accused of misdemeanors so they can stay in their communities while they stand trial. In 2017, the fund bailed out almost 1,000 people, and more than 50 percent of them had their cases dismissed entirely.

Now, a growing number of people are recognizing the power of bail funds to directly fight against systemic racism. Ritchin says that a large part of the Freedom Fund’s donations come from people who “read some articles, see the website, and are looking to make a direct contribution to the fight against mass incarceration.”

“One really beautiful thing about a bail fund,” says Ritchin, “is that you get to say, ‘I’m interested in pushing back against mass incarceration, and now there’s one less person who’s sitting in jail.’” And bail fund money is revolving, so once someone meets all their court dates—as 96 percent of the Freedom Fund’s clients do—the money is returned and can be used to bail out someone else.

*           *           *

Aside from Koch Industries and the Essie Justice Group, Google also credited another organization for influencing its decision to block bail bond ads: Color of Change. Color of Change is the country’s largest online racial justice organization, and a major partner of National Bail Out, a collective of black organizers working to end pretrial detention and mass incarceration. Last year, Color of Change worked with National Bail Out to raise money for Black Mama’s Bail Out Day, a campaign to bail out incarcerated mothers on Mother’s Day.

“Our ultimate goal is to end money bail,” said Clarice McCants, Color of Change’s criminal justice campaign director.

Last year, National Bail Out bailed out more than 120 mothers for Mother’s Day. This year, they bailed out mothers in 16 cities, saying “We will bail out mama’s in all of our varieties. Queer, trans, young, elder, and immigrant.”

National Bail Out has paid more than $600,000 in bail to a network of dozens of community bail funds that includes the Bronx Freedom Fund. As this network has grown in recent years, so, too has its methods of collecting donations. One of National Bail Out’s largest sources of funding is Appolition, an app that allows people to donate spare change from credit card purchases to help end mass incarceration. In its first five months, Appolition raised $130,000.

Another funding source that has sprung out of this movement is Bail Bloc, an app that runs in the background of your computer, mines cryptocurrency, sells it, and donates the funds to Bronx Freedom Fund.

“The system is unjust enough that it requires organizations to be attacking it from every angle”

“Bail is a form of currency mining,” explains Maya Binyam, editor at The New Inquiry and one of Bail Bloc’s co-leaders. She says that cryptocurrency mining bears a “rhetorical relation” to bail. “The state incarcerates people before they’ve been convicted of anything and then forces them to pay for their own release. Bail Bloc allows you to offer your computer as the target for that mining in their stead.”

The app uses about as much energy as running a YouTube video. If you have it open during business hours from Monday to Friday, it’ll up your electricity bill a few dollars per month, and generate roughly an equivalent amount of the cryptocurrency Monero—essentially shifting the burden of the donation from you to whoever pays for the electricity that you’re using.

On Christmas day, after three months of mining from roughly 1,000 daily users, Bail Bloc donated $3,333.77 to the Freedom Fund.

“We want this technology to be available to people who don’t have $100 to donate to a bail fund, but nevertheless use electricity at the institutions they move through—schools or gentrifying coffee shops,” explains Binyam. This is one of her favorite parts of the project. “I worked at a day job where I was one of the only people of color, and there were a bunch of racist people in the office. And I just downloaded it on a bunch of work computers, and it felt kind of like a good ‘fuck you.’”

The most common critique they’ve heard is that there are more efficient ways to donate toward ending mass incarceration than mining Monero—which Binyam sees as positive.  “Instead of saying, ‘Why are we donating money toward bail?’ people are saying, ‘There’s way more efficient ways to donate money toward bail,’” she says. “Which is kind of amazing.”

Binyam says that Bail Bloc was designed to court public opinion and lift up the work of activists leading the fight against cash bail, like National Bail Out and the Bronx Freedom Fund. Grayson Earl, one of the creators of Bail Bloc, says he was also inspired by Black Mama’s Bail Out—a common refrain in these types of movements. One campaign will inspire another, which inspires would-be organizers to start their own community group, then artists and techno-utopians add their own ironic twist, and pretty soon the movement has become so massive and culturally relevant that Google, Facebook, and Koch Industries are trying to get a piece of it.

“The system is unjust enough that it requires organizations to be attacking it from every angle,” says Ritchin. There may be plenty of groups that have joined the fight against mass incarceration, he says, “but there’s even more groups jailing people.”

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Feature

Ohio Is Hoarding Money Meant for Poor Families

Last September, a bipartisan coalition of approximately 70 mayors across 13 counties in Appalachian Ohio had an idea: With so many people thrown off cash assistance (TANF) by the state in recent years, the coalition said that the Kasich administration was now sitting on more than $500 million in unused funds from the program’s block grant. So they requested $12 million to help their constituents, some of the poorest in Ohio: $8 million to prevent water shutoffs, and $4 million to purchase essential items like diapers, feminine hygiene products, first aid supplies, and over-the-counter medications.

“We’re just trying to make sure our constituents have the safe water and essential products in their homes that are needed for the health and safety of their families,” said Gary Goosman, Mayor of the village of Amesville, population 180, and president of the Mayors’ Partnership for Progress. “The state has more than enough resources to get this done.”

Since 2011, TANF caseloads in Ohio have been cut nearly in half, from 99,000 to 53,000 households. The drop isn’t because people are faring better, but largely due to the program’s inflexible work requirement that many struggle to meet when they can’t work, lack needed transportation to get to a job, or can’t get enough hours at the jobs they do have.

As a result, for every 100 families with children in poverty in the state, only about 22 now receive cash assistance—down from 29 in 2013, and 89 prior to bipartisan “welfare reform” in 1996. There are now many more children in Ohio living in households with zero cash income than there are children in families receiving cash assistance. (The Ohio Department of Jobs and Family Services declined to provide an exact figure.) This is a problem nationwide, as evident in the rise in the number of households living on less than $2 per person, per day: from 636,000 in 1996 to nearly 1.5 million in 2011. Over the same period, the number of children in the United States living in $2-a-day poverty also doubled, from 1.4 million to 2.8 million.

Goosman said that this drain in assistance is having a significant effect on the local economies of many rural communities in Ohio. In the mayors’ region alone, there is now at least $50 million less annually in cash assistance and SNAP (formerly known as food stamps) benefits compared with 2011. The average SNAP benefit is just $1.40 per person, per meal—and, like TANF, the program has strict work requirements for certain recipients.

“An entire town can be impacted by the amount of money residents have to spend on groceries, or medications, or transportation. People are living closer to the edge,” said Goosman.

And yet, seven months after the mayors’ request, the Ohio Department of Jobs and Family Services (JFS) would only tell the coalition repeatedly that its proposal remained under consideration.

Finally, on May 4, JFS notified the mayors via email: In September—one year after its initial request—the coalition will receive $500,000 from the Community Services Block Grant (CSBG) toward water bill assistance. In all, the grant will provide 2,450 households with a one-time payment of $200 “to ensure service will be maintained for a minimum of 30 days.” This seems a drop in the bucket in a state where 22 percent of neighborhoods have residents who are currently unable to cover their monthly water bill. The average water-sewer rate in Ohio in 2016 was $1,289 annually, which helps explain why the mayors were looking for individual payments of $500 to qualifying families living below 150 percent of the federal poverty line and a total of $8 million toward assistance. There was also no mention of the mayors’ $4 million funding request in support of the purchase of essential household items for cash-poor families.

JFS provided the bipartisan mayors group with no explanation as to how it reached its figure, or why the funds would be drawn from those already earmarked for cash-strapped community action agencies that provide local services like housing assistance, job training, energy assistance, child care, transportation, and more.

“It was a surprise,” said Goosman. “While we appreciate this funding and it will help us get a pilot program going, we weren’t asking for $500,000 from CSBG, we were asking for $12 million out of $570 million in unspent TANF funds.”

A lot of our child care facilities won’t even be able to afford the quality improvements the state is mandating

A spokesperson for JFS confirmed that there are indeed now $570.7 million in unused TANF funds. However, he said that those monies are committed to increased funding for child care facilities that are able to meet the state’s new quality standards in the future. But the mayors’ towns might not benefit from those funds either.

“In our region, a lot of our child care facilities won’t even be able to afford the quality improvements the state is mandating, so they will shut down,” said Jack Frech, an Americorps VISTA volunteer with the coalition who retired after 33 years as director of the Athens County Department of Jobs and Family Services. “So the TANF money intended for our poor and working-class families will instead go to facilities primarily serving wealthier kids.” (JFS declined to comment.)

It is also notable that a recent Congressional appropriation included an 80 percent increase in discretionary child care funding—enough that one might think the state need not force its mayors to choose between water now and child care in the future.

The bipartisan group of mayors met last week to discuss next steps. “We voted unanimously: We’re happy to have the $500,000 but we’re still requesting the $12 million from the state,” said Goosman.

 

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