Gov. Mike Pence may want to reconsider his suggestion that Hoosiers celebrate the state’s recently announced state surplus.
Around the same time state leaders were boasting that Indiana was closing its June books with $1.9 billion in reserves, a report from the Indiana Institute for Working Families was released showing poverty in Indiana is sharply increasing.
Derek Thomas, a senior policy analyst with the institute, compares the state’s surplus announcement to a father coming home and bragging about how much money he has in his saving account at the bank while the rent goes unpaid and his children starve.
The 2012 Status of Working Families in Indiana report, which examined data on poverty, workforce, wages and post-secondary educational attainment, shows that while the national economy is showing some signs of recovery from the Great Recession, working Hoosiers are still suffering.
Unemployment in Indiana remained above the national average for 11 straight months and Indiana was one of 17 states to see significant increases in poverty rates.
So, there’s not a lot of good news in the report, said Thomas.
The annual report found that poverty increased in Indiana at a faster rate than all but five states. And, more troubling, the increase in poverty shows no signs of slowing. There are more than a million Hoosiers living in poverty – a record-breaking level. There are 2.24 million residents who are officially low income, meaning that they earn less than 200 percent of the federal poverty level. That is $22,980 for an individual or $47,100 for a family of four.
Last week, Pence commended state leaders’ commitment to fiscal restraint and fiscal discipline for creating the structural surplus of $500 million for the 2013 fiscal year.
We’ve heard for how many years that we have this surplus – that we are an island of prosperity – but at the same time we’ve got this growing poverty rate. That sort of speaks to the disconnect, Thomas said. These budget surpluses are only as good as the economic health of your family.
The report suggests that state leaders need to do a better job of ensuring Indiana’s public policy programs are responsive to the needs of working families and address the increasing poverty. A continuing problem is that working people are often punished when they make any economic progress.
The way the system works now we are punishing families for working harder, Thomas said. For example, a slight raise in wages may mean the loss of needed childcare assistance.
The report also found Hoosier adults with jobs are working for less. The median wage in Indiana decreased substantially from 2000 to 2011. And Indiana residents looking for work were less likely to find jobs that paid a living wage. More than 70 percent of new jobs in Indiana paid full-time wages that are not enough to pull the worker out of the low-income category.
Most of the job growth in Indiana over the last year has been in the leisure and hospitality industry. Thomas said Indiana has the highest proportion of fast-food jobs per capita in the nation. And most of these new jobs won’t ensure a family becomes self-sufficient.
The report suggests it’s time for state leaders to have a discussion about increasing the minimum wage.
Forty-five percent of our children are low income right now, Thomas said. That seems unacceptable when we live in the richest nation in the world. That’s a larger share than any of our neighboring states. The data show it has been a rough decade for Hoosier families. If we don’t start to act now and create a toolbox for working families to get ahead we will face another decade of decline.