Wash Post: "How the 1 percent won the recovery, in one table"

The Washington Post has a great table up today, showing the results of a study (PDF) by economists at UC Berkeley, the Paris School of Economics, and Oxford University using Internal Revenue Service statistics. The bottom line: the top 1 percent have captured 95 percent of real growth in average income since the end of the Great Recession. No wonder income disparity is at its highest level since the First World War.

Why is that a problem? There are lots of reasons, but for just one look no further than another new study, this one from Ohio State University - children bear the brunt of economic inequality.

Here in Maryland we know that income inequality exists between different communities, ethnic groups, and education levels. Income for households in the top 1 percent increased 240 percent since 1979, while it grew just 10.8 percent for households in the bottom fifth.

That's why we continue to push for expanded programs to increase educational attainment, job opportunities, and the social safety net. As we begin preparing for the 2014 legislative session we will continue to support raising the minimum wage, providing workers with earned paid sick leave, and increasing the refundable state earned income tax credit.

Unemployment falls in MD

The Bureau of Labor Statistics released state level employment figures for February today. Marylanders unemployment rate fell to 6.6 percent, down from the 6.7 percent it had hovered at for three months.

Maryland employers added 10,500 positions in February. They have added 38,200 positions since February 2012.

The job market is slowly improving, but it's important to remember that the number of employed Marylanders only exceeded the number employed before the 2008 recession as of six months ago. Collectively, Maryland has a long way to go before every working family is able to succeed.

PLEASE ACT NOW - THE FISCAL CLIFF IS DANGEROUS!

This is a repost of a blog by Henry Bogdan, Managing Director of Public Policy and Public Affairs for Maryland Nonprofits and our own Neil Bergsman. At the end there is more information about our fiscal cliff conference call next Thursday.

The "fiscal" or as we're calling it, the "human cliff" poses a real threat for our nonprofits and our clients. It is not just a matter of protecting the deduction for charitable contributions.

The “fiscal cliff” refers to a series of tax increases and budget cuts that take effect around the first of the year, unless Congress acts to avoid them. Maryland Nonprofits is asking you to contact your member of Congress and urge them to REACH A RESPONSIBLE COMPROMISE AGREEMENT:

• INCLUDING A BALANCED PACKAGE OF TAX RATE INCREASES ON HIGH EARNERS AND MODERATE SPENDING REDUCTIONS
• AVOIDING CUTS TO PROGRAMS THAT WOULD THREATEN THE MOST VULNERABLE AMERICANS
• PRESERVING AN EFFECTIVE INCENTIVE FOR CHARITABLE CONTRIBUTIONS
  

The fiscal cliff will trigger automatic federal budget cuts of $109 billion each year, half to defense and half to “discretionary domestic spending.” Across the board this would be an 8.2% cut to hundreds of programs that relate to nonprofits’ missions in the discretionary domestic category: from nutrition, to substance abuse treatment, to job training, and the arts.  That automatic budget-cutting process is called “sequestration.” The sequestration cuts are estimated to mean a loss of over $117 million in Maryland’s state budget alone for the next year.  
At about the same time, tax reductions for people at all income levels adopted over the last 11 years would expire all at once with major impacts on the economy. Together with sequestration these are referred to as the “fiscal cliff”.
If nothing is agreed upon in Washington, there is a strong chance of renewed recession in addition to major spending cuts.  The State Department of Legislative Services recently estimated a potential combined negative impact on Maryland’s fiscal 2014 personal income and sales tax revenues (which make up about 80% of the state’s general funds) ranging from $337 to $635 million.  Together with the sequestration cuts listed above, this could reach over 5% of the state’s total general fund budget.
Much more likely is a gradual or phased package of negotiated tax changes combined with new revenue and significant new cuts in future spending.  For domestic programs, this will be in addition to cuts over the next ten years already adopted in the Budget Control Act of 2011. Failure to raise major new federal revenue, as the President is proposing by eliminating most of the Bush-era tax cuts for the wealthiest 2% of taxpayers, will magnify the size of additional spending cuts required. Domestic program funding through the states, Medicaid, Head Start, Title 1 Education, Women and Children’s Health, for example, are all at risk. Further, any cuts absorbed by states will likely mean reductions in additional areas as they try to re-adjust priorities at their level.   
WHAT CAN YOU DO?
 
Cuts are coming – even without the “cliff” the Budget Control Act has already put reduced spending caps on discretionary domestic spending, and rapidly growing costs of veterans’ benefits will compete with everything else in that category.  Nonprofits must be advocates for raising federal revenue – as much and as fairly as possible. 

1. Support the President’s tax proposal – it is the best chance to protect the most services for people and communities we serve!
2. Oppose ‘flat dollar caps’ on tax deductions – these are being proposed as an alternative to the President’s plan for tax rate actions and a modest limit on the percentage value of deductions for top earners.  Caps won’t raise as much revenue, so many more cuts must occur, and will have major negative consequences for charitable giving and many state tax systems that benefit from federal deductibility.  More information... 
   

HOW CAN YOU DO THIS?

1. Craft a message (you can use this sample format and vary the details for your audience) that: 
1. describes the people (children, families, communities, etc.) that your nonprofit serves or advocates for, and the importance of their needs; 
2. summarizes how cuts in the government-supported services they use and need will impact them and the community; and 
3. supports the President’s tax and revenue plan to help protect those services. 
2. Communicate this message (by phone, letter, email, meetings) to your member(s) of Congress (use http://mdelect.net/ to find your representatives and their contact information). 
3. Communicate to the public through social media, letters to editor, other local media, etc., to raise the profile of the issue. Communicate the same message to your state legislators and state officials (and local officials if they are involved in the services or funding). They will decide whether or how to make up for federal cuts, and how to cut or re-allocate their own resources. 
4. Reach out through your networks, coalitions, or state associations of providers or advocates, to reach more of the state’s delegation in congress (and more of the media and the public). 
5. Keep up with developments and keep your message current and fresh – follow the Maryland Budget and Tax Policy Institute’s updates at www.marylandpolicy.org 
6. Involve your board, staff, volunteers, supporters and clients in the steps above. 
7. AND Join us for a “fiscal cliff” information conference call at noon on Thursday, Dec. 13 at 1-866-740-1260, passcode 7636737.

21,000 more Marylanders employed

Yesterday Maryland received some good news from the Bureau of Labor Statistics when the latest jobs report showed that 20,977 more residents were employed in October than September. 5,104 fewer Marylanders were unemployed, and the unemployment rate dropped two tenths of a percentage point to 6.7 percent.

Click to enlarge

The state added a total of 14,000 new jobs during the month. The largest increases were in the professional and business services industry (+3,900); trade, transportation, and utilities (+3,700); leisure and hospitality (+3,700). The construction (+2,300), financial activities (+1,700), and education and health services (+2,700) industries also added jobs. Manufacturing (-2,300) and government (-2,700) lost jobs.

This is the lowest Maryland's unemployment rate has been since May, and the most private sector jobs created in one month since 1996.

While this is great news, there are still more than twice as many unemployed Marylanders as there were before the Great Recession. As Governor O'Malley develops the budget he will submit to the legislature in January, we urge him to continue to support and expand programs for struggling families all across Maryland.

Unemployment remains high for African American Marylanders

The Economic Policy Institute released an issue brief today on minority unemployment in 2011, and looking forward to the end of 2012.  Yet again the data show that the unemployment rate for African Americans is significantly higher in Maryland and the rest of the country than the rate for other groups.  

Source: Annual unemployment rate data for 2007-2010 is from the Bureau of Labor Statistics.  Data for the third quarter of 2011 is from the EPI report linked to above.

At 11.2 percent, Maryland had the lowest African American unemployment rate in the country in the third quarter of 2011—among the 25 states (including the District of Columbia) for which this rate could be determined.  However, this was significantly above the Maryland average of 7.3 percent and far above the state’s White unemployment rate of just 5.6 percent.  Out of all fifty states, only in Nevada was the White unemployment rate (11.7 percent) higher than Maryland’s African American unemployment rate.

Unfortunately, as the graph and EPI report make clear, this disparity is a longstanding problem that is unlikely to disappear any time soon.  Even as the economy recovers from the Great Recession the only way this problem will improve is if Maryland supports education and job training programs, removes barriers to employment for ex-offenders who have paid their debt to society, and otherwise encourages job growth (including state employment) across the state.

Maryland unemployment rate falls again in December

Maryland’s monthly unemployment rate fell again last month, to 6.7 percent, according to data released today from the Bureau of Labor Statistics.  This is the lowest the rate has been since February of 2009.

The state added 8,100 jobs in December.  Unfortunately, there are still 125,000 fewer employed Marylanders than there were four years ago.

Given the continuing weak economy, Governor O’Malley is right to emphasize jobs in recent weeks.  Whether it is leveling the playing field for local employers by implementing an online sales tax, hiring new state workers in critical areas, funding infrastructure projects and school and rental housing construction through the capital budget, or asking the wealthiest Marylanders to help pay for services to help their less fortunate neighbors, finding the revenues to pay for vital services is responsible governing.

On the other hand, Maryland can ill afford more job-killing budget cuts to schools, healthcare providers, childcare centers, and other vital services that provide employment, help families get back on their feet, and keep Maryland competitive.  As the General Assembly takes up the budget, we call on them to build on the Governor’s proposal and pass a budget that helps low and moderate income Marylanders continue to recover from the effects of the Great Recession.