Washington, D.C. September 10, 2024 – Today’s release of the U.S. Census Bureau’s report on poverty and income shows that a strong economy matters for workers and families – yet far more is needed to reduce poverty. Income rose at all levels, including for the lowest-paid workers, and median household incomes increased 4 percent from 2022, the most significant increase in household income since 2019. These improvements contributed to a small decrease in the official poverty rate from 11.5 percent in 2022 to 11.1 percent in 2023.
Yet poverty overall, and particularly for children, continues to be stuck at far too high a level. According to the 2023 Supplemental Poverty Measure, many U.S. children continue to live in poverty: the rate climbed slightly from 2022 to a level of 13.7 percent, twice as high as in 2021 when the fully refundable child tax credit and other public programs cut child poverty to a historic low of 5.2 percent.
“This year’s U.S. Census Bureau report serves as a reminder for our nation to make the critical policy choices needed to address poverty, especially child poverty. We know what’s effective: policies to make the economy work for low-wage workers and policies to invest in crucial public supports such as the refundable child tax credit, health care, and nutrition supports – a strong safety net,” said Olivia Golden, interim executive director of CLASP. “These policies are also crucial to addressing the persistent and damaging effects of racism on children and families. The strong policies in the COVID response legislation were designed to reach Black families, Latino families, and families with the fewest resources – and, after initial gaps, children in immigrant families who make up a very large share of U.S. children. As a result, these policies cut child poverty in half across the board.”
Today’s report showed that the overall poverty rate in 2023 of 12.9 percent was roughly the same as in 2022 when poverty stood at 12.4 percent. In addition to the increase in overall child poverty rates, racial and ethnic disparities in child poverty also increased, with 20.3 percent of Black children and 22 percent of Hispanic children experiencing poverty compared to just 7.2 percent of white children. These figures reflect the Supplemental Poverty Measure, which looks at the resources that people have available after taking into account taxes, transfers, and work expenses, and uses an annually adjusted threshold based on the cost of a package of necessities.
The slight decrease in overall poverty reflected in the Official Poverty Measure, which considers only cash income, was driven by the strong economy. This was also seen in the overall increases in cash income for all workers, even those with very low incomes. This reflects tight labor markets that are good for workers who are paid low wages. Inflation has gone down significantly from 7.7 percent in 2022 to 3.9 percent in 2023, creating a path for real income growth in 2023. However, persistent racial and ethnic disparities remain in real median household income, driven by historical and current structural racism in education, housing, and hiring resulting in unequal access to good jobs.
The Census report also found that the share of people lacking health insurance throughout 2023 held steady at 8 percent. Policy matters to this result as well. Two different policies created during the pandemic contributed to a reduction in people lacking health insurance over the past several years. We are likely not yet seeing the full effects of the ending of protections for Medicaid members and other health care expansions provided during the COVID pandemic that served as a safety net for people who lost jobs or faced other economic and coverage disruptions. During the pandemic, states were not allowed to disenroll people from Medicaid. Since this protection ended, more than 12 million people have lost Medicaid coverage. In addition, those purchasing insurance through the Affordable Care Act’s Marketplace have had significantly more affordable options due to increased tax credits provided during the pandemic. But those tax credits are set to expire at the end of 2025 unless Congress acts.
The statement can be attributed to Emily Andrews, director of education, labor, and worker justice at the Center for Law and Social Policy (CLASP).
Washington, D.C., September 5, 2024—When workers or their loved ones are faced with violence, they need paid time off to begin addressing and, ultimately, recovering from what they’ve experienced. Research shows that “safe” leave is every bit as important as sick leave. That’s why CLASP is proud to be a member of the safe leave working group and to have helped develop “The Need for Paid Safe Leave & Model Legislative Language,” the first product of the working group. This continues our advocacy in support of job-quality initiatives for people in all industries across the country.
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Guaranteed Income programs mirror pandemic support findings
Some of the results of the Rooted School study echo larger, household findings from The Center for Law and Social Policy, which found families reported more stability after the introduction of two pandemic-era programs, the Child Tax Credit and economic impact payments, through the American Rescue Plan Act of 2021.
Still, two-thirds of Americans say they couldn’t cover living expenses for one month if they lost their primary income source. One suggested policy solution is to supply families with guaranteed monthly income to keep them stable.
But lawmakers have also targeted young people for additional support. The Young Adult Tax Credit Act would provide a universal $500 monthly payment to all 18- to 24-year-olds in the United States. “Our social safety net rightfully has programs for childhood and seniors, but it fails to address the prevalence of young adult poverty,” said Rep. Morgan McGarvey of Kentucky, a co-sponsor of the Young Adult Tax Credit, who noted that he sees nearly 25% poverty among young adults in his state. (It stands even higher, at 26%, among young adults in Louisiana.)
By Lorena Roque
This is the third in a series of commentaries from CLASP experts that explore dimensions of poverty ahead of the U.S. Census Bureau’s annual release of poverty, income, and health insurance coverage statistics from the previous year. On September 10, we’ll get a snapshot of the economic hardship that children, youth and young adults, and families experienced in 2023. Ahead of the release, CLASP experts are offering key insights on the impending 2025 tax debate, Medicaid unwinding, and a fully funded child care system’s role in ending poverty. And, in honor of the 60th anniversary of the War on Poverty, we’ll examine what has and has not changed in the past six decades. The complete series is available here.
As the U.S. Census Bureau prepares to release its official poverty measure numbers for 2023, millions of full-time workers live in poverty. In 2021, 6.4 million workers were among the “working poor” in the United States, a population that is defined as those who have spent at least 27 weeks working or looking for work during a year but have incomes below the national poverty line ($14,580 for individuals and $19,720 for a family of two). In order to combat poverty for workers, labor standards must be improved and enforced for all workers.
Among those 6.4 million workers, almost three million worked full time, yet were still considered the working poor. This was due, in large part, to low wages and earnings. While the federal minimum wage hasn’t been raised since 2009, individual purchasing power has decreased significantly. After adjusting for inflation, today’s minimum wage of $7.25/hour is 40 percent lower than the minimum wage in 1970, which would be $13.05/hour in today’s dollars. While the majority of states, territories, and districts have adopted higher minimum wage laws than the federal government, others have not. These discrepancies in wage laws create racial disparities in both wages and poverty.
In 2021, 7.3 percent of the working poor identified as Hispanic and 6.4 percent identified as Black, compared to 3.6 of white workers and 2.7 percent of Asian workers. Black and Hispanic women are more likely to be part of the working poor than their male counterparts, with 7.7 percent and 7.6 percent for Black and Hispanic women, respectively.
These statistics are not a coincidence. The Fair Labor Standards Act, which was implemented in 1938, left out minimum wage protections for all workers in the farmwork, agriculture, and domestic industries. Almost seventy years later, Black and Hispanic workers continue to be overrepresented in these low-wage fields: in 2022, 78 percent of U.S. agriculture workers identified as Hispanic, 34 percent of whom were women. In the domestic industries, Black women are still disproportionately represented in domestic and care jobs, such as home health aides, personal care aides, and child care workers. In fact, Black women represent 1 in 5 people employed in these jobs.
Without proper protections, farmworkers continue to earn 40 percent less than non-agriculture jobs, while domestic workers are three times more likely to fall into poverty than other workers. The Raise the Wage Act has proposed increasing the federal minimum wage to $17/hour by 2028. But unless the act passes, the number of working poor will at best remain stagnant and at worst continue to grow.
Individuals who work part-time, whether involuntarily or voluntarily, are much more likely to be part of the working poor. Involuntary part-time work is defined as workers who work part-time due to being unable to find full-time work. The gig economy, which historically has a low barrier to entry, has led to a significant increase in the number of people working through an app-based platform. The number of workers reporting earnings from this form of gig work to the IRS increased from 1 million to 5 million workers in 2021. Twenty-four percent of gig workers report that it is their full time job, while 49 percent consider it their part-time job.
However, due to the misclassification of gig workers as independent contractors instead of employees, these workers do not have access to minimum wage protections, employer-sponsored health care, Social Security benefits, and unemployment insurance. Many gig workers work multiple jobs to make ends meet; a joint survey by CLASP and Data for Progress released in 2023 detailed that 50 percent of gig workers reported feeling overworked and said their job is exhausting. In addition, in 2021, 30 percent of Hispanic and 20 percent of Black adults earned money through an app-based platform, more than any other racial group.
Without implementing labor standards for gig companies and appropriately classifying app-based gig workers as employees, these workers will continue to be close to, or fall below, the poverty line. Through the Department of Labor (DOL) and the National Labor Relations Board, administrators have attempted to regulate the gig and franchise industries via the independent contractor rule and the joint employer rule. However, allies of big business, such as the U.S. Chamber of Commerce, have challenged these rules in court to prevent their implementation.
Despite court challenges to multiple progressive labor regulations, the Biden-Harris Administration has issued various labor regulations that have gone into effect in 2024. The administration issued a new overtime rule that would make 3.6 million more U.S. workers eligible for overtime pay by increasing the current threshold of $35,568/year to less than $58,646/year. Additionally, the DOL has finalized a farmworker protection rule for workers under the H-2A program. This program allows employers in the farm and agriculture industry to hire temporary foreign workers when they cannot find qualified U.S. workers to perform the same labor. However, these workers often face similar abusive working conditions as other farmworkers. This rule will help workers have a voice in the workplace and establish timely wages and better job safety.
The 2023 Census poverty data will likely reflect minimal changes in wages at the low end of the income spectrum. Workers across the country need comprehensive minimum wage reform as well as strong labor law and enforcements. Without this reform, as well as targeted poverty relief such as the Child Tax Credit and the Earned Income Tax Credit, policymakers cannot establish an equitable economy or expect racial gaps in wages and wealth to narrow.
By Lulit Shewan
As relentless summer temperatures soar to unprecedented levels, millions of workers are forced to confront the intense heat every day in their jobs. This summer has set new records for both the duration and intensity of heatwaves, creating dangerous conditions in fields, factories, and construction sites. The impact of extreme weather is acutely felt in these environments, where the increasing neglect of workers’ conditions exacerbates the risks they face.
The Biden-Harris Administration’s proposed rule to address excessive heat in the workplace is essential, marking the first nationwide standard for addressing the hazards of excessive heat in the workplace. If finalized, this rule would impact an estimated 36 million U.S. workers by requiring employers to identify heat hazards; develop emergency response plans; train employees and supervisors; and provide rest breaks, shade, water, and heat acclimatization. While these measures are crucial, they represent the basic protections that every worker deserves and are just a foundational step. Comprehensive and enforceable worker safety regulations must be implemented across the country.
The South, with its high concentration of blue-collar workers—around 40 percent of the workforce—faces even greater challenges. The region not only has a significant share of construction activity but also suffers from weak labor organizing and a lack of union presence, which limits worker protections and power. This combination intensifies the risks, such as heat exhaustion and dehydration leading to dizziness and increased likelihood of accidents, including falls from ladders or scaffolding. Additionally, farmworkers in the South endure disproportionately high rates of heat-related illnesses and deaths. Their work, which involves tilling the soil and harvesting crops, exposes them to extreme heat without adequate protections.
Delivery and landscaping workers face similar challenges. The sweltering heat puts a strain on their bodies, increasing the likelihood of heat exhaustion, dehydration, and other heat-related health issues. Even indoor workers in warehouses, factories, and kitchens aren’t immune. Poorly ventilated spaces can become ovens during heatwaves, affecting productivity and overall well-being.
Yet even as the administration pushes its proposed rule forward, some states have taken regressive stances that undermine these federal efforts.
Florida Governor Ron DeSantis signed a contentious law that significantly inhibits heat protection for outdoor workers, barring municipalities from enacting crucial safeguards like required rest breaks, access to water, and shade. Florida law now prevents local governments from imposing heat-exposure protections on businesses, meaning municipalities can no longer mandate essential safeguards for workers in extreme temperatures.
Texas, also known for its unforgiving climate and reliance on industries like oil, agriculture, and construction, faces comparable challenges. In the past, cities like Austin and Dallas took steps to protect outdoor workers by creating ordinances requiring employers to provide paid water breaks. However, these local efforts were curtailed by a preemption law signed by Texas Governor Greg Abbott last year, blocking local jurisdictions from implementing rules related to heat protections. Such laws bolster corporate interests of profit maximization over worker well-being, leaving vulnerable populations—including older workers, those with health conditions, and marginalized laborers—at heightened risk.
Behind the scenes, corporations and their policymaking counterparts wield substantial influence over legislative processes, often stifling progress on heat protection laws. Companies frequently argue that such regulations impose burdens on businesses, potentially hindering economic growth. However, this perspective overlooks the significant toll on workers who endure extreme temperatures to construct our infrastructure, produce our food, and maintain economic activity. The prioritization of corporate interests and profit maximization highlights a troubling imbalance where corporate greed undermines essential protections for those who contribute fundamentally to our economy.
While existing Occupational Safety and Health Administration (OSHA) guidelines cover worker safety, they are not yet legally binding without a formal rule, leaving workers vulnerable. In Florida’s scorching heat, workers endure grueling conditions, frequently going without water or breaks, fearing repercussions if they pause work. This concern can be especially pronounced for gig workers and employees paid low wages.
California and Washington have set commendable standards in safeguarding workers from extreme heat, providing models that other states and federal legislators can emulate. California law mandates rest breaks, access to shade, and sufficient hydration for outdoor workers, recognizing these as essential components of worker safety rather than optional benefits. State regulations require employers to implement a heat illness prevention plan that includes emergency response procedures and acclimatization methods for new and returning workers, ensuring they can adjust to working in the heat gradually. Washington extends its heat safety measures to both indoor and outdoor workers, emphasizing the importance of hydration and rest breaks. The state’s comprehensive standards mandate that employers provide cool-down rest periods when temperatures reach specific thresholds and ensure that workers have access to sufficient water and shaded areas.
These state laws have been influential in shaping federal proposals, including the current administration’s proposed OSHA rule to address excessive heat in the workplace that aims to standardize heat protections nationwide. While this is a critical start to developing robust workplace heat standards, finalizing a rule typically takes six to eight years. This extended timeline means workers currently facing extreme heat may not receive the protections they need. To address this gap, it is crucial to pursue immediate legislative measures alongside the ongoing regulatory process to ensure that all workers receive necessary heat safeguards without further delay.
By Celeste Dorantes
As the nation’s demographics shift, schools must create an equitable and positive learning environment for all students, including English learner (EL) students. ELs hold diverse identities, some arriving from around the world as newcomers and others who are U.S. citizens born into immigrant families. Despite several laws passed over the years to protect the educational rights of ELs, they still often encounter barriers to educational achievement. ELs disproportionately come from families with low incomes and low parental education attainment, leading to a widened racial achievement gap. Adopting effective EL programs in public schools enables these students to fully and equitably participate both in the classroom and in broader society.
By Lorena Roque
Access to good jobs is essential for economic opportunity and racial equity in the U.S., providing fair wages, benefits, and protections for workers. The Biden-Harris Administration has made significant strides, including nearly $167 billion in student loan forgiveness.
In response to the COVID-19 recession, the American Rescue Plan Act spurred the strongest jobs recovery on record, reducing unemployment from 6.4 percent to 3.6 percent and creating over 12 million jobs. Historic lows in Black and Hispanic unemployment rates were achieved. Key legislation like the bipartisan infrastructure law, Inflation Reduction Act, and CHIPS & Science Act aim to create hundreds of thousands of good jobs with strong wage standards.
The administration expanded protections for undocumented workers, raised the federal contractor minimum wage to $15, and increased overtime eligibility. The National Labor Relations Board and Federal Trade Commission took steps to prevent worker misclassification and banned non-compete agreements, respectively.
Threats to these advancements include potential rollbacks under the Congressional Review Act and the Heritage Foundation’s Project 2025. To secure lasting protections, Congress must codify workers’ rights through legislation like the Protecting the Right to Organize (PRO) Act.
By Christian Collins and India Heckstall
The Biden-Harris Administration’s student debt relief efforts aim to alleviate the burden on borrowers, particularly those from marginalized communities. Despite the Supreme Court blocking broad forgiveness under the HEROES Act, the administration has forgiven $167 billion through targeted measures like the SAVE Plan, which caps payments at 5 percent of income and forgives debt after a set period. Reforms to the Public Service Loan Forgiveness program and support for defrauded students have also been key. However, recent legal and legislative challenges threaten these efforts. With the fiscal year 2025 budget cycle approaching, increased funding for Pell Grants and tuition-free community college initiatives are essential for reducing and preventing student debt. Policymakers must act to protect these gains and support future debt relief efforts.
By Nat Baldino
Public comments submitted by CLASP in response to U.S. Senate Banking, Housing, and Urban Affairs Subcommittee on Economic Policy’s July 30, 2024 hearing entitled “Banning Noncompete Agreements: Benefits for Workers, Businesses, and the Economy.”
On behalf of the Center for Law and Social Policy (CLASP), I submit these comments in support of upholding the Federal Trade Commission’s (FTC’s) noncompete ban. We applaud the Subcommittee on Economic Policy’s decision to hold a hearing investigating how the FTC’s noncompete ban will benefit workers, businesses, and the economy. CLASP is a national, nonpartisan nonprofit dedicated to advancing anti-poverty policy solutions that disrupt structural and systemic racism and sexism and remove barriers blocking people from economic security and opportunity. With deep expertise in a wide range of programs and policy ideas and over 50 years of history, CLASP works to amplify the voices of directly-impacted workers and families and help public officials design and implement effective programs.
CLASP seeks to improve the quality of jobs for low-income workers, especially workers of color, women, immigrants, and youth. We work with policymakers to raise wages, increase access to benefits, implement and enforce new and existing labor standards and ensure workers can strengthen their voice through collective bargaining. Quality jobs enable workers to balance their work, school, and family responsibilities – promoting economic stability and security.
The FTC’s ban on noncompete agreements is a crucial part of a suite of policies needed to improve job quality and level the playing field for workers. Noncompete agreements are widely used clauses in employment contracts that limit workers’ ability to work for “competitor” companies, including starting their own business, for a specific amount of time or within a specific geography. In our current labor market, noncompete agreements are frequently used to essentially trap workers in their current employment, limiting economic mobility by preventing workers from seeking competitive employment opportunities. Noncompetes drive down wages, stifle competition, and allow employers to keep job quality low. The FTC’s ban on noncompete agreements combats this common practice by barring employers from creating new noncompete agreements and rendering the vast majority of noncompetes null and void and is therefore essential to improving job quality.
There is a common misconception that noncompete agreements are reserved for executive-level employees to protect “trade secrets.” In reality, noncompetes are pervasive, spanning every conceivable industry and job level. In fact, one in five workers – an estimated 30 million workers – are subject to noncompete agreements. Among these, the modal worker is an hourly worker earning a median wage of $14.2 Few if any of these workers have access to information that is not widely known. In many cases, signing a noncompete comes as a condition of employment. Less than 10 percent of workers negotiate their noncompete agreements, and a whopping 93 percent of workers sign them anyway in order to secure their jobs. Many workers are only given this agreement after they’ve already accepted employment; others are asked to sign non-competes during their onboarding process, often within a mountain of paperwork and rushed through signing so that they’re not even aware of the way in which they are binding themselves to their employer.
Workers most likely to sign a noncompete agreement are those already in low-quality, low-wage jobs. Due to occupational segregation, women, workers of color, immigrant workers, and LGBT workers are overrepresented in such positions. This means that workers already impacted by systems of power are further marginalized by being coerced into signing agreements that limit their bargaining power. Marginalized workers are overrepresented in low-paying industries like customer service, hospitality, and retail – industries that are also the least likely to be unionized and therefore have the power to bargain for better working conditions. Being already at a disadvantage from low pay, around 17 percent of workers in these industries are then subject to non-compete agreements.
Non-competes are a further barrier to racial and gender equity for workers because of the way in which they promote low job quality and prevent competition. When a worker is bound to a noncompete agreement, they cannot leave their job for one with better pay or working conditions. This allows employers to keep job quality and pay low without fear of competition. The prevalence of noncompetes doesn’t just depress wages for workers with noncompetes – they instead have a chilling effect that depress all wages. Noncompetes lead to a stagnant economy for both workers and businesses: with workers unable to move freely in the labor market and smaller and newer companies unable to compete against larger corporations and noncompetes, economic dynamism is stifled, and wages stagnate.
In a job market that already lacks strong worker protections against retaliation, workplace danger, and discrimination, the inability to move to a better-quality workplace dramatically increases the likelihood that women and workers of color will be forced to remain in dangerous or abusive workplaces with poor pay and poor working conditions, perpetuating the cycle of occupational segregation. Noncompete clauses are also detrimental to worker power. When workers know that they cannot find work within their industry outside of their employer, they are less likely to negotiate better wages or working conditions either individually or within a collective bargaining effort. Women in states with strict enforcement of noncompetes are less likely than men to leave their jobs, and women and women of color are less likely to negotiate their non-compete clauses.
Researchers have estimated that banning noncompetes nationwide would close racial and gender wage gaps by 3.69 percent. Evidence from state-implemented noncompete bans bears this out. A study of Oregon’s noncompete ban found that hourly wages increased by 2 to 3 percent on average. Several states have implemented either bans or limits on noncompetes. States such as Illinois, Maryland, Rhode Island, New Hampshire, and Maine all prohibit noncompetes for workers paid “low wages,” with different definitions of what counts as a low wage for each state. Other states have attempted to put guardrails on noncompetes by industry, such as New Mexico within their healthcare industry, or Hawaii’s tech industry. Massachusetts has limited noncompetes to a duration of one year. All of these state policies have shown to benefit workers not only in those states, but in border states as well.
Yet, state programs are not enough. Even within states with broad noncompete bans, like the newly enacted Minnesota noncompete ban, not all workers are covered. In Minnesota, the law only prohibits the enforcement of noncompetes entered into after July 2023, leaving nearly 300,000 Minnesota workers trapped in their noncompetes. Relying on a patchwork of state programs creates incomplete protections for workers. Workers should not merely hope to have a fair employer or live in a state with a noncompete policy that can apply to them. All workers should have the ability to move freely within their industry, seeking jobs with better pay, better working conditions, and more dignity and respect at work.
The FTC’s ban on noncompetes is a much-needed rule to increase worker mobility, economic dynamism, and to decrease the gender and racial wealth gap. We thank you for this opportunity to submit this written statement for the record. If you have any questions regarding this topic, please feel free to contact Nat Baldino, Policy Analyst with the Education, Labor and Worker Justice Team at CLASP.
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The following statement can be attributed to Elizabeth Lower-Basch, deputy executive director for policy at the Center for Law and Social Policy (CLASP).
Washington, D.C., June 27, 2024–Today in a pair of cases, the Supreme Court’s conservative majority overturned a 40–year–old precedent, known as “Chevron deference,” which generally required courts to defer to the expertise of agency rulemakers. This precedent has supported tens of thousands of rules used by federal agencies to execute regulatory authority on topics from the environment to financial services to patient, consumer, and worker protections, and protected them from frivolous lawsuits. With this change, all regulations will be much more vulnerable to litigation – which will delay implementation even when the regulations are eventually upheld – and judges will be able to make decisions grounded in their personal opinions rather than the substantive knowledge of agency experts.
Exactly how damaging this decision will be remains to be seen; Justice Roberts in his decision claims that it “does not call into question prior cases that relied on the Chevron framework.” But the decisions in Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce raise the stakes for judicial appointments at all levels, as well as increase the need for Congress to pass detailed legislative instructions that leave less room for judicial meddling. Because countless federal regulations support people with low incomes, these decisions have the potential to significantly affect their lives.