A Labor Day wish for a strong safety net

September 3, 2020By Audrey Mechling

After months of uncertainty and economic turmoil unleashed by the pandemic, it is tempting to yearn for a return to normal. It is easy to look at our past economy with rose-colored glasses. But even before the coronavirus ground the economy to a halt, “normal” for many Oregon workers meant struggling to make ends meet.

This Labor Day, we must acknowledge that for working Oregonians, a return to the pre-COVID state of affairs is not something to aspire to — it’s nowhere near good enough. The present crisis has made clear that broad-based economic security for all rests on a robust safety net.

In 2018, towards the end of the of one of the longest economic expansions on record, Oregon’s poverty rate stood at 13 percent — about the same level as in 1995. Among Oregonians identifying as Black, Latino, Pacific Islander, or Native American, the situation was more dire, with one in four living below the federal poverty line. The vast majority of Oregonians in poverty belonged to the working poor, households unable to rise above poverty despite having at least one working parent.

Many workers who didn’t fall below the poverty line were also struggling. Analysis done before the pandemic showed that nearly one in five workers in Oregon were a part of the minimum wage workforce. While they may not all have fallen below the poverty line, these workers had difficulties making ends meet. In both rural and urban areas in Oregon, the minimum wage is too low for a full-time worker to afford a one-bedroom apartment. These minimum wage workers are disproportionately people of color, the majority are women, and one in four are parents.

Another measure of the economic insecurity plaguing Oregonians comes from the United Way’s ALICE index, which assesses the share of the population that is Asset Limited, Income Constrained, Employed. This index provides one of the most nuanced looks at how much income a family really needs to make ends meet. Sadly, the analysis concludes that about 44 percent of Oregonians don’t earn enough to achieve the “basics necessary to live and work in the modern economy.”

Over the decades, Oregon has become complacent with unacceptably high levels of economic suffering. It is time to recognize that poverty and economic instability are not a necessary aspect of life: They are a policy choice. We can choose to build a better future, one where economic security is the norm.

A robust and anti-racist social safety net can lift Oregonians out of poverty and achieve broad-based economic security.

One example of what’s possible comes from the recently expired Federal Pandemic Unemployment Compensation (FPUC) program – the formal name for the $600 a week boost in unemployment checks that lapsed at the end of July. This program managed to cap the rise in poverty in the U.S. despite widespread unemployment, and may have even decreased the poverty rate during the most severe economic crisis of our lifetime. We can reduce poverty by choosing to have a robust and accessible unemployment system that focuses on helping people get by, rather than insisting on low replacement wages based out outdated and offensive myths and falsehoods about workers.

After our last major economic downturn, another social safety net came to the aid of working families. The Earned Income Tax Credit (EITC), combined with the Child Tax Credit (CTC), helped lift 129,000 Oregon families out of poverty during the years following the Great Recession. Clearly, tax credits for working families are an essential building block of our safety net.

To make these tax credits even more effective, two changes are in order. First, we need to make them more robust, to up the amount of money they deliver to working families. Second, we need to expand the reach of these tax credits — to remove exclusions that keep categories of workers on the outside. Childless workers, for instance, get almost nothing from the EITC. These tax credits also exclude some of the lowest-paid workers in our communities, workers who lack legal status. These immigrant workers perform arduous, essential work. They pay taxes. And yet, the present structure leaves out these workers and their families — overwhelmingly Oregonians of color. It’s a clear instance of a racist structure that perpetuates disparities.

These are just two examples of changes that we can make to eliminate poverty in Oregon. A better future for Oregon families also requires strong investments in vital public structures like health care, transportation, child care, education, housing, and more.

This Labor Day is not a day of joy for many Oregon workers. It is, sadly, another day to worry about how to pay the rent and put food on the table. It need not be this way. By building a robust safety net, we can ensure that all workers enjoy economic security.