2018 Prosperity Now Scorecard Shows How Congress’ Poor Choices Have Left Working Families Short on Opportunity

We’ve heard it said, by politicians on both sides of the aisle, that government should not be in the habit of picking winners and losers. Most often, this statement is made in reference to “handouts,” or to government allocating resources to groups deemed, by some standard or another, as undeserving.

Often, these standards are couched in the rhetoric of “personal responsibility,” with low-income families and people of color most commonly targeted by attacks that surmise they are less deserving of assistance than others. Though the details of each specific attack may vary, they all share a common thesis: that low-income people are only low-income because of their own poor decision-making. This rhetoric has been repeated ad nauseum by thought leaders, CEOs, elected officials and policymakers at all levels of government. Yet, the explicit choices of elected officials and policymakers are rarely scrutinized to the same extent.

The 2018 Prosperity Now Scorecard report, released today, unpacks the toxic myths that undergird this rhetoric and the dangerous public policy decisions that they are used to justify, and exposes them for what they are—thin pretenses that serve to obscure the roles played by public policy in enriching corporations and the investment portfolios of the wealthiest of the wealthy at the expense of the financial health and long-term well-being of working families.

This [false narrative] elides the fact that savings and earning opportunities for the average working family have yet to fully recover from the financial collapse of a decade ago, even as the cost of living and the cost of investing in oneself continue to rise.

One such myth suggests that low-income adults would rather spend their income on luxury goods­—or, as Senator Chuck Grassley (R-IA) put it, “on booze or women or movies” —than save or invest in themselves or their family’s future. This elides the fact that savings and earning opportunities for the average working family have yet to fully recover from the financial collapse of a decade ago, even as the cost of living and the cost of investing in oneself continue to rise. Nearly four in 10 households lack enough in savings to replace a poverty-level income for three months in the event that a job loss or major medical emergency leaves them unable to work or earn income. This includes nearly three in four households earning $20,268 or less—a threshold that constitutes 20% of all U.S. households.

For these low-income households, saving the family income necessary to build that safety net isn’t as simple as skipping a cup of coffee from Starbucks or opting for a landline instead of an iPhone. A majority of states have established some form of asset limit for households applying for public benefit programs. These asset limits functionally disqualify households that have modest savings or assets—in some cases, as little as $1,000, which may include a car, which is a necessity for many working families—from receiving benefits like TANF or energy assistance, which exist to put money back in families’ pockets so that they can save their way out of poverty, and stay out of poverty. Asset limits disincentivize families from saving, encouraging the very behaviors they are ostensibly designed to deter. Congress also voted to defund the Assets for Independence (AFI) program, effectively putting an end to an initiative that has, for nearly 20 years, made it easier for low-income families to build wealth through matched savings—real dollars that participating families could then use to purchase a home, build a business, or fund their postsecondary education. In light of Congress’ doubling the estate tax exemption—enabling the wealthiest of the wealthy to pass often-unearned income and assets from generation to generation untaxed—our representatives in the federal government have made clear their priority is not helping every family build wealth and seed prosperity, but reinforcing and redoubling the wealth holdings of the already prosperous.

Further narratives abound concerning the “laziness” of low-income households, suggesting that if people are willing to work hard, success is ensured, and that any failure to bring in a livable income is an indictment of that person alone. The data in the Scorecard give lie to this popular assertion. Even as unemployment and underemployment continue to decline in the years since the height of the recession, new, well-paying job opportunities remain scarce for many. Much of the recent economic growth has come in occupations paying an annual wage below the federal poverty line; nearly 25% of jobs in the United States are low-wage, including more than a third of jobs in a handful of states. Further, unemployment among people of color remains nearly double that of their White peers—apparently, “record-low” unemployment among Black people is to be celebrated, even if it’s on par with the record highs White workers experienced during the recession. Further, Black college graduates see higher costs and lower returns on their college degrees than their White peers, suggesting that, contrary to the prevailing narrative, the hard work of earning a college degree may neither provide the insulation from shock, nor widen the pathway to prosperity, for Black families in the ways that it does for White families.

There is still much work to do if we are to re-adjust the priorities of our elected representatives. Just this past weekend, House Speaker Paul Ryan (R–WI) was taken to task for an ill-conceived tweet about the benefits that will accrue to the average taxpayer as a result of the tax cuts that recently passed both chambers of Congress, saying, "A secretary at a public high school in Lancaster, PA, said she was pleasantly surprised her pay went up $1.50 a week ... she said [that] will more than cover her Costco membership for the year."

"A secretary at a public high school in Lancaster, PA, said she was pleasantly surprised her pay went up $1.50 a week ... she said [that] will more than cover her Costco membership for the year." - House Speaker Paul Ryan, February 3, 2018

While the tweet was quickly deleted, its message remains clear: an additional $1.50 a week—less than 4 cents per hour of full-time work, and, at most, $78 a year—is not adequate recompense that justifies the billions of dollars in corporate tax cuts ushered in by the Tax Cuts and Jobs Act. Though any worker would certainly appreciate an additional $78 a year, such a boost is harder to appreciate when it comes at the cost of neighborhood school and community health center closures, cuts to Medicaid and financial aid for postsecondary education, and the loss of a secured future through Social Security and other defined benefit retirement programs.

Speaker Ryan’s tweet, and the sanctimony fueling it, are made even more offensive by the already record-setting profits earned by the country’s largest corporations, the tens of thousands of dollars accruing to the nation’s wealthiest households as a result of that same tax bill, and the obscene giveaways and handouts governments across the country are offering businesses like Amazon to entice them to build in their communities—all being done while undermining and mortgaging the futures of the individuals and families that provide the labor that drives the success of those corporations, and serve as the foundation of those communities.

The rhetoric that our representatives in government use to demonize tens of millions even as they fail to hold corporations to the same standard of accountability would be disgraceful enough on its own. When backed with retrograde public policy decisions that redistribute income, wealth, political power, and opportunity upward from the overwhelming majority to a privileged handful, that rhetoric becomes a poisonous manifesto—a statement of intent and purpose that belies the principles of personal responsibility and unabated freedom of opportunity that these elected officials espouse.

But there is hope. Advocates are leading grassroots campaigns to protect wealth and rebuild families’ economic prospects. Voters and lawmakers in a number of states have taken it upon themselves to change the narrative by enacting referenda, legislation and programs that return opportunity and control back to the working families that power our nation’s economic machine. By adding your voice and talents to this groundswell of action, we can influence policymakers to make choices that benefit all, rather than just a handful—or replace our current representatives new, more diverse, and more responsive voices.

Through the Prosperity Now Community, you can learn more about the organizations and individuals leading this charge, and connect to movements all across the country. On the updated Scorecard website, you can find more policy and outcome data for states, cities and counties; create comparative reports and graphics; and explore additional research and resources in a variety of policy topic areas. And you can read the full 2018 Main Findings Report for more detail on the myths our policymakers propagate, and the ways advocates can push back.

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