alabama's working families and the broken promise of economic ...

CHAPTER 4The Workforce Support GapA strong “bootstraps” ethic of personal responsibility accounts for manynotable successes in Alabama’s political, cultural, economic – and athletic– history. Running deeper still, perhaps, is a stubborn pride that historianWayne Flynt has identified as a defining trait among the poor, disenfranchisedWhite Alabamians who long made up the state’s majority. Together,these independent streaks may help explain Alabama’s traditional failure toinvest in the common good. Public policy generallyfavors employers over employees, higher earnersover lower earners, and efforts to make even modestpolicy changes in support of low-income workingfamilies often face fierce opposition.A July 2007 policy brief by the Urban Institute highlightsthis reluctance to offer anything beyond minimalsupports to working families. The brief reviews the primaryfederal and state work support programs – childcare, food stamps, federal and state earned income taxcredits, Medicaid and State Children’s Health InsurancePrograms – in 44 states for which data wereavailable. Only four states invested less per capita thanAlabama. Of our neighboring states, all invested morein low-income families than Alabama did. 62WagesAlmost half a million Alabama workers over the ageof 18 hold low-wage jobs. 63 In 2005, a low-wage jobwas defined as one with earnings of $9.59 an houror less, adjusted to the state cost-of-living index. Frequently,these low-wage jobs fail to provide benefitsto their employees. As a result, half a million workersbetween the ages of 18 and 64 lack health insurance 64and 1.2 million lack an employer-provided pension. 65With the prevalence of low-wage jobs, state policiesshould insure that adequate supports are in place tohelp Alabama’s workers achieve economic security.Child careAlongside inadequate transportation, lack of accessto child care is consistently identified as a leadingbarrier to employment for low-income families.Working families with household incomes at orbelow 50 percent of the state median income areeligible for subsidized child care. In March 2007,Alabama provided subsidized child care to 32,148children, an increase of almost 4,000 from March2005, but well below the almost 40,000 childrenserved in March 2003 prior to that year’s fundingcutbacks. 66 Capacity for this vital service almostalways exceeds demand, as indicated by a waitinglist that generally exceeds 5,000 at any given time.However, waiting lists are notoriously unreliable asquantitative measures. For example, some childrenon the waiting list have aged out of the need categorybefore receiving service, while the length of thelist itself discourages some families from applying.Alabama does not pay child care providers atthe recommended 75 percent of fair market rate.According to Alabama’s FY 2008-09 state planfor child care services, reimbursement varies byregion, ranging from a high of the 70th percentilefor center-based, infant-toddler care in the Birminghamregion to a low of the 30th percentilefor family/group home care in rural regions. Theaverage for all rates is at the 38th percentile. 67 Thislow reimbursement rate strains the system in twoways, making it difficult both to enlist and retaincompetent providers and to offer high-quality programswith insufficient resources.The Alabama Department of Human Resources setsco-payment requirements for child care services onAlabama’s Working Families 33