Investing in Kentucky’s Working Families Key to State Prosperity
33 percent of State’s Working Families are Low-Income;
Budget Shortfalls and Policy Barriers Hold Families and Kentucky Back
March 4, 2010
Berea, Ky. — A new report suggests that Kentucky’s economic challenges are rooted in insufficient support of the one-third of the state’s working families that are low-income.
The report finds that state budget shortfalls and policy barriers in the areas of higher and adult education, workforce development, economic development and work supports are keeping low-income families from making progress, and holding back economic gains for all of Kentucky.
“Low-income working families make up the fabric of every city, small town and rural community throughout the Commonwealth,” said Justin Maxson, President of the Mountain Association for Community Economic Development (MACED). “Yet as a state we haven’t prioritized investing in those families and putting in place policy measures that really contribute to their success. We have not come to grips with how closely our shared prosperity depends on the success of all of the state’s families.”
Thirty-seven percent of the state’s children live in low-income households. For working families with a minority parent, 47 percent are low-income. Low-income working families face significant barriers to their success, including that most have no parent with post-secondary education, most do not own a home, and 36 percent have a parent without health insurance.
State budget problems are a major factor in these challenges:
• Tuition for public higher education rose 60 percent between 2002 and 2007 in Kentucky, and 45,000 students (47 percent of applicants) are being denied need-based financial aid despite meeting qualification guidelines.
• Even though 54 percent of adults in Kentucky have basic or below basic literacy, the state spends only $48 annually on adult education per adult without a high school diploma or GED, far below the national average of $66.
• Kentucky ranks 41st among the states in child care affordability for low-income parents, in part because of high co-payment requirements.
• Adults in Kentucky lose health coverage through Medicaid at incomes above only 62 percent of the poverty level.
“As the state makes choices about how to address its budget shortfall and explores revenue options,” said Jason Bailey, MACED Research and Policy Director, “It must take into account the inadequacies of current public investment in the state’s families, and the consequences of further cuts on our state’s economic future.”
In addition to budget issues, the report also highlights important policy approaches that have promise. Those approaches include:
• Working to better integrate economic and workforce development through an approach that is region-based, sectoral, and focused on long-term career pathways for workers.
• Building a ladder of access to training and higher education for more families by shifting the focus of financial aid to low-income families, strengthening adult education and avoiding dramatic tuition increases.
• Providing adequate work supports in key areas like child care, health care, unemployment insurance and an earned-income tax credit.
“We need a new commitment to a model of economic prosperity based at its core on long-term investment in our working families,” said Melissa Fry Konty, MACED Research and Policy Associate. “Their success is ultimately our success.”
MACED authored “Investing in Kentucky’s Working Families: A Path to Shared Prosperity in the Commonwealth” as part of the Working Poor Families Project, a national initiative supported by the Annie E. Casey, Ford, Joyce, and C.S. Mott Foundations to examine the conditions of America’s working families.
Jason Bailey, Research & Policy Director