Like several countries in the European Union, conservatives in the U.S. states promised that slashing government spending would fuel economic growth. Thirty states have responded to budget deficits by doing just that. At the same time, 20 U.S. states and a number of other European countries have taken the opposite approach, generating revenue and focusing additional spending on economic recovery. Just like in Europe, the states that chose austerity have been outpaced in job growth and economic recovery by the states that raised revenue to expand government spending.
Progressive state lawmakers have been advancing smart, effective policies to take on what the authors of the State Budget Crisis Task Force report accurately describe as the structural problems facing states in the coming years. Here are five solutions that your state can advance to help avert fiscal crisis while promoting economic growth, fairness, and equality.
In this week’s Research Roundup: Recent reports from the Food Chain Workers Alliance on workers in the food production and food services industries, the Center for American Progress on the facts on minimum wage hikes and how austerity is hammering state economies, National Employment Law Project on Walmart’s domestic outsourcing, the University of New Hampshire’s Carsey Institute on working parents’ lack of access to paid sick leave, Make the Road New York on small business support for a paid sick leave standard, the Center on Budget and Policy Priorities on some basic facts around state and local government workers, Immigration Policy Center on the Obama Administration’s new “deferred action” deportation policy, and a report from researchers at Occidental College and the University of Northern Iowa on the lack of support for most “job killer” allegations in the media.
Wage theft, or the systemic non-payment of wages by unethical employers, is a growing problem affecting millions of workers across the country and costing states billions of dollars in lost tax revenue. Yet, only a few states are starting to address the problem in earnest through legislation – and the vast majority have laws that are grossly inadequate. Those are the conclusions of an extensive, first-of-its-kind evaluation of state laws, Where Theft is Legal: Mapping Wage Theft Laws in the 50 States, released by Progressive States Network. The report grades individual states across the broad body of state laws needed to comprehensively address this growing national crime wave, and concludes that 44 of the 50 states (plus Washington D.C.) deserve failing grades.
A state that asks everyone, including the luckiest few, to pay their fair share during a time of historic inequality. A state with a minimum wage above the federal floor that helps boost consumer spending and power the economy. A state that has been able to avoid economically devastating budget cuts and public sector job losses by seeking responsible budget solutions.
What one word might describe a state that has adopted policies like the above to rebuild their economy? The American Legislative Exchange Council (ALEC) has one in mind: “poor.”
Progressive States Network Executive Director Ann Pratt issued a statement following the release of the jobs report showing the economy adding 233,000 private sector jobs and losing 6,000 public sector jobs in the month of February.
Conservatives have long wanted state lawmakers to believe that enacting sweeping tax cuts is the key to spurring economic growth. As most legislators across the country grapple with another year of difficult budget choices, controversial economist Arthur Laffer and the American Legislative Exchange Council (ALEC) have been pushing a comparative analysis which aims to prove that the nine states with no state income tax (Alaska, Florida, Tennessee, Washington, Nevada, Texas, South Dakota, New Hampshire and Wyoming) have dramatically outperformed the economies of the nine states with the highest income tax rates (California, Hawaii, Maine, Maryland, New Jersey, New York, Ohio, Oregon, and Vermont).