Yesterday, The Maine Heritage Policy Center released a new report, “Top 10 Things Keeping Mainers Poor.”
Poverty is an issue that has touched everyone’s life in some way, regardless of zip code, age or class. It’s an issue that, traditionally, only the left talks about. However, we can’t afford to sit back and simply throw money at the problem any longer. It isn’t the compassionate thing to do.
Since the early 1990s, the percentage of Mainers living below the poverty line has risen dramatically from 9.4 percent to 12.3 percent. Wages are low, educational outcomes are stagnant and taxes are high. It is time at as conservatives, we lead the discussion on how to lift our friends and neighbors out of poverty through the free market and a limited government.
The issue of poverty is huge. No single tax cut, reform bill or regulatory change will be sufficient to reverse Maine’s trajectory from poverty to prosperity. However, here are a few areas MHPC has identified that are in need of real reform.
- Maine says “NO” to good paying jobs
The most sustainable and effective approach to poverty reduction is economic growth and job creation. In 2014, 14.7 percent of Maine families with one worker were in poverty. That number dropped to only 2.7 percent for families with two workers.
Studies have found that unemployment consistently leads to lower reemployment wages by up to 15 percent. Studies have also linked worklessness and poor health and have shown that unemployment can lead to higher mortality and reduced life expectancy. Having a stable job provides more benefits than a paycheck. Employment provides a sense of purpose, focus and fulfillment that bleeds into all aspects of life.
To begin to tackle the issue of unemployment and underemployment, lawmakers need to reform occupational licensing, pass right-to-work legislation, give regulatory relief to businesses and address Maine’s high corporate tax burden.
- The cost of putting a roof over your head
In Maine, 20 percent of low- and moderate-income households spend at least half of their income on housing. Considering the high cost of health insurance and utilities in this state, that cost can be devastating both to the household and the local economy since affordable housing increases the amount of money these households can spend in their local communities. Additionally, a lack of affordable housing can make it difficult for employers to attract and retain quality workers.
According to a 2015 report by The Center for Housing Policy, “Families paying excessive amounts of their income for housing often have insufficient resources remaining for other essential needs, including food, medical insurance and health care.” According to The National Association of Home Builders estimates that the construction of 100 affordable housing units can have a broad ripple effect in local communities, supporting up to 30 new jobs.
Despite a 4 percent population increase between 2000-2009, Maine’s rental housing stock has declined. As a result, rental prices have soared. To address this issue, we need to expand the supply of housing options and promote free market competition to drive down prices, among other things.
- The black hole of heating and light
The high cost of energy has a significant impact on the budgets of Mainers, especially for low-income individuals and households who have to choose between heating their home, running an appliance or filling up their car. In 2013, Efficiency Maine acknowledged that “high heating costs remain one of the greatest economic challenges to Maine homeowners and businesses.”
As energy costs continue to increase faster than wages, the percentage of annual household income devoted to energy expenses has also increased. In 2001, American families earning under $30,000 each year devoted 16 percent of their income on energy. By 2009, that figure increased to 23 percent while pre-tax income has declined by 6 percent.
While Mainers experienced a sharp decline in the cost of heating fuel and gasoline last winter, long-term projections are bleak for low-income households and private-sector businesses that are the backbone of Maine’s economy. To tackle this issue, policymakers should re-evaluate Maine’s renewable portfolio standards and eliminate barriers to clean, hydroelectric power generation. Current law in Maine unfairly favors wind power over less expensive, more efficient alternatives resulting in higher costs to ratepayers across the board.
This is just a preview of the issues highlighted in “Top 10 Things Keeping Mainers Poor.” To read the full report, click here.