The deck is stacked against the working poor in Indiana.
State legislators could take steps to change that in 2016 by addressing four areas: the tax code, child care subsidies, affordable housing and, perhaps most importantly, the minimum wage.
The Herald Bulletin has reported extensively this year on a group labeled Asset Limited, Income Constrained, Employed (ALICE) in a study released in 2014 by the Indiana Association of United Ways.
About 23 percent of Indiana's population and about 28 percent of people living in Madison County belong to the ALICE group. While they earn too much income to qualify for most forms of welfare, they earn too little to afford necessities, pay monthly bills and save enough money to handle unexpected expenses such as illnesses and car repairs. Hoosiers who belong to this group find themselves in a spiral of debt toward poverty.
Many belonging to the ALICE group have children and find that paying for child care while they work is often a money-losing proposition. In Indiana, the Child Care Development Fund provides subsidies to help financially insecure families pay for child care.
It's a great program, but it has a major flaw. A slight rise in income level can cause a family to lose eligibility, providing a disincentive to work hard and earn a raise. If CCDF subsidies were set up on a sliding scale, hard work would be rewarded.
Lawmakers must fix this.
ALICE families also suffer from an unforgiving tax code, a problem that Senate Democrats sought to rectify last year by pushing for an increase in the earned-income tax credit. But the Republican majority blocked the effort.
Lawmakers must fix this.
Low wages and rising housing costs have conspired to take a lion's share of ALICE families' income for rent. According to a national report, a single parent working for minimum wage in Indiana would have to work nearly two full-time jobs to afford a modest two-bedroom apartment.
The National Low Income Housing Coalition released a report in May showing that low-wage earners often put as much as 50 percent of their income toward rent. Housing experts, meanwhile, say that a family should use no more than 30 percent of its income for rent.
Indiana uses the federal standard of $7.25 an hour for minimum wage and falls among the 10 states with the highest percentages of workers who earn minimum wage. Thirty states have set minimum wages higher, but a measure to raise Indiana's standard to $10 an hour died last year in the General Assembly.
Lawmakers must fix this.
If legislators won't raise the minimum wage, at least they could approve more funding for the construction of low-income housing across the state. But guess what? The General Assembly quashed that idea this year, as well.
Lawmakers must fix this.
Gov. Mike Pence and other Republican leaders tout the state's business-friendly climate, and Indiana does consistently rank high in business recruitment. But what good is such economic development if nearly half of Hoosier families are either in poverty or piling up debt.
Let's say it together one more time: Lawmakers must fix this.