Sound Progress

Research and insights from Puget Sound Sage.


Any Carbon Policy Must Meet the Equity Test

Revenue Investment is a Key Component to Socially Just Climate Policy

Puget Sound Sage advocates for a strong carbon pricing policy that re-invests revenue from a carbon-pricing mechanism (whether it be a cap and trade or a carbon tax) into targeted communities that need it the most. A cap and trade or a carbon tax offer both upsides and downsides for the environment and equity, which you can learn more about here. In Sage’s opinion, the merits of each policy comes down to how well it is implemented and whether or not there is a targeted approach to supporting people of color and people with lower incomes.

A targeted investment approach would create massive opportunity to:

  • Identify which communities are the most in need
  • Target those investments to communities who are impacted first and worst by climate change and environmental degradation

We looked towards California’s policy SB 535 – which first commissioned a study to understand environmental hotspots in California. Based on the findings it then had community and policy experts work together to reinvest 25% of the revenue into smart investments that simultaneously address poverty and environmental challenges. This policy has resulted in the largest investment in environmental justice communities in the country. California has already moved millions of dollars to create green jobs, build affordable housing, build up transit centers and invest in clean trucks (which is vital for the health of communities living along heavily polluted truck routes).

How do we evaluate any carbon pricing policy? We start with equity and look towards investing in communities with the most need – but we should be clear about what equity means. This chart can be helpful to explain the difference.

equity-vs-equality

Does Carbon WA’s proposal meet the equity measure?

Carbon WA’s proposal is to tax carbon and use the revenues to 1) reduce the sales tax by 1%, 2) give tax breaks to specific industries, and 3) put the rest towards funding a working families tax rebate. On the surface, this seems like good policy. But let’s examine their approach through a social justice lens.

Ultimately, the core concept to Carbon WA’s carbon tax proposal is “revenue neutrality,” where we greatly increase tax on one thing (carbon) but reduce taxes on other things (general sales). The problem with this is what the revenue neutral approach is about giving everyone the same via a tax reduction. Even at a 1% lower sales tax, this policy solution does not address the severe regressivity of our state’s tax policy – people with lower income pay more in taxes in Washington than any state in the country.

To their credit, Carbon WA included a portion of the revenue to the Working Families Tax Rebate a good policy similar to the Earned Income Tax Credit that gives working families larger refunds at tax return time. However, this solution does not take into account the fact that some communities live in closer proximity to environmental degradation and thus bear worse consequences. In addition, it leaves out large swaths of people with low incomes: specifically, people who lack documents to work in this country, single people, and people on fixed incomes.

For the future of our planet and for the people already experiencing the consequences of climate change, any policy must reduce carbon pollution. A successful and socially just policy will include revenue investments that create good jobs, prepare our region for climate change and incorporate the needs and input of communities of color and communities with lower incomes. We believe Carbon WA’s revenue neutral approach falls short of this measure.


Seattle’s Minimum Wage Starts in Two Days (4/1/2015)

Seattle’s Minimum Wage Kicks in April 1st 2015

With Seattle’s new minimum wage kicking in just two days, and tons of speculation about the impacts, I’d like to break down what it means for workers, businesses and our economy in some hard numbers.

What does Seattle’s minimum wage mean for workers?

Everyone in Seattle should be earning at least $11 per hour starting on April 1st. Depending on the type of business you work for, the compensation package may look different. If you work for a large employer (500+ employees) like Target, McDonalds or Amazon, your paycheck should reflect an hourly wage of $11 per hour. If you earn minimum wage ($9.47) today, then in two days you should earn $1.53 per hour more before taxes. If you work 32 hours a week and are paid every two weeks, your paycheck should show an increase of $91 before taxes. By December 31st 2015 you should have earned $1,836 more before taxes. That is enough money to buy a quality bed, put down a deposit on an apartment, or spend $10 on lunch three times a week for an entire year.

If you work for a smaller business (500 or less employees) your paycheck should reflect at least $10 in direct wages per hour, and $1 dollar in either tips or health care benefits. If you don’t get tips or healthcare benefits, you should be earning $11 per hour as your wage. So for example, if you are a tipped worker, your wages should reflect a $.53 cent increase AND your employer should show that you have earned least $1 in reported tips or they have contributed at least $1 per hour you worked towards a health care package. If you work 32 hours a week and are paid every two weeks, your paycheck should show an increase of at least $31 in pre-tax wages and at least $60 in compensation in the form of tips or healthcare benefits. By December 31st 2015 you should have earned $636 more before taxes.

What does Seattle’s minimum wage mean for the economy?

The University of Washington[i] estimates that nearly 37,900 people are currently earning minimum wage in the City of Seattle. As we’ve already estimated, each person will earn between $636 and $1,600 more this year if they work 32 hours per week until December 31st.[ii] If we look at the aggregate increase for all 37,900 workers earning minimum wage – minimum wage earners in Seattle could earn between $24 million and $69 million more in 2015 than they would have without a higher minimum wage. That represents a significant increase in buying power for Seattle’s lowest wages workers. That’s enough money to buy between 2.4 million and 6.9 million $10 lunches.

What does Seattle’s minimum wage mean for businesses?

Every business has a different model and labor costs can represent a different percentage of your total labor costs. The implications for restaurants have been dominant in the media, so we’ll explore what the implications are for a Seattle restaurant. Using the Washington Restaurant Association’s break estimates of a typical budget breakdown featured in the Seattle Magazine, we can get a sense of the total operating costs.   According to Anthony Anton, CEO of the Washington Restaurant Association: 36% of funds are devoted to labor costs, 30% to food costs and 30% to everything else. These restaurants then operate on a 4% margin.[iii]

If we look at a $1 million dollar business, labor accounts for 360,000 of their total operating costs. Assuming all workers earn minimum wage (which means this estimate is looking at the largest possible increase to labor costs as the typical wage for cooks in our region is $11.27 per hour and the typical wage for dishwashers is $10.45 per hour)[iv] their labor costs should increase between 380,160 (if all workers are tipped) and 417,600 (if no workers are tipped).  It’s safe to say that the total labor costs will be somewhere between those two numbers.  Assuming 50% of work hours are tipped and 50% are non-tipped).  The largest possible increase to labor costs for this business would be 398,880 – representing a 10.8% increase in labor costs. However, what is that increase compared to total operating costs? With a 10.8% increase in labor costs, total operating is no longer 1 million, but 1,038,880 – a 3.8% increase in total operating costs.  A restaurateur could conceivably raise prices by 3.8% to make up the difference.  For a $10 meal, that is a 38 cent increase.  In short – in two days 38,000 people should see increases to their paychecks and some prices may marginally increase. By the end of the year – millions more dollars will have gone to the people who drive our economy – workers.

[i] https://www.documentcloud.org/documents/1096119-uw-evans-report-on-15-minimum-wage.html
[ii] By comparing the number of FTE’s in Seattle (Employment Security Department Data) to the total number of jobs in Seattle (Puget Sound Regional Council Data) we were able to come up with a rough estimate of the typical hours worked for an employee in Seattle – 1600 hours per year or 32 hours per week.
[iii] http://www.seattlemag.com/article/why-are-so-many-seattle-restaurants-closing-lately
[iv] According to 2014 occupational wage data at the Employment Security Department the median wage for cooks in the Seattle Metropolitan region is $11.27 per hour and the median wage for dishwashers is $10.45 an hour.


What does the Carbon Pollution Accountability Act do?

By: Dimitri Groce, Community Research Fellow

As a result of climate change, our region can expect increased wildfires, extreme weather and heat waves, which will have a disproportionate impact on people of color and people with lower incomes.

Since our last post, we have advocated with leaders committed to economic and racial justice to ensure tangible benefits for people of color and people with lower incomes from the Governor’s Carbon Pollution Accountability Act (CPAA).   Below, we break down exactly what the CPAA does and what it means for people with low-incomes and people of color.

First – the bill sets a limit on carbon pollution and targets big polluters in Washington State.  In order to meet this limit, industries that pollute more than twenty-five thousand metric tons of carbon dioxide or more per year will bid on emission “allowances”.  The amount of allowances a facility may have per auction will be capped, and the prices of the allowances will gradually increase every year until 2026. The bill prohibits free allowances ensuring that every big polluter participates in an effort to reduce our regions carbon pollution.

What’s the specific benefit for communities of color and people with lower incomes? In addition to reducing carbon pollution, the state will generate $1 billion in revenue from these auctions, which will be used to create clean energy jobs, invest in education, fund more affordable housing, and fund working families tax rebate.

Most importantly for local communities most impacted by climate change, the bill includes a provision for “hotspot” mapping that will show how the disproportional impacts of environmental degradation intersects with communities of color and communities with lower incomes.  Additionally, the CPAA creates an Economic Justice and Environmental Equity advisory committee, which allows leaders who are the most impacted by pollution to monitor the CPAA and advise the Department of Ecology on how to spend revenue, creating a pathway for the solutions to climate change to be informed by and benefit the communities most impacted.


A Green and Brown City: Why we need Equitable Growth and Climate Justice

On Monday, I made the case that climate change is one of the biggest threats to social, economic and racial equity. But, how, specifically could climate change impact Seattle? And what does this mean for low-income people and people of color?

As a coastal city, Seattle will be directly affected by climate change. We can expect more extreme heat in the summer, more rain in the winter and the possibility of severe storms. But even more startling, by 2100, just 85 years from now, scientists predict sea levels will rise in Elliott Bay by 6 to 50 inches. If nothing is done to mitigate climate change, land area with substantial value will be lost. This includes parts of downtown Seattle, parts of West Seattle, South Park, Georgetown and the Port of Seattle. Georgetown and South Park are two neighborhoods where the population is disproportionately people of color and lower-income families.  In addition, local, good-paying maritime jobs and our food sources are at risk as port facilities, seafood beds and fishing fleets are threatened.

Despite these impacts, scientists say our region will fare much better than many other regions across the country. In fact, climatologists predict that our region will be one of the ideal places to move to avoid the extreme weather and unbearable heat we can expect across the country. Clifford Mass predicts that the Pacific Northwest will become a “potential climate refuge”. If this is true, our region must not only prepare for the impacts of climate change, but also for population growth over the next 80 to 100 years.

But even before we see an influx of new residents as a result of climate change – Seattle is already grappling with a dramatic growth of higher-income earning households moving to the city, resulting in a shortage of apartments and skyrocketing rents. On the supply side, developers are largely building new housing for the upper end of the rental market, leaving a massive gap at the middle and bottom. As a result, Seattle is already seeing displacement of communities of color – especially immigrant and African American communities – to the suburbs.

This displacement is occurring just as Seattle has emerged as one of the nation’s most sustainable cities. Seattle is a leader on curbing carbon emissions and preparing for the worst of climate change affects. We’ve launched large-scale energy efficiency building retrofits, implemented sustainable building practices, invested in light rail and streetcars, expanded bikeways, planned for transit oriented development, piloted urban farming and food forests and crafted an ambitious Climate Action Plan.

Which leads us to wonder, are we investing public resources into a climate-resilient city just in time for communities of color to be forced out? This future is possible, but not inevitable. If policy makers, environmentalists and equity advocates plan together to adapt our city for both growth and climate change, we can build a green and brown city, where all families can live and prosper.


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Four Ways to Incorporate Justice into the Environmental Movement

By Nicole Vallestero Keenan, Puget Sound Sage and Ellicott Dandy, One America

Climate change is one of the biggest threats to social, economic and racial equity. Our jobs, our health, and the communities where we live are threatened by climate change, and we can expect more severe heat waves, flooding, extreme weather events, food scarcity, and the increased spread of disease to have the most direct impact on low-income communities and people of color.  Although it is often overlooked, addressing environmental inequality is an essential component to moving strong policies that make our environment healthier for everyone. Why? In part it’s about doing what’s right, but it’s also necessary.

Research, by environmental justice organization Green for All, shows that people of color are more likely to care deeply about the environment. As in the rest of the nation, the number of people of color living in Washington State is growing. Census data shows that population growth rates among black, Latino, and API communities outpaces the growth of white communities, and the trend is predicted to continue. As the environmental movement considers strong policies for healthier people and a healthier planet, it must craft policies that serve the interests of the people most impacted, and the people whose voting base is growing.

Even though there is a growing population of people of color in Washington, who are likely to support environmental sustainability, a recent report from Green 2.0, finds that organizations at the forefront of the environmental movement are ill-equipped to engage and empower people of color in their movement. Green 2.0 finds environmental government agencies, foundations, and NGOs are often guilty of unconscious bias, apathy in addressing diversity, and of inadvertently maintaining a “green ceiling” such that the percentage of people of color employees has not grown in decades.

In this context, many of Washington’s environmental organizations are searching for ways reverse the trend found by Green 2.0 and better engage with communities of color. One key element to better engage with communities of color is to incorporate social justice into their work.

Here are four ways mainstream environmental organizations can better incorporate justice into the environmental movement:

  1. Re-think communications: As long-time environmental activist Gail Swanson says: “You can’t enlist all humanity if you only speak to half of the population.” Communications experts in environmental organizations know they have to change the way they talk about the environment to be more relevant to people’s every-day lives, and many have taken important steps to talk about health, safety and jobs. However, communications is just one step to increasing engagement with communities of color, and will often come naturally if an organization applies a social justice lens to their work.
  1. Train staff to apply a critical racial lens: Trainings that teach staff to understand and address racial inequities are important, but it’s even more crucial for staff to learn how to and practice applying this awareness to their work. How does this policy affect communities of color or low income communities? What barriers inhibit communities of color from fully engaging in this program? Has my organization sought out and included people of color in crafting this program or policy? The process of asking and seeking answers to these questions can open pathways to deep collaborations with people of color and community based organizations.
  1. Actively seek out the expertise of community-based organizations: No need to reinvent the wheel! Fortunately for environmental organizations, there are people who have been doing incredible environmental justice work in communities of color for years. The mainstream environmental community can and should seek them out and work to support their programs and policy agendas. They should incorporate their input in policy design with the understanding that the policy’s success depends on local expertise of the problem and its possible solutions. Many environmental groups have already begun doing this work, and we encourage strong and socially just partnerships.
  1. Promote and hire people of color into management positions: The Green 2.0 report finds that the few people of color employed by the environmental organizations and agencies studied tend not to hold leadership positions, with the exception of the “diversity manager” role. Even genuine attempts to include people of color in the environmental movement, may be misguided nonetheless. Ensuring people of color have institutional power in environmental organizations is critical for diversifying the environmental movement. This means recruiting people of color to the board and to management-level positions, which means they must expand beyond established networks. When people in charge of hiring are from the communities their organization hopes to engage, more people from these communities are more likely to join the team.


New Study on Early Childhood Education: Between a Rock and Hard Place

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King County’s youngest people, their families, and their educators are all suffering from our regions’ child-care crisis.

In this report, we shine a spotlight on early childhood education in King County, which is increasingly the most expensive in the nation.  Although child care can cost over $10,000 a year per child, the typical child care worker in King County earns poverty-level wages between $23,000 and $29,000 dollars per year. Insurance, rent, taxes, staff-to-child ratios, inadequate subsidy rates, and supplies make providing child care in our region extremely costly, and leaving little for workers. Numerous studies show that low wages are one of the most significant factors contributing to high turnover in early educators. In King County, roughly 38% of teaching assistants are no longer in their positions just one year later. High turnover harms the stability and relationships our children need during their early developmental stages, disrupts the already…

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Seattle City Council Committee Approves $15 Minimum Wage

A Seattle City Council committee unanimously voted today to pass the Mayor’s proposal for a $15 minimum wage.  The ordinance passed out of committee will phase in the minimum wage over the next three to seven years.  Specifically, it will require large businesses (500+ employees) to pay $15 by 2017 or 2018, and small businesses (less than 500 employees) to pay $15 by 2019 or 2021.

This historic vote represents a huge victory for workers, communities of color, and progressive leaders through the U.S.  The final vote in Council is expected to occur next week.

$15/hour minimum wage proposal passes through Seattle City Council's committee with a unanimous vote.

Seattle’s $15/hour minimum wage proposal passes through City Council’s committee with a unanimous vote.

In the end, City Council did not make some of the dramatic changes recently rumored in the media, but they did make some modest amendments that alter the deal struck by the Mayor’s Income Inequality Advisory Committee.

Below, we highlight and explain some of the most significant changes:

Amendments that support workers:

Council strengthened the power for the City to enforce the minimum wage throughout the ordinance.  The City of Seattle is undergoing a separate stakeholder process that will determine how the City handles all labor enforcement strategies; however, the amendments passed today allow for stronger mechanisms than in the Mayor’s proposal.  They include:

  • Extending the period a worker has to report a violation after it has occurred, from just 180 days to three years, which dovetails Washington State law.
  • Ensuring that, if wage theft occurs, employers must not only pay back wages to wronged workers, but they may be subject to a penalty up to $500 for first time violations, $1000 for second time violations, and $20,000 for subsequent violations.

Councilmember Sawant successfully inserted a provision that codifies the City’s intent to identify additional funding for non-profit organizations.

Amendments that weaken the ordinance for workers:

Council pushed back the effective date to April 1, 2015 from January 1, as originally proposed.

The City will allow employers to pay a sub-minimum wage (85% of the minimum) to 14 and 15 year old youth, people with certain disabilities, and apprentices.  Employers must apply for a waiver granted by the Department of Labor and Industries – a practice already done under State law.  This provision will potentially allow for discriminatory wage practices that are currently allowed under State law.  However, the employer will also have to apply to the City for a permit as well.  Between the two permits, the requirement for a waiver will create transparency for workers and the public about which employers are requesting and have received permission to pay sub-minimum wages.