Government safety net programs aim to protect families during tough times—before they fall into poverty. But rising unemployment, foreclosures, and economic distress are putting pressure on a system already in need of updates and repairs.
Urban Institute experts, building on decades of welfare reform research, evaluated public safety nets and proposed new initiatives to bolster work supports and help families gain a stable financial footing. Read more.
The minimum wage establishes a lower bound on what employers must pay their workers. The federal minimum wage is currently set at $7.25 an hour, but 22 states and the District of Columbia (DC) have established minimum wages above the federal minimum. Today, DC’s minimum wage is set one dollar higher than the federal minimum ($8.25), while the minimum wage in the neighboring jurisdictions of Maryland and Virginia use the federal minimum wage. However, DC and two neighboring counties in Maryland (Prince George’s County and Montgomery County) have passed legislation raising their minimum wages to $11.50 an hour by 2016 and 2017, respectively. This report examines the potential effects of raising DC’s minimum wage on DC workers, their families, and on the government programs that serve them.
Over the next two years, the minimum wage in DC will increase in stages, ultimately reaching $11.50 in July 2016, and thereafter DC’s minimum wage will increase with inflation. Based on historical patterns for the DC metro area and an analysis of workers in the food service industry nationwide, we find little evidence that even a substantial increase in minimum wages in DC would result in lower employment. Our estimates of the relationship are imprecise, however, and we cannot rule out modest negative impacts.
Debt can be constructive, allowing people to build equity in homes or finance education, but it can also burden families into the future. Total debt is driven by mortgage debt; both are highly concentrated in high-cost housing markets, mostly along the coasts. Among Americans with a credit file, average total debt was $53,850 in 2013, but was substantially higher for people with a mortgage ($209,768) than people without a mortgage ($11,592). Non-mortgage debt, in contrast, is more spatially dispersed. It ranges from a low of $14,532 in the East South Central division to a high of $17,883 in New England.
Roughly 77 million Americans, or 35 percent of adults with a credit file, have a report of debt in collections. These adults owe an average of $5,178 (median $1,349). Debt in collections involves a nonmortgage bill—such as a credit card balance, medical or utility bill—that is more than 180 days past due and has been placed in collections. 5.3 percent of people with a credit file have a report of past due debt, indicating they are between 30 and 180 days late on a nonmortgage payment. Both debt in collections and debt past due are concentrated in the South.
Thirty-five percent of adults have a debt in collections reported in their credit files, an Urban Institute study shows. Nevada, hit hard by the housing crisis, tops the list of states: 47 percent of people with a credit file have reported debt in collections. The state also has the highest average collections debt. Twelve other states (11 in the South) and the District of Columbia top 40 percent.