As we head into the last few weeks of session, we urge the legislature to enact robust credits so that this time next year, families could be getting refunds to pay for rent, food, and clothes for their growing kids.
Far too many families live in poverty in Minnesota. As we hear in our Listening Sessions, families in Minnesota are often one crisis away from financial disaster. Data in the 2022 Status of Women & Girls in Minnesota, produced in partnership with Center on Women, Gender, & Public Policy at University of Minnesota’s Humphrey School, shows that Black and Indigenous families and communities of color are more likely to face poverty in Minnesota and lack the financial resources to keep up with the cost of living. This is particularly true for families with a single mother who is the head of her household. The median income for a mom with two kids in Minnesota puts the cost of living out of reach for nearly 90% of those families; 30% are living below the poverty line. When we disaggregate the data, the numbers are even more stark. For a family headed by a Black mom, 45% live in poverty, as do 51% of Latina moms and 62% of Indigenous moms. Childhood poverty correlates with negative long-term outcomes, so we must do all we can to alleviate the burdens of meeting basic needs to prevent expensive and dire consequences.
The House’s Tax Bill includes important expansions to the Working Family Credit that will help create financial security for families across the state and alleviate poverty. The credit helps parents afford the essentials, such as paying bills and school expenses, investing in savings, and paying for childcare.
Access to safe and affordable childcare is also essential. Low-income workers, and Black, Indigenous and women of color are more likely to have to reduce their work hours or leave the workforce because of their caregiving responsibilities. Minnesota needs a strong ecosystem to provide high-quality childcare at affordable prices. It needs to include a broad spectrum of policy and funding solutions, such as building the care workforce, which is predominantly led by women, while increasing rates and creating more access to CCAP and other programs that make care affordable for families.
We live in a state where women lead the nation in workforce participation. But the data from the Humphrey School’s Center on Women, Gender, & Public Policy shows that our gender wage gap is larger than most states and has not changed in the last 10 years. The gap is twice as large for Hmong, Native American, and Latina women and nearly three times greater for Somali women as it is for white women.
In addition, women make up the majority of Minnesota workers (59 percent) who are paid at or below the minimum wage, even with advanced degrees. While one in five of Minnesota’s white women work in service jobs, more than one in three Latina, African American, and Native American women work in service fields where benefits are scarce, and schedules don’t align with childcare hours of operation.
On top of that, Minnesota has the seventh highest cost in the nation for quality infant care. The average cost of center-based infant care in Minnesota is more than the annual cost of college tuition at the University of Minnesota. In the Twin Cities metro area, cost for infant care is around $370/week ($19,240 annually), while costs in Greater Minnesota are lower at around $232/ week ($12,064 annually). Think about working two jobs and still not being able to afford daycare. That is the reality of mothers across our state.
We need to do more for our Minnesota families. During Covid, the extended child tax credit at the federal level had a net effect of cutting child poverty in half in six months. While we continue to address the wage gap resulting from employment segregation, low wages, and lack of access to business ownership, we need the Child Tax Credit and the Child Care Tax Credit to lift families from poverty.
We can and should act now to invest in the Child Tax Credit to reduce poverty and the Child and Dependent Care Tax Credit to help ensure working parents don’t have to sacrifice a paycheck to care for their children.