Rhode Island’s unemployment rate is at a historic low. But that doesn’t come close to telling the whole picture about the state’s economy. Lots of Rhode Islanders are struggling to get by. The situation is exacerbated by inflation, the high cost of housing, and the state’s absence of new engines of job growth. These challenges are familiar to the staff of the Economic Progress Institute, a research and policy organization dedicated to improving the lives of low- and moderate-income Rhode Islanders. What is the institute’s prescription for reducing poverty? Does the state make effective use of the tens of millions it spends each year on social services? And why has there not been more progress on improving the public schools that could help boost kids out of poverty?
Listen to Political Reporter Ian Donnis speak with Economic Progress Institute Executive Director Weayonnoh Nelson-Davies, or read the transcript of this week’s episode of Political Roundtable below.
Ian Donnis: Weayonnoh Nelson-Davies, welcome back to The Public’s Radio.
Weayonnoh Nelson-Davies: Thank you for having me.
Donnis: The Economic Progress Institute champions the idea of economic justice, or to put it another way, of reducing poverty and expanding opportunity. What is the institute’s plan for making progress on these issues over the next year?
Nelson-Davies: Thanks for that question. So we’re now in the process of thinking of what our legislative priorities will be. And we have a couple of arching themes. One is Rhode Islanders are struggling to meet their basic needs. And we also need to think about how are we investing in all public service programs and worker support programs? So a few of our priorities will be addressing those issues. One of our top priorities is payday lending reform. For 13 years, we’ve been advocating for payday lenders not to receive special treatment, making millions of dollars off the backs of poor Rhode Islanders. And so we’ll be back at the Statehouse next year, asking our leaders to not give special treatment and profits where poor Rhode Islanders are paying up to 260% in interest rates when other financial institutions can only charge up to 36%. So that will be a big priority of ours to stop this cycle of debt.
Donnis: The House of Representatives this year voted to scale back payday lending. But the obstacle right now is the Rhode Island Senate, which declined to take up that bill. Senate President Dominick Ruggerio seems like the main obstacle to changing payday lending. What is your strategy for overcoming his opposition?
Nelson-Davies: It was the first time in 13 years where we got on the House floor. And we’ve already started having conversations with the Senate president to ask him what was their concerns? We want to address them. And one of his concerns were: are there alternatives for people to get small loans? There are alternatives; there are credit unions that provide adequate and not predatory alternatives. And so we’ve been addressing that to say the only interest right now is millions for payday lenders versus protecting Rhode Islanders, and we think we’re getting to him. So one of our strategies is to let people know what the industry is, and to make sure we get a vote earlier in the session.
Donnis: What are some of the other priorities in the new legislative session starting in January for the Economic Progress Institute?
Nelson-Davies: So up already for us, it’s increasing the minimum wage, now it’s going to get into $15 an hour by 2025. We’re already behind. People need at least $16.79 [as of last year], so we’ll be pushing for that. Lately, we’ve been talking a lot about the Earned Income Tax Credit. We got a 16% raise thanks to the Speaker of the House and General Assembly. We think that is where we can get some relief for folks. And so we’ll be pushing for that. And then pay day. We already talked about payday lending, and pay leave is another big one for worker justice issues. Right now in the state of Rhode Island, people have to take a 40% pay cut to take leave to take care of themselves and their family. We’re asking to extend that 60% wage replacement to 80 or 90, and to give families at least 12 weeks to take care of them themselves.
Donnis: The state spends a lot of money each year on social services. How would you rate the effectiveness of that spending? Is the state getting a good bang for its buck in terms of helping needy people?
Nelson-Davies: From our perspective, we don’t think they’re spending al lot. We do think there has been some disinvestment in public benefits. For example, our Rhode Island Works program for the last few years, I think since 2009, the state has not put state dollars into the Rhode Island Works program. We’ve been using federal dollars, but people are still at 40% of the poverty level. So that is not enough. Childcare assistance is another one where people are spending at least 33% of their income on childcare. So we do believe there needs to be more investment in childcare assistance program. There have been some investments in housing. And so we’re glad that now we’re paying attention to that. But I think we need to do more in supporting families to get out of poverty and give workers what they need to be able to work.
Donnis: During World War II, the American government offered subsidized child care due to how a lot fewer parents were at home. And now when people talk about government subsidies, subsidized childcare, it seems far short of that. What would it take to bring about a better approach, in your view, for childcare?
Nelson-Davies: I think a couple of things there. We have a shortage of early educators. And so we need to sort of address that shortage, right? We need more people working within the childcare industry, and so we need incentives for that. We also need to be able to realize that because people are not making enough. We need to increase wages. So there’s a connection between wages, but then also the Child Care Assistance program, we need to increase that. And so we’ll be proposing to increase the eligibility level so more Rhode Islanders can be able to take advantage of our Child Care Assistance Program.
Donnis: We see how Governor Dan McKee likes to point to the state’s historically low unemployment rate in arguing that Rhode Island’s economy is doing well. Do you agree with the governor’s assessment on the health of Rhode Island’s economy?
Nelson-Davies: I think we’re on the right path. I do think our leaders have put enough investments for workers, enough investments for housing – and education is a big piece, right, to making sure we can invest in the future of our economy. I do think there are a couple of things we need to think about when we look at the state budget and how we’re investing. One of the things we have to think about is how we generate revenue now. We’re about to lose a lot of the federal money that came in during the pandemic. And so one of the things we hope that a governor and state leaders can consider is how we generate revenue in the state of Rhode Island. We are asking for us to think about taxing the top 1% Rhode Islanders with the highest income. And the reason why is if we do that, we can generate revenue that can be targeted towards education, childcare, and transportation. Last year, when we did our analysis, we found and showed that we could have raised $169 million in revenue that can then go back into our economy and invest in some of the public vital services we need.
Donnis: Our elected officials, including Governor McKee, House Speaker Shekarchi, and Senate President Ruggerio, seem very sensitive to the perception of Rhode Island’s tax climate. They’ve been unwilling to support increases in broad based taxes. How would you encourage them to that concerns about the, perhaps negative perception of tax hike is would be less than the benefit?
Nelson-Davies: So a couple of things are happening, right? So some of the pushback we get is people are gonna leave right out in droves, if we increase taxes. There has been no study. There has been no evidence that any of the state that has increased taxes have lost a good amount of people because of that. So if we look at this scenario, imagine businesses and families who are invested in Rhode Island leaving because now they have to pay a little bit more of taxes. And what we’re comparing is $169 million in revenue, I had high for high doubt that we’re going to lose $169 million. So if you believe in Rhode Island, so the cost benefit analysis is there. The other point is we do not have the federal dollars coming in, we are going to face a deficit. And so if we’re really serious about investment in communities, we have to find out where revenues are. And then when we talk about tax relief, we have to use an equity lens to think about how are we creating tax relief. We were very pleased with the General Assembly and the speaker for not passing the state tax reduction last year, because if you look through an equity lens, that doesn’t really benefit the lowest income Rhode Islanders. So think about tax relief with Earned Income Tax Credit, Child Tax Credit, and also thinking about how we generate revenue.
Donnis: You referred to housing a little bit earlier, and we know housing costs have soared in Rhode Island. The state, after many years, is beginning to try to address its housing crisis and directing more money to create housing and help the homeless. What other steps would you advocate in the short term to help alleviate this problem?
Nelson-Davies: We definitely have a homeless problem. And so now we’re getting closer to the coldest months. So we need to find out to make sure our homeless populations are taken care of. I think we need to think of how are we investing in housing, right? Again, using an equity lens, who are going to get housing, where’s housing gonna be put, is really important. And we need to listen to communities. Who is facing housing crises within the communities? Who are housing burdened? And so we need to pay attention to that and make sure that the decisions we’re making are informed by those communities experiencing a housing crisis.
Donnis: One of the big stories this week was the election of Gabe Amo as the new member of Congress in the first district. He, of course, is the first person of color to represent Rhode Island in Congress. I think you had a tweet, celebrating his election, your thoughts on that?
Nelson-Davies: So on a personal level, congratulations. So our newly elected congressman, as a Liberian American, right, I’m proud of them. I think watching him take his mom to vote for him, who is a Liberian-American herself, was heartwarming for me to see. And so I’m proud of him just representing the Liberian and Ghanaian African communities within Rhode Island. And I’m also looking forward to him. We work very closely with our congressional delegation. And so I’m excited about him representing Rhode Island in Washington. And I’m excited about what we can do together to help him do that.
Donnis: In terms of national politics, the presidential race next year between probably Joe Biden and Donald Trump looks like it could be close. What are your concerns about what it would mean for Rhode Island if a Republican Republican was to regain the White House?
Nelson-Davies: I think for us a few concerns, right? We want to make sure we can invest in Rhode Island. So whether it’s the executive or Congress or the Supreme Court, right, we watch to see what policies are being impacted on the federal level that will impact us here. For example, the congressional delegation now voted to not include child tax credit last year, and we found that the poverty rate of children went from 5% to almost 12%. So my concern, whether it’s the president, or it’s Congress, is to make sure that we’re paying attention to policies that impact every day with dollars, and so I’m concerned about a presidential election, but I’m more concerned with what our leaders are going to do to help us here.
Donnis: Weayonnoh Nelson-Davies, executive director of the Economic Progress Institute, thank you so much for joining us.
Nelson-Davies: Thanks for having me.
Donnis: While Donald Trump is sticking to his false narrative about a stolen election, former two-time candidate for governor Ken Block has a new book, Disproven, outlining why he reached a different conclusion. Block’s company, Simpatico Software Systems, was hired by Trump’s campaign after the 2020 election. You can read more about that in my Friday TGIF column posting around 4 this afternoon on what used to be known as Twitter @IanDon and thepublicsradio.org. That’s our show for this week. I’m Ian Donnis and I’ll see you on the radio.