One of the best ways to lift low-income District residents out of poverty is to provide them with a job that pays a living wage.   In an effort to provide good jobs to District residents, the Council enacted and the Mayor signed the First Source Act and the Living Wage Act.   The laws require that 51% of the employees hired for a City funded development projects be District residents and that the jobs pay a living wage.

The District Auditor released an evaluation of the compliance with these laws in connection with certain projects within the jurisdiction of the Deputy Mayor for Planning and Economic Development (specifically those that were started by the former Anacostia Waterfront Development Corporation and the National Capital Development Corporation.)   The auditor found that the District’s implementation was woefully inadequate. 

Among the findings of the Auditor are:

1.        The Department of Employment Services had inadequate procedures to monitor compliance with the statutes.

2.       The failure to monitor resulted in wide spread no- compliance.   Only 4 of 16 covered projects met the 51% goal.   As a result, there were 361 jobs that should have gone to District residents that were given to persons living outside the District.

3.       District residents lost more than $14 million in wages that were paid for by public funds.

4.       The living wage provisions have not been adequately implemented.   The Auditor specifically blamed the Mayor and the Attorney General for failing to support efforts by DOES to comply with the obligations of the law.

The results of the audit are very disturbing.   At a time when the unemployment rate in the District is near 11% and in some wards near 30%, nothing could be more important than job creation.   Given the structural imbalance created by the District’s “unique” relationship with the federal government and its suburban neighbors, it is particularly unfortunate to provide government funds for jobs for people living outside the District.

If the District government is serious about helping reduce poverty in the District, fixing First Source and Living Wage compliance monitoring is a great first and easy step.

Executive Director

We have written before in Makingjusticereal.org about the impact that the recession has had not only on the needs for legal help, but also on the budgets of legal assistance organizations.  As the recession drags on, the situation grows more desperate for people who live at the bottom of the income scale.  Unemployment rates continue to rise in many neighborhoods as government and private services are withdrawn.  Legal assistance, which is often necessary to address poverty related disputes, is also shrinking.

Professor Peter Edelman and I had the opportunity to give the topic a more thorough treatment in the March 2010 Washington Lawyer.  The article builds on the joint “Rationing Justice” report of the D.C. Consortium of Legal Services Providers and the D.C. Access to Justice Commission.

Executive Director

The December unemployment numbers show a worsening picture for the District of Columbia.   The official unemployment rate is 12.1%, up more than 6% since December of 2007.   African American unemployment far exceeds white, with 17.6% of African Americans out of a job as opposed to 5.7% of whites. 

The Economic Policy Institute has created a useful tool called Economy Track that provides quick access to employment and economic activity data.    Economy Track compares the current recession to prior economic downturns and shows that unemployment is worse and the recession more sustained that anything within the last 30 years.  The crisis is likely to deepen.   Unemployment has risen steadily with no sign of abating.   Even when it turns around, it will take a long time to recover.

During this crisis, it is important that the District implement measures to support those who lived in poverty before the recession as well as those driven into poverty by it.   Measures might include: 

• Implement expansions to the Food Stamp program that have already been authorized.   In June 2009, the District Council unanimously enacted legislation to expand the Food Stamp program to include families up to 200% of poverty (from 130%).   The expansion was to be in place with the new budget on October 1.   It has still not happened, leaving tens of thousands of people at risk for inadequate nutrition.  Protect TANF.   District officials attempted this summer to throw entire families off of TANF for program violations.   Under current law, sanctions are limited to a partial reduction in the grant.
• Adequately staff the Department of Human Services to ensure that applications for benefits are timely and accurately processed.  Staffing shortages are creating real harm to people in need. 
• Restore local housing vouchers that were eliminated from the budget in July.   Stable housing not only reduces homelessness, but increases academic success in children and reduces hunger
• Fix the Department of Employment Services and create a real plan to put District residents to work.   Increased access to jobs, living wages and child care are among the most effective strategies to move families out of poverty.   Rather than sustain families in economic limbo, the District should strive to create meaningful income through work for all residents.

Executive Director

The unemployment rate in the District of Columbia rose in September by .3% to 11.4%.  The rate is almost 1.7% above the national average of 9.7%.   However, these statistics do not tell the whole story.

On Tuesday November 3, the Washington Business Journal reported on unemployment by ward.   Not surprisingly, the story was very different east of the river and west of the park.  The unemployment rate in Ward 8 was 28.3%, nearly 10 times the Ward 3 rate of 3.2%.    Ward 7 did not fair much better at 19.5% nor Ward 5 at 15.5%.

The recession is taking its toll on communities that have historically had high rates of poverty.   It is true that nearly everyone has suffered in the economic downturn.   Every industry has shed jobs, housing values are down and the value of investments have dropped.   But for individuals and communities living in poverty: jobs that paid subsistence wages have disappeared, government programs have shrunk and charities have had fewer resources to help.   The recession in the rest of the District is a deep depression in Wards 5, 7 and 8.

The Executive Branch of the District government is currently in the process of preparing its proposed budget for fiscal year 2011 (October 2010 through September 2011) which it will submit to the Council in the spring.   As a result of lower property values and smaller stock portfolios, the District will have fewer tax receipts and we are expecting a second year of reduced revenue.

Faced with a revenue shortfall over the last year, the District has largely balanced the budget by cutting from social safety net programs.  See more specifics posted at the DC Fiscal Policy Institute and an earlier Legal Aid blog.  This is unfair.   Those communities hardest hit by the recession are also paying the highest price for a balanced City budget.   The burden of the revenue shortfall should be spread across the District with those most able to afford the most, paying the most.   Programs serving persons in poverty, who are unemployed or are vulnerable should be preserved. 

The D.C. Fiscal Policy Institute has developed a balanced plan of increased revenue and targeted program cuts.   The Mayor and the Council should give it a close read.

On a final note, the District should avoid cutting programs for persons in poverty before it takes advantage of federal money that might off-set the costs.   The District is currently leaving $46 million in federal TANF money on the table just because they have failed to apply for the re-imbursement.   Forty six million dollars would go a long way to helping people in Ward 8 who are desperate for assistance.