Monday, May 9, 2011

Good Economics

It's amazing, but true, Delaware has a little money due to better than expected revenue. The State is better off by more than $320 million. I say, "amazing" because too many Delawareans are still unemployed and under-employed. The purpose of this post is not to go into why revenue numbers have improved while the lives of many of our citizens have not. The purpose of this post is propose reinvesting a small piece of that money back into Delaware.

Public employees, including educators are still not made whole from cuts made the previous three budgets. I'll speak to educator issues and let other union activists speak for their people.

First, educators need their step increase. This is the less than 1% incremental increase for each year of the first fifteen years of service. All educators need this step increase. The proposed budget only recommends the step for teachers and para-professionals, leaving out all other school employees. We are one community, with one mission to educate children, and we should not do anything to sow division.

Second, educators who wish to increase their skill level by attaining a National Board Certification, or by educating themselves in skills and knowledge clusters should be rewarded for their efforts. The State has in place a moratorium on the stipend connected to those two worthwhile endeavors.

Finally, the Legislature made a commitment a few years ago to bring para-professionals up to the federal poverty level for a family of four. Para-professionals do the real hands-on work with some of our most physically and developmentally challenged kids. Yet these important people in our schools make shamefully low wages. A step one para-professional earns $17,500 per year.

The plan was for para-professionals to be paid increasing amounts up to the poverty level in three phases. So far, the State has only managed Phase I before the tough budget times caused us to go no farther. Implementing Phase II would be another step to keeping our original promise. By delaying this pay plan, we have actually lost ground as the federal poverty level has risen, but the pay of our para-professionals has remained the same.

Phase II of the para-professional pay plan would cost the state about $3.3 million. It would put an additional $2,500 a year into the hands of desperately struggling workers. This is real economic stimulus to the Delaware economy.

If I give a tax break to a corporation or to a wealthy individual, do I create jobs? No, probably not. For example, a corporation is not going to take their tax break money and hire someone unless there is a demand for a product that they can sell and return investment. If such a situation (the potential to make money by hiring additional labor)exists, they will hire with or without the tax break. There is no empirical data that shows tax breaks to the wealthy or corporations create jobs.

On the other hand studies have shown that money in the hands of the working poor ends up being quickly used at the local level for necessities, thus stimulating the economy. If you give our para-professionals a few extra dollars that money is spent at the grocery store, paid to the landlord, or used to purchase clothing at the local K-Mart.

We have a little bit of money to work with for the first time in three years. Let's use it to do some good for common working people. This in turn will do good for local businesses. Before you know it we will have a recovery quickly springing up from the grassroots, not slowly trickling down as waste water from the top.

1 comment:

  1. I agree whole heartedly with Tim. This money should be reinvested where it will help the average worker. We need to unite behind Tim and make sure our legislators know where we stand-behind our paras and for our right to fair compensation as a professional.
    Claudia Bock
    Christina EA