While the national unemployment rate dropped to 7.3% last month (the lowest rate since 2008) the labor force participation rate also fell suggesting that thousands of Americans have dropped out of the labor force altogether. When considering these economic measures, it is important to keep in mind that not all jobs are created equal. The fastest growing job markets—retail, restaurants, and bars—tend to offer part-time employment with limited opportunities for advancement. Nationally, more than eight million people are “stuck” in part-time positions due to economic reasons such as unfavorable business conditions, seasonal declines, or an inability to find full-time employment. The Great Recession may be over but for many working families, the daily struggle to make ends meet continues unabated. This certainly seems to be the case in the Commonwealth, where the unemployment rate climbed another tenth of a percent to 8.5% in July and more than one out of every three children lives in a family where no parent has full-time, year-round employment.
When parents are unemployed or underemployed, children suffer. Stable employment provides parents with more resources to meet the developmental needs of their children and can help keep children out of poverty. It is in everyone’s interest—children, parents, society-at-large—for low-income families to be supported in obtaining employment or improving existing employment conditions. Is this not the very core of the notion that work is better than welfare?
Unfortunately, Kentucky seems to be moving in the opposite direction. By drastically cutting funding for the Child Care Assistance Program, Kentucky has made it more difficult for low-income parents to find employment or advance their education or training to better their employability. In addition to presenting a significant hurdle to parents seeking to enter the workforce, reduced funding for the Child Care Assistance Program may go so far as to pull currently employed parents back into the ranks of Kentucky’s unemployed. As Teresa James, the commissioner of the Department of Community Based Services, has noted, “I am very concerned that we are going to be taking working parents and make them unable to work because they are not able to find child care.”
As we see signs of a slow economic recovery, we must take the time reflect upon investments—like the Child Care Assistance Program— that will promote strong families and a strong Kentucky economy. Another such investment that could provide a much-needed boost to Kentucky’s working families is the enactment of a state Earned Income Tax Credit (EITC). Not only would a state EITC promote increased workforce participation, it also provides low-income families with an opportunity to build assets that provide an important safety net and may ultimately reduce their dependence on government benefits.
Undoubtedly, our elected leaders will face many difficult decisions when it comes to crafting the state budget but they must prioritize programs that will ensure a strong Kentucky economy now and in the future. As we approach the 2014 legislative session, Kentucky’s lawmakers must be prepared to make these vital budgetary decisions—to restore and increase funding for the Child Care Assistance Program and to enact a state Earned Income Tax Credit. Investing in Kentucky’s families is an investment that promises years of positive returns.