New Study Provides More Evidence Harsher Penalties Are Not Solution to State’s Drug Problems

At the same time our state is increasing criminal penalties for heroin, a new analysis further bolsters existing research showing such an approach is not an effective way to address Kentucky’s drug problems.

House Bill 333, which the Kentucky legislature passed earlier this year, increases penalties for low-level heroin and fentanyl trafficking — rolling back the drug sentencing reforms in 2011’s House Bill 463. The new law makes trafficking in heroin in less than 2 grams a Class C felony, with a 5 to 10 year sentence and no eligibility for parole until 50 percent of the sentence is served. This increase is a big jump from the crime’s former classification as a Class D felony with a 1 to 5 year sentence and parole eligibility after serving 20 percent of the sentence. Kentucky’s broad definition of trafficking means those charged with trafficking in these small amounts may be sharing drugs or selling just enough to support their habit, rather than engaging in large-scale dealing.

Despite compounding evidence to the contrary, legislators involved in passing HB 333 cited the need to do something about the state’s devastating opioid epidemic. But the new study by Pew adds to the large body of research showing harsher penalties for drug crimes do not reduce substance abuse.  They are, however, costly to individuals and families as well as the state.

Pew set out to understand “whether and to what degree high rates of drug imprisonment affect the nature and extent of the nation’s drug problems” by comparing publicly available data from law enforcement, corrections and health agencies. If imprisonment was an effective deterrent to drug use and crime, then states with higher rates of imprisonment for drug offenses would have lower rates of drug use among their residents — other things held constant. However, when Pew compared state drug offender imprisonment rates with three important measures of state drug problems — self-reported drug use rates (excluding marijuana), drug arrest rates and drug overdose death rates — no statistically significant relationship was found. These results account for variation in states‘ education level, unemployment rate,  racial diversity and median household income.

According to Pew: “What research does make clear is that some ways of reducing drug use and crime are more effective than others — and that imprisonment ranks near the bottom of the list. Putting more drug offenders behind bars — for longer periods of time — has not yielded a convincing public safety return. What it has generated, without doubt, is an enormous cost for taxpayers.” The increased costs associated with greater imprisonment for drug offenders means less funds for “programs, practices and policies that have been proven to reduce drug use and crime” — which is a net loss for public safety.

Kentucky is clearly heading in the wrong direction with its drug laws — a trend that is especially troubling given recent reports of jail overcrowding, plans to reopen private prisons and a Department of Corrections budget that is $43 million over projections for this year alone, according to the Justice Cabinet.

New Retirement Plan for Private Sector Workers Would Strengthen Economic Security in Kentucky

When it comes to a secure retirement many Kentuckians are in danger in part because they lack access to a retirement account at work that can help them save, new research by the Kentucky Center for Economic Policy shows.

The population is aging in Kentucky and across the country as the baby boomers reach retirement age, with the share of Kentuckians over the age of 65 expected to grow from 15 percent today to 20 percent by 2030. Yet too many in the state are deeply underprepared for financial security in retirement. The growing elimination of more secure defined benefit plans in the private (and more recently the public) sector has worsened the problem, and the current level of Social Security benefits is not adequate for a decent standard of living. The average defined contribution account (such as a 401(k)) balance for current workers in Kentucky was only $32,499 in 2012, and many workers have jobs where no type of plan is offered at all. More must be done at all levels of government to promote a more secure retirement for the sake of retirees and the economy as a whole.

To read the report in PDF form, click here.

Kentucky’s Class of 2016 Faces Lingering Slack in Labor Market

Despite improvement, the labor market is still weak for young Kentuckians graduating from high school and college in 2016 according to a new report from the Economic Policy Institute (EPI). These graduates join the previous seven classes who have faced “profound weakness” following the Great Recession.

In 2015, the unemployment rate for workers under age 25 in Kentucky was still 0.5 percentage points higher than before the recession (unemployment includes people who are currently without work, but actively seeking a job). Even more indicative of the extent of labor market weakness, the underemployment rate for young Kentuckians is 23.3 percent and still 3.7 percentage points above the 2007 rate (underemployment includes the unemployed and also those who are employed part-time but would rather have full-time work and those who have given up looking for work in the last four weeks but have actively looked in the past year). In contrast, the 2015 unemployment rate for all Kentucky workers was back down to its prerecession level and underemployment was elevated just 1.1 percentage points.

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Notes: Includes all workers age 16 and older. Click here to compare rates across states.
Source: EPI analysis of CPS Microdata.

Young workers face competition from older, more experienced workers in a strong economy and their employment prospects are hurt disproportionately in hard times. The depth and length of the trouble for young workers since 2007, EPI points out, is not due to some unique characteristic of young people today – such as a lack of education – but to the historical severity of the Great Recession and the slowness of the recovery.

In fact, Kentuckians “are more educated than ever.” Yet many educated young people are working in jobs that do not require a college degree – nationally, 44.6 percent of college graduates under 27 were in this predicament in 2015. That’s up from 38 percent in 2007.

Despite these unfavorable conditions, it’s not true that young people today are taking refuge from the recession in large numbers by returning to school. Enrollment at Kentucky’s universities and community colleges jumped from 211,179 in 2008 to 235,833 in 2011, but had fallen back to 208,251 by 2015. As the table below shows, a smaller share of young Kentuckians were enrolled in 2013-14 and 2014-15 than before the recession. Nationally, EPI notes, enrollment growth is in line with long-term historical trends and does not indicate that young people are attempting to “ride out” the weak employment situation in school. Combined with the lack of employment, that means an elevated share of young people are “idled” by the bad economy—neither working nor in school.

class of 2016 2

Source: EPI analysis of CPS Microdata.

One possible explanation for why postsecondary enrollment isn’t higher is that decreased public investment in higher education over recent decades has led institutions to raise tuition. With generally stagnant wages over the last 15 years that have only recently returned to 2007 levels, the money people have to pay for college has not kept up with the cost. And while other states have begun reinvesting in higher education after deep cuts through the recession, Kentucky continues to cut state funding including in the new 2017-18 budget.

Young people who do manage to get through college are graduating with more debt. Nationally, average debt has tripled since 1989 according to EPI. In a slack labor market, with fewer (and lower-quality) jobs and stagnant wages, repayment is more difficult. Kentucky students have the third-highest student loan default rate in the nation.

Overall data for the graduating class of 2016 show reason for continued concern, but disaggregated data by race/ethnicity reveal that young black and Hispanic workers face even deeper challenges in the labor market. Nationally, today’s unemployment rate for black college graduates is still 0.4 percentage points higher than peak unemployment was for white graduates during the recession (9.4 percent compared to 9 percent). The current unemployment rate for white college graduates is 4.7 percent. Unemployment is also higher for black high school grads than their white peers. For Hispanic high school and college grads, unemployment rates tend to be higher than for white but lower than for black graduates.

And while women have tended to fare better in the recession in terms of employment – due in part to the fact that traditionally male-held jobs in manufacturing, construction and transportation are hit harder by recessions – women college grads make 79 cents on the dollar what men do. The pay disparity among high school grads is smaller (92 cents on the collar) and has actually shrunk since 2000, possibly due in part to state minimum wage increases which disproportionately benefit women who make up a larger share of the low-wage workforce.

Young Kentuckians will suffer the consequences of the weak labor market they are entering for some time to come. EPI lists two main types of federal and state policies that would tighten the labor market for all Americans, including young people: 1) policies that move the country toward full employment such as continued low federal interest rates and state and federal investments in infrastructure and 2) those that put more money in workers’ pockets like raising the minimum wage, strengthening the EITC, protecting collective bargaining, ending discriminatory practices and raising the overtime threshold.

Visual: Who Benefits from Lexington Raising the Minimum Wage?

The Lexington-Fayette Urban County Council is considering an incremental minimum wage increase to $10.10 per hour for its workers over the next three years. Lexington would be the second city in Kentucky, and in the South, to raise its wage above the current $7.25 federal minimum wage. Recently, Louisville joined 29 states and a growing number of cities nationwide that have tackled the eroding value of the federal minimum wage through their own increases. You can see more data on who would benefit here.

Lexington Min Wage Infographic

“New Americans in Kentucky” Are Diverse and Contribute Substantially to State’s Economy

immigrantsprofileKentucky’s immigrants are a diverse, rapidly growing population that contributes to the state’s economy at a rate consistent with or even exceeding their share of the state’s overall population, according to a new report by the Kentucky Center for Economic Policy. But in the absence of immigration reform, these Kentuckians face barriers that have implications for the entire state economy.

The report, “A Profile of New Americans in Kentucky,” uses data primarily from the U.S. Census Bureau to paint a picture of immigrants in Kentucky and their role in the workforce and economy. Among the report’s findings are:

  • Kentucky’s immigrant population is small compared to other states but grew at a faster rate than all but six states in percentage terms between 2000 and 2012.
  • Immigrants are well-represented across the state’s workforce and occupations.
  • More than one in three are naturalized citizens, many others are legal residents (refugees, students and workers, for example), and estimates range from 50,000 to 80,000 on the number of immigrants who are in Kentucky without authorization.
  • Kentucky’s immigrants are ethnically and racially diverse, having come to the U.S. and to Kentucky from all around the world.

“Our public dialogue tends to cast immigrants as a separate, homogenous group but in fact they are people from all walks of life who are already at home in our Kentucky communities, who already contribute significantly to our economy and pay taxes to support the public good,” said Anna Baumann, policy associate at KCEP. “We need to better understand the diversity of Kentucky’s immigrants and the barriers they face in order to create policies that benefit us all.”

Compared to U.S. born Kentuckians, immigrants are overrepresented among those with less than a high school diploma as well as those with a bachelor’s degree or higher. Immigrants are more likely than other Kentuckians to be small business owners—one in 33 Kentuckians are immigrants, but one in 20 small business owners are. However, the overall poverty rate for immigrants is higher than U.S. born Kentuckians. Low-income immigrants are paid less than U.S. born citizens in the same income category as a result of many factors including their overrepresentation in occupations where wage theft is common and in sectors where employers are more likely to pay unauthorized immigrants low wages, including under the table.

“A level playing field between employers who pay illegal wages and those who play by the rules is just one example of how immigration reform would make our economy fairer and stronger,” said Baumann. “When our neighbors are paid fairly and can spend to meet their families’ needs—and when unscrupulous employers can no longer suppress wages and avoid paying taxes by exploiting a particular group–our local economies and communities benefit.”

About one in three Kentucky immigrants are Hispanic, yet the majority of Hispanic Kentuckians (60 percent) were born in the U.S. The top five most common countries of origin are Mexico, Germany, India, Cuba and Japan. More than half of Kentucky’s immigrants speak English very well or speak only English, and there are 116 languages spoken by “Limited English Proficient” public school students in Kentucky.

For more information about immigrants in Kentucky, the full profile is accessible here: “A Profile of New Americans in Kentucky.”

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Increasing Kentucky’s Minimum Wage Would Help One in Four Workers Make Ends Meet

The decline in the real value of the minimum wage for tipped and non-tipped workers has been contributing to poverty and inequality in Kentucky. Increasing the state’s minimum wage to $10.10 an hour, as proposed in legislation in the 2014 Kentucky General Assembly, would lift the wages of one in four Kentucky workers. It would also benefit more than one in five of the state’s children by increasing the earnings of at least one of their parents. KCEP’s new policy brief outlines the need to raise the minimum wage and the benefits to Kentucky of doing so.

Minimum Wage Brief

Minimum Wage Fact Sheet

min wage