Tuesday 27 June 2017

Wonkbook: Maine tried to raise its minimum wage. Restaurant workers didn’t want it. (Oops, here's your updated newsletter)

By Caitlin Dewey As the Maine House voted on a bill to redu...
 
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By Caitlin Dewey

As the Maine House voted on a bill to reduce the minimum wage for tipped restaurant workers, Jason Buckwalter and a dozen fellow servers huddled in a back room listening to the vote call at the Bangor steakhouse where they work.

They all hoped to hear one thing: that state legislators had voted to lower their wages. Some cried with relief, Buckwalter said, when the final vote ended at 110-37 — overwhelmingly in their favor.

The vote, which took place on June 13, marked the conclusion of a months-long political saga that has upended conventional wisdom about the minimum wage. Workers have traditionally supported such increases, which advocates say are critical to lifting millions out of poverty.

But in Maine, servers actively campaigned to overturn the results of a November referendum raising servers' salaries from $3.75 in 2016 to $12 by 2024,  saying it would cause customers to tip less and actually reduce their take-home income.

The bill was quietly signed into law on June 22 by Republican Gov. Paul LePage, a strident critic of raising the tipped minimum wage.

Read more on Wonkblog.


People making $11,400 in 2026 will face deductibles that are more than half their income

By Carolyn Y. Johnson

Most people are focused on how many people would lose insurance under the Senate health-care bill compared with current law: an estimated 22 million, according to the new Congressional Budget Office analysis. But the report digs deeper into the kind of insurance that people, especially poor people, would be able to access -- and finds that it would be so financially burdensome with high deductibles that many people would choose not to sign up.

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Trump has criticized the insurance offered in the exchanges -- not only for sky-high premiums, but also because deductibles are so high that it is practically useless."

Because of fundamental changes in how the Senate bill would provide support to people, those deductibles are virtually guaranteed to grow.

The Senate bill proposes providing federal assistance for premiums based on a benchmark plan that is fundamentally less generous than the status quo. What that means is that the assistance is calculated based on a plan that shifts a greater portion of health-care costs onto the person through deductibles, co-pays and other out-of-pocket costs. The bill also winds down federal payments that had significantly brought down lower-income Americans' share of their deductibles and co-pays.

Here's how the CBO explains it: A 40-year-old who makes $26,500 a year in the year 2026 would pay an annual premium of $1,700 under the current law, for a plan that covers 87 percent of their health-care costs. That same person would pay an annual premium of $1,600 a year -- slightly lower -- but for a plan that picks up only 58 percent of their health-care costs.

Read more on Wonkblog.

 
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