All,
I met with a labor leader who asked about the Household Impact Study bar charts, "What happens to people 'above the bars'? How do they fare?" I asked Danny Richter, and it turns out that HIS author Kevin Ummel has additional data which are not displayed in the charts we are familiar with. Jerry Hinkle helped me with the calculations to create the attached supplementary chart. (We only made one version, for national income by quintile, not for the other charts.) Brett Cease told me he will be linking to it from the Household Impact Study training page. This can be used with any group that's very concerned that poor people should not come out behind.
Dave
Labor Outreach Action Team
I met with a labor leader who asked about the Household Impact Study bar charts, "What happens to people 'above the bars'? How do they fare?" I asked Danny Richter, and it turns out that HIS author Kevin Ummel has additional data which are not displayed in the charts we are familiar with. Jerry Hinkle helped me with the calculations to create the attached supplementary chart. (We only made one version, for national income by quintile, not for the other charts.) Brett Cease told me he will be linking to it from the Household Impact Study training page. This can be used with any group that's very concerned that poor people should not come out behind.
Dave
Labor Outreach Action Team
Attached files
8 Replies
I wonder.... the people in Quintiles 1 and 2, who lose up to 2.2 of their income with HR 763... who are these people? Has anyone studied this? I live in Maine where a good number of low income people drive significant distances to jobs and other needed places and tend to have older, less fuel-efficient vehicles and less well-weatherized homes. Our Congressional representatives, municipal leaders, and citizens often ask about this when CCL members tell them about CFD and HR 763 in particular. Any ideas how we should respond?
Hi Geraldine,
Sharp eye and good question. Up to 2.2% of income applies only to quintile 1; quintile 2 is up to 1.2. The general answer is that much of a person's carbon footprint is in the stuff they buy, compared to their driving, and poor people don't buy much stuff compared to others, so they have "room to drive," you might say. But I understand that's not a great answer for your needs and I'll forward your question to Danny Richter for his best answer. Stay tuned.
Dave
Sharp eye and good question. Up to 2.2% of income applies only to quintile 1; quintile 2 is up to 1.2. The general answer is that much of a person's carbon footprint is in the stuff they buy, compared to their driving, and poor people don't buy much stuff compared to others, so they have "room to drive," you might say. But I understand that's not a great answer for your needs and I'll forward your question to Danny Richter for his best answer. Stay tuned.
Dave
P.S. Could you give a guestimate how many miles the "significant distances " are?
Also noticed you mentioned their home weatherization. I'll send your question to Danny verbatim, along with your guestimate.
Thanks,
Dave
Also noticed you mentioned their home weatherization. I'll send your question to Danny verbatim, along with your guestimate.
Thanks,
Dave
Geraldine, I sent your question to Danny Richter and he referred it to Rick Knight, CCL's Research Coordinator. His response is a little long, but I'll paste all of it here because I know other CCLers have your same question. His last paragraph sounds like a good response you could make to your MoC. Thanks for your question!
Hi Dave,
It's tricky to try to describe what characterizes 1st-quintile residents fails to benefit under the policy, because it's a result based on statistics. I don't think we know exactly what circumstances this describes, but can speculate about a couple of things. For example, if someone has a large shortfall as a percentage of income, it may be because their income is very low rather than that their energy costs are high. Some may qualify for federal benefits but don't claim them, so their pre-dividend income is near zero and even a small excess energy cost exceeds 0.2% of their income. Some may be incarcerated or otherwise institutionalized, with energy costs attributed to them even though they don't personally pay those costs.
But outside of those unusual cases, the most likely low-income cohort that fails to benefit would be a single individual living alone with high energy costs (i.e., a widower living alone on Social Security in a house in rural Maine). Long commutes are probably less of a factor than building energy. See Fig 16 on p. 34 of the Household Impact Study -- gasoline is between 19 and 23% of excess energy costs but utility costs are 20 to 30%.
As to how we respond, I would say that CCL is aware of the fact that some low-income people could fall behind under the current design, and will be on the lookout for suggestions to address this when the legislation starts to move forward. There are existing federal programs, for example LIHEAP, that could play a role if the bill's sponsors are so inclined.
Rick
Does this help you?
Dave
Hi Dave,
It's tricky to try to describe what characterizes 1st-quintile residents fails to benefit under the policy, because it's a result based on statistics. I don't think we know exactly what circumstances this describes, but can speculate about a couple of things. For example, if someone has a large shortfall as a percentage of income, it may be because their income is very low rather than that their energy costs are high. Some may qualify for federal benefits but don't claim them, so their pre-dividend income is near zero and even a small excess energy cost exceeds 0.2% of their income. Some may be incarcerated or otherwise institutionalized, with energy costs attributed to them even though they don't personally pay those costs.
But outside of those unusual cases, the most likely low-income cohort that fails to benefit would be a single individual living alone with high energy costs (i.e., a widower living alone on Social Security in a house in rural Maine). Long commutes are probably less of a factor than building energy. See Fig 16 on p. 34 of the Household Impact Study -- gasoline is between 19 and 23% of excess energy costs but utility costs are 20 to 30%.
As to how we respond, I would say that CCL is aware of the fact that some low-income people could fall behind under the current design, and will be on the lookout for suggestions to address this when the legislation starts to move forward. There are existing federal programs, for example LIHEAP, that could play a role if the bill's sponsors are so inclined.
Rick
Does this help you?
Dave
Hi all,
The LIHEAP comment at the end of Rick's statement, I would like to think, comes straight from work as his intern. My first report outlined this very concern for low income folks who get left behind. There are certainly other ideas that aren't included, but see the attached document on how this problem could be addressed.
One thing that keeps coming into my mind is how other countries, like Australia, seem to know everything about residents regarding income and assets tied to their social security numbers (or equivalent). Their taxes are even pre-filled out for them. Congress could automatically offer all citizens the slew of assistance that they qualify for in order to avoid these disparities. Conservatives would likely label this as socialism, though. Informing low income households (which should be identifiable) that they can reach out to 411 for assistance (if they find themselves in that position) is the compromise i came up with.
First Quintile Disparities Final Edit.pdf
The LIHEAP comment at the end of Rick's statement, I would like to think, comes straight from work as his intern. My first report outlined this very concern for low income folks who get left behind. There are certainly other ideas that aren't included, but see the attached document on how this problem could be addressed.
One thing that keeps coming into my mind is how other countries, like Australia, seem to know everything about residents regarding income and assets tied to their social security numbers (or equivalent). Their taxes are even pre-filled out for them. Congress could automatically offer all citizens the slew of assistance that they qualify for in order to avoid these disparities. Conservatives would likely label this as socialism, though. Informing low income households (which should be identifiable) that they can reach out to 411 for assistance (if they find themselves in that position) is the compromise i came up with.
First Quintile Disparities Final Edit.pdf
Attached files
Does the 2020 Household Impact Study account for undocumented immigrants?
Thanks Joanne Leovy for the great question - the 2020 update and associated FAQ don't mention immigration assumptions directly in the documents so I've copied CCL research coordinator Richard Knight to help respond to your question when he is able! 😀
A couple of things.
First, on the undocumented immigrants question, the 2020 HIS is in line with the legislation in that the number of people who receive carbon dividends are those who are eligible, i.e., people with either a SSN or an ITIN. Some percentage of undocumented residents do have ITINs, but I don't know what the percentage is (in 2010 "ITINs were used to file over 3 million federal tax returns." meaning that millions will be eligible to get the tax dividend via an ITIN).
Regardless, those who have neither a SSN or an ITIN are not eligible for dividends, and I would assume the HIS study took that into account. It probably would not have much impact on the percent of households who receive a net gain, but of course if a specific household includes undocumented persons, they would come up short.
As for the earlier question of who has a net loss in the low quintiles, Kevin Ummel uncovered an interesting answer to that. In the 2016 study, the key metric for households was income, but it turns out that there is a significant fraction of households that have very low income, but are not poor. That's because some older people get their spending money from investments, such as reverse mortgages or non-taxable retirement accounts, that are not reported as income. So they spend more money on goods and services than would be typical based on their reported income. That's why in the 2020 study, the quintile-defining metric was changed from income to consumption. And lo and behold, the percent of Quintile 1 and 2 households who experience a net loss declined dramatically. This is a much more accurate representation of the financial status of a household, and gives a more realistic answer, i.e., that only a tiny slice (4%) of Quintile 1 households fail to come out ahead. As for who is in that 4%, Kevin Ummel suggested one possible example: a college student living on campus who has very low income but spends money he gets from mom and dad. Overall, this correction shows that the number of struggling families who don't benefit from the policy may be essentially zero.
Rick
First, on the undocumented immigrants question, the 2020 HIS is in line with the legislation in that the number of people who receive carbon dividends are those who are eligible, i.e., people with either a SSN or an ITIN. Some percentage of undocumented residents do have ITINs, but I don't know what the percentage is (in 2010 "ITINs were used to file over 3 million federal tax returns." meaning that millions will be eligible to get the tax dividend via an ITIN).
Regardless, those who have neither a SSN or an ITIN are not eligible for dividends, and I would assume the HIS study took that into account. It probably would not have much impact on the percent of households who receive a net gain, but of course if a specific household includes undocumented persons, they would come up short.
As for the earlier question of who has a net loss in the low quintiles, Kevin Ummel uncovered an interesting answer to that. In the 2016 study, the key metric for households was income, but it turns out that there is a significant fraction of households that have very low income, but are not poor. That's because some older people get their spending money from investments, such as reverse mortgages or non-taxable retirement accounts, that are not reported as income. So they spend more money on goods and services than would be typical based on their reported income. That's why in the 2020 study, the quintile-defining metric was changed from income to consumption. And lo and behold, the percent of Quintile 1 and 2 households who experience a net loss declined dramatically. This is a much more accurate representation of the financial status of a household, and gives a more realistic answer, i.e., that only a tiny slice (4%) of Quintile 1 households fail to come out ahead. As for who is in that 4%, Kevin Ummel suggested one possible example: a college student living on campus who has very low income but spends money he gets from mom and dad. Overall, this correction shows that the number of struggling families who don't benefit from the policy may be essentially zero.
Rick
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