Posts About Poverty and Economic Stability

The current official U.S. measure used to estimate the percentage of people living in poverty by the Census Bureau omits several factors that are important determinants of poverty. Though it is annually updated for inflation and adjusted for family size, the official poverty measure has not changed from the formula developed in the 1960s. That formula was the cost of a subsistence diet multiplied by three, since food costs at that time made-up a third of a family’s budget. The poverty threshold was meant to reflect the minimum level of income needed to meet basic needs – like food - and as a result, has become a tool to track poverty trends. Most importantly, the threshold is used to determine eligibility for public assistance benefits, so if the threshold is too low or does not encompass up-to-date expenditures, many people that need benefits might not be eligible for those services. Adjusting the current measure can help to determine the real levels of poverty, as well as determining whether or not social programs are truly helping all of those in need.

Jointly produced by the Stanford Center on Poverty and Inequality and the Public Policy Institute of California, California became the first state to create a new index to measure poverty in place of the official U.S. measure.

This new California Poverty Measure (CPM) improves on the official measure by including recent nationwide spending levels on food, shelter, clothing, and utilities and is adjusted to account for differences in housing costs across counties, and to differentiate among those who are renting, paying a mortgage, or those who have already paid-off their home. Food stamps and other non-cash benefits are also included. These accompaniments create a more accurate look of how individuals and families are faring by reassessing the resources people need to make ends meet and measuring the resources that are currently in place.

Based on the 2011 state data, California’s official poverty rate was 16.2 percent. After taking into account the augmented resources and updated thresholds offered by the California Poverty Measure, the percent of Californians living in poverty increased to 22.0 percent— an almost six percent difference, which is equivalent to 2.2 million more people living in poverty. Main findings from the California Poverty Measure show that high living costs offset resources families living in poverty have available to make ends meet. Add in medical and work expenses, such as commuting and child care, and that considerably raises the poverty rate.

Since states currently follow the official U.S. poverty measure to determine the distribution of public assistance programs, the California Poverty Measure is a valuable model for other state policymakers to consider as findings demonstrate the important role government programs play in measuring poverty. For example, without taking into consideration cash-based, in-kind, and tax-based safety net programs, the child poverty rate in California would increase to 39.0 percent, which is 13.9 percent higher than the official child poverty rate estimate of 25.1 percent.

Policymakers can use the California Poverty measure to understand the obstacles individuals and families living in poverty face, such as the high costs of rent that has led to a dramatic increase in the number of homeless families and to expand on programs, such as the Earned Income Tax Credit, that have proven to lift people out of poverty.

Coming soon: More information on policy solutions in reducing poverty in our soon-to-be released report, Results-Based Public Policy Strategies for Reducing Child Poverty. 

The shrinking number of affordable housing options has exacerbated issues of homelessness nationwide. To make matters worse, the severely cold winter weather, in addition to creating dangerous circumstances for the homeless, has restricted other options that families with inconsistent housing might have resorted to before.

Though the recommended amount to ensure housing affordability is 30 percent of one’s income, low-wage workers significantly exceed that amount. According to a study by The Joint Center for Housing Studies of Harvard University, for low-income renters with $15,000 in annual income, housing costs are considered affordable at $375 a month based on the 30-percent-income affordability standard; however, in 2013, the National Low Income Housing Coalition found that the national average monthly rent on a two-bedroom is $977, which leads more than 76 percent of renters in low-income households to spend over 50 percent of their income on just on housing costs.

States nationwide have also seen an increase in the cost of rental prices. The National Low Income Housing Coalition also determined the housing wage for a two-bedroom apartment, which is the hourly wage necessary to afford a modest rental unit (including rent and utilities). Based on that research, to live in the four states with the highest housing costs would require an average “housing wage” of $32.12 in Hawaii, $27.15 in the District of Columbia, $25.78 in California, and $25.25 in New York. In other words, to afford a two-bedroom apartment within these states, minimum wage workers must work more than 177, 132, 129, and 139 hours a week, respectively, which is dependent on the cost of living within those states.

Unfortunately, children are at the receiving end of this difficult situation. Families are faced with insurmountable barriers without housing and will have to make sacrifices related to their children’s school attendance, maintaining child care, and often times, maintaining their own employment. The lack of affordable housing has also forced families to “double- or triple up,” which often means multiple families cohabitating in a small space with limited privacy; leading to violations of public housing rules and even facing the threat of eviction. Without a consistent home and strong safety net programs to help in times of need, this situation places children in danger.

The issue of limited housing affordability has created a surge in the family homelessness population. For example, in Washington, DC, 1,000 new residents are moving in every month, but only 5,000 more units are built every year. Since real estate in DC has evolved into a lucrative market, poor families are sometimes pushed out of the city to where shelter or affordable housing are more readily available. The District has seen an increase of approximately 500 newly homeless families that have entered into emergency shelter, and that number is projected to double by the beginning of April. Families in Washington previously had the option of staying in D.C. General Shelter, an abandoned hospital turned into living space, described by residents in a Washington Post interview as having “sketchy water and rat infestation,” but space has been completely filled since last winter.  As an alternative, families were then placed in motel rooms across Maryland and DC, though limited availability and political concerns over spending across jurisdiction, has ruled-out that option as a long-term solution.

Policymakers should consider long-term solutions in addressing the needs of homeless families. One of the most important long-term investments to reducing this problem is to support affordable housing.  As we outline in our report on supporting affordable housing policymakers should:

1. Support the Development of Responsible Affordable Housing Options

• State and local policymakers should encourage the development of affordable housing by establishing housing trust funds that can ensure long-term flexible funding for affordable housing and housing services.
• Enabling and encouraging inclusionary zoning and supporting transit-oriented development can expand the affordable housing stock while contributing to housing equity, access to educational and employment opportunities, and sustainable community growth.  A minimum percentage of each new housing development’s total units can be designated as affordable housing and remain that way for a set period of time, and in return, developers can receive cost offsets, such as relaxed zoning restrictions, and density bonuses.
• Utilizing the Low-Income Housing Tax Credit (LIHTC) can produce affordable housing since it is designed to be flexible with states being held responsible for establishing the program’s goals and the types of rental housing developed.
• Policymakers can encourage transit-oriented development by offering incentives for residential and mixed-use developments near transit stations, which can support affordability, economic development, mobility, and pollution reduction.
• Policymakers can also incentivize efforts to increase the energy-efficiency of existing properties and support new developments by using environmentally responsible development principles. Reducing the costs for energy, transportation, and water can help low-income families meet their needs while creating more environmentally responsible communities.

2. Strengthen Housing Programs

• State policymakers can help ensure access to decent, safe, and sanitary affordable housing in rural, suburban, and urban communities by providing a range of subsidized housing options and supporting housing maintenance, such as enhancing section 8 funding to include low- and moderate-income families with special needs and disabled and homeless families.  

3. Provide Housing Protections for Low-Income Families

• State policymakers can support housing protections through rent regulation, reasonable code enforcement, tax relief, and eviction prevention.

4. Coordinate Access to Services and Support Asset Building

• State policies can provide low-income families with the opportunity to live in housing where services are accessible and well-integrated. Human service agencies can coordinate and streamline service provision for low-income households, supports should include opportunities to learn about asset building and affordable homeownership. Integrating services with affordable housing can help low-income families achieve housing stability.

Visit PolicyforResults for our web resource for more details on our policy recommendations for Promoting Affordable Housing.

In 2012, the Earned Income Tax Credit (EITC) benefited more than 27 million workers and helped lift 6.5 million people out of poverty, including 3.3 million children. EITC, a federal tax credit, works by supplementing the earnings of low-wage workers, encouraging work and off-setting payroll and income taxes. In 2013, a family of three could receive the maximum tax benefit of $6,044.

More than half of the states have adopted their own version of the EITC to supplement the federal credit. EITC at the federal level, and in most states that have created EITC programs is refundable, which is a critical aspect of the program.  Twenty-one states and DC offer a fully refundable EITC, which helps families remain out of poverty by allowing families with no income tax liability to receive the entire EITC as a refund. The four states that do not provide a refundable EITC restrict benefits to the reduction of state income taxes, unfortunately, this does not do much to compensate for the other tax costs that low-income families are responsible for paying.

In addition to creating or expanding state EITC programs , several recommendations have been made to strengthen the federal EITC, which include extending the EITC to single, childless workers. EITC for single workers without children can provide a strong incentive to enter the workforce and increase the hours worked, while providing a significant wage supplement to low-wage earners. Some advocates suggest that combing the EITC with a raise in the minimum wage to $10.10 can save federal dollars since taxes would be higher and less low-wage workers would rely on public benefits.

Two-parent families with two children and a full-time, minimum-wage worker should not have to raise their children in poverty. For these working families, the supplement of wages through EITC goes a long way in helping improve outcomes for children living in poverty, since parents have extra financial resources to mitigate obstacles that come as a result of financial strains. For childless workers, a small group of workers that are heavily taxed into poverty, extending the EITC in their favor could have significant returns. State policymakers should consider the positive impact of maintaining, restoring, or expanding one of the most effective safety-net programs in preventing poverty. The EITC is an important resources for encouraging work, providing income, and improving outcomes for young children.

For more information on improving outcomes for young children, stay tuned for our Child Poverty section soon to be released on PolicyforResults! 

Women currently make up 50 percent of the workforce, and account for nearly two-thirds of minimum wage workers. Of all households with children under the age of 18 years old, 40 percent include mothers who are either the sole or primary source of income for the family.
And more than half of babies born, are born to mothers under the age of 30 who are unmarried, most of them white. But, according to The Shriver Report: A Women’s Nation Pushes back from the Brink,  a unique report released by Maria Shriver and the Center for American Progress, one in three American women are currently living in or “on the brink” of poverty — defined in the report as  less than 200 percent of the federal poverty line. That means that 42 million women, and the 28 million children live on the brink of poverty.

The Shriver Report is a multiplatform study of the change in makeup and reality of American families.  The report states that the American family has permanently changed, and that public policy has to adjust itself accordingly— to best support the reality of these families. Currently only one fifth of American families have a male breadwinner and a female home maker. The overwhelming majority have working women as the primary breadwinners. And while women represent a majority of college graduates, a pay equity gap exists such that a woman with a bachelor’s degree earns what a male with an associate’s degree makes. And a wage gap exists such that the average working woman earns 77 cents for every dollar the average man earns, 64 cents for African American women, and only 55 cents for women who are Latina.

In addition to the examinations of cultural transformations impacting American women and families, the report also outlines a number of public policies that would increase positive outcomes for working women and their families. These policy suggestions include:

• A higher minimum wage
• Paid family leave
• Improved access to work and income supports for vulnerable families
• Increasing access to better opportunities to access medium and high paying jobs
• Pay equity
• Increased access to affordable quality child care  

The report also states that closing the wage gap between men and women would cut the poverty rate in half for working women, and add a half a trillion dollars to the national economy. In addition to helping working women care for their families and communities. The report also highlights the fact that that 96 percent of single mothers say paid leave is the workplace policy that would help them most, and nearly 80 percent of all Americans say the government should expand access to high-quality, affordable child care. This is especially important given that two out of every three American families has a working mother as the primary breadwinner, and that more than 70 percent of them do not receive any paid sick days at all.

Policies to support women in the workforce can and should be pursued at every level of government.  State policymakers have an important role to play in ensuring that working women are supported both in contributing to the financial stability of their families and to the economy.

For state policy strategies on reducing poverty and promoting economic stability for children and families, please click here.

The temporary federal Emergency Unemployment Compensation (EUC) program has supported 11 million people from falling into poverty since 2008, including 600,000 children in 2012 alone. However, in December, the emergency laws that extended benefits beyond 26 weeks expired, forcing 1.3 million jobless workers to lose out on this vital economic support. In most states, the maximum period of unemployment payments dropped to 26 weeks, down from as much as 73 weeks. Before the expiration, workers that exhausted their benefits used to receive up to 14 additional weeks of assistance through the EUC and up to 47 weeks in states with especially high unemployment.

For millions of Americans, unemployment insurance allows parents and caregivers to provide for their families while actively seeking employment. Without the extra financial assistance, obtaining employment will be increasingly more difficult. Finding available work is a time-consuming and costly process, and shortening benefits will only worsen the conditions unemployed families are experiencing. Many families are limited to jobs with significant wage cuts, and in some communities, the jobs are just not available; according to Center on Budget and Policy Priorities, for every job opening available, there are three unemployed workers. While the data shows that unemployment rates have dropped slightly with the expiration of benefits; the reason can be attributed to worker’s giving up in their search and dropping out of the labor force altogether.

With the tough labor market, the expiration of unemployment insurance is problematic for millions of families. During these times of economic hardship, policymakers should prioritize strengthening the safety net to ensure that families and children have basic necessities for survival. Extending the benefits will allow millions of hardworking individuals find meaningful work, while preventing obstacles families may face, such as keeping food on the table or how to afford rent.

For state policymakers it is important to consider the impact of these changes on resident’s attempting to find work – and to look for meaningful state solutions to address the new gaps created by the expiration of the EUC. For more information on how poverty impacts children, stay tuned for our upcoming report!

50 years ago today, President Johnson declared a War on Poverty leading to the formation and expansion of social programs and policy initiatives aimed at reducing poverty and addressing its effects. These initiatives are still critical to the lives of Americans today.  They help to support the poor and near poor and serve as a safety-net for families during difficult economic times and emergencies.

At a time where an unacceptable 15 percent of the United States is living in poverty, safety net programs like health care and food and nutrition programs are essential to maintain and uphold. Unfortunately, today’s political climate continues to put those programs at risk – as many of these investments face significant cuts as a result of budgetary decisions. Children have very high rates of poverty in the United States. A significant 22 percent are currently living in poverty, and the same percent are food insecure. The unfortunate reality is that people of color face even higher rates of poverty and food insecurity. These are not merely numbers – the impact of living in poverty is significant and long lasting.

A recent brief highlighted five ways that poverty harms children, which include the negative effects to the brain and other body systems, educational achievement gaps, poor physical, emotional, and behavioral health, social ills related to community poverty, and lastly, families and home environments.

The improvements made in 50 years have demonstrated the benefits of safety net programs; however, it is necessary to continue pushing through solutions and strategies that increase support for vulnerable children and families. Advancing equity needs to be a primary driving force behind an anti-poverty policy agenda. Since 1964, the demographics of America have changed dramatically, and it is imperative that policies continue to reflect this shift. Disparate opportunities are now more evident than ever before, while inequality is at an all-time high. Equity needs to inform policymaking and is an essential part of doing this work well.  This work should also include removing burdensome roadblocks for poor families and to address the needs of families facing multiple barriers. 

To learn more about CSSP’s perspective on innovative policy strategies for addressing poverty in the future, read CSSP’s statement on the 50 Year Anniversary of the War on Poverty.

Target Corporation, the nation’s second largest retailer, recently announced its new “Ban the Box” policy. The ban the box initiative calls for the removal of employment barriers for people with criminal records, or returning citizens, by demanding that employers remove the question on job applications that asks if the applicant has a criminal record. Target joins over 50 cities and counties, and 10 states in implementing this “ban the box” policy.

Minnesota, where Target is based, recently expanded its 2009 “ban the box” legislation to include both public and private employers state wide. That legislation stipulates that Minnesota’s private employers cannot inquire into an applicant’s criminal history until after that applicant is invited to interview for a position, or before an offer of employment. Ban the box legislation is important because previously, these individuals may have been qualified for a job, but rejected just for answering in the affirmative to a question about their criminal history. This practice rejected a whole potential population from the work force, even though most returning citizens have been charged with nonviolent offenses. This practice also often denied applicants the ability to explain that their record was unrelated to the job, occurred in their youth or was inaccurate. In Minnesota now, private employers who do not comply with this policy will be penalized in the form of a fine.

This policy should have a positive impact on both the individuals with criminal records and returning citizens in Minnesota; 1 in 5 Minnesotans have a criminal record. Minnesota is also the state with the 8^th highest number of people incarcerated and/or currently on some type of court supervision in the country. Research shows that returning citizens that are unable to find employment are more likely to re-offend – leading to higher recidivism rates. There are also significant equity concerns related to ban the box policies. Research shows that African Americans and Latinos are disproportionately represented in the criminal justice system. Nationally, there are 650,000 returning citizens and 65 million Americans with criminal records returning to their communities and searching for employment every year; for them and their families these policy changes are monumental, and paramount to their success.

Ban the box policies help to keep corrections costs down for states by reducing recidivism and increasing public safety —while also promoting economic growth within states. For results-based policy strategies that remove employment barriers for returning citizens and more state examples of policies that support workers and low income families please visit policyforresults.org.

Today, Kids Count at the Annie E. Casey Foundation released a new policy report, The First Eight Years, that highlights the importance of making early investments in young children. Unfortunately, despite the fact that most brain development occurs in the early years of childhood, federal spending for children is lowest during this period of their growth. The new report from Kids Count states that investing in the first eight years of a child’s life is critical for children to succeed, both while they are in school and in their future. The Kids Count report highlights three primary goals with related policy recommendations.

 The report includes detailed analysis under each goal and policy recommendation. The goals in the report include:

(1) Support parents as they care for their children

• States should establish or continue to expand voluntary, evidence-based home-visiting and parent-training programs for children at risk of falling behind.
• States should Increase mental health services.
• States should boost economic stability by improving income supports such as SNAP, EITC, and child support and expand educational assistance and job-training programs for parents.
• States and the federal government should align eligibility and recertification dates, streamline benefits packages and offer one-stop locations for job training and other programs that serve low-income parents.

 (2) Improve access to quality early care

• States should adopt early learning and development standards that set clear expectations for child development.
• States should set child-care reimbursement rates at levels that allow providers to retain a skilled child-care workforce and maintain age-appropriate instructor-child ratios.
• States can expand and improve Head Start and Early Head Start that combine early education services for parents and access to other resources.
• States should provide voluntary, full-day, high-quality and developmentally appropriate prekindergarten programs that serve all children, beginning with investments that target low-income 3- and 4-year olds.
• States should provide supports needed for all children to reach important benchmarks, and continue to implement rigorous, state-developed college and career-ready education standards.
• States should ensure that children have access to affordable and comprehensive health care from a primary care provider who can manage and coordinate their care. 

(3) Ensure that care is comprehensive and coordinated for all children from birth through age 8  

• States should use consistent measures of child development that provide broad assessments of child well-being.
•  States should develop linked data systems, which include as many early care and education providers as possible that should help administrators ensure that children who need services receive them and identify additional resources that children need to flourish.
• States should increase coordination efforts to include better integration and transitions among early education, K-12, health care, and family support systems.

The findings of The Kids Count policy report demonstrate the need for high-quality early childhood programs, which include supports for families, that can have a powerful and lasting impact on young children—an impact that continues into adulthood. Policymakers can advance their efforts to support young children by looking toward evidence on best practices across early childhood fields, which can be used to make the case for policies supporting a comprehensive and integrated birth through age 8 system that ensures all children have a real chance to be successful and contribute.

Visit Kids Count at the Annie E. Casey Foundation for more details from this policy report.  For a complementary resource focused on Supporting Early Healthy Development please read CSSP’s Policy for Results report, scheduled for release on November 12, 2013.  Stay tuned!

The path to success for most young Americans is based, in part, on factors outside of their control, such as positive family, social, and educational experiences. However, as a result of child poverty, difficult family dynamics, impoverished, high-crime neighborhoods, failing schools, and many other barriers, a significant number of young adults find themselves without basic high school credentials and the skills and training necessary to maintain a job or become economically self-sufficient and capable enough to support a family.

The Working Poor Families Project recently released a policy brief, State Opportunities for Reconnecting Young Adults to Education, Skills Training, and Employment, that provides background information, strategies and policy recommendations for reconnecting young adults from 18 to 24 to education and skill training opportunities.

According to the policy brief, without a high school diploma, not only do young adults face negative consequences, but the adverse effects extend to the society at large. A high school graduate yields a public benefit of over $200,000 more in lower government spending and higher tax revenues than does their counterpart who did not complete high school. In the United States, about 5 to 6 million young people between ages 18 to 24 do not have high school credentials. If that number were cut in half, the government would likely see a total of $45 billion in savings and increased revenue. Additionally, lower educational attainment levels are correlated with higher crime rates, and the overwhelming majority, 75 percent, of state prison inmates are without a high school diploma or equivalent. If the male graduation rate were increased by only 5 percent, the nation would see an annual savings of $4.9 billion in crime-related costs.

While prevention is a critical in ensuring we reduce the number of young people disconnected from work and school.  The brief highlights the importance of focusing on recovering or reconnecting out-of-school young adults. Some states are taking action to reconnect disconnected young people.  The four primary approaches include:

1. Elevating state attention to the issue of disconnected young adults
2. Engaging young adults to achieve educational outcomes
3. Leveraging adult basic education and high school equivalency options
4. Introducing and preparing young adults for work

States have had success in achieving positive outcomes using these strategies.   For example, Texas’ Dropout Recovery Program (TDRP) invested in local organizations, school districts, charter schools, non-profits, and higher-education institutions in an effort to connect out-of-school young adults to education opportunities so they could achieve their high school equivalency or gain college readiness skills. The program was able to serve over 8,000 dropouts in the course of 4 years, and had positive outcome data a meaningful impact on the lives of the graduates.  However, in spite of this progress, the state legislature did not continue funding this program. Although the program costs $21 million annually, estimates suggest that the program would save the state $95 million.

The Open Doors Young Adults Reengagement Initiative in Washington State is another example of reconnecting young adults to education. The initiative allows local school districts to enter into inter-local agreements with qualifying organizations, such as community colleges, educational service districts, and others, to provide dropout reengagement services for out-of school students not expected to graduate by age 21. The initiative is funded through Washington’s Office of State Public Instruction (OSPI) and provides basic education funding directly to community colleges undertaking recovery programs in agreement with a local school district.

The successful state-led initiatives taking place are important models for policymakers across the country to follow moving forward. As the brief sates, “Without policy targeted to the needs of young adults, the nation risks an entire generation marked by the insecurities of the Great Recession for the rest of their working lives.” Implementing programs that can increase opportunities for the disadvantaged can increase positive outcomes for the future, while also benefitting society. 

For results-based policy strategies aimed at increasing high school completion – visit policyforresults.org.  

While the government shutdown is well into its second week, it is important to keep in mind the devastating consequences that are continuing to impact the most vulnerable children and families. Though programs that directly ensure public health and safety have avoided the spending freeze, including Medicaid and Social Security, most of the programs that are affected are still vital supports and services that help sustain young women and children, low-income families, and the elderly.

Temporary Assistance for Needy Families (TANF), which provides temporary financial assistance to help pregnant women and families pay for food, shelter, utilities, and expenses other than medical costs, has stopped awarding new funds, however states have the option to continue providing benefits with state dollars. Since TANF provides significant services in addition to cash assistance, such as GED preparation, vocational training, postsecondary education, vocational rehabilitation, help with child care, work stipends, job retention services and more, discontinuing the program during the shut-down – particularly if it continues for much longer - would be a devastating for families in need.

Head Start programs will also be affected by the shutdown—a total of 23 programs serving 19,000 children will be affected as their grants begin to expire. Those cuts are in addition to the 57,000 children pushed of Head Start as a result of the sequester, on top of a $400 million mandatory cut to the program nationwide. The longer the shutdown continues, the more Head Start programs and young children will be adversely impacted. 

Implications of the government shutdown to nutrition programs are equally alarming. The Supplemental Nutrition Assistance Program (SNAP), which helps over 47 million low-income Americans, will continue providing benefits, but only until the end of October. States have the option of continuing the SNAP program through 2014, but the $2 billion available for contingency funds that would be used to compensate the loss of funding would not be enough to support the program in the long-term, since SNAP provides about $6 billion in support to families per month.

The Special, Supplemental Nutrition Program for Women, Infants, and Children (WIC), which assists over 9 million at-risk mothers, infants, and young children in accessing healthy food, nutrition information, and health referrals, will also continue until the end of October. Like SNAP, most states have funds to continue WIC for a week or so, but the program won’t be able to continue for very long, with emergency funds running out by the end of the month.

The impact on supplemental nutrition programs is also impacting the elderly. Senior Nutrition Programs have stopped as a result of the shutdown. The Department of Health and Human Services can no longer fund Meals on Wheels, which provides more than one million home-delivered meals to seniors who need them each day. This crucial service has also been impacted by the sequester, which is discussed in this previous post.

The government shutdown is risking the basic supports and services low-income families need to survive. Although there are emergency funds to continue certain programs in the meantime, the long-term consequences will be harmful and widespread. State policymakers should use their discretion to continue the programs that can provide supports and services to vulnerable families; however, the only sustainable solution is for the government to go back to work in serving children and their families as soon as possible to minimize the impact.