The Shriver Brief : Poverty Law Commentary & Insights : Sargent Shriver National Center on Poverty Law : Affordable Housing, Healthcare Reform

Too often, workers have to choose between taking time off for illness and not receiving the wages they desperately need or showing up for their job despite their poor health or the poor health of someone they care for. For workers who support families, these decisions are even more difficult. In the absence of guaranteed leave for sickness or family obligations, workers fear losing their jobs or sacrificing their paycheck. Fortunately, there are viable solutions. Paid sick days help workers maintain a work-life balance, and an increase in the minimum wage would put more money in the pockets of low-income workers. We need to support policies that allow workers to take time off when they are sick and earn wages that keep their families out of poverty. But recent legislation that passed the U.S. House is a misguided attempt to give employers the ultimate deciding power and exploit low-wage workers.

Paid Sick Days

Paid sick days ensure workers are not forced to choose between their health and their paychecks. Hourly-paid employees in particular are made to feel that taking time off will jeopardize their jobs, and they often go to work despite their illness. This is called “presenteeism” and is estimated to cost our national economy $160 billion in lost productivity each year. Those who show up sick to work are often the same people who prepare our food or care for children—nearly three in four food service workers and child care workers don’t have access to paid sick leave, putting public health at risk (pg. 2-3). No one wants to work while seriously ill, but people who are supporting themselves or their families need every paid hour of work they can get. Unpaid time off has serious implications for the economic security of workers and their families. Just three and a half days of missed work is equivalent to an entire month’s groceries for the average family (pg. 1). Paid sick days clearly benefit workers, but they also help employers by reducing turnover, which can be very expensive. Five cities and one state have already introduced their own paid sick days laws with great success. San Francisco instituted a paid sick days law in 2007 and saw greater increase in job growth as well as business growth compared to the five neighboring counties. The movement in support of paid sick days laws is making progress in states across the country. Find out what is going on in your state. Additional information and resources are available here.

The Healthy Families Act

Now pending in Congress, the Healthy Families Act (H.R. 1286/S. 631) would set a national paid sick days standard, allowing workers to earn up to seven paid sick days each year. The Healthy Families Act would guarantee paid sick days for most workers, allowing workers in businesses with 15 or more employees to earn up to seven paid sick days each year. These sick days could be used to recover from illness, access preventative care, or care for a sick family member, which is a crucial problem for all working parents. The bill would give victims of domestic violence, stalking, or sexual assault the opportunity to use their paid sick days to recover or get much needed assistance.

The Fair Minimum Wage Act

The Fair Minimum Wage Act (H.R. 1010/S. 460) would help families prosper—nearly 28 percent of workers who would be affected by an increase are parents (pg. 8). Currently, a parent who works full-time, year-round at a job that pays federal minimum wage will not earn enough to be above the federal poverty line (pg. 3). We need to help families struggling to provide for children by paying workers wages they can actually live on. The Fair Minimum Wage Act would raise the minimum wage to $10.10 via three incremental increases of $0.95, and then index it to inflation. To put the present (and shockingly low) minimum wage of $7.25 per hour in perspective, if minimum wage had increased at the same rate of the average worker’s wages, it would be about $10.50 today (pg. 4). Leaving minimum wage workers behind will increase income inequality and keep families in a cycle of poverty. 

The Paycheck Fairness Act

Women workers and their families would also benefit from the passage of the Paycheck Fairness Act (S. 84), which would target discriminatory pay practices that contribute to the persistent wage gap between women and men. The Paycheck Fairness Act would strengthen the Equal Pay Act to make investigation into employment discrimination against women more effective. Women earn, on average, $11,084 less annually than their male counterparts. This is especially hard on single mothers but also hurts two-parent families who rely on both parents’ wages.

The Working Families Flexibility Act

Unfortunately, the only proposal that has made progress in Congress so far is the Republican-backed Working Families Flexibility Act of 2013 (H.R. 1406), a bill with a misleading name that would actually undermine the Fair Labor Standards Act and force workers to spend more time away from their families by increasing overtime hours without paying workers overtime wages. The Working Families Flexibility Act, despite being bad news for all working families, passed the House on May 8th with a vote of 223-204 (with only three Democrats voting for the bill). The legislation allows employers the opportunity to give workers paid time off for overtime hours worked, instead of paying workers the overtime pay they have earned. Unfortunately, instead of making workers’ schedules more flexible, the bill will cause employers to increase workers’ overtime hours. Since they do not have to compensate workers for up to 13 months, the bill hands employers an interest-free loan for the amount of money they would have had to pay as time and a half wages. Because hourly-paid workers in today’s economy cannot say no to their employers without putting their jobs at risk, employees will be forced to choose comp time instead of pay. Provisions of the bill give employers all the power, including decisions as to when workers can take their comp time (this can be refused if it “unduly disrupts the operations of the employer”), and employers can even cash out comp time for wages if they choose to do so, leaving workers who had planned on having time off with no options. The bill provides no recourse for requests for time off that are unfairly delayed or denied and no protection for employees when businesses collapse or go bankrupt.

Take Action and Contact Members of Congress! 

Contact both of your U.S. senators and your U.S. representative and let them know that you support the Healthy Families Act (H.R. 1286/S. 631), the Paycheck Fairness Act (S. 84), and the Fair Minimum Wage Act (H.R. 1010/S. 460) and would like to see all these bills move forward. In addition, let your senators know that you oppose the Working Families Flexibility Act of 2013 (H.R. 1406). Hopefully, this bill will not move in the Senate; however you should still let your senators know that you oppose this legislation. For Illinois residents, Senator Mark Kirk (R-IL) is a member of the Senate Committee on Health, Education, Labor, and Pensions (also known as the HELP Committee), which all of these bills have to pass through, so contacting Senator Kirk is particularly important. Thanks for taking action!

For more information, please contact Wendy Pollack, director, Women’s Law and Policy Project, Sargent Shriver National Center on Poverty Law.

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Lenders use credit reporting information to determine a borrower’s creditworthiness and to make lending decisions. However, a new report by Demos reveals that a growing number of companies are checking credit reports as part of the hiring process.     

According to Demos, 1 in 4 unemployed people reported that a potential employer requested to check their credit report as part of the job application. Employers’ rationale for this practice is that people with bad credit scores will be less reliable or won’t be hard-working or high-quality employees. Yet the report clearly shows that negative beliefs about people with poor scores are nothing more than false stereotypes. According to Demos, financial misfortune is the major driving force behind peoples’ low credit scores, not irresponsibility or poor work ethic. Job loss, loss of health coverage, and medical debt are the leading reasons for poor credit scores—not laziness or irresponsibility. While these factors might hinder a person’s creditworthiness, there is no evidence to suggest that they hinder a person’s job performance. Additionally, African Americans and other minorities are more likely to have poor credit scores, partially due to the proliferation of predatory lending schemes that target minority neighborhoods. Often, these predatory financial products leave people with no option but to default on their loans. The practice of using credit checks in the hiring process is a clear example of structural racism and could be a driver of the ever-growing racial wealth gap.  

Moreover, credit scores are prone to error, and therefore cannot be relied upon as an accurate predictor of a person’s reliability as an employee. According to a recent Federal Trade Commission (FTC) study, 1 in 4 consumers identified at least one potentially material error among their three credit reports that could negatively affect their credit scores. Out of the people who found errors in their reports, just 5.2% were able to have their credit scores adjusted enough to move to a lower credit risk score. This study revealed that the Fair Credit Reporting Act (FCRA) is inadequate in allowing consumers to control their own credit scores. The Consumer Financial Protection Bureau (CFPB)’s recent comprehensive study of credit reporting found that ongoing efforts to measure credit report accuracy will likely continue to rely on consumers to identify potential inaccuracies in their credit reports and to rely on the dispute resolution system to validate that inaccuracies have occurred. However, the FCRA’s existing consumer dispute process will not identify or ameliorate certain types of errors that may be associated with the credit reporting agencies’ data processes.

As part of the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act, the CFPB was given authority to supervise both consumer reporting companies and those that provide consumer reporting companies with consumers’ credit information, such as large banks and many types of nonbanks. In July 2012, the CFPB adopted a rule to extend its supervision authority to cover larger consumer reporting agencies, and in September it released the examination procedures it will use to examine these companies. Previously, these companies were not supervised at the federal level. In October 2012, the CFPB began accepting consumer complaints about credit reporting; for the first time, this gave consumers individual-level complaint assistance with consumer reporting agencies at the federal level. The CFPB has indicated that it may also consider the development and implementation of data quality and accuracy metrics to reduce risk to consumers and assure compliance with FCRA obligations.

As of February 2013, eight states (California, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont and Washington) have passed laws prohibiting the use credit checks as part of the hiring process. During 2012, 35 bills in 17 states and the District of Columbia were pending related to restrictions on the use of credit information in employment decisions. Given credit checks’ low probability of providing reliable proof of a worker’s abilities and its disparate impact on minorities, this practice should be banned nationally. Moreover, when credit rating agencies make errors on reports, the person with the damaged score should not be punished. Requiring people who have suffered financial misfortune to face greater barriers to employment embodies everything America is not about. 

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Forty-six million Americans live in poverty. More than one in five children and nearly one in three single-parent families are poor. And yet, in 2012, Congress did virtually nothing to improve their lives. In fact, according to the Sargent Shriver National Center on Poverty Law’s sixth annual Poverty Scorecard, most significant poverty-related legislative proposals considered by the U.S. House of Representatives would have made poverty worse had they been enacted into law.

The 2012 Poverty Scorecard grades the voting record of every U.S. Senator and Representative on the most important poverty-related votes in 2012. We identified which votes to use in consultation with national experts in twenty different subject areas.  This year’s votes again cover a wide range of topics, including budget and tax, food and nutrition,  health care, immigrants, community and economic development, domestic violence, housing, legal services and veterans.  In all, we used 11 Senate votes and 17 House votes to grade the Members.    

In addition to showing Congress’ neglect on the issue of poverty, the Poverty Scorecard also shows that when it comes to poverty, as with other topic areas, there are very few moderates in Congress.  Based on 2012 voting records, 95 percent of the Senators and 92 percent of the Representatives were at one extreme or the other, i.e., they earned an A+ or A grade or a D, F, or F-.  Only five Senators and 32 Representatives earned a B or C.

The Poverty Scorecard found an inverse correlation between a state’s poverty levels and the voting record of its Congressional delegation.  Members with poor records in voting to fight poverty tended to come from states with higher levels of poverty whereas members with good records tended to come from states with lower levels of poverty.

The antipathy of the majority of the House of Representatives towards people living in poverty was best exemplified by its passage of Rep. Paul Ryan’s proposed budget, which would have dismantled Medicare by converting it into a private voucher program, undermined the structure of Medicaid and SNAP (formerly Food Stamps) by converting them into state block grant programs, and slashed funding for such important anti-poverty programs as the WIC nutrition program for pregnant women and young children, Pell Grants for Higher Education, mental health and substance abuse services, and workforce programs, Fortunately, the Senate rejected Rep. Ryan’s proposed budget.

Other House votes that would have made poverty worse included a vote to repeal the Affordable Care Act (Obamacare), separate votes to repeal two key provisions of the Affordable Care Act, votes to eliminate economic and community development programs for low-income people and neighborhoods, votes to slash funding for legal services and subsidized housing, and votes to prevent the federal government from protecting the civil rights of immigrants.

Most of the Senate’s significant poverty-related votes were on proposals that would have reduced poverty. Unfortunately a minority of Senators used parliamentary tactics to block consideration of legislation needed to vindicate women’s right to equal pay for equal work, and a proposal to increase jobs for veterans by creating a veterans job corps and providing for various veterans’ hiring preferences.

The only two legislative proposals included in the Poverty Scorecard that became law were needed to avoid a crisis. One extended expiring tax cuts and unemployment benefits for 2012 and the other averted the fiscal cliff.

Congress made few strides in reducing poverty last year. More action is required for millions of Americans to have access to basic programs that allow them to lift themselves out of poverty and reach for the American dream. By sharing these grades and holding lawmakers accountable, the Shriver Center will help to spark a legislative environment that has low-income families’ best interests in mind. To learn more, download the 2012 Poverty Scorecard from our website. 

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Several recent NPR stories reported by Chana Joffe-Walt that originated on This American Life perpetuate stereotypes and misconceptions about disability and the country’s main safety net programs that support people with disabilities. Many of these stories’ mistakes and insinuations have been pointed out and refuted in other blogs this week. These include comprehensive facts from the Center on Budget and Policy Priorities, a Media Matters fact check, strong protest from the Paralyzed Veterans of America to the stories’ skepticism about mental and other disabilities that cannot be seen, and a letter from over 100 groups that work on behalf of people with disabilities.

Ira Glass of This American Life issued a statement defending the reporter’s fact-checking of the piece, denying factual errors, and standing by the story. That statement, in turn, was rebutted by Shawn Fremstad of the Center for Economic Policy Research.

Although the blogs convincingly establish that the NPR stories make a number of errors about the disability programs, what is more disturbing to me is the tone of the reporting and the reporter’s cynical message that something is fishy with these programs. Joffe-Walt never outright claims that a significant number of the people who receive disability benefits are not in fact disabled, but reading and especially listening to the This American Life piece make it unmistakable that this is what she wishes to convey. Her stated “news” from her research is that the growth in disability benefits recipients reveals a hidden feature of our economy—that there are no jobs for lots of people with less than high school education in our economy. That’s a fair and useful point. But she clearly also conveys that she thinks there is something wrong with the disability programs, because people who tell her they would try to work if they could find a job instead are able to qualify for disability. 

Joffe-Walt says the disability definition is “squishy,” especially with respect to impairments that are not readily visible, because “you can end up with one person with high blood pressure who is labeled disabled and another who is not.” She apparently did not dig enough to find out that core inquiries in the disability determination process, which may be answered only by medical experts, are about the “severity” of impairments and the impact they have, when combined with all of the person’s impairments, on his or her ability to function in the workplace. High blood pressure, in particular, is explicitly blocked from being the basis for disability all by itself. Thus, two people with high blood pressure of different severity, in the presence of different additional medical impairments, can easily fall on different sides of the disability line. Nothing “squishy” about it, once you understand it.

Joffe-Walt questions the good faith of all 14 million Americans “on disability.” She never notes how stringent the disability requirements are, or that only 40% of applicants succeed in establishing disability. Although at times she concedes that many people getting disability benefits are actually medically unable to work, she also says that “going on disability,” which offers recipients small cash benefits and health coverage but also keeps them poor for the rest of their lives, is a “deal 14 million Americans have signed up for.” That conclusion assumes that, for most of recipients, “going on disability” was some sort of choice. But people who are disabled do not have a real choice. Their only “choice” is whether to apply for available subsistence income or to have no income at all.

The main problem I have with the piece is its paper-thin penetration of a deep problem. Joffe-Walt never examines the issues through what should be an obvious lens—what if virtually all of the people receiving disability benefits are actually disabled or medically unable to work? The real problem is not why so many people get disability benefits, but why so many people are disabled. If you spend any length of time in low-income communities, it becomes increasingly clear that there are lots of walking wounded, a reservoir of people who medically qualify for disability benefits but who have not been able to apply or navigate the system to get assistance.

Examining the issues through that lens gives rise to important questions about our health system and the healthiness of our workplaces (in addition to Joffe-Walt’s good point about the changing nature of the American job market). The one doctor Joffe-Walt could find in the Alabama county she visited apparently carries on a heroic practice. Yet one wonders how much preventive care, how much early diagnosis and treatment of conditions to keep them from becoming acute, how much well-child care, how much prenatal care is going on in that crowded practice, where so much of interaction involves assessing the disabling impact of impairments people already have. In the larger picture, there are important questions about the impact that a lack of health insurance, and its attendant lack of a regular relationship with a doctor, have on the working ability of the 50 million uninsured Americans.  

There is a huge debate raging in this country about vigorously implementing the Affordable Care Act, which has aggressive strategies to reform the health care system and insure most of the uninsured, all of which can bring down the number of people with disabilities. And we have the spectacle—in Alabama and elsewhere—of governors and legislators rejecting those reforms on ideological and political grounds. Joffe-Walt’s piece, unbeknownst to her, is a very poignant reminder of who and what those politicians are sacrificing on the altar of their political ambitions. 

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The chronically unemployed live within or haunt the edges of every American community. Unable to find work  due to a lack of education, extreme poverty, homelessness, family instability, substance abuse, mental illness, criminal histories, or race, ethnicity, and gender bias, their plight reminds America of how far short we’ve fallen from the promise of justice and opportunity. Almost 23 million people remain unemployed or underemployed, and poverty continues to grip over 46 million Americans. On top of that, large numbers of adults and out-of-school youth in the United States are chronically unemployed. Few of them are counted in formal unemployment statistics because they are no longer, or never were, sufficiently connected to the labor force to be counted in those statistics. What if we could attack these economic and societal ills with one swing? Well, I think we can.  

The Transitional Jobs strategy is a pragmatic approach to lowering chronic unemployment and poverty that cuts through the complex reasons for a person's unemployment and starts with the desired outcome--employment. Transitional Jobs combine wage-paid work, job skills training, and supportive services to help individuals facing barriers to employment succeed in the workforce. The person is placed in a subsidized, temporary, wage-paying job. Case-managed social services are also brought to bear while the person is working and earning an income to address the factors that have blocked that person from finding work in the past. Job development services then help place that person in unsubsidized work as soon as appropriate, and job retention services consolidate a successful transition to long-term employment and a career path. 

The transitional jobs strategy has produced promising outcomes for participants, often breaking through their chronic unemployment. Research shows that Transitional Jobs programs are the most promising strategy for supporting transitions to work for chronically unemployed Americans. They offer immediate and long-term benefits to individuals, families, employers, and communities, including: reducing recidivism rates; reducing reliance on public benefits and lowering taxpayer costs; improving educational outcomes for dependent children; increasing local demand for goods and services; and benefiting employers by increasing productivity and financial well-being.

Since there has never been a federal program or budget line dedicated to the transitional jobs strategy, practitioners and a growing number of local and state government officials have had to cobble together funding to support this work. As recognition of this strategy has begun to spread, some progress has been made toward incorporating it into a national approach to solving the dual problems of poverty and unemployment. The Obama Administration is currently operating a demonstration program in the Department of Labor--the first ever application of federal funds explicitly to transitional jobs. Still, more can and should be done to advance this strategy to help a greater number of people facing chronic unemployment and poverty.

As the Obama Administration moves into its second term, here are three ways the transitional jobs strategy can be adopted to attack chronic unemployment and poverty:

1.  Creating Pathways to Jobs for All Americans through Job Creation.

The Pathways Back to Work Act is aimed at providing subsidized employment and transitional jobs for youth, the long-term unemployed, and low-income Americans, along with job training to get unemployed Americans back to work, strengthen communities, and benefit employers. With almost 23 million people unemployed or underemployed, and millions more unemployed outside of the official count, the economy needs a booster shot. Measures like the Pathways Back to Work Act would do just that and can be structured to ensure that those who are chronically unemployed have access to transitional jobs in a greater number of communities across the country.

2.  Strengthening Families through Employment Opportunities.

The child support program serves half of all poor children in the United States and 17 million children in total. While many noncustodial fathers want to be involved with their children, many live in poverty and lack the resources to provide for their children financially. Most unpaid child support is owed by these parents, and for many the lack of a steady income is a major barrier to fulfilling parental obligations.

The Obama Administration has supported demonstration projects and coordination with the U.S. Office of Child Support Enforcement to test iterations of the transitional jobs strategy that seek to provide noncustodial fathers with on-ramps to employment and help them meet child support obligations. The Administration could expand these programs, and the states could re-vamp their child support programs to incorporate transitional jobs programming.

3.  Transitioning Chronically Unemployed Veterans to Civilian Employment.

Current unemployment rates for new veterans are higher than rates for other veteran cohorts, and new veterans require a range of supports--including targeted employment services and supports--to reintegrate. The disproportionate unemployment numbers among veterans also reflect a deeper problem: issues rooted in their military experience create barriers to becoming or remaining employed. As a result, a veteran’s initial unemployment upon return can become chronic. Transitional jobs programs, combining employment with services to address the deeper problems, are an important element of successful reintegration for veterans.

A transitional jobs program operating independently of the VA hospital system should be considered in order to serve veterans with barriers to employment who are not enrolled or participating in VA hospital services. Transitional jobs programs currently in operation within the VA hospital system should be expanded to meet the employment needs of chronically unemployed veterans in hospital settings in a greater number of communities.

The transitional jobs strategy provides a very promising opportunity to successfully attack the problems of chronic unemployment and poverty. There are seasoned practitioners who are ready to provide information, advice and technical assistance, brought together by the National Transitional Jobs Network. They have experience applying the transitional jobs strategy in a wide variety of contexts: as part of larger public employment strategies; focused on particular populations; or as stand-alone social enterprises.  The transitional jobs strategy is an excellent way to take aim at chronic unemployment and poverty.

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Congress’s bipartisan approval of the fiscal cliff compromise, H.R. 8, the American Taxpayer Relief Act of 2012, includes an extension of the federal Emergency Unemployment Compensation (EUC) program through 2013 (see Title V of H.R. 8), continuing crucial benefits for America’s unemployed workers. Many raised their voices to ensure that the unemployed were treated as a top priority in the fiscal cliff negotiations. This extension of the EUC program will help keep millions of people out of poverty.

The extension of EUC was appropriately deemed an emergency measure, which meant its cost is not required to be offset. The slow economic recovery makes this extension absolutely essential in helping people who are actively looking for work. Without the continuation of the EUC program through 2013, more than two million unemployed workers would have lost benefits on January 3, 2013, nearly one million would have run out of state benefits by March (and would not have had access to federal ones), and more than five million would have been denied EUC in 2013. In Illinois 90,000 unemployed workers would have received their last EUC payment by mid-January, and an additional 2,800 unemployed workers each week would run out of state benefits and would have no access to federally funded benefits.

Congress has never allowed federally funded unemployment insurance benefits to expire when the unemployment rate is above 7.2 percent (see figure 2), and, with the renewal of the EUC program, Congress preserves this crucial program. Although the nation’s jobs deficit is still significant, strong job creation policies and continued aid will help unemployed workers avoid their own personal fiscal cliff.

The maximum number of weeks of EUC unemployed workers may receive is determined by the number of weeks a state pays for regular benefits and the unemployment rate in that state. What does this means for unemployed workers in Illinois? For individuals who started their regular (state funded) benefits during 2012 (and therefore eligible to receive a maximum of 25 weeks of regular benefits, reduced from 26 weeks prior to 2012), and exhausted their regular benefits after September 1, 2012, it looks like the maximum number of weeks of EUC benefits they are eligible to receive is 35.75 weeks (final calculation still to be determined). This is a total of 60.75 weeks of unemployment insurance.

The Shriver Center recently published a guide to help workers through the unemployment insurance maze, A Worker’s Guide to Unemployment Insurance in Illinois. The guide covers a range of topics including eligibility issues, the claims process, and what to do if you are denied benefits. Also visit the website of the Illinois Department of Employment Security (IDES) for the latest information about the EUC program.

For more information on how unemployment insurance is crucial in reducing economic hardship for families and in putting people back to work, visit the National Employment Law Project’s website

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Mitt Romney famously was caught saying to a group of wealthy donors during the presidential campaign:

There are 47 percent of the people who….are dependent upon government, who believe that they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it. That that's an entitlement. And the government should give it to them…And so my job is not to worry about those people—I'll never convince them that they should take personal responsibility and care for their lives.

It turns out that, in addition to conveying an abhorrent message, Romney was pretty far off on his numbers. According to a new report by the Pew Research Center, “A Bipartisan Nation of Beneficiaries”:

• 55% of the American people have received benefits from at least one of the six best-known federal entitlement programs – unemployment benefits, Social Security, Medicare, SNAP (formerly Food Stamps), Medicaid and/or cash welfare. These six programs generate the vast majority of federal spending on the social safety net.
• 71% of the American people are part of a household where one or more people have received at least one of these benefits.
• If veterans’ benefits and federal college grants and loans are also counted, 86% of the American people—6 of every 7 Americans—are part of a household where one or more people have received at least one of these benefits.

Nor can Romney blame his election defeat on the “beneficiaries” of government largesse who, he also said, would “vote for the president no matter what.” As it turns out, there is not much difference in the political beliefs of those who have received benefits from one of the six major entitlement programs and those who have not:

• 57% of conservatives, 53% of liberals, and 53% of moderates say they have received benefits.
• 60% of Democrats and 52% of Republicans say that have received benefits.
• 59% of the people who voted for Obama and 53% of the people who voted for Romney say they have received benefits.

Even 2 in 5 relatively wealthy Americans—persons whose annual earnings exceed $100,000—say they  have received benefits from one of the six major entitlement programs.

Less surprising is the finding that women, blacks, and rural residents are more likely to have received benefits than their counterparts.

The Pew report also measured public attitudes towards benefits.  Fifty-seven percent of the public said that it is the government’s responsibility to care for those who cannot take care of themselves, with only a small difference between those who have received benefits (60%) and those who have not (55%).

There was a much greater difference on this point between people with different political orientations. Seventy-four percent of Democrats say that it is the government’s responsibility to care for those who cannot take care of themselves, but only 57% of independents and 38% of Republicans agree.

The report also found that some benefits are more popular than others. Providing unemployment benefits is just as popular among people who have never received them as those who have. However, among people who say the government has a duty to care for those who cannot care for themselves, there are double-digit gaps between recipients and non-recipients of Medicaid (13%), SNAP (14%), and cash welfare (17%).

President Obama and Congress have averted the fiscal cliff.  As we move on to a potential fiscal apocalypse if Congress fails to increase the debt ceiling before approximately March 1, policymakers should take careful note of the Pew report’s main findings. To reiterate, 55% of Americans have received at least one major entitlement benefit, and 7 out of 10 Americans are part of a household that includes a member who has received at least one of these benefits. Receipt of benefits is about the same across the political spectrum, with conservatives actually more likely to have received benefits than liberals or moderates. And 57% of the American people, including majorities of those who have and have not received benefits, believe that it is the government’s responsibility to care of those who cannot take care of themselves,.

Right-wing think tanks like the Heritage Foundation and others will continue to decry people who receive benefits as “takers” and disparage safety net programs for “breeding a culture of dependency on government.” As the Pew report shows, a solid majority of the American people has had a different life experience and rejects this view.

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Nicholas Kristof’s recently published piece, “Profiting from a Child’s Illiteracy,” uses stories about child poverty in Kentucky to come to false conclusions about the SSI program, which provides crucial aid to help very low-income families handle the expensive realities of caring for children with disabilities.   

Kristof alleges that parents can—and do—win SSI disability benefits for a child simply by making sure that the child is illiterate. He bases this on an opinion voiced by a schoolteacher about one child withdrawn from a literacy class. In fact, there is no such avenue for disability benefits in the SSI program, which has an extremely rigorous set of eligibility requirements. Falling behind in school cannot be the basis of a disability finding, just as doing well in school will not necessarily defeat a disability application. A finding of disability can only be based on medically documented conditions. It is very difficult for a child to prove disability for purposes of SSI, especially disability involving mental impairments. 

It is highly unlikely that the teacher in Kristof’s story had access to the child’s medical records. But based on this one anecdote containing a core mistake about the SSI program’s rules, Kristof concludes that the SSI program sometimes actually “perpetuates” child poverty by motivating—and causing—parents to deprive their own kids of their education. What a bare foundation for such a sweeping denunciation of parents in poverty raising children with disabilities!

Kristof points to an excellent early childhood literacy program operated by Save the Children in the same Kentucky area, and rightly praises early childhood education as a proven way to improve the chances a child will be upwardly mobile later in life. But he poses a false policy choice, advocating that Washington “take money from S.S.I. and invest in early childhood initiatives instead.” 

Children with disabilities clearly need both. There are strong relationships between the deprivations of deep poverty and mental health. Great early childhood literacy programs like the ones that Save the Children operate can provide much help to children in poverty who have disabilities. But the task is immensely harder if the families the children live in are abjectly poor. The bedrock strategy of the SSI program for children is to provide an essential platform of daily living support from which a child with disabilities can rise. 

If there are outlying cases involving abuse by a parent, those cases should be identified and dealt with. That is the stuff of program administration, not policy. For some reason, conservatives periodically have targeted this program for the most vulnerable children in the country, using trumped up allegations of abuse that have never held up under scrutiny. Kristof’s attack is wrapped in more sympathetic language, and he at least argues that the funds he would cut from SSI be used on early childhood education (instead of just to shrink the government), but in the end it is the same sort of unfounded attack. Children with disabilities need subsistence support and early childhood programs. Let’s not use misleading conclusions from outlying anecdotes to make a big policy mistake.   

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The fiscal cliff will remain in the headlines as the January 1 deadline for reaching a deficit reduction agreement looms. What’s in it for poor people? A lot.

If Congress and the President don’t act, several things will happen automatically on January 1; the convergence of these things comprises the fiscal cliff. The Bush tax cuts, the payroll tax cut, and the 2009 improvements to low-income tax credits would all expire, causing taxes to increase on all Americans and by an estimated $2,200 for the average, middle class family. Discretionary federal spending, both defense and non-defense, would be cut drastically through a process called sequestration. Head Start, child care, WIC, housing assistance, and other low-income programs would all be affected. In addition, over two million people would immediately lose their unemployment compensation, since all extensions beyond 26 weeks would expire.

Economists agree that this combination of substantial tax increases and deep spending cuts would put the economy into recession. Therefore, President Obama and Congress will be working towards a deficit reduction agreement that would take effect before January 1 and that would spare us from going over the cliff.

For low-income people it’s of paramount importance that any deficit reduction agreement does not increase poverty or income inequality. Every previous deficit reduction agreement has adhered to this bedrock principle, as did the Bowles-Simpson Bipartisan Commission on deficit reduction.  

The items of greatest and most direct concern to low-income people in the fiscal cliff showdown are the fate of Medicaid and the 2009 improvements to the low-income tax credits.

Cutting Medicaid, the health insurance program for low-income Americans, would not only harm those who are already participating but would jeopardize the Affordable Care Act’s (ACA) Medicaid expansion. The U. S. Supreme Court, in upholding the ACA, said that states may not be penalized if they choose not to expand Medicaid. The ACA makes expansion financially attractive to states as the federal government picks up 100% of the cost in the first years and 90% thereafter. Cuts to Medicaid, however, may cause states to worry that future changes would make this matching formula less favorable, discouraging them from proceeding with the Medicaid expansion.

The budget adopted by the House Republicans last year would have turned Medicaid into a block grant to the states. Election results have pushed block granting Medicaid off the table. However, those who want to cut Medicaid substantially may now push for a per-person cap on the federal Medicaid match, another version of a block grant that would shift the entire risk of increasing health care costs onto the states.

The second major objective for low-income people in the deficit–reduction debate is to extend the 2009 improvements to the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC). These improvements increased the EITC for families with three or more children and reduced the level of earnings a family must have before it can qualify for the CTC.  Failure to extend these provisions will drive nearly one million children into poverty.

The fate of these tax credits is related to the debate about how to raise more revenue.  President Obama has insisted that the marginal tax rate on the wealthiest 2%--individuals with income over $200,000 and couples with income over $250,000--return to the pre-Bush tax cut level of 39.6% from the current 35%. The Republicans have pushed to increase revenue by reducing tax expenditures rather than raising tax rates. There are two problems with this. First, reducing tax expenditures would substantially limit the value of the charitable tax deduction to upper-income people, resulting in fewer and smaller donations to charities that provide vital services to low-income people. Second, the low-income tax credits are themselves tax expenditures and would be vulnerable to being cut if the revenue increases are achieved by reducing tax expenditures rather than raising tax rates.

The future of the Medicaid expansion, low-income tax credits that lift a million families out of poverty, unemployment compensation for 2 million people, and massive cuts in programs that serve low-income people—all are hanging in the balance.  Our message to the politicians is simple and clear—reach a deficit reduction agreement that does not increase poverty or income inequality.

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The Census Bureau recently released new data capturing the state of poverty in the U.S. using the Supplemental Poverty Measure (SPM). The U.S. government uses two measures for quantifying poverty: (1) the official poverty measure and (2) the SPM. 

The official measure, also known as the Federal Poverty Level (FPL), is used to determine the eligibility of individuals applying for means-tested public benefit programs, such as the Supplemental Nutrition Assistance Program (SNAP), Medicaid, and Temporary Assistance for Needy Families (TANF).  

In March 2010, the U.S. Census Bureau announced that it would develop an alternative way to measure poverty and created the SPM. The SPM is an attempt to update the official poverty measure or FPL; it is generally agreed that the FPL is outdated and therefore underestimates the level of poverty in the U.S. The SPM is not intended to replace the FPL, but rather to supplement it. Thus, the FPL will continue to be the measure for determining eligibility for public benefits.

The SPM is a more robust tool for examining the overall picture of poverty in the U.S. For years, statisticians, policy analysts, and advocates argued that the official poverty measure was overly simplistic, as it is simply calculated by looking at gross pre-tax income. The SPM, on the other hand, takes into consideration geographic location, necessary expenses, taxes, and alternative forms of income such as public benefits. The final calculation of the SPM is the “sum of cash income; plus in-kind benefits that families can use to meet their food, clothing, shelter and utilities needs; minus taxes (or plus tax credits); minus work expenses; minus out-of-pocket medical expenses and child support paid to another household.”   

According to the first SPM data, which was released last November, 49.1 million, or 16%, Americans lived in poverty in 2010, significantly more than the official poverty measure for the same time period, under which 46.6 million people, or 15% of Americans, were living in poverty.

The new SPM data released earlier this month found that approximately 49.7 million or 16.1% of Americans were living in poverty in 2011 versus 46.6 million, or 15%, under the official poverty measure.  Although the report shows that there was no statistical change in the overall SPM poverty rate between 2010 and 2011, the data is still grim. According to the new SPM data, African American and Hispanic populations have significantly higher poverty rates than whites and Asians; 25.7% of all African Americans and 28% of all Hispanics were living poverty in 2011, compared to 14.3% of whites and 16.9% of Asians. Women were also more likely to be living in poverty compared to men;  53.5% of people living in poverty in 2011 were women versus 47% of men. As for poverty levels by age, according to the official poverty measure, 22.3% of children (under 18), 13.7% of adults (ages 18-64), and 8.7% of seniors (65 and above) were living in poverty in 2011. While under the SPM, 18.1% of children (under 18), 15.5% of adults (18-64) and 15.1% of seniors (65 and above) were living in poverty in 2011. 

Most importantly, the SPM examines the impact of various government programs on poverty. The new SPM data reveal that without Social Security the overall poverty rate would increase from 16.1% to 24.4%. Similarly, without refundable tax credits the overall rate would grow from 16.1% to 18.9%. Alternatively, if people didn’t have expenses such as child support, income and payroll taxes, work-related expenses, and medical out-of-pocket expenses, the overall poverty rate would decrease from 16.1% to 12.7%. 

The 2011 SPM data allow us to understand the current poverty levels in our society more clearly. There are somewhere between 45 and 50 million Americans living in poverty according to the SPM and the official measure. Yet, these measures still understate the number of people in poverty, since they focus solely on income poverty and do not even consider asset poverty. Asset poverty means having insufficient funds to meet one’s needs for three months if income were to disappear for those three months. According to the Urban Institute, 1 in 5 people, or 60 million Americans, were asset poor in 2010. Unfortunately in the 2012 election, tackling domestic poverty issues was not on either the candidates’ agenda or the media’s agenda. In a country with so much wealth and an overall increasing wealth gap as well as a worsening racial wealth gap, it is totally unacceptable that so many people are living in or on the edge of poverty, and we as a country need to bring this issue to the forefront.

This blog post was coauthored by Alex Hoffman.

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The Shriver Center’s mission involves improving the quality of life and opportunities of people living in poverty. From that perspective, here are some initial thoughts on the presidential election.

Yes, as some have argued, it would be good to have a more forthright conversation about poverty in the presidential campaign, to name it as a priority to be addressed, and to hear the competing strategies. The principal framing of both sides on economic issues focused instead on the middle class. Much of that is unavoidable—the taking of advice from pollsters and experts about what messages will work during a particular passage of time to improve the chances of victory. That is a lesson all of us in the advocacy world have been struggling to learn for many years—the point is to win, to actually move the ball, not to deploy more personally satisfying rhetoric. 

A quick reminder about the time we are in helps to explain this middle-class framing. The Great Recession has dramatically blurred the lines between the middle class and people in poverty. Lost jobs, lost homes, lost health insurance, lost savings, lost credit, broken neighborhoods, and the very real threat of all those things for people who have managed to avoid them so far are all signs of the perilous nature of middle-class status. And yet the data tells us that everyone, rich or poor or in the middle, prefers to think of themselves as middle class. For most people in poverty, policies framed as advancing the middle class are policies aimed to help them.

So I’m OK with the framing. Particularly from the Obama side of things, it is hard to argue with success. Far more important than framing is the practical impact that the administration’s policies and economic plans will actually have on the prospects for people in poverty. What can we glean from the campaign and from last night? 

The acceptance speech was a resounding affirmation of the core attitude essential for a positive policy direction for people in poverty: “We are all in this together.” The election was yet another chapter in the major struggle of our times between competing narratives about national political life: “we are all in this together” versus “the primacy of the individual.”  People in poverty, and people in the middle class at risk of falling into poverty, will fare better when the general tide of the times favors the common good, mutual duty and responsibility, and the community as well as the individual.

The first level of translating this public narrative into practical outcomes that help people in poverty is the general attitude about the role of government. The campaign juxtaposed the Tea Party attitude that government is bad—because it is government—against the pragmatic notion that government is crucial to and capable of solving problems. As timely exhibited by the ongoing response to Hurricane Sandy, government can competently address emergencies without partisan rancor. The answer to government failure (Katrina) is not to jettison government but to do the job better (Sandy). What bigger emergency, what more compelling need for a smart pragmatic government role, than the thorny and massive-scale issues of poverty?

As a specific illustration of how winning these high-level arguments can produce pragmatic progress, we will now see the full implementation of health care reform. The Affordable Care Act is the single biggest blow against poverty since the 1960s—half a century, or the whole career of an anti-poverty advocate my age. It hasn’t been framed that way, but that’s what it is. It completes Medicaid, making health coverage available to everybody who is poor, which instantly makes them more employable and productive and opens the path to the middle class. It makes affordable commercial coverage available to the whole economic spectrum well up into the middle class, boosting upward mobility, and instantly eliminating the nightmare of lost coverage, bankruptcy, slow death from untreated conditions, blocked aspirations, and loss of middle-class status. The Affordable Care Act stands as a major rebuttal to those who say President Obama got nothing done, or did nothing to address poverty, in his first term.

The Affordable Care Act is a prime manifestation of “we’re in this together,” and of a pragmatic role for government in solving a major economic issue for people in poverty and the middle class. The leading critique against it took the opposite sides of these arguments—the mandate was “the biggest attack on freedom ever” (primacy of the individual) and the law was “too much government” —and failed.

From public narrative, to the role of government, to specific initiatives, the election can be understood as a promising direction for the prospects for people in poverty. It is not self-executing, however, and there are many obstacles, starting with a Congress probably not convinced that these core arguments are conclusively decided. Looming immediately ahead are the immense issues of the “fiscal cliff” that have profound implications for people in poverty. There is a compelling role for those of us committed to the improvement of the prospects of people living in poverty to help see to it that the promising direction of the election produces that improvement.        

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California’s domestic workers, primarily immigrant women of color, vowed to continue fighting for labor rights after Governor Jerry Brown vetoed Assembly Bill (A.B.) 889, the Domestic Workers Bill of Rights. Brown said in his veto message that the bill raised too many unanswered questions. But the National Domestic Workers Alliance accused Brown of doing a “tremendous disservice” not only to the workers but to the people they care for. After multiple mobilizations in Sacramento of thousands of workers, for whom time away from work was a real sacrifice, and after New York adopted similar legislation in 2010, workers had been hopeful.

The labor of domestic workers, who care for children, older people, and people with disabilities, goes largely unrecognized, and these workers lack basic protections that others take for granted. For historical reasons, domestic workers are not covered by the National Labor Relations Act and other employment laws. And because domestic workers toil in isolation in individual homes, taking concerted action can be difficult. But in recent years, across the country, they’ve found each other and begun to organize.

A decade of advocacy in New York City culminated in a state law that provides expanded overtime pay, protection from discrimination, mandatory days of rest, and other basic benefits for the tens of thousands of women who work as nannies, housekeepers, and companions for the elderly in New York State. Clearinghouse Review reported on that effort last year. Authors Ai-jen Poo and E. Tammy Kim described how a campaign that began with a focus on domestic workers’ grievances against individual employers grew into a multi-year effort focused on the state legislature. Domestic workers from the Asian, South Asian, Latina, and Caribbean communities collaborated to design the legislation. Starting in 2003, they built a base, recruited allies, and told their stories publicly. The New York Assembly passed a version of their bill in 2009; the state senate followed in 2010, and Governor David Paterson signed the bill that summer.

California domestic workers have also been organizing for a decade, and workers’ advocates were hopeful that California would follow New York’s lead, particularly given California’s large immigrant population. Domestic workers’ rights legislation had passed in the state in 2006 but was vetoed by then-Governor Arnold Schwarzenneger, a Republican. This time, there was reason to think that the chances were better with Democrat Jerry Brown in office. After all, the first time Brown was governor—some 35 years ago—he staunchly supported the landmark California Agricultural Labor Relations Act, which dramatically increased the labor rights of farmworkers.

A.B. 889 would have removed the exclusion of California’s approximately 200,000 domestic workers under other state labor laws and, in the words of Sylvia Lopez, a leader of the California Domestic Workers Coalition, recognize them as “real workers.” If Brown had signed the bill into law, Lopez and her colleagues would have been assured of the same rights other employees enjoy to meal and rest breaks, overtime pay, and workers compensation. Domestic workers who “live in” or work 24-hour shifts would have received certain industry-specific protections as well, such as the right to eight uninterrupted hours of sleep and use of kitchen facilities to cook their own food.

But Governor Brown wasn’t persuaded. In his veto message, he expressed concern for elderly or disabled employers of domestic workers, asked what the bill’s “economic and human impact” would be on employers, and also raised other questions. However, he didn’t reject the bill’s approach entirely, calling instead for the Department of Industrial Relations to “study” his questions and simultaneously to address certain domestic worker issues through regulations.

Although describing itself as “shocked” at the veto, the National Domestic Workers Alliance vowed to continue and expand its campaign in California and to move into other states as well, suggesting Illinois and Massachusetts as likely locales for new efforts. Work is only beginning in these states, and the Shriver Center will be involved in the campaign in Illinois as it unfolds.

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On September 12, the Census Bureau released official poverty data that showed that the national U.S. poverty rate did not significantly change since 2010. While the poverty rate did not increase, but it also did not decrease, which is bad. There are still 46 million people in America who live in poverty, including one in every five children. That’s 25% more people than at the start of the recession in 2007 and is still the highest number in the 52 years that this data has been collected.

This past week, the Census Bureau released The American Community Survey (ACS), which provides more detailed poverty data on the state and local level.  According to the ACS data, the number of people with incomes below the poverty line grew by 0.6 percentage points between 2010 and 2011. This was the fourth consecutive increase in the poverty rate, however, this year’s increase was smaller than the increases between 2008 and 2009 (1.1%), and between 2009 and 2010 (1.0%).

According to the ACS, among large metropolitan areas, poverty rates ranged from 8.3% to 37.7% in 2011. Additionally, 27 states and the District of Columbia saw no statistically significant change in their poverty rate since 2010, while 22 states saw increases in their poverty rates. Only Vermont had a decrease in its poverty rate, from 12.7% in 2010 to only 11.5% in 2011.

Nationally, real median income dropped 1.3 percentage points since 2010, from $51,144 to $50,502. According to the ACS, 27 states had median household incomes lower than the national median, while 19 states and the District of Columbia had higher median incomes. Median incomes ranged from a high of $70,004 in Maryland to a low of $36,919 in Mississippi. Vermont, where median income rose from $50,707 in 2010 to $52,776 last year, was the only state to have an increase in median income.

The data also show that, nationally, the percentage of people without health insurance coverage decreased (16.3% in 2010 to 15.7% in 2011). In particular, the Patient Protection and Affordable Care Act provision enabling adult children under age 26 to obtain coverage under their parents’ policies, which went into effect in 2010, decreased the number of uninsured young adults aged 19 to 25. Coverage of this group increased from 68.3% to 71.8%.  Overall, 37 states and the District of Columbia saw increases in health coverage, while 13 states had no significant change. And, once again, Vermont was the state that had the highest increase in coverage in the young adult (aged 19 to 25) group, going from 75.2% in 2009 to 89.1% in 2011. Vermont was also one of only nine states whose increase was greater than the national average.

Maybe one question to ask is “What’s up with Vermont?” since, in all of the reported poverty measures, Vermont is on the top. What specifically is the state doing to reduce poverty, and how can these efforts be translated to other states?

While it is impossible to draw a direct causal link between poverty reduction efforts in Vermont and decreases in the state’s poverty rates, there are some possible drivers of this correlation. For example, Vermont has the third highest minimum wage in the U.S. ($8.46).  Wages are one of the basic determinants of income so, logically, a higher minimum wage should reduce poverty.

Vermont has also enacted policies and programs that promote saving and asset building and protect consumers. For instance, with respect to education, Vermont allows savings in its 529 college savings program without a fee, and the state provides incentives for savings in the state’s 529 college savings program for residents. It has also developed content standards for personal finance courses that schools must implement when teaching financial education.  For business development, Vermont provides state funding through the use of federal block grant funding to support microenterprise development.  To protect homeowners from foreclosure, Vermont provides access to judicial review, regulates mortgage servicers, and limits deficiency judgments. In terms of health care policies, in Vermont, both parents and childless adults earning below 300% of the Federal Poverty Level (FPL) are eligible for Medicaid. Additionally, the state's Medicaid program covers basic dental care for adults and provides an extension of COBRA coverage for small firm employees.  Finally, Vermont has strong asset building policies. It has eliminated asset limits in its Supplemental Nutrition Assistance Program (SNAP) program and excludes at least four categories of assets in its Temporary Assistance for Needy Families (TANF) program. Vermont also has a strong state funded Individual Development Account (IDA) program. It provides tax incentives for working families such as a refundable state Earned Income Tax Credit (EITC) which is 32% of the federal EITC, as well as a Child and Dependent Care Tax Credit.  Finally, Vermont has strong consumer protections against predatory lending.  It caps payday lending and short-term installment loan rates (18% and 24% respectively) and prohibits car-title lending entirely.

Overall the 2011 poverty data show that there is a lot of work to be done when it comes to fighting poverty on both the local and federal level. However, poverty reduction is possible if states begin changing their public policies to promote asset building and savings opportunities and strong consumer protections to protect such savings and assets.  

This blog post was coauthored by Alex Hoffman.

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Yesterday the U.S. Census Bureau released data on poverty and health insurance coverage for 2011. The headline is that poverty stayed the same in 2011 as it was in 2010. Not too interesting, unless one looks beneath the surface. 

Poverty: There are still 46 million people in America who live in poverty, including one in every five children. That’s 25 percent more people than at the start of the recession in 2007. The poverty level for a family of three is $19,090. 

Economic Recovery and Poverty: There is no assurance that poverty will decrease as the economy recovers. During the last economic recovery, economic growth was so weak and the monetary benefits of recovery were so unevenly shared that the official poverty rate grew from 11.7 percent at the start of the recovery in 2001 to 12.5 percent when the recovery ended in 2007.   

The Middle Class: Middle class living standards took another serious blow as median income fell by 1.5 percent in 2011. The median income has fallen by eight percent since the recession started in 2007. For a family with $50,000 in annual income, that’s a loss of $350 per month.

Government Programs Lifted Millions Out of Poverty: Unemployment insurance kept two million people out of poverty in 2011 and social security kept twenty-one million people out of poverty. In addition, Food Stamps (now called SNAP benefits) and the earned income tax credit are not considered when the official poverty rate is calculated because they are “non-cash benefits.” If counted, they would have lifted ten million people, including five million children, out of poverty.

Income Inequality:  Income fell for the bottom four-fifths of American households, and rose by two percent for the top-fifth, including five percent for the top five percent of households—a $15,000 increase in annual income. Apart from being unfair, this continuing growth in income inequality is a drag on economic growth and job creation, shifting resources away from persons who will spend them and stimulate economic activity.     

Overall, the Census numbers paint a picture of continuing high rates of poverty, government programs that provide an essential safety net, a major decline in middle class living standards, and an ever-widening gap between rich and poor that is undermining our economic recovery.  

This article is largely based on analysis by the Center on Budget and Policy Priorities. 

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The recession has made many Americans understandably desperate for employment. Some money-hungry employers take advantage of this desperation by misclassifying new hires as independent contractors rather than employees. You know how people sometimes talk about distinctions without a difference? The distinction between independent contractors and employees is not one of those meaningless distinctions. 

Misclassifying an employee as an independent contractor can have dire consequences for the worker. Independent contractors who are injured on the job are not eligible for workers’ compensation. Independent contractors are also not eligible for minimum wage, overtime, unemployment insurance, and any benefits an employer offers to his or her employees, such as health care or vacation benefits. Even worse, the workers who are most frequently misclassified as independent contractors work in low-wage industries such as construction, home health care, landscaping, and delivery services—so they are precisely the people who need employment protections the most.

Although employers that engage in independent-contractor misclassification certainly save money, society as a whole does not benefit. The government loses tax revenue when employers misclassify their employees, and competing businesses suffer when misclassifying employers game the system.

What is being done to fight this problem? On the federal level, the Wage and Hour Division of the U.S. Department of Labor maintains a helpful website outlining the federal government’s response to independent contractor misclassification. The Department of Labor is fighting misclassification through a multi-pronged Misclassification Initiative. As part of that initiative, in 2011 the Department of Labor and the Internal Revenue Service entered into an agreement to “work together and share information to reduce the incidence of misclassification of employees, to help reduce the tax gap, and to improve compliance with federal labor laws.” The Department of Labor has also signed memoranda with individual states outlining plans to cooperate on this issue.

In addition to working with the Labor Department, some state and local governments are tackling independent-contractor misclassification on their own. The range of state and local approaches to this problem is broad; some states, such as Illinois, have passed their own laws to reduce independent-contractor misclassification. Some states have created task forces to fight the problem through investigating alleged misclassification, filing lawsuits, and educating employers and workers about their rights and responsibilities. And some states have given their labor departments more budget dollars to crack down on this problem.

As Andrea Vaughn of the Public Justice Center discussed in a recent issue of Clearinghouse Review, Maryland has both passed a law prohibiting independent-contractor misclassification and created a task force to fight it. In her article, Identifying Misclassified Workers: Lessons Learned from Maryland’s Workplace Fraud Act, Vaughn describes the independent-contractor misclassification problem generally as well as the history behind Maryland’s 2009 law, the Workplace Fraud Act. Vaughn observes that “[t]he strength of the opposition that the Act has faced—both before and after its passage—shows the potential power that this type of legislation bears against unscrupulous employers.” Advocates for low-income workers should take note of the Maryland act and develop a nuanced understanding of independent-contractor misclassification so that they can address this problem in their own work. 

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Tax policy has taken center stage in Congress, with two important votes in the Senate last week and two more expected in the House this week. The members of each body are voting on a pair of bills that present stark differences.

Senate Majority Leader Harry Reid offered a bill that would have ended the Bush tax cuts on income over $200,000 for individuals and $250,000 for couples (the 2% of taxpayers above this income level would continue to benefit from the Bush tax cuts’ lower rates on the first $200,000/$250,000 of their income). Reid’s bill also extended the 2009 improvements to refundable tax cuts for the working poor.

Senator Hatch offered a bill that would have fully extended the Bush tax cuts and ended the 2009 improvements to the refundable tax cuts for the working poor.

How the Hatch bill’s elimination of the 2009 improvements to the refundable tax cuts for the working poor squares with his pledge (and that of 39 other Senators who voted for his bill) to Grover Norquist not to raise taxes on anyone, ever, is unclear. Perhaps a footnote excluded taxes on the working poor from that pledge. 

Senator Reid’s bill carried by a vote of 51-48; all Republicans voted against the bill and all Democrats but one voted in favor. Senator Hatch’s bill went down to defeat 54-45.

This week we’ll see more of the same in the House, which will vote on proposals very similar to the Reid and Hatch bills. Expect opposite results.

Extending the Bush tax cuts on income over $200,000 for individuals and $250,000 for couples would reduce the average millionaire’s taxes by $140,000. 

Congressman Ryan’s even more costly budget plan, besides extending all of the Bush tax cuts, would add four new tax breaks that are heavily skewed to the wealthy, with 39% of the new tax breaks going to millionaires. Under Ryan’s plan, the average millionaire would pay $400,000 less in taxes, for a 12.5% increase in after-tax income. Meanwhile, Ryan’s elimination of the 2009 improvements to the refundable tax cuts for the working poor would cause the after-tax income to fall for Americans with income below $30,000.

These persistent efforts to give massive tax breaks to the wealthiest people in our society conflict with public opinion on tax policy. Americans think that making the tax system fairer is the most important goal for reforming our tax system; according to a recent poll conducted by Hart Research Associates for Americans for Tax Fairness, Americans believe, by a two-to-one margin, that we should raise income taxes on the richest 2% of households.

Hence, those who continually seek any opportunity to cut taxes at the top of the income scale are fundamentally out of step with the prevailing majority opinion that the wealthy should pay more in taxes, not less.

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On July 1, Illinois workers will lose ground, and our policies will continue to undermine our business climate. 

July 1 marks the second straight year that Illinois has not raised the state minimum wage. So while costs have risen on families’ necessities, many Illinois workers are less able to afford the basics. This spring, the Illinois Senate Executive Committee took testimony, including from the Shriver Center, about S.B. 1565, a bill to raise the state minimum wage to its historic value and index it to inflation. The committee voted to send the bill on to the full state Senate. But when the legislative session ended in May, S.B. 1565 still hadn’t come to a vote. This summer, it is critical we contact legislators in both the state House and the Senate, so they hear our voices and pass this important legislation in the fall.

Raising the minimum wage will help Illinois families. Over one million workers in Illinois earn at or near the minimum wage, and a third of Illinois workers earn $12 an hour or less. These workers represent all ages, demographics, and education levels. Most low-wage workers are 30 or over, and one in seven has a college degree. People who work for a living should earn enough to provide for themselves and their families. If a worker earns the minimum wage here in Illinois, $8.25 an hour, and works 40 hours a week, 50 weeks a year, he or she makes just $16,500. Families depend on minimum-wage workers, and there’s nowhere in Illinois a family of two with the parent working full-time, year round, can make it on just $17,000.

Raising the minimum wage will also help Illinois businesses. A recent study concluded that the proposal to raise the minimum wage in Illinois in S.B. 1565 would create 20,000 new jobs and over $2 billion in net economic activity. Right now, our businesses are suffering because of a lack of consumer spending. Two-thirds of the state economy is driven by consumer spending. Businesses can’t expand until Illinois families have more to spend. Raising the minimum wage will put money in the pockets of hard-working Illinois families, who will spend it right in their communities, helping businesses, who will in turn hire more workers. Furthermore, by helping workers cover the basic necessities, raising the minimum wage helps reduce employee turnover, increase worker productivity, and reduce workers’ reliance on taxpayer-funded public benefits.

The minimum wage in 1968, then $1.60 an hour, would be worth about $10.60 today. When Dr. Martin Luther King, Jr., was assassinated in Memphis in 1968, he was there advocating for economic justice for low-income workers. His work to make a more just society is as of yet incomplete, and his demand that workers be treated with dignity and fair pay rings just as true today. Raising the minimum wage is a step towards a just society, where hard work is rewarded with an income that can sustain a family.

It’s time to create a fair minimum wage that’s in line with its historic level—around $10.60 an hour—and indexed to inflation. That’s why the Shriver Center supports the Raise Illinois Campaign, and I hope you will as well.

Please sign the voter petition today, and “like” the campaign on Facebook. Then get involved, get educated, tell your story, find and contact your state legislators, and advance the fight for a fair minimum wage in Illinois.

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Illinois legislators have approved a $73 supplemental appropriation to fund child care subsidies in 2012. The Child Care Assistance Program (CCAP) helps low-income parents who need child care to work or go to school. Parents share in the cost of care by making a co-payment based on the family’s income and size, with the state paying the balance based on a provider reimbursement schedule. In early May, the Illinois Department of Human Services sent a notice to 35,000 homes and centers participating in the CCAP informing them that unless a supplemental appropriation was approved, they would receive no payments until July for services rendered in April, May and June.

Unfortunately, a companion bill will reduce and delay the assistance provided to recipients of Temporary Assistance to Needy Families (TANF) by reinstating a 45-day application processing deadline and then paying benefits retroactively only to the thirtieth day after application. This will impose significant hardship on the most vulnerable poor families.

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This post was coauthored by Sessy Nyman, vice president for policy and strategic partnerships at Illinois Action for Children. 

There is no other way to describe it — the state budget proposals in Springfield are a disaster for working families and their children.

More than $85 million in truly frightening cuts to the Child Care Assistance Program are proposed in this budget. The CCAP helps low-income parents who need child care to work or go to school. Parents share in the cost of care by making a co-payment based on the family’s income and size, with the state paying the balance based on a provider reimbursement schedule.

These cuts include an on-average 52-percent increase in a parents’ co-payment, a significant reduction in eligibility to qualify for the program — from 185 percent of the federal poverty level to 150 percent to enter, and the elimination of a scheduled rate increase to center-based providers. This will send thousands of families out of the CCAP and force countless providers to close their doors.

In the long term, less access to child care is also likely to produce a myriad of social problems that result when young children do not get the nurturing care they need.

To make matters worse, these cuts will start a domino effect that ultimately puts low-income families with children at risk of losing valuable early childhood education opportunities.

Many families that are enrolled in the state’s Preschool for All program also receive child-care assistance or participate in Head Start programs. They rely upon child-care assistance to access care for their children before and after their child’s half-day of preschool.

Where will a family send their child after each half-day of preschool if they are no longer eligible for child-care assistance, cannot afford the massive increase in their child-care co-payment, or cannot find child care since so many providers have been forced out of business by budget cuts and late payments from the state?

If child care is cut, there will not be another option for the families that depend on it. If education is cut, we cannot expect our schools to improve. Illinois will clearly violate its constitutional responsibilities to provide for the safety and welfare of its people both now and in the future if these cuts are enacted.

Research, including that of Nobel Prize-winning economist James Heckman, shows that every dollar spent on early childhood development, including the years spent in a child-care setting, yields at least eight dollars in return. Indeed, one study after another has concluded that investing in quality early childhood education and care produces a higher rate of return than any other public investment. Illinois willingly refuses that return on investment and the economic impact it brings if it severs the links in the chain of early childhood development.

Moreover, investing in child care creates jobs and stimulates the economy. Every dollar we spend on child-care assistance makes it possible for a single mother to work, creates a job for a caregiver, and enhances the early childhood experience of a child. It also pumps dollars into local communities.

Parents need full-day child-care options in order to participate in the state’s Preschool for All programs that promote this early child development. Illinois’s early childhood system has been designed to provide our highest-risk children with the school readiness opportunities children need, and the full-day child-care options families need to work and contribute to the economy.

Preschool for All, Head Start, and child care work hand in hand to support families today and prepare children for the brightest tomorrow possible.

We live in a society that places a very high value on work and believes that every parent should support their children through work. As a society, we rightfully expect parents to put their children first, even when times are tough. It is time that we, as residents of this state, demand the same from our elected leaders — put our children first, especially when times are tough.

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Last week, House Republicans approved a budget plan titled The Path to Prosperity: A Blueprint for American Renewal.  In his introduction to the budget plan, House Budget Committee Chair Paul Ryan argues “[t]he social safety net is failing society’s most vulnerable citizens and poised to unravel in the event of a spending-driven debt crisis.”  Unsurprisingly, the Republican budget contains many cuts to the social safety net, including cuts to the Supplemental Food Assistance Program (SNAP), formerly known as the Food Stamp Program.  The Ryan budget would cut 17 percent of the SNAP budget over ten years, beginning in fiscal year 2013. 

Despite the draconian nature of the SNAP cuts, the Ryan budget proposal is notably short on details regarding how exactly the cuts would be structured.  The only concrete proposal the Republicans offer is to convert the SNAP program into a block grant “tailored for each state’s low-income population” beginning in 2016, with benefits “contingent on work and job training.”  Block grants are fixed sums of money that the federal government gives to the states. These grants are unresponsive to changes in need and fail to provide a stimulus during economic slowdowns.

It is worth reading some of Ryan’s critique of SNAP in detail. Ryan acknowledges that SNAP “serves an important role in the safety net by providing food aid to low-income Americans,” but criticizes the program’s growth.  Ryan writes:

“Enrollment grew from 17.3 million recipients in 2001, to 23.8 million in 2004, to 28.2 million in 2008, to 46.6 million today.  According to the U.S. Department of Agriculture, “The historical relationship between unemployment and SNAP caseloads diverged in the middle of the decade … As the unemployment rate fell 1.4 percentage points between 2003 and 2007, SNAP caseloads increased by 22 percent.” The trend is one of relentless and unsustainable growth in good years and bad.  The large recession-driven spike came on top of very large increases that occurred during years of economic growth, when the number of recipients should have fallen.”  

According to Ryan, the “unsustainable growth” in SNAP participation has been driven by the program’s structure. In Ryan’s view, because states receive money in proportion to how many people they enroll, they have an incentive to enroll as many people as they can, with no incentives to make sure that SNAP recipients are working or participating in job training programs.

Let’s unpack Ryan’s assertions.  First, where is Ryan getting his numbers?  His numbers describing the relationship between unemployment and SNAP caseloads come from a March 2012 article titled ”What’s Behind the Rise in SNAP Participation?” in the U.S. Department of Agriculture’s magazine, Amber Waves.  Ryan’s quotation from the article is selective, to say the least; immediately after the language Ryan quotes describing the decline in unemployment between 2003 and 2007, the authors write that during the same time period, “[t]he number of people in poverty rose by 4 percent, indicating that economic need remained high even as unemployment declined.” 

But Ryan left that part out.

Second, do the article’s authors come to the same conclusion that Ryan does?  Not really.  It is true that, over the last decade, several pieces of legislation allowed states to be more flexible in how they administered SNAP.  As the states improved their application processes and it became easier for people to apply, more people participated in the program.  But there have also been changes in federal policy that have increased SNAP participation. As the Amber Waves authors note, several agricultural bills expanded categories of exempt assets—allowing people with retirement and educational accounts, as well as car owners, to receive SNAP benefits. Ryan also ignores the 2009 increase in benefits that was a part of the American Recovery Reinvestment Act of 2009—an increase that was always intended to be temporary and will expire in November 2013.

As the New York Times pointed out in an editorial about Ryan’s budget plan, “[a]lready, most people who get SNAP benefits use them up in the first two weeks of a month, and many turn to food banks by month’s end. Cutting benefits so sharply would lead to a significant increase in hunger, particularly among children, which would quickly create dangerous ripples through the health and education systems.” Indeed, almost half of SNAP recipients in fiscal year 2010 were children. That fact might be particularly important in Ryan’s analysis. After all, children don’t vote.

The Center on Budget and Policy Priorities has excellent resources for advocates concerned about the Ryan budget’s impact on SNAP, including a comprehensive analysis of the budget’s effects on SNAP recipients and a table describing the cuts’ state-by-state impact.  For example, in Ryan’s home state of Wisconsin, 844,000 people are currently scheduled to receive SNAP benefits in 2013.  That’s 844,000 people who would feel the belt-tightening effect of these cuts.

Clearinghouse Review: Journal of Poverty Law and Policy recognizes the importance of SNAP to legal aid lawyers and other advocates for low-income people, which is why the Review is dedicating its 2012 special issue to hunger and food insecurity.  Historically, the Review has prioritized helping advocates stay current with trends in SNAP advocacy.  The Review recently published articles about the use of SNAP at fast food restaurants and the legality of subjecting participants to new identification requirements such as fingerprinting.  The 2012 special issue will examine SNAP’s past, present, and future, as well as physical, employment-related, and environmental aspects of low-income communities that limit access to nutritious food and affect people’s overall health.  Look for the 2012 special issue of Clearinghouse Review in the fall. 

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The number of people in poverty has risen to unparalleled levels. According the most recent Census Bureau data, there were 46.2 million Americans living in poverty in 2010, up from 43.6 million in 2009 (an increase of 2.6 million). In other words, more than one in six Americans were poor in 2010. This is the highest number since the Census Bureau began gathering data 52 years ago, superseding last year’s all-time high.

What has been the legislative response of the United States Congress to the increase in poverty? Virtually nothing. Only one bill that will reduce poverty—legislation that will expand job opportunities and training for veterans—passed the Senate and House and was signed into law by the President in 2011.

The Shriver Center’s 2011 Poverty Scorecard, released today, rates every member of Congress on how they voted on anti-poverty legislation. In consultation with national anti-poverty experts in 20 different fields, we identified the 18 House votes and 11 Senate votes that were the most significant votes to people in poverty in 2011. The 2011 Congressional Poverty Scorecard includes a thorough summary of each vote we scored that describes the measure that was voted on and why it was important in fighting poverty. 

In past years, almost every vote important to people in poverty concerned a legislative initiative that would fight poverty. In contrast, most of the votes in 2011 that were of the greatest significance to people in poverty were votes against legislation that would have made poverty even worse.

Several votes would have eliminated programs that people in poverty rely on, including national health reform, legal services, school-based health centers, the McGovern-Dole international food program, and three important foreclosure relief and neighborhood stabilization programs.

Other votes were on sweeping proposals that affected a wide array of anti-poverty programs. These included proposals to dismantle the Medicare program, undermine the structure of Medicaid and the Supplemental Nutrition Assistance Programs (formerly Food Stamps), enshrine a balanced budget requirement and other ruinous fiscal principles in the U.S. Constitution, and substantially cut funding for Pell Grants for higher education, employment and training programs, the WIC nutrition program for pregnant women and young children, and mental health and substance abuse program.

In addition to making poverty worse, some of the proposals would have exacerbated the 30-year trend of growing income inequality in the United States. In particular, the Ryan budget proposal approved in the House but rejected in the Senate would have made massive cuts in federal programs, most of which would have fallen on the poor, with all of the resulting savings used to provide additional tax breaks for the wealthy.

The Poverty Scorecard is a powerful tool that advocates, media, and citizens can use to evaluate the performance of their elected representatives. Each Senator and House member is assigned a letter grade, A+ through F-, based on their overall voting performance. Members who did not vote on enough bills were not graded. In total, we graded 431 of 435 Representatives and all 100 Senators. Readers are encouraged to examine their representatives’ voting records, as well as other data available in the Poverty Scorecard, to learn more about what Congress did, and did not do, to combat poverty in 2011.

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Congress has recently reached a compromise on a measure to extend federal unemployment insurance benefits through the end of the year, which will keep 3.3 million long-term unemployed individuals from losing a critical lifeline. Without the compromise, 166,700 unemployed workers in Illinois would lose their unemployment benefits, which for most is the only way to provide for their families still struggling in the weak economy. Yet, even though the economy has seen recent sustained growth and a slight decline in the overall unemployment rate, long-term unemployment (unemployment lasting for 27 weeks or more) still accounts for 42.5% of all unemployment in the United States. And Congress’ agreement is indeed a compromise between proponents and opponents. The agreement unfortunately also reduces the maximum duration of benefits available in states with high unemployment from 99 weeks to 73 weeks. For the long-term unemployed, the deal is bittersweet.

A report from the Pew Fiscal Analysis Initiative found that the challenge of long-term unemployment is persistent, which makes the extension of federal benefits even more critical. The number of workers who were out of work for at least a year nearly doubled after the official end of the recession—from 16% (2.5 million) to 31.8% (4.4 million) nationally between 2009 and 2011. States typically provide around 26 weeks of regular benefits (though many states provide less or have recently reduced the number of weeks available, as Illinois did by passing legislation last spring that reduced the total number of weeks of benefits available to 25 weeks), but in the current economic climate it often takes the unemployed far longer to find a job. Currently, jobless workers endure an average 40.8 weeks, or nearly 10 months, of job searching. For each new job opening, there are over four unemployed people.

With the odds of getting a job in the current weak economy stacked against the unemployed, federal extended benefits are monumentally important to lending individuals and families an economic lifeline while staying attached to the workforce. The nation saw the labor force participation rate (the proportion of all working-age adults who are either employed or seeking employment) decline to just 64% by the end of 2011, the lowest percentage since 1985. A decrease in the labor force participation rate such as this can in part be attributed to unemployed people giving up on their job searches, which has the net effect of pushing down the official unemployment rate since only those who are actively looking for work are counted as unemployed. The long-term unemployed may be more likely to give up on their job searches and run the risk of dropping out of the labor force completely, as the longer these individuals remain unemployed the more likely they will become “unemployable” because of atrophied work and job search skills, or dispirited by the stigma of being out of work for months or even years on end.

Unemployment insurance not only ensures that unemployed workers and their families can continue living their daily lives and meeting their basic needs, but also stirs much-needed economic activity when recipients spend their benefits at local businesses, which allows local businesses to grow and create jobs. A study by the Labor Department found that, in the depths of the recession, regular, state-funded unemployment benefits boosted employment by 1 million jobs and an additional 750,000 jobs by federal emergency unemployment benefits. The country cannot afford to lose federal unemployment benefits while the economy is still underperforming and the recovery has only begun to regain steam.

Furthermore, policymakers should not lose sight of the purpose of unemployment insurance and how it has historically functioned to benefit the economy. Misguided attacks on unemployment insurance from House Republicans (such as proposals to limit eligibility for benefits, like requiring claimants to have at least a high school diploma or GED or requiring claimants to pass drug tests in order to obtain benefits) played a significant role in the compromise. These proposals were a gross injustice to unemployed workers who lost their jobs through no fault of their own. It is unfair to workers to assume a prevalence of drug use among unemployment insurance claimants when there is no evidence, and furthermore blames unemployed workers for their joblessness in an economic climate created beyond their control.

In fact, current data tell us that the scope of long-term unemployment is widespread across demographic lines, affecting millions of workers regardless of age, education level, and occupation. Thirty-four percent of unemployed workers with a bachelor’s degree in the third quarter of 2011 had been out of work for a year or longer, compared to nearly 38 percent of jobless high school graduates and approximately 39 percent of unemployed workers without a high school diploma. Whether having a certain level of education is required for a job or not, long-term unemployment affects all industries—more than 20% percent of unemployed workers in every industry had been out of work for a year or longer in 2011. What’s more, older workers who have worked hard throughout their lives may be getting hit the hardest—almost half of all unemployed workers older than 55 had been out of work for at least a year in 2011.

The compromise, which also includes an extension of the payroll tax cut, is likely to pass both the House and Senate before Congress goes on recess this weekend, and includes some drug testing provisions on workers who lost their jobs because of refusal to take an employer’s drug test. While these concessions are unfortunate, extending federal unemployment insurance benefits must be accomplished prior to the recess. It is an important step in the right direction towards fixing our economy and putting people back to work. Nonetheless, we have much more work to do, including increasing education and training opportunities for jobless workers, in order to combat long-term unemployment and its ramifications for families and communities.

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During the recent economic downturn, many American families became food insecure, meaning they had limited or uncertain access to enough nutritious food for an active, healthy life. In 2010, 40.3 million people received monthly benefits through the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps), up from 33.7 million people in 2009 and more than double the number of food stamp recipients in 2002. Participation in school meal programs also increased, and 32 million children now participate in school meal programs each day. Food insecurity is especially troublesome among older adults, given the population’s particular health and medical needs. From 2001 to 2009, the number of older Americans at risk of hunger increased by 79 percent.

The increasing prevalence of food insecurity in America has prompted Clearinghouse Review: Journal of Poverty Law and Policy to choose it as its 2012 special issue topic. Every year, the Review devotes one issue to exploration of a single topic; last year’s special issue focused on applying a human rights lens to poverty law practice, and the 2010 special issue discussed climate change and green jobs.

Helping low-income people increase their access to food through benefits programs such as SNAP, the Women, Infants, and Children Program (WIC), and the Child and Adult Care Food Program (CACPF) has long been a traditional strength of the legal services community, and Clearinghouse Review has published many articles on these topics. Recently, the Review has published articles exploring whether states should require identification requirements for SNAP participants, the use of SNAP benefits at fast-food chains, and low-income college students’ eligibility for SNAP benefits.

However, the nature of food insecurity is evolving, as are the federal and state programs that address the problem. Assisting clients with SNAP benefits has become a moving target for legal services attorneys, who are trying to help more clients get benefits in the face of state budget cutbacks that cause delays in processing times and reduce compliance with federal legal deadlines. Children, the elderly, immigrants, and people living with disabilities all face additional challenges when trying to access nutritious food through SNAP and other programs.

As the number of food-insecure Americans grows, it will not be enough for only those legal services attorneys specializing in benefits to confront the hunger problem. To end hunger in America, advocates from many disciplines—health, education, economic development, and housing, to name a few—will need to focus on food. Moreover, it will not be sufficient for these advocates to understand the changing landscape of federal and state benefit programs. To understand why so many communities are unable to secure nutritious food for all of their members, advocates need to take a close look at the communities themselves. Many low-income communities have become “food deserts” with limited access to nutritious foods. These neighborhoods also contain few safe spaces for physical activity, which has contributed to a dramatic rise in obesity over the past decade. Low-income families are also affected by food’s production, distribution, and consumption, both as workers and consumers.

The good news is that, across the country, advocates and community leaders are developing new approaches to food insecurity. Not only are they using traditional antipoverty programs in new ways, they are helping low-income people access nutritious food through farmers’ markets, community gardens, and fresh food financing initiatives. Lawyers are dismantling state-level barriers to national food programs, helping communities rezone to have more green space, incorporating the concept of a “human right to food” into their arguments, and ensuring that, as the delivery of benefits is modernized through the use of new technologies, vulnerable clients’ ability to access benefits is not compromised.. Food banks are collaborating with unexpected partners to make sure that nutritious food does not spoil before it reaches consumers. In its 2012 special issue, Clearinghouse Review hopes to showcase dynamic and diverse solutions to food insecurity from across the country so that advocates can share their expertise with one another and design new solutions to food insecurity.

If you are interested in learning more about Clearinghouse Review’s 2012 special issue, please contact Staff Attorney-Legal Editor Michele Host. The editorial team welcomes suggestions regarding topics and authors. If you or your organization is interested in sponsoring the 2012 special issue, contact Brendan Short.

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America overall is more integrated than ever, and all-white neighborhoods are virtually extinct. Gentrification, immigration, migration to the suburbs, and the tearing down of public housing all have contributed to desegregation over the past decade. However, there are still areas of the country that remain highly segregated.

According to a recent report by the Manhattan Institute for Policy Research, although Chicago has seen the second largest decrease in segregation among the ten biggest cities, next only to Houston, Texas, it is still the most racially segregated city in America.

The study uses census data and two key measures to discuss segregation. First the report examines “isolation,” which measures the tendency of members of a racial group to dominate a neighborhood. The report also measures “dissimilarity,” which is the evenness of the distribution of two racial groups across an area. Chicago’s difficulty lies in the fact that it has historically isolated African-American neighborhoods that are very rarely integrated because, unlike other neighborhoods, they are not experiencing population growth or the influx of new housing.

While segregation may be decreasing since its peak in the 1960s, racial income and asset inequality still persists and is actually growing. According to a recent Pew Study, the median wealth of white households is 20 times that of black households and 18 times that of Hispanic households. This is the largest racial wealth gap since the government began publishing the data 25 years ago. In fact, the gap has doubled since the 2008 recession. Prior to the recession, in 2005, Hispanics had $18,359 in net worth (assets minus debts), African-Americans had $12,124, and whites had $134,992. After the recession, the net worth for Hispanics and African-Americans fell dramatically, while white families were left unscathed. In 2009, the average white family had $113,149 in net worth compared to $6,325 for Hispanics and $5,677 for African-Americans.

Tom Shapiro of Brandeis University, who has studied the racial wealth gap for years, says he's concerned about the long-term impact. He thinks the wealth gap will likely grow even more, unless the economy turns around soon. Not only does the economy need a boost, but so do government policies that create barriers for minorities’ financial stability and mobility. As the Manhattan Institute’s report notes, access to credit and fair housing laws significantly contribute to a city’s segregation patterns. Government programs and policies that increase access to credit and bank accounts, as well as policies that encourage saving and diversified asset holdings will eradicate segregation. During the recession, white families, whose assets were diversified, were relatively safe compared to minority families, whose assets were mainly concentrated in the housing market, which crashed. Clearly, the racial wealth gap is still prevalent in cities across America, and there is much to be done to begin to close it. Changing government policies and creating asset building opportunities for everyone is an important first step. 

Check the Shriver Brief for more coverage on access to credit, fair housing laws and closing the racial wealth gap.

This blog post was coauthored by Alison Terkel.

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Families must be able to save money in order to achieve self-sufficiency and prosper. Unfortunately, the federal government often forgets this common-sense principal. 

Many public benefits programs—like cash welfare or Medicaid—limit eligibility to those with few or no assets. If a family has assets over the state’s limit, it must “spend down” longer term savings in order to receive what is often short-term public assistance. These asset limits are a relic of entitlement policies that no longer exist, since cash welfare programs now focus on quickly moving families to self-sufficiency rather than allowing them to receive benefits indefinitely. In other words, although personal savings and assets are precisely the kind of resources that allow families to move off—and stay off—public benefit programs, asset limits actually discourage anyone receiving public benefits from saving for the future.

States have full discretion in setting or eliminating asset limits for Temporary Assistance to Needy Families (TANF), Medicaid, and the State Children’s Health Insurance Program (SCHIP). They also have some flexibility to address asset limits for the Supplemental Nutrition Assistance Program (SNAP, formerly known as Food Stamps). Several states have eliminated asset limits in TANF, Medicaid and SCHIP, and 38 states have eliminated asset tests in SNAP.

Pennsylvania is one of these states. In 2008, when the recession hit and unemployment soared, it dropped asset limits in its SNAP program. Unfortunately, Pennsylvania’s Department of Public Works (DPW) recently announced that it wants to reinstate these tests. Under the proposal, individuals under 60 could have no more than $2,000 in assets, and individuals over 60 could have no more than $3,250, not including retirement accounts and homes. This is devastating news for the state’s 850,000 families currently receiving SNAP benefits. It would also be a blow to Pennsylvania’s economy since research shows that every $1 in SNAP benefits generates $1.73 in economic activity.

This proposed policy reversal is highly unusual because the trend among states has been to eliminate asset tests. So what is different about Pennsylvania? According to Anne Bale, a spokesperson for the DPW, Pennsylvania residents have complained about fraud and abuse in the SNAP program. DPW’s hope is that reinstituting asset limits would eliminate this waste, without requiring the state to spend money on fraud detection and prosecution. However, the state recently won an award for running the most efficient state SNAP program and has one of the lowest rates of SNAP fraud in the nation: 1/10 of 1%. Moreover, the state would not really save any money since it’s likely that more caseworkers would need to be hired and all caseworkers would need to receive training on the new limits and how to apply them. Added to the cost of software to computers, asset limits and the extra workload of understaffed offices, any cost savings would be slim. It would be a no-win situation: both bad for the state’s economy and bad for people trying to escape poverty’s cycle.

This proposed policy sends entirely the wrong message: Do not pull yourself up out of poverty; rather remain in the cycle of poverty, dependent on government benefits. It’s simply bad public policy to require people to spend all their assets in order to ensure a meal on the table then tell them that they need to save and become self-sufficient!

It time to do away with asset limits once and for all. Grab your fork and tell Pennsylvania and other states to stop sticking it public benefit recipients.

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What’s most important to sustaining human life? Arguably it’s water. In fact, the United Nations recognized the human right “to safe and clean drinking water” through a resolution in 2010.

California law recognizes the right, too—sort of. The state requires water systems to provide a “reliable and adequate supply of pure, wholesome, potable, and healthy water,” but some residents of rural areas in the San Joaquin Valley, where high poverty rates abound, must pay up to 20 percent of their income for drinkable water. In the unincorporated town of Lanare, for example, residents pay $54 per month for tap water that is contaminated with nitrates (which have been linked to cancer and blue-baby syndrome), arsenic, and other toxic substances, forcing them—at least those who can pay—to spend an additional $35 per month for bottled water. In contrast, the residents of nearby Riverdale, a larger town, will build a new $5.4 million arsenic water treatment plant after passing a bond issue and obtaining a $500,000 grant from the state.

The struggle for safe water isn’t limited to California. Although the federal Safe Water Drinking Act requires most water providers to meet drinking water standards, funding realities dictate that access to safe drinking water too often depends on a community’s wealth . Most states have taken over enforcement of the Safe Drinking Water Act but, unlike under the Clean Water Act, which deals primarily with discharge of pollutants into surface water, states don’t get much federal funding to help meet drinking water standards. This lack of funding at every level complicates enforcement efforts.

This reality may be shifting in California, where California Rural Legal Assistance (CRLA), using a combination of litigation and legislative advocacy, has changed the legal landscape when it comes to low-income residents’ access to safe water.

California implements the federal Safe Drinking Water Act through its Health & Safety Code, which requires the Department of Public Health to develop a Safe Drinking Water Plan every five years. In recognition of gaps in the knowledge and enforcement capacity of the state’s myriad small water systems, the plan focuses on analyzing the water quality and service of water systems with fewer than 10,000 connections. But it’s been nearly 20 years since the Department obeyed the statutory mandate and submitted a plan—decades during which many rural Californians have been drinking water laced with arsenic.

CRLA sued on behalf of residents of the San Joaquin Valley and a grassroots organization, La Asociación de Gente Unida por el Agua (the AGUA Coalition), asking the court to order the California Department of Public Health to prepare the required plan. After an appellate court reversed a dismissal of the suit (Newton-Enloe v. Horton) in April, the parties settled the case in November. The department will submit a Safe Drinking Water Plan—a detailed five-year implementation plan—within three years of the settlement. And, most important to CRLA, the department must comply with the state statute and investigate the water quality and service of water systems throughout the state with fewer than 10,000 service connections. In doing so, the department must report on and take into consideration, and attach as an appendix to the plan, any data that CRLA collects on small water systems.

On the legislative front, CRLA and other advocates helped achieve passage of a package of seven drinking water bills that, among other things, provide grants to small communities to upgrade their water systems and create a revolving fund to make “severely disadvantaged communities” (median household income less than 60 percent of the statewide average) eligible for grants covering the full costs of water treatment projects.

This advocacy dovetails with the earlier visit of Caterina de Albuquerque, the Special Rapporteur on the human right to safe drinking water and sanitation, at the invitation of the U.S. government. Between February 22 and March 4, de Albuquerque undertook a fact-finding mission with stops in Washington, Boston, Sacramento, and to the Winnemem Wintu in northern California; she issued a formal report in August contending that “States’ obligation with regard to the right to safe drinking water and sanitation requires that water and sanitation be available, accessible, affordable, acceptable and of good quality for everyone without discrimination.” She noted that “existing federal laws generally focus on maintaining water quality rather than ensuring access for all citizens.”

While federal progress toward a right to water seems unlikely at the moment, as CRLA has shown, changes may be possible at the state level. For more on CRLA’s fight to give low-income residents access to safe drinking water, see Furthering the Fight to Make Clean Water a Right in California, in Clearinghouse Review’s September-October 2011 issue, Human Rights: A New (and Old) Way to Secure Justice.

For more information on homelessness and the right to water and sanitation see, Toward a Human Rights Framework in Homelessness Advocacy: Bringing Clients Face-to-Face with the United Nations, by Mona Tawatao and Colin Bailey and Opening the Door to the Human Right to Housing: The Universal Periodic Review and Strategic Federal Advocacy for a Rights-Based Approach to Housing, by Eric Tars and Déononné Bhattarai in the same publication.

This blog post was coauthored by Kathleen Donahue McNally.

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The 2010 Census data released this past September showed that the income gap between Americans is widening. More specifically, the income gap between blacks and whites widened such that the average white worker’s income was about 1.7 times higher than that of black workers, which is up significantly from the 1990s. But this isn’t the case across the whole country; the suburbs are experiencing a wave of desegregation and a closing of the income gap.

Affluent black Americans, who are leaving industrial cities for the suburbs and the South, are shifting traditional lines between rich and poor. While suburbia is flourishing amidst the new flux of diverse middle-class residents. Cities such as Chicago, Detroit, Philadelphia, and others are suffering from racial and economic inequality because, for the most part, only lower-skilled minorities have remained.

These changes in city demographics will result in political redistricting as the African American political base shifts. Chicago has had one of the biggest losses, with over 180,000 middle- and working-class African Americans leaving the city for the suburbs and the South, where housing is cheaper, schools are better, and jobs are easier to come by. Not only has such migration changed the face of major industrial cities, but it will also change the face of the upcoming elections and how candidates campaign to their new base. Once Southern red states could now become swing states or even blue states due to the influx of African Americans who have left Northern cities.

Concern and debate about wealth distribution has been the central theme of the Occupy Wall Street movement. Although many seem to write off the Occupy movement as a radical minority group, research shows that 92% of Americans are actually in favor of wealth redistribution. When survey participants were asked what they thought the wealth gap was, the majority believed that the top 20% only controlled 59% of wealth, a modest estimation. The truth, however, is that the top 20% control 84% of the wealth. When asked what the ideal distribution of wealth should be, people said that the top 20% should only control 34% of the country’s wealth. This disconnect among Americans’ beliefs about economic inequality, their self-interest, and their public policy preferences suggests that, if there were more awareness of the reality of the gap, people would be more likely to advocate to close it.

As the Occupy movement continues and grows, and more Americans become aware of the real level of wealth inequality, it is sure to be an important topic during the 2012 Presidential election. 

This blog post was coauthored by Alison Terkel.

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We need jobs that keep people out of poverty, not in it! Raising the minimum wage is good common sense—people who work for a living should make enough money to provide for themselves and their families. Unfortunately, that’s not the case right now. If a worker earns the minimum wage here in Illinois, $8.25 an hour, and works 40 hours a week, 52 weeks a year, he or she makes just $16,830. It’s time we raise that amount. That’s why the Shriver Center supports the Raise Illinois Campaign, and I hope you will as well. Please sign the voter petition today.

In Illinois, this year was the first year in five years that we did not raise the minimum wage. But even before this year, the minimum wage has stagnated while the cost of living continues to rise. Minimum wage earners in Illinois already have $2/hour less in purchasing power than a minimum wage earner in the late 1960s. Let’s create a fair minimum wage that’s in line with its historic level—around $10.65 an hour—and indexed to inflation.

This is the time to raise the minimum wage. Research shows, and many economists agree, that raising the minimum wage helps many workers whose income is either right at minimum, or just above it, without reducing employment. It gives a needed boost to our communities, because low-wage workers will spend the extra earnings right where they live.

Wages have fallen significantly because of the recession. The new jobs that are coming back are more likely to be low-wage than the jobs they replace. The vast majority of minimum-wage workers are adults, not teens, and many are using their low incomes to support families. If you’re lucky enough to not know what it’s like to earn a poverty-level wage, consider reading our worker stories, or this moving editorial. By helping workers have the basic necessities better covered, raising the minimum wage helps reduce employee turnover, increase worker productivity, and reduce worker’s reliance on taxpayer-funded public benefits. By raising the minimum wage, we’ll increase consumer spending, which is the driver of economic growth.

We also need to make sure more workers are even guaranteed the minimum wage. Did you know that tipped workers in Illinois currently are paid as little as $4.95 an hour? And domestic workers in Illinois have no minimum wage at all? We need to make this a just society, where hard work is rewarded with an income that can sustain a family.

The Raise Illinois Coalition has introduced a great bill into the Illinois General Assembly, SB 1565. Now it’s all of our turn to see that it passes. Please take 30 seconds to sign a petition in support of the bill and “like” the campaign on Facebook. Then get involved, get educated, tell your story, find and contact your state legislators, and advance the fight for a fair minimum wage in Illinois.

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The “Welfare” Reform Proposal

Senator Jim DeMint (R-S.C.), along with seven other Senate Republican co-sponsors, has introduced the misleadingly titled bill, The Welfare Reform Act of 2011 (H.R. 1167). The bill is an attempt to hark back to President Clinton and Speaker Gingrich’s popular federal welfare reforms  of 1996. At that time, the program that provided a federal entitlement to cash assistance for needy families, the Aid to Families with Dependent Children program, was repealed and replaced by the Temporary Assistance for Needy Families’ (TANF) program, which placed time limits on the receipt of benefits and added work requirements. The new “welfare” reform bill expands the definition of welfare well beyond its popular meaning of cash assistance to needy families to encompass a wide range of other programs for low- and moderate-income people and imposes deep cuts and restrictions on them.

To support the supposed need for welfare reform, these lawmakers point out that “welfare” spending has grown more quickly over the last 20 years than have outlays for Medicare and Social Security, education, and defense. In a statement, Senator DeMint said that, “with record levels of federal spending and record levels of Americans in poverty and using food stamps, it’s hard not to conclude that federal welfare programs are failing.”

The proposed bill would, supposedly, save roughly $2.4 trillion over a decade—or twice as much as the minimum savings that the deficit-reducing Supercommittee is tasked with finding.  Specifically, the bill would:

1.     Require disclosure of total means-tested welfare expenditures in the President’s budget; 

2.     Plan an aggregate spending cap on all means-tested welfare spending at pre-2007 levels once unemployment falls below 6.5%; 

3.     Provide enforcement of the spending cap through the budget resolution process;

4.     Extend work requirements to the Supplemental Nutritional Assistance Program (SNAP) (formerly known as food stamps);

5.     Incentivize states to alleviate poverty through self-sufficiency, not dependence on government; and

6.     Prevent federal funding of abortion. 

Why Lawmakers Don’t Get It:

As usual, some lawmakers aren’t getting it and, in fact, are getting it wrong.

They misinterpret the relevance of the recent poverty data—they see it as a result of individuals’ failure to be self-sufficient. The reason that there is more federal spending on means-tested programs is because there are more people in need as a result of the very deregulation of financial institutions that conservative lawmakers championed. The impact of a pre-2007 cap would be a drastic reduction in the number of families receiving needed aid. In just the first six years of the cap, programs would be cut 40 percent, and cuts would grow deeper thereafter. For example, if all programs were cut by the same percentage Medicaid and Children’s Health Insurance Program would be cut by $144 billion in 2016 and more than $1.1 trillion over the cap’s first six years. Similarly, SNAP would be cut by $24 billion in 2016 and $153 billion over six years and job training programs would be cut by $1.4 billion in 2016 and $10 billion over six years. Needy families should not be penalized for their appropriate reliance in troubled times on welfare “safety net” programs. This is especially true when the “failure” wasn’t with these families, but rather with financial institutions. 

Similarly, increasing the work requirement for families with dependent children to 120 hours, up from 90 hours under current law, and expanding this requirement to SNAP would leave many needy families without a safety net because of their failure, perhaps for legitimate reasons (e.g., child care issues), to fulfill this requirement. Additionally, under current rules, only a narrowly defined set of activities count toward a state’s work participation rate and participation in some of these activities can only count for limited periods or if other limitations are met. Many of the activities that TANF recipients often need to be prepared for work do not count and there no evidence that participating in a narrowly defined set of work activities improves participants’ employment outcomes. Instead of increasing and expanding the requirement, it would be better to expand the type and duration of activities that can count thereby encouraging more individuals to work.

Although these lawmakers claim that public benefit programs aren’t working, the newly created Supplemental Poverty Measure (SPM), which is an attempt to update the woefully inadequate official poverty measure that under-estimates poverty, proves they’re wrong. The SPM, which takes into account, for the first time, certain out-of-pocket expenses (e.g., taxes, housing, utilities, health care costs) and the value of government income supplements (e.g., SNAP),  that are aimed at improving the economic situation of the poor, shows the impact such programs have on poverty.

Under this new measure, almost 7 million more people would have lived in poverty in 2009 and 2010 absent government action and excluding SNAP, for instance, would have increased poverty by 17.7 percent.

This data proves that public benefit programs are an important factor in poverty alleviation, and that, especially in today’s economy, the nation cannot afford further cuts in them. Yet, that is exactly what this welfare reform bill would do. 

So how do they continue to get it so wrong? Your guess is as good as mine.

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Illinois will lose 27,000 jobs in 2012, and its unemployment rate will increase from 10% to 10.5%, unless Congress approves extending the Emergency Unemployment Compensation (EUC) program, according to the Economic Policy Institute. EPI’s projection that failure to extend the EUC program will have such a dramatic effect in increasing unemployment is based on standard economic “multiplier” effects and the fact that the long-term unemployed—often the most desperate for resources to meet their basic needs—are apt to immediately spend any benefits they receive. Taking this consumer spending out of the economy, by failing to extend EUC, would result in lost jobs in the stores and businesses where the money would be spent. That is why failing to extend the EUC would increase the unemployment rate.

The EUC program was created as part of the American Recovery and Reinvestment Act of 2009 to provide unemployment insurance benefits to the millions of Americans who lost their jobs in the Great Recession and have exhausted or no longer qualify for unemployment benefits through existing state programs. The EUC program is desperately needed given the anemic pace of job growth since the recession’s end and the long durations of unemployment that a record number of Americans are experiencing.

The EUC program will expire at the end of 2011 if Congress fails to extend it. Rep. Sandy Levin (D-Mich.), the ranking Democratic member on the House Ways and Means Committee and the co-sponsor of legislation to extend the EUC program for a year, explains: "Never before has Congress allowed emergency unemployment benefits to expire with such a large percentage of Americans looking for work and we must not let that happen now.”

The EUC program was extended for one year near the end of 2010 as part of a grand compromise that also included a two-year extension of the Bush tax cuts for the wealthy. The EUC program has been a target of some Tea Party adherents and their supporters in Congress, who believe that extending the period that unemployment compensation is available makes people lazy and unwilling to look for work. Nevertheless, it is currently expected that Congress will agree to extend the EUC program, although what other demands will be made in return for agreeing to such an extension remains to be seen.

This blog is based on analysis and a report by the Economic Policy Institute.

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In March of last year, the U.S. Census Bureau announced that it would develop an alternative way to measure poverty. The Supplemental Poverty Measure, which was released yesterday, is an attempt to update the current federal poverty measure that, it is generally agreed, is outdated and therefore underestimates the level of poverty in the U.S. 

Measuring Poverty

The current poverty measure was developed in 1963 and is based on the cost of a minimally adequate diet in the mid-1950s, multiplied by three. At the time the measure was developed, families of three or more persons spent about 1/3 of their after-tax income on food.  

Other than being updated annually based on the consumer price index, the methodology for measuring poverty has not changed since the measure was first developed. From the very beginning, policymakers have expressed concern about the accuracy of the measure and proposed that it be revised.Today, the measure is badly outdated. For example, food now consumes only 1/7 of the average family’s budget.

In 1995, the National Academy of Sciences/National Research Council (NAS) was commissioned by Congress to study the official U.S. poverty measure and provide suggestions on how to revise it. The Supplemental Poverty Measure released yesterday is largely based on their report, Measuring Poverty: A New Approach.

The Supplemental Poverty Measure is based on an updated market basket of goods that reflects changes in consumer spending since 1963. It takes into account household expenses such as taxes, housing, utilities, health care costs, child support payments, and work-related expenses (i.e., travel and child care). This is offset by including the value of government income supplements, such as subsidized school lunch programs, energy assistance programs, housing subsidies, and the Supplemental Nutrition Assistance Program (previously food stamps), that are not accounted for in the official poverty measure. The result is that the new calculation more accurately reflects how low-income Americans are actually getting by.

New Data Increases Poverty Levels

Under the Supplemental Poverty Measure, 49.1 million, or 16 percent, lived in poverty in 2010, significantly more than the official measure released in September that found 46.6 million people, or 15 percent, lived in poverty. Given that the number of people in poverty in 2010 under the existing measure was the highest that it has been in the 52 years since this information has been collected, this new measure’s estimate is even more dramatic.

The annual income at which a family of four—two adults and two children—is considered living in poverty under the supplemental measure was $24,343 in 2010. That compares with the official figure of $22,113. This threshold is still low, and most poverty advocates believe that using 200 percent of the federal poverty level for eligibility for public benefit programs is more reasonable. In fact, when polled most Americans believe that the minimum amount of yearly income a family of four would need to “get along” in their community is a little more than $40,000 annually, or roughly twice both the official measure and the supplemental measure.

The figure below compares the poverty rates under the official measures and the new measure for different age groups. The percent of the population that was poor using the official measure for 2010 was 15.1 percent versus 16 percent under the new measure. The supplemental measure puts the percentage of American children under 18 living in poverty at 18.2 percent, a drop from the 22.5 percent official rate. The reason for the drop is that the supplemental measure includes benefits designed to help poor children, such as school lunch programs. On the other hand, the supplemental rate for the elderly was 15.9 percent, a 9-percent increase from the official rate of 6.9 percent. Again, the reason is that the supplemental measure’s inclusion of expenses, particularly out-of-pocket health care costs, more realistically depicts the budgetary constraints the elderly face. 

In terms of minorities, the picture is still grim, but different. The official poverty data released in September showed that the poverty rate for African-Americans had increased faster than for the rest of the population and was just over 27 percent, and the rate for Hispanics was 26.7 percent, whereas whites’ rate was 13.1 percent, and Asians’ was 12.1 percent. Under the new measure, Hispanic poverty rose to 28.2 percent, surpassing that of blacks, 25.4 percent, for the first time. Poverty levels among whites, 14.3 percent, and Asians, 16.7 percent, were also higher under the supplemental measure. 

Public Benefit Programs Work 

Because the supplemental poverty measure takes into account in-kind benefits aimed at improving the economic situation of the poor, for the first time it is possible to see the impact such programs have on poverty. Applying the new measure, almost 7 million more people would have lived in poverty in 2009 and 2010 absent government action.

The chart below shows the effect of adding or subtracting a benefit program or expense on the poverty level for both 2009 and 2010. In general, including SNAP benefits, housing subsidies, school lunch programs, WIC, and energy assistance programs all result in lower poverty rates. On the other hand, subtracting amounts paid for child support, income and payroll taxes, work-related expenses, and medical out-of-pocket expenses result in higher poverty rates.

For instance, including the Earned Income Tax Credit (EITC) results in lower poverty rates; without it the poverty rate for all people would have been 18 percent rather than 16 percent in 2010. The EITC had a significant effect on child poverty—if the EITC is not included, the child poverty rate would be 22.4 percent rather than 18.2 percent. Similarly, excluding SNAP would increase poverty by 17.7 percent and excluding housing subsidies, school lunches, WIC, and LIHEAP would increase poverty by 16.9 percent, 16.4 percent, 16.1 percent, and 16.1 percent respectively.

These figures prove that public benefit programs are an important factor in poverty alleviation. Without such programs the level of poverty in the U.S. would be significantly higher. Especially in today’s economy, the supplemental measure highlights the need for such programs and reiterates the fact that the nation cannot afford further cuts in them.  

Effect of Supplemental Poverty Measure on Public Benefits 

The Supplemental Poverty Measure will not replace the official poverty rate, but instead will be published alongside the traditional figure as a "supplement" for federal agencies and state governments. It will not change eligibility for governmental benefits or the formulas by which billions of dollars in federal spending are distributed to states and localities. It will, however, provide a much more accurate view of poverty in America and better demonstrate the effect of government benefit programs in reducing poverty. 

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Last week the Census Bureau released data on the national poverty rate. As was discussed in our recent blog about this data, the number of people in poverty in 2010 was the largest in the 52 years for which poverty estimates are available. There were 46.2 million people in poverty in 2010, up from 43.6 million in 2009, and the nation's official poverty rate in 2010 was 15.1 percent, up from 14.3 percent in 2009.

This week, the American Community Survey (ACS) data were released. The ACS is a sort of mini-census conducted annually that polls roughly three million homes per year. This survey provides demographic, social, economic, and housing data for states, congressional districts, counties, and other localities. In other words, it provides much more data on what is happening at local levels.

According to the ACS, real median household income fell between 2009 and 2010, decreasing by 2.2 percent from $51,190 to $50,046. No state showed an increase in real median household income. 

The ACS data also show a continued decrease in employment. Between 2008 and 2010 the nation experienced a 4.9 percent decline in the employment/population ratio, from 71.5 percent in 2008 to 66.6 in 2010. In fact, all of the 50 largest metropolitan areas, except New Orleans–Metairie-Kenner, Louisiana, experienced a significant decrease in their employment/population ratio during this time period.

Although the recession was “officially” over by mid-2009, the nation’s employment ratio continued to decline between 2009 and 2010, dropping from 68.2 percent to 66.6 percent. Although this decline was smaller than the 3.3 percent decline that occurred between 2008 and 2009, the overwhelming majority of the 50 largest metropolitan areas (43) continued to experience declines between 2009 and 2010. 

Income and Unemployment in Illinois

In Illinois, median household income, at $52,972, is slightly above the national average of $50,046. Yet, Illinoisan’s still experienced a 3.7 percent decline from last year’s median household income of $54,992. In terms of employment/population ratios, Illinois is again slightly above the national average of 66.6 percent, at 72.2 percent, however, the decrease between 2008 and 2010 shows that the downward trend in this ratio is continuing. In 2008, Illinois’ employment ratio was 72.2 percent, in 2009 it was 68.7 percent, and it’s now at 67.4 percent.

White House Jobs Bill

On September 8^th the President, speaking before a joint session of Congress, unveiled the proposed American Jobs Act bill. The bill, which proposes tax credits for American businesses, and payroll tax cuts for all workers, is intended to get the economy going again. As President Obama stated: "The purpose of the American Jobs Act is simple: to put more people back to work and more money in the pockets of those who are working. It will create more jobs for construction workers, more jobs for teachers, more jobs for veterans, and more jobs for the long-term unemployed. It will provide a tax break for companies who hire new workers, and it will cut payroll taxes in half for every working American and every small business. It will provide a jolt to an economy that has stalled, and give companies confidence that if they invest and hire, there will be customers for their products and services."

Of particular interest, given the ACS data on unemployment, the bill, which is a combination of tax cuts, investments in infrastructure, funding for job training, and benefit extensions, contains provisions for extending unemployment benefits for the long-term unemployed. The need for job creation and the extension of benefits for those currently unemployed is underscored by the ACS data.

A complete copy of the 2011 American Community Survey data is available from the Census Bureau. A summary and the full text of the American Jobs Act of 2011 are available on the White House website.

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The American Jobs Act uses a variety of mechanisms to help get disadvantaged Americans working again--tax credits, economic stimulus, assistance finding a job, opportunities to get training or work experience, preventing job discrimination, and flexible funding to support innovative initiatives. The size of the bill and the scope of its strategies will hopefully prove sufficient to move the country forward to end the unemployment, disillusionment, and real deprivation that so many of us are experiencing. We have the opportunity to make meaningful investments in our future prosperity while putting people back to work.

Here’s a roadmap to the provisions of the American Jobs Act (AJA) that will help low-income individuals and the long-term unemployed. The draft bill, sent by President Obama to Congress, also includes many other provisions, many of which would create jobs. The White House has a 20-page summary of the whole act, which includes the reasons for the various provisions, and evidence of their bipartisan support. At this time, the House has not scheduled any hearings on the bill. If you’d like more information, read our longer article on these provisions.

1. Tax credits make up half the total cost of the bill, and there are many targeted at businesses and employees. In addition to a payroll tax cut (from 6.2 percent to 3.2 percent) for businesses on the first $5,000,000 in wages, there is a complete payroll tax holiday for hiring new workers or raising wages, up to a limit. Employers can also receive a tax credit for hiring a worker who has been unemployed at least six months in the last year, or who is unemployed veteran.

2. Mandatory reemployment services for recipients of Emergency Unemployment Compensation (EUC is generally weeks 26-79 of unemployment insurance). The federal government will reimburse states for providing services including career and labor market information, individual assessment, career one-stop orientation, and job search counseling. It’s important that the federal government, and states, reduce the burden on individuals by, for example, providing virtual services, flexible scheduling, and supportive services (such as transportation allowances and child care) for individuals at 200 percent or below of the federal poverty line to attend these programs. Additionally, the state may set up an optional self-employment assistance program for recipients of EUC.

3. Reemployment Now Program. States have flexibility to use their share of this $4,000,000,000 allocation on: individual counseling, job search skills training, and case management; innovative programs; wage insurance; administrative costs of the self-employment program; and/or Bridge to Work. Wage insurance partially compensates individuals over age 50 who were receiving EUC when they accept a new full-time job with lower earnings than their previous job. Bridge to Work is a voluntary program where individuals can work for eight weeks at a short-term job placement. Their pay is their unemployment benefits and an additional amount so their total payment equals the minimum wage (a state may also require employers to pay more beyond this amount). Additionally, the state may spend the funds on supportive services, additional wages beyond minimum, and administrative expenses. For employers to stay eligible to receive placements, they must offer at least one participant a full-time job within 24 weeks, and states may (and should!) add conditions for employer participation.

4. Short-Time Compensation Programs. Many states currently have a work-sharing unemployment insurance program in place, and under this statute those states may continue their program, and new states can create a program with the federal government. Employees who lose 10-60 percent of their hours (or state can lower the 60 number), at participating employers, receive a pro-rata share of their unemployment insurance.

5. Pathways Back to Work Fund. This fund will provide workforce development funds, often delivered through the Workforce Investment Act (WIA) infrastructure, but with different outcome measures. The changed measures will hopefully address the tendency of the current WIA outcome measures to discourage service of those individuals who face the greatest barriers to work or school, while still providing accountability and transparency.

a. $2,000,000,000 to “subsidized employment to unemployed, low-income adults.” The funds may also be used for supportive services for participants, such as transportation and childcare.

b. $1,500,000,000 to provide summer and year-round employment opportunities to low-income youth. The funding must be used for “summer employment opportunities for low-income youth, ages 16 through 24, with direct linkages to academic and occupational learning, and may include the provision of supportive services, such as transportation or child care, necessary to enable such youth to participate” and “year round employment opportunities,” for out of school youth. The priorities for funding are employment opportunities in either emerging or in-demand occupations in the public or nonprofit sector, and “linking year-round program participants to training and educational activities that will provide such participants an industry-recognized certificate or credential.”

c. $1,500,000,000 of “competitive grants . . . to local entities to carry out work-based training and other work-related and educational strategies and activities of demonstrated effectiveness to unemployed, low-income adults and low-income youth to provide the skills and assistance needed to obtain employment.” Some examples from statute are: on-the-job training; apprenticeships; other activities combining work and skills training; sector-based training; subsidized employment; and integrated basic education and training. The priority for the funding will go to proposals in areas of high poverty and high unemployment.

6. Fair Employment Opportunity Act of 2011. Would prohibit discrimination against the unemployed in advertizing, considering candidates, and hiring.

7. Transportation Job Training. $50,000,000 in competitive grants for transportation jobs training.  Of the total $10,000,000 would go to assist minority businesses in competing, on an equal basis, for contracts and subcontracts.

The recent census numbers show the number of Americans living in poverty is at an all time high. The national unemployment rate stands above 9%, with no new jobs created last month at all. This country needs a strong push to help unemployed workers find jobs and get the economy moving. This plan offers help to strapped communities and states by making investments in our future prosperity.

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Over 43 million American workers are unable to take even a single day of paid leave when they are sick or need to take care of ill family members. This number is being slowly chipped away at as cities and states pass paid sick leave legislation. On September 12, Seattle became the fourth city to pass a mandatory paid sick leave ordinance, granting Seattle workers the right to take paid time off without punishment or retaliation when they or a family member are ill or need to attend a medical appointment. Paid sick leave legislation is supported by over two thirds of registered voters, and new research on San Francisco’s paid sick leave ordinance reveals that an overwhelming majority of workers and employers are satisfied with it.

San Francisco – A Case Study

Data from San Francisco point to the overall benefits of mandated paid sick leave. The Institute for Women’s Policy Research released a comprehensive study of the effects of San Francisco’s current Paid Sick Leave Ordinance (PSLO) on both employees and employers. The study analyzed the responses of 1,194 employees and 727 businesses to survey questions regarding their experiences under the new PSLO. Passed in 2006, the ordinance allows workers to accrue one hour of paid sick leave for every thirty hours of paid work, up to nine days per year. Up to nine days of unused leave can carry over to the next year. Workers can request paid leave for either personal health reasons or to care for family members.

Over half of the employees interviewed reported “experiencing benefits” from the PSLO, even though two-thirds of employees worked somewhere that granted some type of paid sick leave before the passage of the ordinance. Employees also reported that their employers were more supportive of them taking paid sick leave and that they were better able to care for themselves and their families. Significantly, most employees took far fewer paid sick days than they were legally allowed, suggesting that employees view paid sick leave as more of an insurance policy than guaranteed time off. They also saved time off for when it was most needed, for example, workers with families were more likely to take days off to care for sick children.

Not only did employees benefit from the PSLO, but employers also reported no detriment. Two-thirds of the employers interviewed said they were satisfied with the ordinance, and almost all said they had noticed no productivity decreases. Although few employers noted any immediate benefits from the PLSO, research has shown that there might be long-term benefits for employers—workers with access to paid sick leave are more likely to report higher satisfaction with their jobs than workers without it. Higher satisfaction can lead to increased productivity and less turnover, which can save employers money. And early data indicates that after passage of the PSLO, San Francisco’s percentage growth in employment stayed strong and even exceeded the surrounding counties’.

Paid Sick Leave in the States

Although many employers do currently grant paid sick leave, many still do not. Of those employers who do, most do not allow time off to take care of family members’ health needs, and some retaliate against workers who use their leave by cutting hours, docking pay, or issuing demerits that can lead to dismissal. Paid sick leave legislation has been introduced in Congress and in almost half of the states in the U.S. But it has become law only in San Francisco, Washington, D.C., Connecticut, and now Seattle. Grassroots campaigns around the country have been gaining traction, with Denver set to vote on an ordinance in November. In Illinois, the Healthy Workplace Act was introduced in the last legislative session, although it failed to pass out of the General Assembly. The bill would benefit the 45 percent of private sector employees in Illinois who currently do not have access to any paid sick leave—over two and a half million people. Workers, both full and part-time, would earn up to seven paid sick days per year, with one hour of leave earned for every 30 hours worked. Paid sick days could be used for personal illness, to care for an ill family member, or for medical appointments, and employers could not punish employees for taking advantage of the paid leave.

Federal Paid Sick Leave legislation

Federal paid sick leave legislation has been gaining support since its first introduction in 2004. The Healthy Families Act was reintroduced in Congress in May in both the U.S. House and Senate, and is currently in committee. The bill would allow paid leave for personal health reasons, to take care of a sick family member, or for domestic and sexual violence survivors to recover or seek assistance. Lawmakers and employers should consider the positive outcomes in San Francisco and guarantee workers the important right to paid time off by supporting efforts to institute paid sick leave in Illinois and nationally.

More information about what’s going on in Congress and in the states is available at Family Values @ Work  and the National Partnership for Women and Families.

To voice your support for the federal Healthy Families Act, contact your Senators and Representative.

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During this past week, workforce groups from all over the nation have been highlighting the importance of adult education programs in providing opportunities for low-income and low-skilled Americans. Adult Education and Family Literacy Week underscores the vital need for adult education programs, so that any American who works hard can gain the training and education they need to improve their lives. These programs are important to a just and prosperous society and warrant sustained investment and innovation.

Research shows that employer demand for educated workers is growing—by 2018, 63 percent of all employment will require at least some college education. Yet in 2010, over 15 million adults ages 25 years and older had less than a high school degree (Table 2). Education remains one of the most important factors in determining an individual’s well-being, as well as that of their children, but basic skills deficiencies prevent many adults from navigating higher education and the workplace and affect their ability to thrive, especially in hard economic times. In August 2011 14.3 percent of those without a high school diploma were unemployed, compared with 8.2 percent of those with at least some college.

For many of these low-skilled adults, the adult education system is the primary source for opportunities for skill upgrading. Adult education provides literacy and numeracy services, GED preparation, English language proficiency, and other services to help adults not only gain basic skills to succeed in further higher education, but also to enter career paths that lead to family sustaining wages. According to the new census data, the median annual earnings in 2010 for adults 25 years and older with less than a high school degree was $25,856, where those with a bachelor’s degree earned $55,804. Research has also shown that for each year of postsecondary education, an adult is more likely to be employed, lead a healthier life, and have children who are better prepared to succeed in their own schooling.

More skilled workers are critical for businesses and the economy, too. Sixty-one percent of U.S. employers say it is difficult to find qualified workers to fill vacancies at their companies. More skilled workers would not only allow employers to fill jobs in sectors important to local and regional economies, but workers would also contribute more to the overall economy by expending their earned wages—over a lifetime, workers with at least a high school diploma will contribute at least $300,000 more than high school drop outs. In the current fiscal crisis plaguing the nation, low educational attainment coupled with increased demand for skilled workers has negative consequences for individuals, states, and our economic recovery as a whole.

The recession and subsequent jobless recovery are accelerating the shift to jobs that require postsecondary education, but public funding for education, training, and support services has been inadequate with growing need. Federal adult education under Title II of the Workforce Investment Act provides for basic skills instruction to 2.4 million undereducated adults – but that is just three percent of the 93 million American adults with low basic skills. Not only have these programs endured a decade of decimation in their federal funding, but state fiscal crises are further reducing funding and hindering alignment of adult education and workforce development services. Without targeted strategies to educate more low-skilled Americans as demand for skills grows, the U.S. will continue to lag behind in measures of educational attainment and economic competitiveness.

Fortunately, a number of states, including Illinois, have recognized the need for building the skills of the workforce, and have launched pioneering approaches to reach low-income and low-skilled adults. Bridge programs are an innovative strategy that helps adults succeed in education by integrating basic skills instruction, which is contextualized to a particular industry or occupation, with higher-level academic content or technical skills training. The Shifting Gears Initiative, funded by the Joyce Foundation, has spearheaded bridge model creation and career pathways development in the state. You can learn more about specific bridge programs in Illinois and their outcomes here.

Chances are, you know someone who lacks a degree or who would benefit from developing more skills in math, reading, or English language to help them find a job, or a better job. You can help support that person and raise awareness of the importance of adult education. Here are many ways you can get involved and make a difference in the lives of adult learners.  

This post was coauthored by Jessica Palek.

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According to the annual poverty data released by the Census Bureau yesterday, there were 46.2 million Americans living in poverty in 2010, up from 43.6 million in 2009 (an increase of 2.6 million). In other words, more than1 in 6 Americans were poor in 2010. This is the highest number since the Census Bureau began gathering data 52 years ago, superseding last year’s all-time high.

The national poverty rate climbed to 15.1 percent in 2010, an increase over 2009’s rate of 14.3 percent. This is the fourth yearly increase. The South was hit hardest, as its poverty rate climbed by 1.2 percent—twice the rate of any other region in the country.

Experts believe that these figures understate the real level of poverty in the U.S. For example, many more young adults are staying or moving back home because they can’t find jobs, and others have doubled up with friends and relatives. If only their incomes, as opposed to the entire household’s, are counted, then instead of the official poverty rate of 8.4 percent, 45.3 percent would be in poverty.

Additionally, the government’s methodology for determining poverty inadequately measures the real poverty rate in America. The federal poverty line of $22,314a yearfor a family of four and $11,139 for an individual is based on methodology designed in the early 1960s that fails to capture people’s spending and living needs in today’s economy.

The Census Bureau will release a Supplemental Poverty Measure in October 2011. This new measure, which the Bureau announced last March, is intended to provide an alternative, modernized measure of economic well-being. It will use a more accurate measure of a family’s income by including income from government programs (e.g., tax credits, nutritional support, housing and energy assistance), while deducting expenses (e.g., child support obligations, child care costs, work expenses, taxes and medical costs). It will not replace the official poverty measure and will not be used to determine eligibility for government programs. 

Income
Middle-class American families’ income fell in 2010. The median household income fell 2.3%, or $1,154, in 2010, adjusting for inflation. Overall, median income has changed very little compared to rising consumer prices over the last 30 years. Adjusted for inflation, the middle-income family earns only 11% more than they did in 1980, while the top 5% richest Americans saw their incomes surge 42%.

Income inequality has also increased. The top-earning 20 percent of Americans—those making more than $100,000 each year—received 49.4 percent of all income generated in the U.S., compared with the 3.4 percent earned by those below the poverty line. That ratio of 14.5-to-1 was an increase from 13.6 in 2008 and nearly double a low of 7.69 in 1968. Between 1999 (the year that household incomes peaked before the 2001 recession) and 2010, income at the 50^th and 10^th percentiles declined 7.1 percent and 12.1 percent respectively, while the decline in income at the 90^th percentile was only 1.5 percent. Although there was no change in the income ratios in the 90^th to 10^th percentile, the 90^th to 10^th percentile income ratio increased from 10.42 to 11.67 percent. Households in the top 20 percent by income saw incomes fall by 0.7 percent, while those in the bottom 20 percent saw incomes fall by over six times as much—4.5 percent—in inflation-adjusted dollars.

Households in the Midwest, South and West experienced declines in real median income between 2009 and 2010. On the other hand, median household income for the Northeast stayed about the same. More detailed state-by-state data will become available when the Census Bureau releases the American Community Survey next week on September 22^nd.

Interestingly, the data note that, because more families have “doubled-up households,” the poverty statistics may significantly under count actual household poverty levels.Doubled-up households are defined as households that include at least one "additional" adult: a person 18 or older who is not enrolled in school and is not the householder, spouse, or cohabiting partner of the householder.

In spring 2007, prior to the recession, doubled-up households totaled 19.7 million. By spring 2011, the number of doubled-up households had increased by 2 million to 21.8 million, and the percent rose by 1.3 percentage points from 17 percent to 18.3 percent. Nearly 6 million young adults age 25-34 (14.2 percent) resided in their parents' households, compared with 4.7 million (11.8 percent) before the recession, an increase of 2.4 percent. As noted earlier, while it is difficult to precisely assess the impact of doubling up on overall poverty rates, the poverty rates for young adults age 25-35 would go from 8.4 percent to 45.3 percent if only their income was considered rather than the entire family’s income. 

Minorities
The Census Bureau poverty data show the poverty rate for African-Americans increased faster than for the rest of the population and was just over 27 percent. Blacks and Hispanics were hit particularly hard by the recession. The rate of blacks living in poverty climbed by 1.6 percent, and Hispanics’ rate increased by 1.3 percent. In comparison, the white poverty rate grew by 0.7 percent, and the Asian poverty rate actually fell by 0.4 percent.

One recent analysis concluded that the gap in wealth between white households and households of blacks and Hispanics was the largest in 2009 since the government began publishing data on this topic a quarter century ago. According to the report, about a quarter of all Hispanic (24%) and black (24%) households in 2009 had no assets other than a vehicle, compared with just 6% of white households.

Health Insurance Coverage 
The Census Bureau’s report also showed that the number of people without health care coverage rose to 49.9 million last year from 49.0 million in 2009, though the percentage of uninsured was from the 2009 rate of 16.3 percent. The Northeast and the Midwest appear to have had the lowest uninsured rates in 2010.

The increase in the number of people without health insurance is due mostly to working-age Americans who lost employer-provided insurance in the weak economy. Between 2009 and 2010, the percentage of people covered by employment-based health insurance declined from 56.1 percent to 55.3 percent, while the percentage covered by government health insurance increased from 30.6 percent to 31.0 percent. Reaching a new low, this is the tenth year of decline in the share of people with employer-provided insurance. Interestingly, however, the percentage covered by Medicaid (15.9 percent) was not statistically different from 2009. Moreover, an additional 2% of young adults age 18-24 gained coverage due to the health care reforms that allow them to remain under their parents’ health insurance until the age of 25.

The number of uninsured people isn’t likely to decrease if the unemployment rate remains high. Despite the historic Affordable Care Act health care reform legislation passed last year, many Americans will remain uncovered for a while because many of the Act’s primary expansions in coverage will not take effect until 2014. 

Children and the Elderly
The share of children under 18 living in poverty also jumped to 22% from 20.7% in the previous year. In 2010, 16.4 million children younger than 18 lived in poverty, compared with 15.5 million in 2009.

Historical Impact of Recessions 
These data cover the first full calendar year after the technical end of the  December 2007-June 2009 recession. The data are bleak but not surprising.

Given that in 2010 the unemployment rate was 9% and the number of Americans who were unemployed for 6 months or more was at an all-time high, the single most important factor in the increase in poverty may be the increase in the number of people who did not work at all last year. Since the start of the recession in 2007, the number of men working full time, year-round with earnings has decreased by 6.6 million, and the number of women has declined by 2.8 million.

Taken together, the data all point to the severe and widespread financial strains of a nation in the throes of an economic crisis. And the Census data report, coming shortly after President Obama’s proposed package of $447 billion in tax cuts and spending to revive job growth and the recovery contained in the American Jobs Act, is almost certain to intensify the debate over the government’s role in helping the poor and unemployed at a time of budget deficits and painful cutbacks in public services.

As the poverty rate approaches levels not seen since Lyndon B. Johnson launched the War on Poverty in 1965, it is crucial that American families tell Congress just how important such government safety nets have been to their economic well-being. The 2010 data show that there has been a sharp increase in those households that are in “deep poverty” (i.e., households living at less than half of the federal poverty level). Deep poverty has risen to an estimated 6.3%—20.5 million people—an increase of more than 25% since 2000. This number is an indicator of “disconnected” households with little meaningful attachment to employment.  As experts note, as government programs to assist those Americans suffering from this economic downturn are cut, it won't take much for “deep poverty” to claim a share of the population the country hasn't seen in over three decades. If that happens, the current poverty numbers, as astounding as they are, will seem meager.

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Last night, President Obama finally drowned out the summer’s budget deficit political circus with an impassioned speech and serious proposal to deal with our real American crisis – the jobs deficit. Between the jobs lost in the recession, and the growth of the American population, the National Employment Law Project calculates that we have a deficit of more than 11 million jobs. The President will send Congress a bill called the American Jobs Act, which would pump a half billion dollars into the economy in 2012 through jobs-creating programs, infrastructure investments, and tax credits. The priority of this funding must be strengthening the American middle class, including creating on-ramps for those who have worked hard, but never been able to get there yet. The President’s proposal will enable us to create jobs now by making critical investments in our nation’s future prosperity. You should contact your representative immediately to ensure that Congress passes it right away.

The proposals in American Jobs Act are tried and true strategies, which have had the support of members of both political parties. The bill looks to our nation’s immediate needs but does so with a long-term goal in mind – an American “economy that creates good, middle-class jobs that pay well and offer security.”

President Obama promised that the cost of the bill will be paid through a deficit reduction plan he will introduce in ten days. The outline of the plan represents a balanced approach of increasing revenue and making additional spending cuts on a responsible timeline. These cuts must not harm the most vulnerable among us. It also will include tax reform so that the wealthiest Americans and the most profitable corporations pay their fair share. The President will also propose changes to Medicare and Medicaid. We need to see the specifics of these proposals. They must make smart changes that assure that America’s seniors and low-income individuals and families have access to quality health care for decades to come.

About half the cost of the bill is a relatively modest proposal to extend and expand the payroll tax cut. Currently workers pay 4.2% of their income to fund Social Security, but that will rise back to 6.2% at the end of the year if Congress takes no action. The proposed cut would halve the payroll tax paid by employees through 2012 to 3.1%, saving a worker who makes $50,000 per year about $1,500. The bill also would cut the payroll tax paid by small businesses for the first time. Early estimates suggest these will cause employers to add 50,000 jobs per month. Additionally, all business would get tax credits for hiring workers, especially the long-term unemployed and veterans, for giving raises, and for making capital investments. Payroll taxes go to funding Social Security, and the President indicated that the amount saved by individuals and businesses would have to be paid in through other sources of government revenue. The challenge is that we still have to continue to support Social Security and ensure its long-term viability as one of the most important anti-poverty programs in America.

The American Jobs Act also funds major infrastructure investments, including building and repairing roads, bridges, railroads and airports, and repairing and modernizing 35,000 school buildings, through a public-private fund that picks projects with two criteria: “how badly a construction project is needed and how much good it would do for the economy.” The construction industry is ripe for adding workers, including women and minorities, who have historically been underrepresented. Additionally, it provides funding for critical workers that states have cut – teachers and first responders.

The bill has many other important provisions. There are several key provisions to help the long-term unemployed. First, the bill would extend unemployment insurance another year. Without this extension, millions of Americans who have been out of work for 6 months or more would lose their benefits starting in January, and would stop spending those benefits in their communities, further damaging the economy. Second, it would prohibit employers from discriminating against someone just because they are unemployed. Third, it creates a $4,000 tax credit for businesses that hire someone who’s been looking for work for 6 months or more. However, the proposal to create a work program along the lines of Georgia Works is concerning because recipients of unemployment insurance are placed at work sites where they are supposed to be trained, but may instead just be free labor to a corporation.

The American Jobs Act seeks to create economic opportunity for all. Right now we have a crisis where young people can’t find summer work, or first jobs. This summer, the smallest proportion of youth were working compared to any summer since the Bureau of Labor Statistics started recording this data in 1948. This long-term, early unemployment is doing serious damage to their lifetime economic prospects, and we’ve seen the rioting that youth hopelessness, poverty, and unemployment have caused in England this summer. President Obama’s proposal would create more opportunities for young people and low-income and disadvantaged Americans who want to work by connecting them with training and jobs through the creation of the Pathways Back to Work Fund. We need more details on the size and scope of this program.

The American people expect the politicians in Washington to make real choices to get our economy growing again. The American Jobs Act will create jobs now through smart investments in our future prosperity, and will be funded by fair increases in revenue from big business and the wealthiest Americans. That’s true to our American values of shared sacrifice and equal opportunity.

The circus is over. Congress, go back to work. America needs you to pass the American Jobs Act, so we can get back to work too.

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Over the past 20 years, electronic deposit and electronic benefit transfers (EBT) have replaced paper checks for the delivery of public assistance benefits. EBT systems deliver government benefits by allowing recipients to use a plastic card to access their benefits through ATMs and point of sale (POS) devices located in select retail outlets.

One reason that EBT systems have become so popular is that states have found that they can save millions of dollars by "outsourcing" the provision of these benefits to big financial firms. In fact, JP Morgan is the largest processor of food stamp benefits in the United States.

JP Morgan has contracted to provide food stamp debit cards in 26 states and the District of Columbia. JP Morgan is paid for each case that it handles, so that means that the more Americans that go on food stamps, the more profits JP Morgan makes. Considering the fact that the number of Americans on food stamps has exploded from 26 million in 2007 to 43 million today, one can only imagine how much JP Morgan's profits in this area have soared.

J.P. Morgan also provides unemployment insurance benefit debit cards in seven states which is ironic since it, along with other big Wall Street banks, was a major contributor to the financial collapse that lead to tens of thousands of Americans becoming unemployed. 

It seems grossly unjust that the very Wall Street financial institutions that caused the recession and received bailouts from the U.S. government and tax dollars during the financial crisis are now making money off the recession and their victims again – low income families and taxpayers. Moreover, one of the programs that was on the chopping block during the debt debate was the food stamp program. In other words, Congress was prepared to cut food assistance to families, but did not even bother examining whether big banks’ profits from administering food stamp program benefits should be cut.

As part of the recent Wall Street reform, the Consumer Financial Protection Bureau (CFPB) was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CFPB, which became operational on July 21^st, is now the sole federal agency focused on consumer protections. Among its responsibilities is supervision and enforcement with respect to the laws over providers of consumer financial products and services. As such, one of its early efforts should be to review the practice of continuing to allow financial institutions to profit off the very consumers they helped to defraud and deplete their assets in the first place.

To learn more about the CFPB visit its website.

To learn more about issues surrounding the electronic payment of public benefits you can view the Shriver Center’s webinar, The Next Frontier: in Public Assistance: Electronic Payment Cards.

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Wealth and assets are the building blocks of economic stability and mobility. Higher levels of wealth also benefit society as a whole. Unfortunately, wealth inequality in the United States is not only wide but growing — the wealthiest tenth of American households possess almost three-quarters of the country’s total net worth. The racial wealth gap is even worse. In less than a generation (from 1984 to 2007), the racial wealth gap has more than quadrupled, mostly as a result of rising white wealth. In terms of household net worth, for every dollar owned by a white household Latinos own twelve cents and African-American families own only ten cents.   In fact, the median net wealth of white households is 20 times that of black households and 18 times that of Hispanic households. These lopsided wealth ratios are the largest since the government began publishing this data a quarter century ago and roughly twice the size of the ratios that prevailed among these groups for the prior to the Great Recession.

Early evidence is that the great recession has already significantly increased the racial wealth gap because of catastrophic losses in wealth amongst minorities. A recent report by the Pew Research Center estimates that from 2005 to 2009 the racial wealth gap doubled – so that median white families currently have as much as 20 times the wealth of black families, and 18 times the wealth of Hispanic families. These racial wealth disparities will rise further as the after-effects of the Great Recession continue. Although the recession affected all U.S. households’ wealth, through unemployment, falling stock prices, and huge losses in home values, it affected minorities more. In fact, the foreclosure crisis has caused “the greatest loss of wealth for people of color in modern U.S. history.”

In order to understand the persistence of this discrepancy, one needs to examine the country’s historical and current discriminatory practices and policies. Even when characteristics such as income, education, and other demographics are equal, minorities continue to have less wealth than similarly situated whites. Historically, legal, or de jure, discrimination, both by the government and by private actors, increased the racial wealth gap and created the opportunity for whites to build assets at the expense of minorities. Additionally, and perhaps more importantly, other facially neutral policies of the U.S. government racialized wealth acquisition, including the government’s promotion of white land acquisition, home ownership, retirement, and education, without explicitly delineating opportunities along the lines of race. Today, although racial discrimination is no longer legal, de facto discrimination still exists in terms of government and social priorities, principles, social norms, and the actions of individuals. Housing discrimination, unequal educational systems, disparate treatment in the realm of criminal justice, and disparate employment opportunities all continue the current advantages that whites enjoy.

Two critical public policy strategies in reducing this gap is identifying and eradicating current discriminatory government policies, whether de jure or de facto, and assisting racial minorities in developing assets. As advocates in the asset building field have explained, “public policies have and continue to play a major role in creating and sustaining the racial wealth gap, and they must play a role in closing it.”

At the moment, however, the federal government is actually exacerbating the racial wealth gap.  Instead of subsidizing wealth creation mostly for the wealthy, the federal government must switch to supporting asset-building strategies for those who need it most. In 2009, the United States spent nearly $400 billion on asset building policies. These subsidies, however, overwhelmingly go to those who already have significant wealth. For example, those earning more than $160,000 received an average of $5,109 in tax breaks per taxpayer, while those earning less than $19,000 received an average of only $5 in tax credits in 2009. Shifting the government’s expenditures toward facilitating the asset-building of the poor and minorities would help alleviate the legacy of racial inequality and provide needed fiscal stimulus.

Multifaceted public policies and strategies to help individuals build their own assets are also needed. Specifically, we must identify strategies to (1) promote savings, (2) increase access to mainstream credit, and (3) improve and increase financial education. Only by acknowledging that the same social system that has, and continues, to foster the accumulation of private wealth for many whites while denying it to blacks and redirecting this focus will we, as a society, begin to decrease the wealth gap that has racially divided this country for centuries.

To read more about the causes of the racial wealth gap and asset building policy solutions to bridge this gap read the “Eliminating the Racial Wealth Gap: The Asset Perspective,” featured in the July-August 2011 issue of Clearinghouse Review.

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If you have a refrigerator and a stove you aren’t really poor! Or at least that is what a recent report, “Air Conditioning, Cable TV and an Xbox: What is Poverty in the United States Today,” by the Heritage Foundation claims.

The report’s premise is that public policy discussions on poverty are meaningless absent a detailed description of the actual living conditions of poor households. Specifically, the report asserts that although the Census Bureau reports that over 30 million Americans are living in poverty, in reality, this number overestimates poverty because poor families own things like refrigerators, stoves, microwaves, washers and dryers, and ceiling fans. Oh and let’s not forget to include the coffee maker that poor families own instead of going to Starbucks for their $4 latte!

 Putting aside the fact that, according to 2009 Census Bureau data, 43.6 million people were actually in poverty (which is the highest number in the 51 years that the U.S. has published poverty rates), the report analyzes data from the Residential Energy Consumption Survey (RECS) which measures energy consumption and ownership of various “conveniences.” Comparing the amenities available to poor households versus those available to all households, the report asserts that the average poor person has a living standard far higher than the public imagines. According to the authors’ analysis, both typical households and poor households each have air conditioning, washing machines and dryers, refrigerators, stoves and ovens, TVs and cable or satellites, a DVD and VCR, and cordless phones. Based on this analysis, the report concludes that poor households are living well today. As the report states, “the poorest Americans today live a better life than all but the richest persons a hundred years ago.”

But everyone is better off today than they were 100 years ago!! The wealthy are better off than they were 100 years ago, too. The real issue is how the poor fare in today’s economy, not how they would have fared in the economy 100 years ago.

For example, the report acknowledges that, although poor households were less likely to have air conditioning in any given year, the share of all households with air conditioning has steadily increased over the past 25 years. (Admittedly, I am sitting in an air conditioned room writing this while outside it’s over 100 degrees, so I currently think air conditioning is certainly not a luxury.) The reality, however, is that poor families have air conditioning solely because most of today’s homes were constructed with it. It’s not a luxury that the poor are indulging in; it’s merely what is available in the housing market. Do we know whether poor families are actually using the air conditioning in their homes, or are they unable to because they cannot afford it?

The report also asserts that poor Americans are well housed because their dwellings are spacious compared to international standards. All American homes are spacious compared with most other countries’ housing, but that doesn’t mean that poor families are living in palaces!

According to the report, homelessness is not a problem either. The authors assert that only 240,000 out of the total 643,000 Americans without a permanent domicile are actually “homeless” because they live in cars, abandoned buildings, alleyways, or parks. The rest of the so-called homeless are in emergency shelters or transitional housing so they don’t really count as homeless. Moreover, the report explains that individuals typically lose housing, reside in emergency housing for a few weeks and then re-enter permanent housing, so the homeless rate isn’t really a problem. But how long is it before they lose this new housing because they can’t continue to pay for it? The report does admit that there has been an increase in the number of families with children who use homeless shelters, but asserts that the increase isn’t a “tidal wave of increased homelessness.” Perhaps the increase isn’t as large because those families that lost their homes have moved in with other family members. Or perhaps it’s because poor families are relying on Section 8 housing instead of sleeping the streets, though they may have to line their sleeping bags up in the gutters soon with HUD programs among the many public benefits programs that the Republican budget proposal would cut.

Similarly, the report implies that having a refrigerator, stove, and oven means that families are not poor. Families should have these items. It’s whether or not there food to put in the fridge and to cook on the stove that matters! Of course the authors also argue that food is available because, even though there has been an increase in the use of charity food pantries and soup kitchens during the recession, only one poor family in five took food from a pantry and even less ate at a soup kitchen. Would that be because more people applied for food stamps to get by instead? And, by the way, food stamps are another public benefit program on the chopping block, so there probably will be longer lines at the soup kitchen soon.

Although the recession has increased the number of families in poverty, the authors contend that once the recession ends the living conditions of the poor are likely to continue to improve as they have in the past. So I am guessing that the racial wealth gap, which has increased fourfold in the past 25 years, is likely to improve to as well? After all minorities and low-income families were the hardest hit by the recession so they should bounce back pretty quickly, if the report is correct.

The report claims that the creation of a new poverty measure is simply a propaganda tool in President Obama’s endless quest to “spread the wealth.” In other words, the new measure’s focus on income inequality rather than poverty is a way to get the American public to unknowingly buy into the goal of income leveling. Yet, even if the new poverty measure was the “Trojan horse” that the authors claim, the horse has already left the barn because research shows that 92% of Americans already favor income redistribution. 

The report correctly states that the current federal poverty measure, which defines poverty in terms of income and ignores public benefits, undercounts the economic resources provided to poor people. The new poverty measure would correct this by including such benefits into the poverty calculation. Since the new poverty measure is merely a ruse, though, I guess we shouldn’t mention that part.

Perhaps the only thing that the authors do get right is the fact that “accurate information about the extent and severity of poverty is imperative for the development of effective public policies.” They are correct when they say that “misrepresentations of poverty data lead to a misallocation of resources and, by obscuring the causes of deprivation, impedes the development of effective countermeasures.” Unfortunately it’s the data and how government dollars should be allocated that they get wrong. As the report points out, federal and state governments spent $714 billion on means-tested welfare programs in 2008. However, the federal government also spent over $400 billion in asset building policies that mostly benefit the wealthy. So maybe the right allocation would be to redistribute the asset building expenditures and tax credits from the wealthy to the poor. Perhaps then there wouldn’t be a welfare state, because the poor would actually own assets that would help them move away from welfare programs.

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Most of us scream on carnival rides and enjoy seasonal treats during the summer without thinking about the laborers who make these activities possible. Many of these workers travel long distances at considerable expense to take low-paying, dangerous jobs. These seasonal workers are employed through the H-2B visa program, which is ripe for change.

Under the terms of the H-2B program, U.S. employers petition for seasonal nonagricultural workers to work here on a temporary basis. (The H-2A program works in the same general way for seasonal agricultural workers.) Getting approved to host an H-2B worker is difficult, and three separate federal agencies are involved in the application and visa issuance process.

You might think that, in light of the rigorous process used to approve H-2B workers, there would be strong safeguards in place to protect the workers from exploitation once they arrive in the United States. You would be wrong. As an initial matter, under existing law H-2B workers are not even guaranteed a minimum number of work hours under their employment agreements—unlike H-2A agricultural workers, who are required to receive hours equivalent to three-fourths of the work days specified in their employment contracts.

Moreover, because there are multiple federal agencies involved in the H-2B program, it is incredibly difficult for workers to determine how to pursue an employment-related question or complaint. And, because H-2B workers apply to work in this country for a particular employer and cannot change employers once in the United States, they often feel compelled to continue working for employers who confiscate their passports, make them live in unsanitary housing, subject them to verbal abuse, and otherwise exploit and degrade them. 

Even if H-2B workers are inclined to seek legal help, organizations that receive Legal Services Corporation funding are not permitted to assist them. Thankfully, other organizations and the federal government do step in.  Earlier this year, several H-2B carnival workers from Mexico were awarded thousands of dollars following a Department of Labor investigation sparked by activists concerned about the condition of New York State Fair workers.

Fortunately, the federal government has decided to revamp the guest worker program and make it more just for seasonal workers. In March 2011, the U.S. Department of Labor proposed revisions of the regulations governing H-2B workers. The proposed revisions are significantly more protective of workers’ rights than the current regime. 

In addition, U.S. Senators Robert Menendez (D-NJ), Harry Reid (D-NV), Patrick Leahy (D-VT), Dick Durbin (D-IL), Chuck Schumer (D-NY), John Kerry (D-MA), and Kirsten Gillibrand (D-NY) recently launched the Comprehensive Immigration Reform Act of 2011. This wide-ranging bill contains provisions addressing border security, work authorization, and paths to legal immigration—including an attempt to revive the DREAM Act. Several provisions in the bill would affect guest workers. This legislation currently has no Republican support, but it is encouraging to see lawmakers trying to coalesce around a reform plan. 

The fate of the Comprehensive Immigration Reform Act probably will not be decided anytime soon, but hopefully the Labor Department’s revisions to the H-2B regulations will be adopted quickly and some of the structural flaws in the H-2B program will be remedied.

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As states privatize portions of their public benefits programs in an effort to save money, more and more Americans are getting lost in the shuffle. Recently in Indiana, a federal district court examined the privatization process in the context of one man’s application for Medicaid benefits. In Novak v. Indiana Family and Social Services, 1:10-cv-0677-RLY-DML, 2011 U.S. Dist. Lexis 34249 (S.D. Ind. March 30, 2011), the court found that private companies performing functions traditionally held by state governments can become state actors and thus be held responsible for losing or delaying citizens’ applications for benefits.

The Novak case began in October 2008 when a law firm representing Raymond Novak applied for Medicaid benefits on his behalf. Unfortunately for Mr. Novak and his wife, in December 2006 the State of Indiana had contracted with IBM to modernize the way Indiana’s Family and Social Services Administration (FSSA) processed Medicaid claims and applications. IBM quickly took over most of the Medicaid-related work in Indiana. 

As the Novak court wrote, “the effort to modernize resulted in significant delays and other problems that left the Medicaid benefits procurement process in Indiana with a backlog of unprocessed or incorrectly processed Medicaid applications.” In fact, although the contract was supposed to run for ten years, Indiana cancelled it after less than three because of IBM’s unsatisfactory performance. (The State of Indiana and IBM are currently embroiled in a highly publicized lawsuit regarding the state’s decision to terminate the contract.)

Mr. Novak and his wife, Rosemarie, were victims of IBM’s substandard performance. Not only did the service center responsible for Mr. Novak’s application lose it (and neglect to contact Mr. Novak’s lawyers to let them know the application had been lost), the center denied his application without providing any information about how to correct it. Mr. Novak’s lawyers appealed, and again the service center did not respond. Once again, the lawyers learned that the appeal had not been processed and that no hearing date had been set. The lawyers then sent Mr. Novak’s paperwork directly to FSSA’s appeals division. When an administrative law judge reviewed the case, although she denied Mr. Novak’s appeal, she explained her reasoning in detail so that Mr. Novak’s lawyers could correct the application.

Mr. Novak was later found eligible for Medicaid benefits, but the Novaks still sued FSSA and IBM, claiming not only that FSSA’s denial of benefits was unlawful, but asking for damages in a civil rights claim under 42 U.S.C. § 1983. The Novaks alleged that the FSSA’s application system was prejudicial to them because it delayed Mr. Novak’s eventual receipt of benefits and forced the couple to incur unnecessary legal fees.

While the court dismissed some of the Novaks’ claims, it allowed the section 1983 claim against IBM to stand. To bring a section 1983 claim against a defendant who is not a government official, the plaintiff must show that the defendant was a state actor. Analyzing the Novaks’ description of IBM’s actions, the court found that, because “the State entrusted to IBM its obligation to accept, promptly review and process a Medicaid application in accordance with the federal Medicaid statutes and regulations,” IBM was a state actor. This acknowledgment sends an important message to other states as well as to private contractors who consider entering into contracts to handle welfare work. After Novak, it is clear that corporations who contract with states to process Medicaid claims or other public benefits can be found responsible if they do not meet the requirements of federal law.

The Novaks’ situation is not an anomaly. Texas has also contracted out its eligibility determination for public benefits, and more and more states are considering privatization as a way to save money. Advocates agree that privatization of public benefits is fraught with peril for low-income clients. In a recent issue of Clearinghouse Review, Professor Wendy Bach of the University of Tennessee Law School asserted  that privatization not only makes it more difficult for applicants to receive benefits, privatization also reduces government accountability, making it difficult for community members and advocates to challenge inequities in the welfare system. The National Center for Law and Economic Justice notes that advocates for low-income people need “to ensure that privatization and modernization initiatives are implemented in an effective and accountable manner, guaranteeing low income individuals and families the benefits, services, and opportunities for which they are legally entitled and that they need to achieve economic independence.” In 2002, Clearinghouse Review’s annual special issue was devoted to privatization, and the Review will continue to follow this important topic in future issues.

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All too often, the news about low-income people and technology is bad. Low-income communities trail the rest of the country in their ability to access the internet. As a result, low-income Americans have less access to information, job opportunities, and public services than other citizens. Moreover, the bureaucracies that have an impact on low-income Americans’ lives—namely, the city, state, and federal agencies that distribute public benefits—usually lack the most current technological innovations, and efforts to modernize program administration are frequently delayed. In New York, for example, the New York City Housing Authority’s recent attempt to modernize by installing a new $36 million computer system has been plagued by delay and lost information. Additionally, some attempts to modernize public benefits administration have unintended adverse consequences for certain populations. As Cary LaCheen wrote in a recent Clearinghouse Review article, many public benefits agencies are using call centers to interact with clients in an effort to reduce face-to-face time and streamline operations. Unfortunately, this efficiency comes at a cost for deaf and hard-of-hearing individuals, who face multiple barriers when they try to communicate remotely with benefits agencies.

Against this dispiriting backdrop, Single Stop USA’s successful use of technology to benefit low-income Americans is especially welcome. Single Stop USA, which recently received a $1.1 million grant from the White House Social Innovation Fund, began in New York City as a project of the Robin Hood Foundation. Single Stop USA uses its revolutionary benefits enrollment network, or “BEN,” to help low-income people understand the public benefits maze and make sure that they are receiving all of the assistance for which they are eligible. 

BEN is proprietary software that Single Stop USA counselors access over the internet on their office computers. After Single Stop USA counselors are trained to use the BEN technology, they are placed in local organizations such as hospitals, churches, public defenders’ offices, and community colleges. When clients go to these organizations to meet with their attorneys, go to class, or get check-ups, they can also meet with Single Stop USA counselors. The counselors interview the clients, enter some basic information into BEN, and then provide the clients with information about city, state, and federal benefits that they are entitled to receive. Finally, the counselors either guide clients through the benefits application process or provide the clients with referrals to service providers who will help them, free of charge. BEN is constantly being revised and updated; just in time for tax season, BEN now has a “tax tab” that can provide clients with free tax preparation. This is particularly essential for low-income clients, many of whom think that they do not need to file income taxes when, in fact, there are often credits that they are eligible for, such as child care credits and the Earned Income Tax Credit.

Until recently, Single Stop USA’s work has focused on New York and California, but the White House Social Innovation Fund Grant will help it to expand nationwide. The BEN concept is well-suited for nationwide expansion, because the software can be custom-designed for every organization that Single Stop USA partners with and work with the particular array of state and local services available to clients in a given location. The White House grant is designed to help Single Stop USA with its efforts in community colleges, on which Single Stop USA plans to focus as it continues to grow. Community colleges are an ideal location for the Single Stop USA model, because the benefits that students receive from a Single Stop USA consultation can help them on multiple fronts. Obviously, students who meet with Single Stop USA counselors get immediate assistance with their taxes and benefits. Improved benefits and tax returns also help the students achieve their long-term goal: higher-paying jobs.

Single Stop USA is not the only organization using technology to benefit low-income Americans. Indeed, Pine Tree Legal Assistance in Portland, Maine, recently launched Stateside Legal. Stateside Legal acts much like Single Stop USA’s benefits calculator, but for U.S. military veterans. Any veteran can go to Stateside Legal, enter some basic personal information, and receive legal information about state and federal programs he or she might be eligible for, as well as general information regarding foreclosure, consumer debt problems, and health diagnoses common to veterans. Veterans can also use the site to find an attorney, if necessary. Stateside Legal has already received about 79,000 page views since its launch in November 2010. Stateside Legal received a $300,000 grant from the Legal Services Corporation’s Technology Initiative Grants Program, which “promotes full access and high-quality legal representation through the use of technology.” In fact, the Technology Initiative Grants Program funds many noteworthy uses of technology on behalf of America’s poor, including I-Can! E-File, a free electronic tax-filing system that helps low-income Americans file for the Earned Income Tax Credit. The I-Can! program has 560 partners in 49 states.

As more and more organizations follow the example set by Single Stop USA, and the Technology Initiative Grants Program’s grantees, hopefully we will begin reading more headlines about advocates successfully using technology to close the income gap and fewer headlines about the dearth of innovative technologies available to low-income Americans.

Editor's Note: The Editorial Team of Clearinghouse Review: Journal of Poverty Law and Policy would like to know more about how legal aid and other public interest law advocates use technology to stay informed. Please respond to our brief online survey by May 6, 2011.

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The Supplemental Nutrition Assistance Program (SNAP, formerly called Food Stamps) is one of the nation’s most important anti-hunger and anti-poverty programs and helps 44 million Americans buy food, including 1.8 million in Illinois. In 2009, SNAP effectively lifted 4.6 million Americans out of poverty. Today, SNAP is threatened by House Budget Committee Chairman Paul Ryan’s long-term budget plan, which passed the House on April 15, and other potential structural changes in government spending such as a global spending cap.

What is SNAP?
Food stamps have existed in one form or another since the latter years of the Great Depression, helping Americans avoid hunger and malnutrition. SNAP also helps American farmers and the 200,000 retailers who accept the benefits. The federal government pays for all SNAP benefits, and splits the cost of administering the program with the states.

SNAP is a critical part of the safety-net for American families. Three-quarters of all benefits go to households with children, and nearly one-third go to households where a family member is elderly (over 60) or disabled. SNAP serves American families whose income is less than 130% of the federal poverty line ($1,579 per month for a family of two or $2,389 for a family of four). This eligibility level is set by Congress.

SNAP benefits are keyed to the USDA Thrifty Food Plan, which is the Department of Agriculture’s estimate of the cost of a bare-bones, nutritionally adequate diet. The maximum benefits (including the small temporary increase provided by the American Recovery and Reinvestment Act) is currently $367 for a family of two or $668 for a family of four; that amount goes to families with no disposable income after certain necessities are deducted from their income. But the average person receives just $4.46 a day. Perhaps not surprisingly, food pantries report more need towards the end of the month, when people have exhausted their SNAP benefits and still need to eat.

Ryan’s Long-Term Budget Threatens SNAP
Chairman Ryan proposes radical, unwise, and unnecessary changes to the SNAP program including the following.

• Ryan would cut almost 20%, or $127 billion, from the SNAP program over ten years. Slashing this much from the program would require cutting off access to food for millions of Americans, or drastically reducing benefit levels.
• Ryan would change the structure of SNAP to a “block grant” starting in 2015. Block grants cap federal expenditures for a particular program, and the federal government simply gives states a fixed amount each year without regard to the level of need.
• Ryan would require adult recipients of SNAP to work or engage in job training. Our society should provide the most vulnerable among us adequate nutrition, even if they or their parents are unable to work.
• Ryan would make SNAP receipt time-limited, like Temporary Assistance for Needy Families (TANF). Such a policy would cause hunger and malnutrition for millions of Americans, especially the elderly, after they exhausted their period of eligibility.

Cutting $127 Billion from SNAP Would Rip a Hole in the Safety Net
Slashing 20% from the SNAP program would hurt millions of Americans, including the elderly and working families. It would also hurt farmers and retailers and shift a huge financial burden onto the states. In Illinois alone, a conservative estimate of the cuts would be $5 billion in lost support over 10 years. That is money that families could not use to buy healthy food, and money stores would not bring in, reducing employment and increasing food deserts, areas that lack access to healthy food. If the $127 billion in cuts come from solely from narrowing eligibility, at least 8 million individuals would need to be cut from the program. If the $127 billion in cuts come from a universal cut in benefits, it would be a reduction of over $30 per person per month, which adds up to more than $1,000 a year for a family of three. There isn’t much else to cut—SNAP is efficiently run and has an extremely low error rate, with over 98% of SNAP benefits going to households who are qualified for the program.

SNAP Should Remain a Federal Program
SNAP is, and should remain, a federally funded program for three main reasons. First, hunger is a national problem, and ensuring access to enough food for all Americans should be a shared commitment. Second, SNAP benefits food producers and sellers all around the country, ensuring steady national and local supplies of food. Third, if SNAP were block-granted, states would not be able to adequately respond to increases in need caused by natural disasters or recession. In 2005 after the hurricanes in the Gulf Coast, for example, SNAP provided two million suffering families $1 billion in benefits.

Block-Granting SNAP Would Undermine Its Purpose and Is Not Necessary to Control Spending
Chairman Ryan believes that block-granting SNAP would help keep spending down. In fact, the block-grant structure is unwise and unnecessary.

First, it’s unwise because a block-grant structure would rob SNAP of the flexibility to respond to times of increased need, like natural disasters and recessions. It is a testament to the flexibility of the program that in this time of unprecedented economic challenge it has grown to a record high, with 44 million Americans receiving SNAP in January 2011. SNAP must remain a counter-cyclical program to keep families afloat in difficult times.

Second, block-granting SNAP is not necessary to keep spending in check. Chairman Ryan incorrectly asserts that SNAP costs are rising out of control. In fact, the growth of SNAP is already slowing as the recovery begins. The non-partisan Congressional Budget Office predicts that SNAP expenditures will begin to fall starting in 2012. The program’s cost will return to a .3% share of GDP—the same as before the recession – by 2021. You can find state-level trends calculated by Food Research and Action Center here. 

In the last decade, SNAP costs have increased for four reasons. The vast majority of the rise is temporary and caused by the recession ,which has caused increase expenditure on SNAP because more people than ever qualify for help. The SNAP caseload closely tracks the number of people in poverty and the unemployment. Here in Illinois, for instance, in the last five years the unemployment rate has increased by 71% (from 5.6% in January 2006 to 9.6% in January 2011), and SNAP receipt has increased by 48% (from 1,216,433 to 1,803,223). Also, Congress and the President responded to the recession by temporarily boosting SNAP benefits by an average of $46 per household, which will expire in October of 2013. This expense is one of the best forms of stimulus in which our government has invested. A small part of the increased cost of SNAP comes from higher food costs, since the maximum SNAP amount is tied to the cost of a bare-bones nutritious diet. Finally, in the last decade we have made strides in getting qualified people who need help buying nutritious food enrolled in SNAP, but still one-third of eligible families do not receive SNAP, especially working families and the elderly. All this demonstrates that the biggest causes of the rise in the cost of SNAP have been the rise in the number of people who qualify for SNAP, and increase in benefits, both of which are temporary.

Adding a Time-Limit and Work Requirement to SNAP Are Impractical and Naive
The House doesn’t really think that people will stop needing to eat, do they? For many adults around the nation, SNAP is literally the only government support to which they are entitled that prevents their utter destitution and starvation.

Ryan’s proposal to require SNAP recipients to work or do job training is unrealistic and expensive. States already have smaller-scale employment & training programs for SNAP recipients, and require able-bodied childless adults to work or engage in training. But expanding this program to all recipients would swamp already-strapped states, driving up administrative costs with additional personnel and infrastructure. Paradoxically, elsewhere in Ryan’s plan he guts our nation’s investments in job training! Even the recently passed FY 2011 continuing resolution cut $1billion from job training and education.

Protecting SNAP’s Ability to Prevent Hunger in Challenging Times is a Moral Imperative
SNAP literally saves lives. SNAP helps families improve their nutrition, because 90% of SNAP benefits go to fruits and vegetables, grain products, meats, or dairy products, and the program includes a strong nutrition education component. Research shows that the national expansion of SNAP (Food Stamps) in the 1960s reduced infant mortality. That’s why prominent Americans, including conservatives like Bob Dole, support SNAP. Hunger and malnutrition in America was real—if you don’t remember it, watch this moving video. Today, tens of millions of Americans—one in five –struggle to buy food for their families.

Our lawmakers face a stark challenge—a growing structural deficit at a time of unprecedented need. But SNAP is not a part of the structural problem. For decades now our nation has embraced this core belief—that in a land so prosperous and fortunate as America, no adult, child, or elder should go hungry. Let us not turn our back on this most fundamental obligation.

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On April 12, 2011, Equal Pay Day events will be held throughout the country. April 12 is how long into the new year women must work to make the same amount of money as their male counterparts did the previous year. The Sargent Shriver National Center on Poverty Law is cosponsoring the Equal Pay Day Rally in Chicago at Daley Plaza on Tuesday, April 12, at noon. Illinois Lt. Gov. Sheila Simon, Evelyn Murphy of the Wage Project, and Doris Moy of the Illinois Department of Labor are scheduled to speak. Please join the rally.

This year the Equal Pay Day Rally falls soon after the release of the White House Council on Women and Girls’ first report on the status of women in America. Entitled “Women in America: Indicators of Social and Economic Well-Being,” the report paints a portrait of women’s status in America today compared with men’s and highlights women’s gains of the past fifty years. Women have made considerable gains in their participation in education and the workforce, but a wage gap persists between men and women. For this reason, this year’s Equal Pay Day is especially relevant.  

Women’s Employment Rates
According to the report, more women are employed now than ever before. Women’s labor force participation rates have risen over the past few decades, whereas men’s have declined. Still more men are in the workforce than women, but the gap between the two has decreased: in 2009 the labor participation rate for women was 61 percent; for men, 75 percent. Having affected fewer women than men, the recession has narrowed this gap. Whereas men’s unemployment rate doubled during the recession from 4.4 percent to 9.9 percent, the unemployment rate for women rose less, from 4.4 percent to 7.7 percent. This difference can be attributed to the recession-caused unemployment having affected mostly male occupations. For example, in manufacturing, production, and construction—overwhelmingly male occupations—unemployment rates rose dramatically.

The types of jobs held by women have also shifted over the past fifty years. Women today are more likely to hold business and finance jobs, although women still lag far behind men in this category. Women hold 14 percent of all management, business, and finance jobs today, up from 9 percent in 1983. However, one-fifth of all women in 2009 were employed in just five occupations: secretaries, registered nurses, elementary school teachers, cashiers, and nursing aides. 

Women’s Education Rates
One reason for the improvement in women’s labor participation is that women are pursuing education in much higher numbers. More women than men are enrolled in college and graduate school, and women have higher graduation rates than men across all academic levels. In 2008, 72 percent of women who graduated from high school enrolled in college the next school year as opposed to 66 percent of men; women made up 57 percent of total undergraduate enrollment.

Disparities are notable in the types of degrees that men and women pursue—mirrored in the gender segregation of certain fields. Although women earn more bachelor’s and graduate degrees overall, historically male-dominated fields such as engineering and mathematics continue to be overwhelmingly male. Women receive fewer than half of all bachelor’s degrees conferred in mathematics and the physical sciences. Health care and education continue to be mostly female.  

The Persistence of the Wage Gap
Women’s gains in labor force participation and educational attainment have not been matched by gains in wages. As women have received more degrees, their earnings have increased—up 33 percent since 1979—but not enough to equal men’s average annual earnings. Across all levels of educational attainment, women still earn only 75 percent as much as their male counterparts. For the average working woman, this pay gap will account for a loss of $430,000 over the course of a career, according to a recent report of the U.S. Congress Joint Economic Committee. The gap is even wider for black and Hispanic women, who earn 71 percent and 62 percent, respectively, as much as male workers. Because of this wage gap, women would have to work from January 2010 until April 12, 2011, to earn as much as men earned in 2010.

Not only does the wage gap persist between men and women in the same profession, but also women tend to occupy positions with lower average salaries. In 2009, compared to only 32 percent of professional men, 70 percent of professional women worked in education and health care, relatively low-paying fields. The fields in which women are least likely to get a degree or pursue a profession—mathematics and science—have the highest wages.  

The Wage Gap and Poverty
Women’s earnings increasingly constitute a sizable share of family income, and more households are headed by single women than single men. Family earnings, however, are the lowest among female-headed households, and those with children earn 30 percent less than those without children. Poverty rates for households headed by an unmarried woman with children have consistently remained high. Over the past forty years, in large part due to the wage gap, these households have had poverty rates two to three times higher than the overall poverty rate in the United States. Mothers see on average a 2.5 percent earnings decrease per child whereas men see a 2.1 percent earnings increase. The disparities are even starker for black and Hispanic families. In 2009 more than 25 percent of all black and Hispanic women had family incomes below the poverty line. 

Looking Forward—Equal Pay Day Rally in Chicago
“Women in America” presents promising data on the progress of the past fifty years, but it also shows the inequalities that remain. The wage gap persists in spite of major gains in educational achievement, with the result that female-headed households are the most impoverished. Please join the Shriver Center, Women Employed, and many other individuals and organizations at the Equal Pay Day Rally to show your support for equal pay and continue the fight for equality.

For more information, contact Wendy Pollack, director of the Women’s Law & Policy Project, Sargent Shriver National Center on Poverty Law.

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Today, across the country, a battle rages on—there are those who would use the budget crisis to attack on our values of economic security and opportunity for all. Make no mistake about it, the attack on public sector unions in Wisconsin, New Hampshire, Ohio, Indiana, and many other states across this country is an attack on the middle class—on decent wages, benefits, safe working conditions, and retirement security. The recession has already taken a serious toll on working Americans, with 1.5 million Americans joining the ranks of low-income working families in 2009 alone. Far too many hard-working American families are not able to earn enough money to achieve economic security.

In this time of a fragile economic recovery, where workers have not seen much benefit from the large productivity gains since the end of the recession, we must work together to strengthen the middle class and the American Dream. Instead, some in Congress are seeking to roll back the historic achievement of healthcare reform, and lawmakers in many states are training their sites on ending collective bargaining. Attacking unions is not supported by most Americans, won’t fix state balance sheets, and will undermine the ability of hard-working Americans to achieve economic security. Public sector union members are not overpaid, and are in fact now mostly women, who are increasingly filling the role of the sole breadwinner for their families.

We stand this week in remembrance of Dr. Martin Luther King, Jr., who was assassinated on April 4, 1968. At the time of his death, he was leading the fight for economic human rights—lending his voice and leadership to the Memphis sanitation workers, who sought the right to bargain collectively. Dr. King spent the last years of his life, including his critical year in Chicago in 1966, asserting a broad platform of fundamental human rights: the right to safe housing, the right to work for fair pay, the right to vote, the freedom to bargain, and affordable education to enable individuals to grasp the American Dream.

As we remember his brave legacy, we take on the challenge to strengthen what Dr. King fought for, and what the folks in Wisconsin continue to fight for. This week individuals, organizations, and churches will stand in solidarity with the working people in states where politicians threaten the economic human rights that Dr. King championed.

Please join us. You can find local events in your area here, starting with worship services this weekend, and then events throughout the coming week. In Chicago there will be a rally in Daley Plaza (50 W. Washington) in solidarity with those in Wisconsin on April 9 at 1:00 p.m., starting with a march to the plaza at 12:00 p.m., from the Hyatt Regency Hotel, 151 E. Wacker.

Let’s stand together as one to fight for the whole platform of human rights that Dr. King lived for, and died for.

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Workforce development programs are an important part of the nation’s economic recovery and job creation efforts—working with employers to train workers for existing and emerging high-demand jobs. Yet the U.S. House of Representatives recently passed the House Fiscal Year 2011 Continuing Appropriations bill, HR 1, which completely zeros out all funding for Workforce Investment Act (WIA) Adult, Dislocated Worker and Youth state and local employment and training programs, a cut of over $3.6 billion for the coming year (beginning this July). Other programs targeted for deep cuts or elimination include Perkins Career and Technical Education, YouthBuild, Job Corps, green jobs training, reintegration of ex-offenders, and Community Service Employment for Older Americans. HR 1 is now being considered by the Senate. During the week of March 21, members of both the House of Representatives and Senate are scheduled to be home for a District Work Period. Thursday, March 24^th has been identified as “Workforce Day of Action,” to ensure all Members of Congress and their staff are made aware of the importance of the nation’s workforce development system. Employers, workers, educators, providers, and others who understand the value of these programs must join together in this effort.

Nearly 14 million Americans remain unemployed as of February, with over 40 percent unemployed for six months or longer. As of January, more than 633,000 Illinoisans are out of work. Many are unable to return to their prior jobs because those occupations no longer exist; unfortunately, these workers and many others lack the skills and education needed for today’s 21^st century economy.

The workforce development system has faced unprecedented challenges in recent years as demand for education and training skyrocketed during the recession. Over the past program year, the WIA system served over 8.4 million jobseekers in the U.S. and helped 4.3 million gain employment. In Illinois, 173,109 jobseekers were served by the WIA system in the past program year. Since the beginning of the recession in 2007, WIA participation rates in Illinois have increased 25.1% for adults and 24.6% for youth who are seeking employment, education, training and work experience (percent increase calculated from the PY 2007 DCEO IL Workforce Development Annual Report and the PY 2009 DCEO IL Workforce Development Annual Report). Despite funding remaining stagnant at 2008 levels, nationwide WIA participation rates increased 234 percent. 

If HR 1 becomes law, the cuts will result in:

• Closing of 3,000 One-Stop Centers that serve millions of jobseekers in need of career guidance, training, and employment services.
• 276,000 youth will lose access to employment, education, training, and work experiences under WIA youth programs (over 13,000 youth in Illinois); more than 7,000 low-income young people will lose access to services under YouthBuild; 10,000 more will lose access to services under Job Corps.
• Over 14 million students enrolled in school-based career and technical education programs supported by Perkins will see services and opportunities cut or even eliminated.
• As many as 50,000 low-income seniors will be denied part-time community-service jobs under the elimination of the Community Service Employment for Older Americans program.
• And veterans who receive priority services under WIA will have to find other sites to get the help they need to successfully transition to civilian jobs.

This national effort is led by the National Skills Coalition and others. To prepare for a meeting or site visit with Members of Congress, read the National Skills Coalition’s Workforce Day of Action: How to Prepare memo for more specific information.

The nation’s workforce investment system has played a vitally important role in helping Illinois’ and America’s workers find new jobs or to get the training they need to make career changes in a very tough economy. Today, more than ever, federal policy must support investment in the skills of the American workforce to help support the nation’s economic recovery and job creation efforts. Reducing our investment in workforce development, basic skills and postsecondary education will have an immediate impact on jobseekers looking to increase their skills for available jobs, and on employers seeking skilled workers.

Now is not the time to eliminate the nation’s primary system for getting people back to work. Tell your Members of Congress where you stand on workforce development cuts. Click here to contact your Illinois Senators at their district office. Click here to contact your Illinois Representative at their district office.

For more information, contact Wendy Pollack, Director of the Women’s Law & Policy Project.

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The Great Recession has undermined the economic security of people and communities across America, including the poor. There were 43.6 million Americans living in poverty in 2009, an astounding 17 percent increase in the two years since the Great Recession began in 2007. With poverty at such a rising tide, never has it been more important for our elected representatives to take effective action to fight poverty.

Each year the Shriver Center publishes its Poverty Scorecard, which grades the performance of every Member of Congress on the fifteen or so most important poverty-related votes of the year. Experts in approximately twenty different subject areas help us identify which votes to use. The Scorecard’s purpose is to hold our Senators and Representatives accountable – every single one of them – for their efforts to fight poverty, or their failure to do so.

The major legislation Congress has considered over the past two years reflects an evolving federal response to the Great Recession. In 2009, there were several bills in the housing field, especially relating to foreclosure. In 2010, much of the focus was on extending unemployment insurance benefits and spurring job creation. Examples include: Hiring Incentives to Restore Employment, votes to extend the TANF jobs program, multiple unemployment insurance extensions, the Disaster Relief and Summer Jobs Act. Major consumer protection legislation and national health care reform were also produced in 2009 and 2010 in response to the troubled economy. Summaries of important legislation, including the Health Care and Education Reconciliation Act, appear in the Poverty Scorecard.

As in 2009, several major pieces of legislation that will have a significant impact in fighting poverty were enacted into law in 2010. These include the Affordable Care Act (national health care reform), reauthorization of the federal child nutrition programs, a series of extensions in the weeks of eligibility for unemployment insurance benefits, bills that sought to stimulate job creation, and a package of major fiscal relief to the states.

The final version of each of these bills was the product of significant compromise. Health care reform did not include a public option. Child nutrition reauthorization was at a lower funding level than recommended by the President and the cost was offset by a cut in future SNAP (supplemental nutrition assistance program, formerly known as food stamps) benefits, as was the cost of major fiscal relief to the states. Unemployment insurance benefit extensions were generally for short periods and did not include extensions of many other anti-poverty programs such as the TANF emergency contingency fund. Job creation initiatives were greatly scaled down from the bills that were introduced. And then there was the greatest compromise of all, a 13-month extension of federal extended unemployment insurance benefits and low-income tax credits in return for extending tax cuts for the wealthy and lowering the tax on large estates.

As a result of the significant compromises that occurred, half of the 16 bills included in the Poverty Scorecard passed both the Senate and House and were signed into law, a higher percentage than in previous years. Of the 8 other bills, 2 failed to obtain the 3/5 vote required to invoke cloture and move to a final vote in the Senate and 6 were considered in the House only. At least some of these bills were not considered in the Senate because of the Senate rule which prevents legislation from moving to a final vote unless there is a super-majority of 60 per cent voting in favor of “cloture”, commonly called the filibuster rule. The Senate should eliminate the profoundly undemocratic filibuster rule and allow legislation to be voted on and approved by a simple majority.

The Scorecard includes a summary of each vote we scored that describes the measure that was voted on and why it was important in fighting poverty.

With the help of national anti-poverty experts in 20 different fields, the Shriver Center has identified the 16 House votes and 14 Senate votes over the past year that were the most significant in fighting poverty. Each member is assigned a letter grade, A though F, based on their overall voting performance. Members with a perfect voting record earned an A+ and members who voted against reducing poverty every single time got an F-. Members who did not vote on enough bills were not graded. In total, we graded 428 of 435 Representatives and 99 of 100 Senators.

Distribution of Grades for Senators and Representatives

Congressional Delegations with Poor Voting Records

We compared each state’s poverty ranking with the average voting rank of its congressional delegation. As in past years, we often found a negative correlation between a state’s poverty rate and the voting record of its members, i.e., the states with the highest poverty rates often had delegations with the lowest average score in voting to fight poverty.

Congressional Delegations with Good Voting Records

In contrast, Congressional delegations in several states around the country with higher than average poverty rates had good records in voting to fight poverty.

Even states with comparatively low poverty rates have a lot of poor residents. The Congressional delegations in five states with relatively low poverty rates had especially good records in voting to fight poverty.

The Poverty Scorecard is a powerful tool that advocates, media, and citizens can use to evaluate the performance of their elected representatives. The goal of the Poverty Scorecard is to enable citizens to read about how well their legislator stood up and fought for the interest of low income communities. Readers can even use the action page to contact their legislator. Our representatives must be held accountable.

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Published reports indicate that Illinois Governor Quinn’s office may soon announce extraordinary, mid-year (FY11) cuts in human services funding in the order of $400 million. There are published reports that the child care assistance program (CCAP) alone could be slashed by $100 million.

Cuts of this magnitude would cause devastating cuts in services under any circumstances. However, the effect of these cuts would be greatly magnified by the fact that there would be only four months left in FY11 when the cuts take effect. This means that services would have to be cut by three times as much as they would have been cut at the start of the fiscal year to obtain comparable savings. Looking to the future, the service levels after these mid-year cuts would likely be the baseline for future budgets.

Just what effect would the FY11 mid-year cuts under consideration have on program services? As of December 2010, there were approximately 188,000 children in the CCAP. A $100 million cut in the CCAP's budget for the remaining four months of FY11 would be approximately a one-third cut in the CCAP's budget. The number of kids affected, and exactly how they would be affected, would depend on how the cut was implemented. But, the straight math, for estimation purposes, is that at least 63,000 children would have to be cut from the program over the remainder of FY11 to save $100 million.

One strong possibility is that intake would be stopped. This would mean that when a low-income single parent gets a job, she would no longer be eligible for the child care assistance she needs to get her child into quality care and make it possible for her to work. An estimated 7,000 to 8,000 children per month would be unable to access child care assistance if intake is frozen. Illinois has never instituted a waiting list since the CCAP began in 1997.

Cutting child care assistance is bad public policy all the way around. It is about the worst policy decision there is in terms of killing jobs during a recession with unemployment rates hovering around 10 percent. Every dollar of child care assistance both makes it possible for a low-income single parent to work and pays the wages of a child care worker. It also has the third important benefit of enhancing the life prospects of the child receiving care. Let’s hope the Governor and his advisers step back from the precipice and decide not to proceed with the threatened cuts to child care and other vital human services.

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The U.S. Department of Health and Human Services (HHS) has recently released additional funding for the Low-Income Home Energy Assistance Program (LIHEAP). LIHEAP is a federally funded program that assists qualified, low-income households in paying for winter energy costs.  The program is designed to assist individuals and families with energy costs, primarily winter energy costs, so they are not forced to make painful decisions regarding which bills to pay and which necessities to live without. HHS has allocated nearly $230 million in additional funds to Illinois. In 2009, 415,669 low-income households in Illinois received energy assistance through LIHEAP; about two million households were actually eligible.

LIHEAP will provide a one-time payment for eligible households to be used for winter energy bills and emergency furnace repairs. The amount of payment is determined by household size, energy type, and the household's 30-day income, which cannot exceed 150% of the federal poverty level.   If heat and electricity are included in the household’s rent, the monthly rent must be greater than 30% of household income to receive assistance. When applying, applicants should bring the following items to their local Community Action Agency:

• Proof of gross income from all household members for the 30-day period prior to the application date.
• A current copy of heat and electric bills (if the applicant pays for home energy directly). The utility bill must have been issued within the last 30 days.
• Proof of Social Security numbers of all household members.
• If a member in the household receives TANF, the applicant must bring the recipient’s Medical Eligibility Card.
• Applicants who have their utilities included in the rent must bring proof of the  rental agreement stating the monthly rental amount and that utilities are included, as well as contact information for the landlord.

The following example illustrates the application process:

A family of four living in Rock Island, Illinois, is interested in receiving LIHEAP assistance for their gas heat. They are eligible for LIHEAP if their gross income does not exceed $2,756 in the 30 days prior to their application. At this income level, they will qualify for a one-time direct payment to the vendor of $379 to help pay their gas bill. If heating costs are included in the family’s rent, their monthly rent must be greater than $827 to receive a one-time cash grant to offset energy costs. Once the application is complete, the Community Action Agency has 30 days to notify the applicant of approval or denial. Upon approval, the payment will be made within 15 days to the vendor or applicant.

LIHEAP assistance is available until May 31, 2011, or until funding is exhausted.   For more eligibility information and where to apply visit the Illinois LIHEAP website.

Heidy Robertson coauthored this blog post.

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Last September the Census Bureau released the 2009 poverty statistics, which showed that 14.3 percent of Americans are living in poverty. At 43.6 million people, this number has not been this high during the 51 years that the U.S. has published poverty rates.  Additionally, also published last September, the American Community Survey (ACS), which offers additional demographic and geographic information about poverty levels, revealed that in Illinois, 13.3 percent of the population is living in poverty. Another 6 percent of Illinois families are experiencing ‘extreme poverty’, surviving on $11,025 a year for a family of four.

Both the Census Bureau’s and the ACS’s estimates are calculated using the official poverty measure, a formula created in the mid-1960s based on the cost to feed a family. Yet, advocates, government agencies, and social service providers alike have pushed for a new, more accurate way to measure poverty. 

Since 1979, the Census Bureau has published a variety of experimental poverty measures using expanded definitions of income and alternative methods to account for inflation.

The Annual Social and Economic (ASEC) Supplement released annually by the Census Bureau, is one such alternative measure. The most recent statistics, published this month, revealed that 23.7 percent of Americans lived in poverty in 2009, a number almost 10 percent higher than the official poverty measure. This ASEC data takes into account government benefit transfers (e.g., public assistance, medical assistance, etc.) in its calculation and shows that without public benefits the poverty rate would be much higher.

In the meantime, last May the Census Bureau announced that it will introduce a Supplemental Poverty Measure (SPM) starting in the fall of 2011. The SPM will have many advantages over the official measure in that it will include factors such as family structure, public assistance, child support payments, and homeownership in its analysis. The Bureau is working hard at developing and testing different measures and it recently posted the following key findings from its initial research using the SPM:

• The SPM poverty rate for all persons is 15.7 percent as opposed to 14.3 percent for the official rate.
• The SPM poverty threshold is $24,869 whereas the official poverty threshold is $21,834.
• The SPM calculates that 16.1 percent of the elderly are living in poverty. When out-of-pocket medical expenses are taken into consideration, the percentage drops drastically to 8.7 percent, indicating that medical expenses are a huge factor for the elderly.
• The Earned Income Tax Credit (EITC) and food assistance (SNAP) appear to be effective at reducing poverty among children. According to the SPM calculation, the EITC reduces child poverty by 4 percent and SNAP reduces child poverty by almost 3 percent.

The SPM will be especially useful in evaluating the effectiveness of anti-poverty policies such as EITC. It will not replace the official poverty measure, which means that eligibility for government benefit programs will still use the outdated and incorrect official poverty measure thereby precluding many  from receiving the benefits they need. It also appears that the ACS and perhaps the ASEC will also continue to be published. Ultimately, however, it is important that the SPM, which will present a clearer picture of poverty, becomes the official measure so that policymakers can better serve the ever increasing number of families living in poverty with the hope of one day eliminating poverty entirely.  

This blog post was coauthored by Kelly Ward.

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The Working Poor Families Project has released its winter policy brief detailing the toll the recession has taken on America’s working poor. While headlines during the recession have primarily focused on the high unemployment rate, they have often ignored the millions of working families who are still employed, but have been squeezed by reduced pay and reduced hours. The brief includes some sobering statistics on the challenges facing America’s working poor.

More than half (55%) of the American labor force has “suffered a spell of unemployment, a cut in pay, a reduction in hours or have become involuntary part-time workers.” The consequence has been a significant rise in the number of working families who are not earning enough to have any kind of economic security. The Working Poor Families Project defines low-income as earning less than 200% of the federal poverty line. A low-income family of four is earning just about $44,000. 

Census data summarized in the policy brief reveal that in 2009 there were more than 10 million low-income working families – that’s more than 45 million Americans, including 22 million children. Now 30 percent of all working families are low-income. The increase from 2008 is stark – 1.5 million Americans joined the ranks of low-income working families.

The recession has not hit all groups equally. 

• Because a disproportionate job losses have been in traditionally male-dominated fields (especially construction and manufacturing), male unemployment has significantly exceeded female unemployment during the recession. As a consequence, the proportion of married women who are working and have an unemployed husband has more than doubled in just two years. Women still earn just about 77 cents to the dollar earned by men. This means more families are relying exclusively or primarily on the generally lower income of women to make ends meet. 
• Racial minorities continue to earn less money than non-Hispanic whites. Nearly twice as many working families with at least one minority parent were considered low-income in 2009 as white families. This is in part because minorities on average have lesser educational attainment, and education continues to be critical both for preventing unemployment, and to increase wages.  
• Meanwhile, income inequality continued to rise in 2009 – with the highest 20% of earners earning ten times what the bottom 20% did.
• Children have been hit hard by this recession – nearly half the increase in members of low-income families is made up of children. Over 700,000 children joined the ranks of low-income families last year. Growing up in poverty has long term consequences for children, their families, and all our community. As Professor Holzer has argued, in order to have long-term growth, we need robust employment and poverty-reduction measures over the near-term to mitigate this recession’s harm to parents and their children.

Far too many hard-working American families are not able to earn enough money to achieve economic security. As we address the challenges of this recession, we must consider not only the unemployment crisis, but also the ongoing crisis for families who cannot find a job that pays a family-sustaining wage. The president has already begun to address the need to increase enrollment and success in post-secondary education. Cities around the country are working to improve wages and benefits for low-income working families. Health care reform is already being implemented around the country. This landmark success will increase access to health insurance, improve coverage, and reduce premiums for millions of low-income working families, helping make ends meet. Low-income families want to contribute to this country’s economic prosperity, we all have a stake in creating the opportunity for each American to succeed. Together, we must recommit to make work pay. 

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The 2010 legislative session will pass without Congress reauthorizing cash assistance for poor families with children (called Temporary Assistance for Needy Families or TANF); instead, its funding was simply continued at current levels for the next year. Reauthorization will likely occur next year, and Congress has already begun hearings on how to improve TANF. When Congress gets around to reauthorizing TANF, it must mend our frayed safety net. Ultimately, the key to improving TANF will be to measure success not by caseload reductions but by the elimination and alleviation of poverty. 

The federal poverty line in the U.S. for a family of four is just $22,050. In Illinois, 15% of families with children under 18 were poor in 2009. Those who live in extreme poverty have income totaling less than half of the poverty line. It is unconscionable that the safety net in an industrial democracy such as our own still leaves nearly nineteen million people living in extreme poverty in 2009. In Illinois 8.5% of children are growing up in extreme poverty, and many are not being helped by TANF at all. The same picture is playing out around the country.

Since federal welfare reform was enacted in the 1996, the Government Accountability Office (GAO) reports that caseloads have plummeted across the country—declining 87% in just 10 years. Meanwhile, extreme poverty is 18% higher than it was in 2000. The decline in TANF caseloads is due almost entirely to a huge rise in the number of eligible families who are not receiving benefits. Even before the recession, the GAO concluded that increasing the enrollment of eligible families to 1995 levels would lift 800,000 children nationally out of extreme poverty. Welfare has declined, but the real human need for it has not.

A few months ago, the Senate Committee on Finance concluded a “Hearing on Welfare Reform: A New Conversation on Women and Poverty.” The Sargent Shriver National Center on Poverty Law submitted testimony to that hearing. Among other suggested reforms, we highlighted the need to fundamentally rededicate TANF to its purpose—to be a robust and flexible safety net to lift people out of poverty. 

Here in Illinois, we have made significant strides to improve TANF through Public Act 96-0866, (described more fully here), which went into effect on July 1, 2010. By making benefits available sooner, and to more poor individuals, our TANF program has become a more robust safety net during the recession. In fact, Illinois has experienced a relatively significant increase in TANF receipt during the recession, rising approximately 40% in two years and 15% in just the months since Public Act 96-0866 went into effect on July 1, 2010. But we are still not talking about many families; only one in nine Illinois families in poverty receives TANF.

TANF reauthorization presents the opportunity to rededicate the program to its most critical goal, the alleviation of poverty, while at the same time furthering the aims of reducing dependency on aid and strengthening families. It is time to reauthorize TANF.

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The Chicago Tribune’s story about the end of the Put Illinois to Work program (“Quinn to end temporary jobs program next month”) supports the Tribune’s editorial narrative that government programs are wasteful and ill-conceived, but only by putting the program in a false light. The Tribune incorrectly assumes that the goal of Put Illinois to Work was to place the participants in permanent jobs, and then it criticizes the failure to achieve that goal.

Put Illinois to Work has provided temporary jobs to 25,000 Illinois parents and youth who have been unable to obtain employment in an economy where there are five job-seekers for every job. Most of those temporary jobs have been in the private sector.

The premise of the Tribune’s story is that the program has failed in its “ultimate goal of workers getting full-time employment.” The Tribune cites no authority for its assertion that this is the program’s ultimate goal—it just says it was the program’s “idea.”

But permanent employment was never the program’s objective. Rather, the main goal, at which it succeeded beyond anyone’s wildest expectations, was to create temporary jobs that would provide participants with income and job skills and keep them off welfare. Another main goal was to provide economic stimulus by putting money in the pockets of people who would spend it. In this economy, where there are few permanent jobs to be had, obtaining permanent jobs was a by-product but not a main goal of the program. 

The program in part has filled a need created by limitations in the unemployment insurance program. More than one-third of unemployed workers do not qualify for unemployment benefits when they lose their jobs because they did not work long enough, they worked part-time, or for other technical reasons.

The story also failed to mention that for an investment of $10 million in Put Illinois to Work, Illinois was able to leverage $200 million in federal funding—$1 for every $19 in return. Had Illinois not availed itself of this federal funding, it would have gone to other states.

Federal funding ended September 30 not because “the money ran out” but because of pre-election maneuvering in Congress. This left Governor Quinn with a choice—pull the plug on the program or keep it going for two months in hopes that Congress would extend the program during the lame duck session in November. Governor Quinn decided to extend the program based on strong indications that Congress would extend federal funding. And Congress probably would have done so had Senate Republicans not refused to consider any other legislation until tax cuts for millionaires were extended.

This left Governor Quinn with another choice—end the program on November 30 as scheduled or have the decency to extend it through the holidays. He chose common decency.

In this time of scarce resources, when it’s necessary to have an honest debate about the merits of funding government programs vs. cutting spending, let’s have that debate based on the facts. 

A version of this article was published in the Chicago Tribune's Voice of the People on December 21, 2010.

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On December 9, 2010, the Illinois Commission on the Elimination of Poverty released its plan entitled “Building a Pathway to Dignity & Work." This ambitious plan includes concrete steps, laid out in chronological stages, to cut extreme poverty in Illinois in half in just five years.

Extreme poverty is defined as 50% of the Federal Poverty Line. So, extreme poverty means stark hardship; a family of four living in extreme poverty has income of $11,025 a year or less. In Illinois 6% of our residents live in extreme poverty--that’s more than 750,000 individuals, and there are seven counties where more than one in ten residents lives in extreme poverty.

The Illinois Commission on the Elimination of Poverty was formed by law in Illinois in 2008 to be a standing, permanent commission to work towards eliminating poverty in the state. The Commission is comprised of representatives from the legislature, the governor’s office, the relevant state agencies, and the private sector. The idea of the Commission grew out of the “From Poverty to Opportunity Campaign” of Heartland Alliance, which also provided the staffing for the Commission. Wendy Pollack, Director of the Women’s Law and Policy Project at the Shriver Center, is a member of the Commission and serves on the Making Work Accessible committee.

The goal of eliminating poverty is deeply rooted in Illinois and is central to the international human rights agenda. The preamble to the Illinois Constitution lists the primary purposes of our state government, and one core priority to “eliminate poverty.” The United Nations lists the elimination of extreme poverty as one of its eight Millennium Development Goals.

The Poverty Commission’s recommendations include:

• Increasing the proportion of eligible individuals who utilize federal and state public benefits;
• Making quality child care more affordable;
• Expanding comprehensive scholarships to low-income community college students, which combine financial aid with mentoring and support to help students succeed;
• Establishing a statewide transitional jobs program, which will engage 40,000 individuals each year in time-limited, wage-paying positions coupled with case management to help transition them into the workforce permanently;
• Utilizing at least 10% of state affordable housing resources to address the housing needs of families experiencing extreme poverty, and increasing rental subsidies for seniors and people with disabilities; and
• Creating contextualized English instruction within vocational training in specific high-growth industries.

While this report is the culmination of years of effort, it is also the first step. Now we have to see to it that the proposals identified in the report are put into place. There’s a lot of work to do, and succeeding in this ambitious agenda will take the cooperation of committed individuals around the state. To follow the campaign and the efforts of the Commission, check out Heartland’s blog. To endorse the Commission’s report and get involved, fill out an online endorsement.

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On November 30, the day that the Put Illinois to Work (PITW) program was scheduled to end, Governor Quinn announced that he has extended the program through January 15. PITW provides $10/hour private and public sector jobs to approximately 25,000 low-income, unemployed Illinois workers. “I am extending this program today to keep thousands of people in Illinois at work through the holiday season,” said Gov. Quinn. 

Until September 30, PITW was largely paid for by the federal government with a funding stream created by the American Recovery and Reinvestment Act of 2009. Congress, however, failed to extend that funding beyond September 30. Just before PITW was originally scheduled to end on September 30, Governor Quinn extended the program through November 30. Extending PITW for another six weeks until January 15 will cost Illinois approximately $50 million in state general funds. PITW is a partnership between the Illinois Department of Human Services and Heartland Human Care Services.

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Wondering about the level of honest discourse to expect from leaders of the new Republican majority in the U.S. House of Representatives?  Their first salvo does not bode well.  

House Republicans announced earlier this week that they are targeting the Temporary Assistance for Needy Families emergency contingency fund (TANF ECF) for elimination.  

Representative Tom Price (R-Ga.), chairman of the House Republican Study Committee, explained that the program encourages states to increase their welfare caseloads “without requiring able-bodied individuals to work, get job training, or make other efforts to move off of taxpayer assistance.”  

Price claimed that eliminating the program would save $25 billion over ten years.   

Now the facts:

1. The TANF ECF primarily funded jobs for the recently unemployed. For example, Illinois used over 90 percent of its TANF ECF allotment to provide 25,000 jobs through the Put Illinois to Work program.      
   
   
2. TANF recipients who did not participate in the Put Illinois to Work program still were subject to the TANF program’s work requirements, instituted as part of welfare reform 14 years ago. Representative Price was in office when the Bush Administration made TANF work requirements even more stringent in 2006.
   
   
3. The $25 billion in savings claimed by the Republicans assumes that the program would be funded at the level of $2.5 billion for the next ten years. But the program expired on September 30th, so “eliminating” it would produce no savings at all. 
   
   
4. Furthermore, the longest extension considered before the program expired would have been for one year, not ten.

The bottom line: make-believe cuts to a program that has been wholly mischaracterized and no longer exists.   

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Unlike many industrialized countries, the United States does not require employers to provide their workers with any paid sick days. As a result, American workers are often forced to go to work when they or their children are sick, putting themselves, their families, their co-workers, and the general public in harm’s way. This problem is particularly severe among low-income workers, who are less likely to have paid vacation or personal leave that they can use when they are sick. 

After San Francisco passed its paid sick leave ordinance in early 2007, paid sick leave advocates hoped that other states and localities would quickly enact paid sick leave policies of their own. While Washington D.C. now has a paid sick leave law, and California, New Jersey, and Washington have laws requiring employers to provide paid family leave, most communities’ efforts to achieve paid sick leave for their workers continue to encounter obstacles.

In 2008, a California bill that would have provided workers with paid sick leave died in committee after being approved by the state assembly. Earlier this month, New York City Council Speaker Christine Quinn refused to call a vote on the proposed New York City paid sick leave bill despite the support of a supermajority in the New York City Council. The New York City bill would have required employers to provide workers with at least five sick days a year to take care of their own illnesses or the illnesses of family members. The bill would not have applied to workers who already had a week or more of paid leave. Quinn said that she could not allow the bill to pass because it “threaten[ed] the survival of small business owners.”

More recently, paid sick leave supporters in Wisconsin are holding their breath as they wait for a final decision on Milwaukee’s paid sick leave ordinance. 9to5 Milwaukee led a coalition of organizations that fought to get a paid sick leave proposal on the ballot in 2008. Milwaukee voters approved the ballot initiative by an overwhelming 70 percent. The resulting ordinance requires employers to provide employees with at least one hour of paid sick leave for every 30 hours worked by an employee, among other requirements.

The ordinance was challenged in state court by the Metropolitan Milwaukee Chamber of Commerce. Legal wrangling continued through October 2010, when the Wisconsin Supreme Court refused to issue a final decision in the case and ordered an intermediate appellate court to decide the matter—even though the appellate court had previously ruled that only Wisconsin’s highest court could decide the issue.

Notably, the trial court's reasoning for striking the ordinance down was not straightforward disapproval of paid sick leave, but based on an issue of constitutional law and statutory interpretation. The text of the Milwaukee ordinance provides that an employee can use sick leave not only for his or her illness or the illness of a family member, but also to address issues related to “domestic violence, sexual abuse, or stalking.” The full text of the proposed ordinance was published in polling places and newspapers, as required by Wisconsin statute. Notably, however, the domestic violence-related language was not included on the actual ballot. It was the absence of that language on the 2008 ballot that formed the basis of the trial court’s original ruling. Specifically, the trial court held that the ballot question was unconstitutional because it did not provide voters with sufficient information about the ordinance. The trial court also held that the sections of the ordinance relating to domestic violence were outside the scope of Milwaukee’s police powers. 

The Shriver Center has been at the forefront of efforts to enact paid sick leave policies at both the state and national level. In Illinois, the Shriver Center has joined with Women Employed and other organizations to advocate for paid sick leave policies. On a national level, the Shriver Center is a member of Family Values at Work, a coalition of leaders advocating for paid sick leave and other family-friendly employment policies. Last April, Wendy Pollack, Director of the Shriver Center’s Women’s Law and Policy Project, joined the Family Values at Work coalition in Washington, D.C. to lobby for the Healthy Families Act, proposed federal legislation that would give workers up to seven paid sick days a year for themselves or to care for sick family members.   

As Wendy wrote in her November-December 2008 Clearinghouse Review article, What's a Mother to Do? Women, Low-Wage Employment, and Leave Policies, “the lack of adequate sick pay puts workers in an untenable position if they get sick or need to take care of a sick child or elderly parents—stay at work when you should not or lose a day of pay, and possibly even your job, if you stay home.” Regardless of the eventual outcome in Wisconsin, the Shriver Center will continue to work with its state and national partners to ensure that American workers will one day have the paid sick leave that they need and deserve. 

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Poverty in the Nation

Two weeks ago, the Census Bureau released data on the national poverty rate. As was discussed in our previous blog, the number of people in poverty in 2009 is the largest in the 51 years for which poverty estimates are available. There were 43.6 million people in poverty in 2009, up from 39.8 million in 2008, and the nation's official poverty rate in 2009 was 14.3 percent, up from 13.2 percent in 2008.

This week, the American Community Survey (ACS) data was released. The ACS is a sort of mini-census conducted annually that polls roughly three million homes per year. This survey provides demographic, social, economic, and housing data for states, congressional districts, counties and other localities. In other words, it provides much more data on what is happening at local levels.

According to the ACS, thirty-one states saw increases in both the number and percentage of people in poverty between 2008 and 2009. Poverty rates from the 2009 ACS for the 50 states and the the District of Columbia ranged from a low of 8.5 percent in New Hampshire to a high of 21.9 percent in Mississippi.

Poverty in Illinois

The percentage of Illinoisans living below the poverty line rose dramatically over the last decade. In 1999, the poverty rate in Illinois was 10.7 percent. The 2009 data show that 13.3 percent of Illinois residents were living in poverty last year.

The Heartland Alliance for Human Rights and Human Needs analyzed the 2009 data for the region. The Illinois fact sheet developed by Heartland Alliance reveals that the Illinois poverty rate in 2009 was 13.3%, an increase from 12.2% in 2008. Moreover, the Illinois child poverty rate in 2009 was 18.6%, an increase from 16.8% in 2008.

Other poverty measures in Illinois showed that median household income fell from nearly $60,000 in 1999 to just under $54,000 last year, a 10-percent decrease. The proportion of the population in "extreme poverty"--that is, living on less than half the federal poverty guideline--rose 18 percent over the same period, with 140,000 new Illinoisans joining the ranks of the extremely poor. Six percent of the state's population now lives below that threshold, which comes out to $11,025 per year for a family of four.

Recession Over?

Although the National Bureau of Economic Research, the organization that determines when economic downturns begin and end, recently reported that the Great Recession ended in June 2009, it acknowledged that economic conditions since then have not been favorable or that the economy has returned to operating at normal capacity. The effects of the recession, which began in December 2007, lasted 18 months, and was the longest and deepest downturn for the U.S. economy since the Great Depression, will continue for years.

Experts agree that the number of people in poverty could have been worse if the Recovery Act had not expanded benefits and federal support for programs like P-12 education, Medicaid, TANF, the Child Tax Credit, the Earned Income Tax Credit, and SNAP/Food Stamp programs. This federal support created jobs, helped both employed and unemployed low-income families make ends meet, kept some of them out of poverty, and allowed them to contribute to local economies by spending their paychecks and benefits in their communities, thereby supporting state budgets during dire financial times. Unfortunately, these important social safety net programs are in jeopardy due to the impending expiration of the Recovery Act and the ongoing massive state budget shortfalls, which are fueled by unwillingness in most states to raise necessary tax revenues. If federal and state politicians do not rise to the task, more people could fall into poverty and less money will be spent in local economies, which could trigger another recession.

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Today the Census Bureau released the 2009 poverty data which shows that the number of people in poverty in 2009 is the largest number in the 51 years for which poverty estimates are available. There were 43.6 million people in poverty in 2009, up from 39.8 million in 2008 — the third consecutive annual increase. The nation's official poverty rate in 2009 was 14.3 percent, up from 13.2 percent in 2008. The data also show that nearly 21% percent of children, or roughly 15.5 million, were in poverty in 2009 versus 19% in 2008, or approximately 14.1 million in 2008.

Living in poverty means deprivation and hardship. For a family of four, life at the poverty level means trying to provide children with a roof over their heads, clothing, adequate health care and a nutritious diet on an annual income of $21,947.

The 2009 poverty data grimly illustrates the heavy toll that the recession has taken on the American people. The increase in poverty is made even more painful by the fact that it follows an economic recovery that utterly failed to reduce poverty--indeed, it was the first economic recovery on record where the poverty level at the peak of the recovery (2007) was actually higher than it was in the previous recession (2001).  

The unprecedented increases in poverty and child poverty are consistent with other data that show the severity of the current recession. For example, the unemployment rate in the United States doubled between 2007 (when the recession began) and 2009, going from 4.6 to 9.3 percent.  Also during this time, the number of Americans receiving food stamps increased by 33 percent, to over 35 million people.

The 2009 poverty data calls for two policy responses. First, Congress should extend or make permanent several key pieces of the Recovery Act aimed at low- and moderate-income households that otherwise will expire this year. Second, Congress should not extend the Bush tax cuts for the wealthy that are due to expire this year.

Continuing Recovery Act Provisions

The 2009 poverty data demonstrate the need to continue several provisions of the Recovery Act that help low- and moderate-income people make ends meet and begin to rebuild assets, while also stimulating the economy through consumer spending:

1. The Temporary Assistance for Needy Families (TANF) emergency contingency fund (ECF) must be extended for one year. This fund has created 240,000 jobs in 37 states, making it the most successful direct job creation initiative since the Great Depression. It will expire at the end of September unless Congress takes action.
   
   
2. The 2009 improvements to the Child Tax Credit due to expire at the end of the year must be made permanent. This credit provides assistance for parents in helping to defray the costs of having a child such as child care costs. The Recovery Act allowed low-income working families to count more of their earnings below $13,000 in calculating the value of their Child Tax Credit. These improvements have a dramatic effect for low-income families--for example, a parent working for the minimum wage and raising two kids saw her credit increase from $250 to $1,725. These changes will expire at the end of the year unless Congress takes action.
   
   
3. Similarly, the 2009 improvements to the Earned Income Tax Credit (EITC) due to expire at the end of the year must be made permanent.  The EITC supports low- and moderate-income working people by providing a refundable tax credit.  These credits were expanded to help families deal with the recession. Specifically, the Recovery Act provided a temporary increase in the EITC for taxpayers with three or more qualifying children. The maximum EITC for this new category is $5,657. The Recovery Act also temporarily increased the beginning point of the phase out range for the credit. Since these credits help 13 million children currently living in poverty and millions of working families, Congress must ensure that these changes are made permanent.
   
   
4. Extra weeks of unemployment benefits for the long-term unemployed will expire on November 30, and it is clear that they too need to be extended.
   

The Bush Tax Cuts for the Wealthy

The unprecedented level of poverty in the U.S. is further evidence that the Bush tax cuts for the wealthy should not be extended beyond the end of this year, when they are scheduled to expire.

The income gap between rich and poor--now at its widest since the Great Depression--was exacerbated by the Bush tax cuts. Households in the bottom fifth of the income spectrum received tax cuts averaging $29, while the top 1 percent of households received tax cuts averaging $41,077.

In addition, a recent report by the non-partisan Congressional Budget Office (CBO) concluded that extending the Bush tax cuts for the wealthy was the worst available policy option for stimulating the economy since wealthy people are much more likely to save their tax cuts than spend them. The CBO found that creating a temporary jobs tax credit or extending unemployment insurance benefits would generate three to five times more economic growth and create four to six times more jobs than extending the Bush tax cuts for the wealthy.

The increase in poverty and child poverty between 2008 and 2009 is further evidence that the Bush tax cuts for the wealthy should not be extended.

Note: On September 28, the American Community Survey data will be released. This data will provide more specific information about poverty levels in each state including, among other things, how median income differs by race/ethnicity, gender, family structure and education in each state and how that compares to the national average. Look for our blog’s analysis of this data as soon as it is released.

This blog post was co-authored by Dan Lesser.

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The American Recovery and Reinvestment Act of 2009 (ARRA), otherwise known as President Obama’s economic stimulus plan, included a small funding stream that states can use to create a subsidized jobs program for parents in low-income families who have been displaced from employment by the recession or otherwise are in need of employment. This spring, the Illinois Department of Human Services (IDHS) produced a plan to utilize these stimulus dollars and received immediate federal approval of its plan. IDHS dubbed its new jobs program “Put Illinois to Work.”

Three months have now passed since the Put Illinois to Work program began in early April, and it’s fair to say that it has been a monumental success in helping to solve our state’s #1 problem--getting people in Illinois back to work. It has done so at little cost to the state by creatively harnessing the federal funding stream created by ARRA. Illinois has done what the anti-government chorus considers the impossible, working closely with the private sector to get a large-scale government program that produces jobs up and running quickly and efficiently. 

Put Illinois to Work provides jobs that pay $10 per hour for 30-40 hours per week of work. As of today, there are over 18,000 people in Put Illinois to Work jobs. Employers have created 35,000 work slots, more than double the state’s original goal of 15,000. The program has been so popular that with over 60,000 job applicants, IDHS has had to close intake to the program.

The state has invested $10 million to leverage a federal investment of $200 million--a $20 return on every $1. Employers’ training and supervision expenses are considered an in-kind contribution under federal law so these workers come at no cost to the employer. In addition to earning badly needed income, workers with thin employment histories are building up their job skills and resumes. IDHS anticipates that thousands of Put Illinois to Work participants will receive continuing offers of employment when the program’s funding runs out.

The Temporary Assistance for Needy Families (TANF) emergency contingency fund (ECF)--the federal fund that pays for Put Illinois to Work--expires on September 30, 2010.  State subsidized employment programs like Put Illinois to Work enjoy wide bipartisan support in the United State Congress (a rare thing these days). The U.S. House of Representatives has already passed a one-year extension of the TANF ECF. A similar measure was uncontroversial in the U.S. Senate but was included as part of the unemployment extension legislation that recently failed to get the 60 votes needed to advance in the Senate. 

The Shriver Center and many other advocates are undertaking intensive efforts to get Congress to find another way to extend the TANF ECF for one year beyond September 30, 2010. For the sake of the tens of thousands of low-income Illinoisans who need and want to keep these $10 per hour jobs, let’s hope that these efforts are successful.   

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A recent editorial in the Chicago Tribune professes to have some "heart" for the long-term unemployed, but it calls upon Congress to vote down an extension of unemployment benefits anyway. We disagree. Congress should approve the extension as soon as possible.

Some may blame lingering unemployment on the unemployed, accusing them of failing to look for or take jobs "on employers' terms." But the main cause today is that there simply are no jobs. There are currently five workers for every job opening, according to a U.S. Department of Labor survey of employers. In normal times, this ratio is one to one. In the last recession, it was two to one. Employers are not waiting for workers to show up for vacant jobs. There is no relationship whatsoever between unemployment benefits and American productivity; indeed, even if an insured worker fails to take a job (which we do not concede), there are millions of uninsured and unemployed workers to snap them up.

In fact unemployment insurance allows laid-off workers the ability to preserve their retirement accounts and life-insurance policies, it helps them avoid foreclosures and bankruptcies, it maintains a minimally decent standard of living and it keeps them consuming goods and services. They buy things with the benefits at stores who employ people, who get paychecks and who make their own purchases. This "multiplier" effect has been estimated at $1.61 of positive economic impact for each dollar of benefits.

Yes we can and should have a "heart" for these workers, but we should also know that unemployment insurance helps to fight the recession and maintain jobs. Its minimal cost is well worth it.

This post was co-authored by Andrew Stettner, deputy director, National Employment Law Project, and Carrie Thomas, associate director, Chicago Jobs Council.

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Put Illinois to Work (PIW) is a new jobs program that provides employers with a unique and promising opportunity to benefit from federal stimulus money, at no cost to the employer, while supporting Illinois’ economy and workforce. Participant employees are paid $10/hour by the state and are expected to work at least 30 hours/week. The PIW program is currently funded through September 30, 2010, but prospects are good that the funding will be extended for another year. 

Employers benefit from PIW in several ways:

1. PIW provides access to temporary free labor.

2. There is no long-term commitment. Although encouraged to hire PIW workers after the program ends, this decision remains entirely at the discretion of the employer. 

3. If employers do decide to hire PIW participants full-time at the end of the program, they will receive tax credits.

Virtually all employers -- public, private, and non-profit -- are eligible to participate in PIW. Participant employees are paid out of a fund created by the American Recovery and Reinvestment Act in exchange for employers’ in-kind contribution of supervision and training.

PIW was launched by the Illinois Department of Human Services (IDHS) on April 1, 2010. Already, nearly 350 employers across the state have signed up to participate, creating more than 2,825 jobs. Recently, the New York Times published an article highlighting the positive experiences of two participating employers, Michael’s Fresh Market and DeNormandie Towel and Linen Supply Company.  

For more information and to become a PIW employer, go to www.PutIllinoistoWork.Illinois.gov.

This post was coauthored by Jessica Sklarsky.
 

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[This is the last in a series of six articles summarizing the half century history of the US poverty threshold and the dire need for an updated poverty measure.]

As the earlier posts have discussed, the main problem with the currently poverty measure is that its ridiculously out of date. Updating the measure will offer a more realistic view of what constitutes poverty in 2010. The measure will actually have some real relationship to costs rather than rely on antiquated 1955 costs. It’s currently based on the lowest cost food plan available in 1955; a time when food constituted 1/3 of the average family’s budget. Now, however, food is only 1/7 of a family’s budget while the costs of housing, childcare, and health care, none of which are taken into consideration, have all risen disproportionately. The 2008 average poverty threshold of $22,025 for a family of four represents the same purchasing power as the corresponding 1963 threshold of $3,128.

The current poverty measure is also confusing. As discussed previously, the poverty thresholds are published by the Census Bureau and are the original measure and are mostly used for statistical purposes. The poverty guidelines are published by the Department of Health and Human Services (HHS) and are used for determining eligibility for certain federal benefit programs. The Census Bureau and HHS also follow different labeling practices. The Census Bureau labels its poverty thresholds by the year to which they are applied, whereas HHS labels its poverty guidelines by the year in which it issues them. Because of these disparate labeling practices, the Census Bureau poverty thresholds for 2008 and the 2009 HHS are actually for the same year. Trying to compare these two versions leads to confusion.

Perhaps most importantly, however, is the fact that such outdated poverty measures are used for benefits determinations at all. Although some means-tested programs do not use the poverty guidelines in determining eligibility (e.g. TANF, SSI, EITC), many others do.  Currently at least 82 federal or federally assisted programs use information about numbers of people in poverty in some way in formulas for allocating funds to states or localities, or use some percentage of poverty in calculating benefits eligibility. Federal programs that use the guidelines in determining eligibility include Head Start, Low Income Home Energy Assistance, Children’s Health Insurance Program, Food Stamps, and Women Infants and Children (WIC). Some federal programs use a percentage multiple of the guidelines, such as 125%, 150% or 185%. This is not the result of a single coherent plan, instead, it stems from decisions made at different times by different congressional committees or federal agencies. Additionally, some state and local governments have chosen to use the federal poverty guidelines in some of their own programs and activities such as state health insurance programs.

Use of the poverty guidelines might not have been important if cash and in-kind government benefits for poor families had risen at the same rate. The rate of growth has, however, been very unequal. In the early 1960s more than $8 out of $10 in public means-tested benefits was transferred to poor people as cash, less than $2 as in-kind benefits. By the early 1990s, more than $7 out of $10 was transferred as in-kind benefits. Official poverty statistics, therefore, mask the full extent to which poverty has been reduced by programs to ameliorate it, because they exclude the consumption gains that result from in-kind transfers.

The new poverty supplement addresses many of these deficiencies. Yet, there will likely be little to celebrate from the new data. Given the depth and length of this recession, the supplemental measure will likely confirm what we’ve known for a while – that more and more working families are living on the brink. On the other hand, the new measure could prove transformative if it becomes the central basis by which we establish whether we are making progress on reducing poverty.

The current poverty measure’s failure to evaluate the effectiveness of anti-poverty programs creates the false impression that poverty is intractable and that we’ll never make a dent in this problem no matter what government does. In reality, research shows that just four policy recommendations, to improve the Earned Income Tax Credit, Child Tax Credit, child care assistance, and minimum wage, would cut the U.S. poverty rate by 26% over 10 years.

This new data can help us understand how well the federal government is responding to the recession and what types of policies are most effective at helping those families striving to join the middle class. In particular, these supplemental figures could take on added significance at a time when many in the government point to an overhaul of public benefit programs as the best hope for reducing the ballooning federal debt. The fact that the new measure will not immediately be used as an “official measure” is also beneficial.

Using the new measure as a supplement allows studies of the potential effects such a switch could have. Once this impact is assessed, advocates can then lobby for a change if appropriate.

In the meantime, after such a long discussion about the poverty measurement, it is important to remember exactly what the purpose of the U.S. poverty measure is. As its creator explained:

"Unlike some other calculations, those relating to poverty have no intrinsic value of their own. They exist only in order to help us make them disappear from the scene . . . .With imagination, faith and hope, we might succeed in wiping out the scourge of poverty even if we don't agree on how to measure it."
 

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Among numerous stories I’ve come across about people with criminal records turning their lives around, a recent story from the Quad-City Business Journal caught my attention. The story involves a trio who served time in federal prison for trafficking meth, the employer who hired them, and the federal prosecutor who described their employment relationship as “just terrific.”

Sally Hillman, Frannie Spickers, and Brian Nimrick were all convicted of trafficking methamphetamine. Upon completing their prison sentences, they searched for employment. Usually, a job search for people with past convictions can yield very few results, especially in the current job market. Even when employers are willing to take a chance on someone with a criminal record, those employers often do not expose themselves publicly out of fear of becoming stigmatized.

In this story, though, not only did Hillman, Spickers, and Nimrick find work with Greystone Logistics, but this Bettendorf, Iowa-based manufacturing company openly acknowledged its policy of giving second chances to people with criminal backgrounds. A plant manager explains:

It really comes from the heart. Sure we get great workers with good attendance and good attitudes. But when you hear their success stories — such as getting to see family they had not seen in years — and they are genuinely grateful to have a job and a place to plant their feet to start again, to get that second chance, you know you are doing the right thing.

It makes you want to go the extra mile when you are made aware of the discrimination they have to endure to get a job, to rent an apartment, etc. We truly do want to give these great people a re-chance to adapt and to become a productive member of society. Without employment it cannot be done. When you have that "Grampa" who gets to see his  9-year-old grandchild for the first time, and he is doing everything right so he can see his grandkids, how can you not do this for them?

This chance for Hillman, Spickers, and Nimrick was a chance not only to work, but also to succeed. The story notes, for instance, that Spickers has been working to move up the company ladder since joining Greystone Logistics as a janitor nearly two years ago.

Another other notable person pleased with the trio’s success is Jeffrey Lang, the federal prosecutor in the meth trafficking case that originally landed them behind bars. Now the acting United States Attorney of the Central District of Illinois, Lang praised their story as an example of how the criminal justice system is supposed to work:

The system protected the public back then. They are rehabilitated and now they are productive members of society.

Lang’s words echo a speech by Mr. Lang’s counterpart in the Northern District of Illinois, Patrick Fitzgerald, who reminded us that like law enforcement, businesses have an important role in ushering people from prison and jail back into society. Greystone Logistics has stepped up to that challenge quite well.

 

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[This is the fifth in a series of six articles summarizing the half-century history of the U.S. poverty threshold and the dire need for an updated poverty measure.]

As fears about the economy became reality, the call for modernizing how the nation measures poverty took on new urgency. The President’s FY 2011 budget, for example, included a proposal for creating a new poverty measure. 

Based on this new sense of urgency as well as the many previous proposals and discussions, in March the U.S. Census Bureau announced that it will be developing an alternative way to measure poverty. The Supplemental Poverty Measure will be released in the fall of 2011, at the same time that the official income and poverty measures for 2010 are released. This new measure will be broadly based on NAS’s1995 recommendations, but updated by the research done on this issue for the past 15 years. The precise formula has yet to be determined, but in general it is expected that the measure will:

• Define “family unit” to include all related individuals who live at the same address in order to reflect today’s family structure;
• Use the most recent five years of available data to increase the stability of the poverty thresholds;
• Include in-kind benefits to meet help meet food, clothing, shelter, and utility needs as income, and deduct basic expenses such as work expenses, taxes, child care, out-of-pocket expenses, child support and commuting costs;
• Be updated annually and the measure itself continuously improved based on the latest research; and
• Include some form of geographic adjustments that present a more realistic relationship between cost of living and what it takes to meet basic needs.

Based on alternative poverty measure figures previously used by the Census Bureau experimentally, it is clear that the new measure will put poverty rates much higher than the official rate. Although it’s impossible to predict precisely what the new supplemental rate will reveal, other alternative measures’ figures would predict the following:

• Overall poverty is expected to increase from 13.2 percent, or 39.8 million people, to 15.8 percent, or 47.4 million, mostly due to rising expenses from medical care and other factors.
• About 18.7 percent of Americans 65 and older, or nearly 7.1 million, will be considered poor compared to 9.7 percent, or 3.7 million, under the traditional measure, due to out-of-pocket expenses from rising Medicare premiums, deductibles, and a coverage gap in the prescription drug benefit.
• About 14.3 percent of people 18 to 64, or 27 million, will be in poverty, compared to 11.7 percent under the traditional measure, many of which will be low-income, working people with transportation and child-care costs.
• Child poverty should be lower, at about 17.9 percent, or roughly 13.3 million, compared to 19 percent under the traditional measure, since single mothers and their children’s non-cash aid, such as food stamps, will be counted as income.
• And the Northeast and West will have bigger jumps in poverty, due largely to cities with higher costs of living such as New York, Boston, Los Angeles, and San Francisco.

Importantly, this new poverty measure will not replace the official poverty rate, but will instead be published alongside the traditional figure as a "supplement" for federal agencies and state governments. The point of the new measure is to provide a more realistic view of poverty including both the necessary expenses of modern day living as well as the anti-poverty programs currently being used. Issuing a supplemental measure, however, will not change eligibility for any governmental benefits or, in and of itself, cost the government one penny in additional poverty program expenditures. While some may argue that this new measure should immediately become the official measure, such a change shouldn’t be rushed into because the impact of the new measure must first be assessed.

The next and final blog in this series explores what effects, if any, this new supplemental measure will have on current benefit programs and current programs attempting to ameliorate poverty.
 

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[This is the fourth in a series of six articles summarizing the half century history of the US poverty threshold and the dire need for an updated poverty measure.]

In September 2008 and again in 2009, the Measuring American Poverty Act (MAP Act) was introduced in Congress. The bill had a number of provisions intended to build on the NAS approach while seeking to address many of its criticisms. In general, it would have incorporated NAS’s suggestions that the poverty measure be based on current consumption patterns for food, clothing, shelter and other basic necessities, include income assistance from public programs (e.g., Earned Income Tax Credit, Food Stamps, Housing Assistance) and deduct necessary expenses (e.g., federal income taxes, work expenses, and out-of-pocket medical expenses). Finally, it would have also taken into account NAS’s suggestions to include geographical differences in the cost of living. Among the bill’s key provisions were:

• Thresholds: The Census Bureau would have been required to adopt thresholds along the lines recommended by NAS to better reflect the needs of children.
  

• Resources: The bill would have adopted the NAS approach of counting tax credits, non-cash benefits such as food stamps, and housing subsidies as household income, and, at the same time, subtract expenditures for health care, necessary work-related expenses, and child support.
  

• Historical Measure: The bill would have treated the current official poverty measure as the “historical” measure, and require that calculation and reporting of poverty rates be done for both the modern and historical measure.
  

• Use of New Measure: The bill would have specified that adoption of the modern measure would have had no automatic effects on program funding formulas or eligibility rules that currently use the official poverty measure. Instead, Congress would, over time, have been required to make whatever adjustments it considered appropriate on a program-by-program basis.
  

• Decent Living Standards and Medical Care Risk Measure:  The bill would have directed that NAS make recommendations for Decent Living Standards and Medical Care Risk measures. The Decent Living Standard would be defined as “the amount of annual income that would allow an individual to live at a safe and decent, but modest, standard of living,” that is, an amount intended to be above that of the poverty thresholds. The Medical Care Risk measure would calculate the extent to which individuals are at risk of being unable to afford needed medical treatment, services, goods, and care, taking into account both uninsured and underinsured statuses.

• Calculation of Relative Measure: While the bill would not have mandated reporting of relative poverty measures using percentages of median income, it would have required that public online tools be made available to allow members of the public to calculate poverty using alternative approaches, including calculations based on 50 and 60 percent of median income.
  

In sum, the proposed bill would have addressed a range of concerns leveled against the NAS approach. First, in addition to establishing a “modern” poverty measure the bill would have laid the groundwork for developing a Decent Living Standard measure. This measure would recognize that a family needs resources far exceeding the current poverty line in order to have a “reasonably” decent life, while acknowledging that it would not be feasible to immediately implement a new poverty line that is twice as high (or higher) than the current one. Finally, over time, a Decent Living Standard recognized in federal law could have become an important vehicle for analyzing and talking about the need to increase the number of families that have the resources not just to get by but to thrive.

The bill also would have ensured that there would be no immediate effects on existing funding or eligibility rules by specifying that there would be no automatic effects on program funding formulas and benefits eligibility.  Instead, it recognized that there may be good reason to adjust funding formulas and eligibility rules overtime.

One drawback to the MAP Act was that implementation of the new measure would have required Congressional action. In contrast, the administration could have, and still can, change the current measure without Congressional action since the directive to use the original poverty measure came from the Office of Management and Budget. Administrative action would be preferable to legislation because the measure could be developed and continually refined without locking in the detailed rules contained in parts of the Act. Still, the introduction of the MAP Act was an important step forward in showing how the administration or Congress could build on NAS’s recommendations and the subsequent learning and experience to develop a significantly better poverty measure.

The next blog in this series discusses the recently announced supplemental poverty measure.

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[This is the third in a series of six articles summarizing the half century history of the US poverty threshold and the dire need for an updated poverty measure.]

For the last fifty years, there has been no improvement to the Federal Poverty Measure. The National Academy of Sciences (NAS) 1995 approach for updating the poverty measure was probably the closest the U.S. has come to such reform in recent history. Among the report’s recommendations were that:

• The poverty threshold should be comprised of a budget for three basic categories (e.g., food, clothing, shelter including utilities) and a small additional amount to allow for other needs (e.g., household supplies).
• Actual data on household spending should be used to develop a threshold for a reference family.
• Each year, the threshold should be updated to reflect changes in spending on food, clothing, and shelter over the previous three years and then adjusted for different family types and geographic areas of the country.
• The resources of a family to be compared with the thresholds to determine poverty status should be defined to include money and near-money disposable income (e.g., resources should include most in-kind benefits and should exclude taxes and certain other nondiscretionary expenses (e.g., work expenses).
• A regular updating procedure to maintain the time series of poverty statistics should be used.

The primary advantage of NAS’s proposal was that it would have directly addressed many criticisms of the current poverty measure by:

• applying thresholds that actually reflect the costs families incur to meet a set of basic needs;
• ensuring a logical relationship between the thresholds and resource-counting rules;
• using resource rules that both better reflect family resources and expenses such as health care, work-related costs, and child support paid, and that do a far better job of showing the effects of key policies; and
• providing for geographic variation in the thresholds to reflect variations in actual costs.

These changes are important, in that they would have created a measure that better reflects the effects of government and anti-poverty policies. For example, the American Reinvestment and Recovery Act, or ARRA, contained a number of provisions intended to help poor and vulnerable groups. The current poverty measure does not reflect these efforts since ARRA’s expansion of tax credits, such as the Earned Income Tax Credit, Making Work Pay, and Child Tax Credits, as well as SNAP benefits and child care assistance, are not considered in the measure.Thus, there is no way to measure their effectiveness. Similarly, removing these credits and benefits would financially hurt many, but will not affect the poverty level at all. Adopting an NAS-type approach would have fixed this problem.

However, NAS’s approach also had a number of drawbacks. Among them:

• Measuring economic deprivation by assessing whether households can afford to meet a set of basic needs is not productive when international comparisons and many other developed countries use a “relative” measure of poverty based on the share of families below 50 or 60 percent of median income (on the premise that, in a developed society, measuring the number of families far from the median provides a better measure of whether families are outside of the social mainstream).
• Using self-sufficiency standards, basic living budgets, and family budgets aims too low because often such measures conclude that the amount of income a family needs for a reasonably decent life or similar formulation may be twice the current poverty line or higher.
• Using thresholds that reflect only food, clothing, shelter, and “a little more” do not adequately reflect the developmental needs of children.
• Excluding health care and work-related costs in the thresholds can make the measure misunderstood by suggesting that these costs are not important. And, by only subtracting actual expenses, the measure provides no recognition that some families have low or no expenses because they are going without needed health or child care.

Despite these drawbacks, NAS’s approach became the one most widely debated. There was great consensus as to many of its principles, but, as always, disagreement among others. Eventually, NAS’s suggestions were used, at least in part, as the basis for several legislative proposals for updating the poverty measure that were eventually introduced.

These legislative proposals are discussed in the next blog in this series.

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[This is the second in a series of six articles summarizing the half-century history of the U.S. poverty threshold and the dire need for an updated poverty measure.]

Today's policy experts are not the first to raise concerns over the poverty measure's accuracy. As early as November 1965, policymakers expressed concerns about the poverty thresholds and how to adjust them for increases in the general standard of living. In 1968, ideas began to be discussed about raising the thresholds to reflect such increases. A committee was established to reevaluate the thresholds. Ultimately, the committee decided to adjust the poverty thresholds only for price changes, and not for changes in the general standard of living. Thus, in 1969, it was decided that the thresholds would be indexed by the Consumer Price Index (CPI) instead of by the per capita cost of the economy food plan.

In 1973, a thorough review of federal income and poverty statistics occurred. Specifically, the Subcommittee on Updating the Poverty Threshold recommended that the poverty thresholds be updated every ten years using a revised food plan and a multiplier derived from the latest available food consumption survey. It also recommended that the definition of income used to measure overall income should also be the income definition used to calculate the multiplier for the poverty thresholds. This would generally have resulted in higher poverty thresholds at each decennial revision. Unfortunately, none of these changes were implemented.

Interestingly, beginning in 1979 the Census Bureau began testing a variety of experimental poverty measures using various expanded definitions of income and alternative methods to account for inflation. None of these, however, replaced the official poverty measure.

In 1981, several minor changes were made to the poverty thresholds in accordance with recommendations of an interagency committee. During most of the 1980s, although there were extensive debates about poverty measurements, particularly about proposals to count government noncash benefits as income for measuring poverty without making corresponding changes in the poverty thresholds, no changes were actually made.

Perhaps the closest the U.S. came to succeeding in revising this measure came in 1990. A Congressional committee tasked the National Academy of Sciences/National Research Council (NAS) with studying the official U.S. poverty measure and providing suggestions for how to revise it. In May 1995, NAS’s report was published. According to the report:

The major conclusion is that the current measure needs to be revised: it no longer provides an accurate picture of the differences in the extent of economic poverty among population groups or geographic areas of the country, nor an accurate picture of trends over time. The current measure has remained virtually unchanged over the past 30 years. Yet during that time, there have been marked changes in the nation’s economy and society and in public policies that have affected families’ economic well-being, which are not reflected in the measure.

Ultimately, none of NAS’s recommendations were implemented.

In 2004, the Office of Management and Budget held a workshop to review progress made in moving towards a new measure of income poverty as recommended by NAS’s 1995 report.  Over the succeeding three years, these discussions continued but did not result in any consensus. That is, not until recently.

Stay tuned for the next installment in the series where we discuss the findings and implications of the National Academy of Sciences’ Report.

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[This is the first in a series of six articles summarizing the half century history of the U.S. poverty threshold and the dire need for an updated poverty measure.]

The Federal Poverty Measure is badly in need of revision. The current measure is not an accurate reflection of the resources a family needs to stay healthy and thrive. This six-part series will examine the history of the measure and past and current efforts to reform it.

The Federal Poverty Measure is a decades-old relic that became widely utilized by historical accident. The current measure was created during the mid-1960s by an economist at the Social Security Administration (SSA) who began publishing articles with poverty statistics for the United States using a poverty measure that she had developed.

Since 1965, there have been two slightly different versions of the Federal Poverty Measure: (1) the poverty thresholds, and (2) the poverty guidelines. The poverty thresholds are the original version of the Federal Poverty Measure. They are published by the Census Bureau and are used mainly for statistical purposes. The poverty guidelines are a simplification of the poverty thresholds. They are published by the Department of Health and Human Services and are used for administrative purposes (e.g., determining financial eligibility for certain federal programs).

The original poverty threshold measure has two components--a set of poverty lines or income thresholds, and a definition of family income to be compared with those thresholds. Both components of the measure are flawed and need to be revised.

In devising the measure, the economist used the price of food as the basis of the measure. At the time the measure was developed, families of three or more persons spent about 1/3 of their after-tax money income on food. In particular, the "economy food plan"--the cheapest of four food plans developed by the Department of Agriculture, which was designated for "temporary or emergency use when funds [were] low," was used as the basis. The poverty thresholds were determined by taking the dollar costs of this food plan for families of various sizes and multiplying the costs by a factor of three to allow for other expenses. However, currently food is only 1/7 of a family's budget, while the costs of housing, child care, and health care, none of which are taken into consideration, have all risen disproportionately to the cost of food.

A family's income was calculated using pre-tax income levels, since that was the only income information available at that time. Although income was based on pre-tax dollars, the poverty thresholds were created using estimated income available after taxes. In other words, using this measure, a family would seem to have more money relative to the poverty line than they had in reality. The inconsistency of this method was acknowledged, but since there was no other alternative, it was understood that the result would yield "a conservative underestimate" of poverty.

In effect, the measure was for a hypothetical average family that had to cut back on its expenditures. The measure assumed that expenditures for food and non-food items would be cut back at the same rate and that the amount that a family would be spending on non-food items would be minimal, but sufficient. Thus, the original poverty measure was presented as a measure of income inadequacy, not of income adequacy. As its developer noted, "if it is not possible to state unequivocally 'how much is enough,' it should be possible to assert with confidence how much, on an average, is too little."

In May 1965--just over a year after the Johnson Administration initiated the War on Poverty--the Office of Economic Opportunity adopted the poverty thresholds as a quasi-official definition of poverty for statistical purposes and for program planning. In 1969, the thresholds became the federal government's official statistical definition of poverty, though it was clearly stated that "[the official poverty thresholds] were not developed for administrative use in any specific program and nothing in this Directive should be construed as requiring that they should be applied for such a purpose." Thus, these thresholds were intended to be used for research, not to determine eligibility for antipoverty programs.

The next blog in this series will examine previous efforts to revise the Federal Poverty Measure.

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As millions lose their jobs, homes, and health insurance during this recession, they look to Congress to come through and help them in their time of need. But does it? Are the representatives in Washington really looking out for the interests of the people who were laid off by a plant closing, lost their health insurance, or face crushing debt as a result of a medical emergency? The 2009 Poverty Scorecard grades the performance of each member of Congress on the most important poverty-related issues that came to a vote in 2009.

The Shriver Center's Poverty Scorecard compiles Congress's votes on 20 bills that have the most significant impact on the 40 million Americans living in poverty. The issues covered include economic recovery, health care, asset-building, housing, and climate change. The Scorecard shows that Congress did more to fight poverty in 2009 than in the two preceding years, and passed major anti-poverty initiatives that were signed into law by President Obama. But despite successes like the American Recovery and Reinvestment Act and the Lilly Ledbetter Fair Pay Act, Congress could have done much more--only 7 of 17 poverty-related bills made it through both chambers and were signed into law. Paradoxically, representatives from many states with the highest poverty rates had the poorest voting records in fighting poverty.

The Scorecard's purpose is to hold U.S. Senators and Representatives accountable for either advancing or derailing efforts to ensure equal opportunity for all Americans. Our nation's political leadership must take even more aggressive action to address the many complex structural causes of poverty, by adopting the right priorities, enacting needed laws, and adequately funding essential programs, so that the current devastating trend will be reversed and there will be decent living standards in every region of the country.

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The USDA recently released its annual report for 2008 on food insecurity in the United States. As expected in this time of recession, food insecurity significantly increased, rising from 11.1% (13 million households) in 2007 to 14.6% (17 million households) in 2008, the highest levels since the study began in 1995. Food insecure households are defined as those who, at some time during the year, had difficulty providing sufficient food for all household members due to lack of resources. One-third of these households experienced very low food security, an episode in which food intake of some household members was reduced or eating patterns were disrupted.

Access to adequate nutrition affects many aspects of a child’s life, especially their learning and future health. As the nation focuses on the rising cost of health care, it is important to recognize that a large portion of every health care dollar is spent on preventable diseases, many of which are closely linked to nutrition. President Obama pointed out the importance of this issue to our nation’s strength: “Our children’s ability to grow, learn, and meet their full potential – and therefore our future competitiveness as a nation – depends on regular access to healthy meals.”

Fortunately, several programs exist to fight hunger in the United States. They range from the National School Lunch Program to Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), and include the Supplemental Nutrition Assistance Program (SNAP, formerly known as Food Stamps). By expanding these programs, increasing access to them, and reducing associated administrative burdens, we can make use of this existing framework and truly fight hunger. 

SNAP is a massive program that reaches all ages and many working families (eligibility extends up to 130% of the Federal Poverty Level, or just under $24,000 per year for a family of 3). Utilization of this program is skyrocketing across the country, having increased by more than 37% in the past two years. In fact, a new study predicts that nearly half of all children in the country (and a shocking 90% of African American children) will receive SNAP benefits at some point during their childhood.

While the federal government fully funds the benefits in programs like SNAP, states are largely responsible for the administration. And, in light of state budget crises, the front-line workers administering these programs are not getting the support they need to deal with increasing demand. This leaves needy families without benefits, and leaves millions of dollars in Washington that could be funneled into local economies. 

President Obama has declared a goal of ending childhood hunger by 2015. While it is understandable that the prevalence of food insecurity rises during a severe recession, the trend does not need to continue. We must commit to ensuring that everyone in this wealthy nation can meet their most basic needs and access an adequate diet. Improving access to our existing food and nutrition programs in a vital first step, and can go a long way toward achieving the President’s goal.

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Compared to their parents and grandparents, today’s families are experiencing a transformation in how they navigate work and caregiving responsibilities. This change has profound implications for what the government and business must do to respond to the needs of workers, particularly female workers, and their families.

The recently issued Shriver Report: A Woman’s Nation Changes Everything, a study by Maria Shriver and the Center for American Progress,* contributes to the ongoing national discussion about the current state of women in the United States. Among the findings is that although women have made strides in the workforce, more can and should be done to increase these achievements.

According to the report, although many women have always worked, women now, for the first time, make up half (49.9 percent as of July 2009) of all workers on U.S. payrolls. This is a dramatic change from just over a generation ago: in 1969, women made up only a third of the workforce (35.3 percent). Women are also increasingly taking on the dual roles of breadwinner and caregiver: nearly four in ten (39.3 percent) mothers are primary breadwinners, bringing home the majority of the family’s earnings, and an additional quarter (24 percent) of mothers are co-breadwinners, brining home at least 25 percent of the family’s earnings. The recession is accelerating these trends by leading to massive job losses, especially within male-dominated industries, with men accounting for three out of every four jobs lost (73.6 percent).

The report recognizes that while the composition of the national labor force has shifted and the typical family structure has changed, government and business institutions have failed to catch up with these realities. As a nation where both men and women generally work outside the home, our country’s workplace policies and social safety net must be updated to reflect the current realities of today’s workers. The report calls on policymakers to reform government incentives and requirements for employers to ensure equality for women workers and to support employees’ dual work and care responsibilities by addressing these issues:

• Equal Pay: Although women make up half of the labor force, they have not achieved equality in pay. The typical full-time, full-year female worker brings home 77 cents for every dollar earned by her male colleagues. And, for specific groups of women—including women of color and disabled workers—the wage gap is even larger.
   
• Equal Opportunity: Continued sex segregation in employment has prevented women from accessing higher paying jobs in nontraditional fields. Low-income women in particular need access to job training that will lead to career pathways with family-sustaining wages and benefits.
   
• Anti-Discrimination: Anti-discrimination laws, including Title VII and the Pregnancy Discrimination Act, must be reformed so that employers cannot disproportionately exclude women from workplace benefits.
   
• Family and Sick Leave and Social Security: Our social insurance system needs to be modernized to include paid family and sick leave as well as social security retirement benefits that take into account time spent out of the workforce caring for children and other relatives.
   
• Child and Elder Care: Workers need better support from the government with direct subsidies for child care, early education, and elder care to help them cope with their family and work responsibilities.
   
• Flexible and Predictable Schedules: More flexible and predictable work schedules are needed to help employees balance work and family more efficiently.

The Sargent Shriver National Center on Poverty Law’s Women’s Law and Policy Project and Community Investment Unit continue to work on issues of employment, education and skill development, and financial opportunities with the goal of promoting women’s economic progress and achieving gender equity in the workplace.   Eliminating sex-based discrimination and establishing policies that recognize the everyday reality of workers’ caregiving responsibilities are necessary for ensuring the economic security of women and their families. Better training and educational opportunities, stricter enforcement of fair employment laws, and the creation of policy where fair employment protections do not exist are all imperative in empowering women to increase their earning power, develop economic self-sufficiency, and support their families’ well-being. 

For more information about the Shriver Center work contact Wendy Pollack, director of the Women’s Law and Policy Project at wendypollack@povertylaw.org, or Karen Harris, supervising attorney of the Community Investment Unit at karenharris@povertylaw.org.

*Please note that the Sargent Shriver National Center on Poverty Law is named in honor of Maria Shirver’s father, Sargent Shriver, but is not the author of the report.

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Most people rejoice when they find out they are getting a raise. But for low-income people, that joy may quickly turn to frustration when they realize the modest increase in income may cause a loss of hundreds of dollars in food stamp benefits. 

People across the country faced this challenge when the $25/week increase in Unemployment Insurance contained in the American Recovery and Reinvestment Act (the federal stimulus bill) took effect in March. For some, this modest increase in income pushed them off the “cliff” of aid programs as the extra money was more than offset by a loss in food stamp benefits.

Low-income families face similar challenges each day, with their steps toward independence cancelled by a loss of a work support such as food stamps. Ideally, working families are phased off of aid programs, with their benefits gradually decreasing while their incomes increases. This approach rewards work and provides the support necessary for a family to sustain its success.

But, eligibility for food stamps for most families is strictly capped at 130% of the Federal Poverty Level, or $1907/month for a family of 3. As a result, a household whose gross income exceeds this amount is ineligible--regardless of how much the family actually has available to purchase food after allowable expenses for rent, utilities, and child care. For example, a family of 3 whose monthly income increases by $100, from $1850 to $1950 per month, may lose over $300 in food stamps. Rather than being rewarded for its accomplishment, the family is left less financially secure.

Fortunately, states have the option of raising this cap, bringing more federally funded food stamps to needy families and their communities. Through a policy maneuver known as “categorical eligibility,” the “cliff” can be reduced so that families are eased off of assistance as their earnings increase. Such a policy reduces the number of families who earn too much to receive assistance but not enough to survive. By raising the gross income limit for food stamps, a state can prevent families from being penalized for their successes.

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