Racial Wealth Gap Is Wide and Growing

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.

Because You Have a Refrigerator and a Stove You Are Not Poor?

RefrigeratoIf 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.

 

The H-2B Program: Flaws and Promise

Carnival workerMost 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.

 

Private Contractors for Public Services Held Accountable in Indiana

WheelchairAs 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.

 

Single Stop USA Receives Grant to Expand Use of High Technology for Low-Income Americans

Computer terminalsAll 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.

 

Equal Pay Day Rally Is Set for April 12

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.

 

We Are One: Stand Together for Worker Rights and Human Rights

Union ProtestToday, 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.

 

Poverty Scorecard Grades Congressmembers' Records on Anti-Poverty Legislation

Poverty ScorecardThe 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


A+ A B C D F F-
Senators 15 37 5 2 7 29 4
Representatives 165 74 16 7 84 73 9

 

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.


Poverty Rate Poverty Rate Rank Delegation’s rank in voting to fight poverty
Mississippi 21.4% 1st 43th
Alabama 16.8% 7th 44th
Oklahoma 16.4% 9nd 46th
Kentucky 17.4% 6th 42nd
Louisiana 18.4% 2nd 38th
Texas 16.8% 8th 41st
South Carolina 15.8% 11th 43rd
Georgia 15.0% 13th 40th
Tennessee 16.1% 10th 36th
Arizona 14.7% 14th 37th

 

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.


Poverty Rate Poverty Rate Rank Delegation’s rank in voting to fight poverty
New Mexico 18.1% 3rd 3rd
Arkansas 17.7% 4th 14th
West Virginia 17.6% 5th 12th
New York 13.8% 17th 7th
Oregon 13.6% 20th 11th

 

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.


Poverty Rate Poverty Rate Rank Delegation’s rank in voting to fight poverty
Connecticut 8.7% 48th 4th
Hawaii 9.4% 46th 2nd
Maryland 8.2% 49th 9th
Massachusetts 10.1% 41st 8th
Rhode Island 11.6% 34th 1st

 

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.

Additional LIHEAP Funds for Illinois's Low-Income Households

Gas MetersThe 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.

 

 

Poverty by Any Other Name Is Still Poverty

PenniesLast 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.

 

Addressing the Toll Recession Has Taken on Working Families

Frustrated WorkerThe 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. 

Recommitting to the Safety Net--Improve and Expand Benefits to Lift More Families Out of Poverty

Child EatingThe 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.

 

Human Rights at Home: Illinois Poverty Commission Releases Plan to Cut Extreme Poverty in Half by 2015

Building a Pathway to Dignity and WorkOn 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.

Phantom Cuts to a "Welfare" Program

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.   

 

They Say It's Over, We Say It's Not: Illinois Poverty Rates Still Up

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.

Number of Americans in Poverty Highest in 51 Years

Homeless WomanToday 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.

 

Decreasing Poverty, Even If We Can't Agree How to Measure It

[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.]

MoneyAs 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."
 

Out with the Old (Sort of) and In with the New: A New Federal Poverty Measure

[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.]

MoneyAs 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.
 

Acting on the Data: The Measuring American Poverty Act

[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.]

MoneyIn 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.

For Good Measure: NAS's 1995 Report on Updating the Poverty Measure

[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.]

MoneyFor 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.

No Real Progress: 1969-2004

[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.]

MoneyToday'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.

Hard Numbers: A Measure Meant for Research, Not Eligibility

[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.]

CashThe 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.

 

2009 Poverty Scorecard Grades Members of Congress

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.

Maria Shriver Report on Women: Update Policies to Reflect the American Workforce

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.