Category Archives: Poverty

Poor People Need a Higher Wage, Not a Lesson in Morality

Source: Greg Kaufmann, The Nation, April 22, 2015

David Brooks’ rendition of poverty is as “representative” of people with low-incomes as corrupt corporate titans are of small entrepreneurs. …. What we really need isn’t a moral revival but a moral revolution, one that might begin with Brooks and others looking in the mirror and asking some basic questions:
Do I accept that people working full-time are paid wages that keep them in poverty?
Do I accept that workers with low-incomes can’t take a paid sick day to care for themselves or a family member?
Do I accept that many parents can’t afford the childcare they need to go to work?
Do I accept that people with low-incomes often lack the transportation needed to get to job assignments and as a result are kicked off of income assistance?
Do I accept that our public schools are separate and unequal—with some kids forced to share textbooks while just miles away an affluent community has state-of-the-art facilities?
Do I propagate myths and stereotypes about people living in poverty, or do I help spread the truth—like the fact that more than 1 in 2 Americans will spend a year in poverty or near poverty during their working years?
Do I embrace the real evidence that shows just how far a little assistance can go to improve life outcomes for people in poverty? ….

The Inequality of Water

Source: Sam Ross-Brown, Paul Waldman, American Prospect, April 9, 2015

….Another way to look at it is that we’ve reached a point where two of the most immediate water crises the country now faces—Baltimore and Detroit—have nothing to do with climate. They exist entirely within a broken economic and social system, and yet they’re every bit as dangerous to public health and human rights as California’s record-breaking drought. Responding to climate change in a serious way not only means taking a hard look at our energy systems and lifestyles. It also means addressing how the politics of water and carbon impact the realities of inequality and injustice. …

America’s Working Poor: Conceptualization, Measurement, and New Estimates

Source: Brian C. Thiede, Daniel T. Lichter and Scott R. Sanders, Work and Occupations, Published online before print April 9, 2015
(subscription required)

From the abstract:
This article addresses measurement challenges that have stymied contemporary research on the working poor. The authors review previously used measurement schemes and discuss conceptual assumptions that underlie each. Using 2013 March Current Population Survey data, the authors estimate national- and race-specific rates of working poverty using more than 125 measures. The authors then evaluate the association between each measure and a latent construct of working poverty using factor analysis and develop a working poverty index derived from these results. Finally, the authors estimate multivariate regression models to identify key social and demographic risk factors for poverty among workers. The authors’ national estimates of working poverty range from 2% to nearly 19% and are highly sensitive to alternative assumptions. The authors’ analyses find that the latent construct is most highly correlated with empirical measures of working poverty that include part-time or part-year employment and that use poverty income thresholds that include both the poor and near poor. Crude rates and conditional risks of poverty among workers vary considerably among racial groups. This article provides a conceptual and empirical baseline for decisions about how best to estimate the magnitude and composition of America’s working poor population.

Beyond Child Welfare — Theories on Child Homelessness

Source: Jessica Dixon Weaver, Washington and Lee Journal of Civil Rights and Social Justice, Vol. 21, 2014

From the abstract:
According to recent federal data from 2013, the number of children who experience homelessness in the United States has reached an astonishing 2.5 million. Among industrialized nations, America has a one of the highest poverty rates among children, peaking at 22% in 2010. This Article considers why there is an ambivalent and sometimes hostile response to chronic, persistent poverty among families with young children. Various reports on the state of homeless families state that the cause of homelessness is a combination of lack of affordable housing, extreme poverty, decreasing government support, domestic violence, the challenge of raising children alone, and insufficient working wages. Homeless families with children comprise 37% of the total homeless population, and families of color are overrepresented within this number, making up 61% of the group. This article addresses the color of child homelessness and how various theories on poverty and laws designed to assist impoverished parents have created categorizations of the deserved and the undeserved poor. In an effort to transform the poverty dialogue, this article sets forth that vulnerability theory and the principle of subsidiarity can be utilized as a means to transcend identity categories and recognize both state and community responsibility to provide more comprehensive support for homeless children within families.

The High Public Cost of Low Wages

Source: Ken Jacobs, Ian Perry and Jenifer MacGillvary, University of California, Berkeley, Center for Labor Research and Education, Research Brief, April 2015

From the press release:
While the U.S. economy rebounds, persistent low wages are costing taxpayers approximately $153 billion every year in public support to working families, including $25 billion at the state level, according to a new report from the University of California, Berkeley, Center for Labor Research and Education. The report details for the first time the state-by-state cost to taxpayers of low wages in the United States. Following decades of wage cuts and health benefits rollbacks, more than half of all state and federal spending on public assistance programs (56 percent) now goes to working families, the report documents….

The report analyzed state spending for Medicaid/Children’s Health Insurance Program and Temporary Aid to Needy Families (TANF), and federal spending for those programs and food stamps (SNAP) and the Earned Income Tax Credit (EITC).

The UC Berkeley researchers also report that:
• On average, 52 percent of state public assistance spending supports working families, with costs as high as $3.7 billion in California, $3.3 billion in New York and $2 billion in Texas.
• Reliance on public assistance can be found among workers in a diverse range of occupations, including frontline fast-food workers (52%), childcare workers (46%), home care workers (48%) and even part-time college faculty (25%).

From 2003 to 2013, wage growth remained flat or negative for the entire bottom 70 percent of workers in the United States, Jacobs said. Over the same time, the share of non-elderly Americans receiving health insurance from an employer fell almost 10 percentage points, from 67 percent to 58 percent. Despite modest pay raises at some of the country’s largest and most profitable employers, including Walmart and McDonald’s, wages continue to lag far behind inflation.

The researchers note that raising wages would result in significant savings to state and federal governments. In recent months, the substantial cost of low wages has prompted elected officials to take action. California, Colorado, Maine, Oregon and Washington are considering increasing the minimum wage to $12 or higher. In Connecticut, a proposal currently moving through the state legislature would fine large companies that pay low wages in an effort to recoup the cost these companies impose on taxpayers. The Congressional Democrats’ fiscal year 2016 budget proposal unveiled last month included a provision that would roll back tax breaks for large companies that fail to raise pay on pace with inflation….
Related:
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The Public Subsidy to Low Wage Employers
Source: Stefan Baskerville, George Gabriel, Jesse Hancock, Sanjiv Lingayan, Henriette Neubert, Citizens UK, 2015

UK taxpayers are subsidising big business by an estimated £11 billion per year .

Who Pays Taxes in America in 2015?

Source: Citizens for Tax Justice, April 9, 2015

…Many taxes are regressive, meaning they take a larger share of income from poor and middle-income families than they do from the rich. To offset the regressive impact of payroll taxes, sales taxes and even some state and local income taxes, we need federal income tax policies that are more progressive.
Some features of the federal income tax offset the regressivity of other taxes, at least to a degree. For example, the federal personal income tax provides refundable tax credits such as the Earned Income Tax Credit (EITC) and the Child Tax Credit, which can reduce or eliminate federal personal income tax liability for low-income working families and can even result in negative personal income tax liability, meaning families receive a check from the IRS.

These tax credits are only available to taxpayers who work and therefore pay federal payroll taxes. These progressive provisions do make the income tax more progressive, but overall they do little more than offset the regresssivity of other taxes that poor and middle-income families pay.

Estimates from the Institute on Taxation and Economic Policy tax model, which are illustrated in these charts and tables, include the following key findings:
■ The richest one percent of Americans pay 23.8 percent of total taxes and receive 22.2 percent of total income.
■ The poorest one-fifth of Americans pay 2.0 percent of total taxes and receive 3.2 percent of total income.
■ Each income group will pay a total share of taxes that is quite similar to each group’s total share of income.
■ Contrary to popular belief, when all taxes are considered, the rich do not pay a dispropor­tionately high share of taxes. Although each income quintile pays combined federal, state and local taxes that are roughly equivalent to their share of the nation’s income, this by no means indicates our tax system is fine as is. In a truly progressive tax system, millionaires and billionaires wouldn’t be paying roughly the same tax rates as working families earning $100,000 per year.

The gap between rich and poor schools grew 44 percent over a decade

Source: Jill Barshay, Hechinger Report, Education by the Numbers, April 6, 2015

The growing gap between rich and poor is affecting many aspects of life in the United States, from health to work to home life. Now the one place that’s supposed to give Americans an equal chance at life — the schoolhouse — is becoming increasingly unequal as well. I’ve already documented the startling increase since 2000 in the number of extremely poor schools, where three-fourths of the students or more are poor enough to qualify for free or discounted meals (see here), and I’ve noted the general increase in poverty in all schools here.

But now there’s new evidence that poor schools are getting increasingly short-changed by the states and localities that fund them. The richest 25 percent of school districts receive 15.6 percent more funds from state and local governments per student than the poorest 25 percent of school districts, the federal Department of Education pointed out last month (March, 2015). That’s a national funding gap of $1,500 per student, on average, according to the most recent data, from 2011-12. The gap has grown 44 percent since 2001-02, when a student in a rich district had only a 10.8 percent resource advantage over a student in a poor district.

Rising Food Insecurity and Conservative Policy in the US: Impact on the Elderly

Source: Peter S Arno, Kenneth A Knapp, Stephan Russo, Deborah Viola, World Journal of Social Science Research, Vol. 2 No. 1, 2015

From the abstract:
Food insecurity, a critical problem in the developing world, has recently received increased attention among wealthy nations. Food insecurity, broadly defined, is when a lack of resources prevents household members from having enough food. In the US, food insecurity has been rising while social safety net programs to ameliorate hunger among at-risk households have been targeted for cuts by conservatives. Our main objective was to assess the prevalence and impact of food insecurity among the elderly. In a survey of 500 older, homebound meal clients in New York City, we found that nearly one in five (17%) is food insecure, 89% endure chronic health problems, 14% live with severe functional impairments, 38% are in declining health, and 10% experience unmet needs for services. New York City’s oldest community residents have serious health problems, multiple unmet social service needs, and often suffer from food insecurity. Understanding the relationship between these issues is critical if community organizations and government agencies at all levels—even in wealthy countries—are to be more effective in assuring the well being of their oldest residents.

Improving Population Health by Reducing Poverty: New York’s Earned Income Tax Credit

Source: Jeannette Wicks-Lim, Peter S Arno, University of Massachusetts – Amherst, Political Economy Research Institute, Working Paper Series, Number 377, February 2015

From the abstract:
The relationship between low socioeconomic status and higher levels of morbidity and mortality has been well-established in the literature. Researchers, however, rarely test the link between health improvements and social programs or economic policies designed to alleviate poverty. In this paper, we examine the health effects of the Earned Income Tax Credit (EITC), a broad-based income support program that operates at the federal, state, and local level. Specifically, we examine the health impact of expanding New York State and New York City’s EITC benefits on low-income neighborhoods between 1997 and 2010. We estimate that the 15-percentage-point increase in the state and local EITC rates reduced the low birth weight rate in New York City’s poor neighborhoods by 0.45 percentage points. This level of impact is substantial—from 1997 to 2010 low birth weight rates in these neighborhoods only fluctuated between 9.0 percent and 9.8 percent. Our estimates also suggest that EITC’s impact on low-income neighborhoods is stronger than that experienced by the average EITC-recipient household. Aside from this study, we are aware of no other neighborhood-level analysis of EITC’s impact on health. This evidence of health benefits associated with the EITC program should encourage policymakers to integrate the use of social and economic policies, such as the EITC, in their public health interventions.

Low-Income Housing Policy

Source: Robert A. Collinson, Ingrid Gould Ellen, Jens Ludwig, National Bureau of Economic Research (NBER), NBER Working Paper No. w21071, April 2015
(subscription required)

From the abstract:
The United States government devotes about $40 billion each year to means-tested housing programs, plus another $6 billion or so in tax expenditures on the Low Income Housing Tax Credit (LIHTC). What exactly do we spend this money on, why, and what does it accomplish? We focus on these questions. We begin by reviewing the history of low-income housing programs in the U.S., and then summarize the characteristics of participants in means-tested housing programs and how programs have changed over time. We consider important conceptual issues surrounding the design of and rationale for means-tested housing programs in the U.S. and review existing empirical evidence, which is limited in important ways. Finally, we conclude with thoughts about the most pressing questions that might be addressed in future research in this area.