[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
ECONOMIC OPPORTUNITY
AND POVERTY IN AMERICA
=======================================================================
HEARING
before the
SUBCOMMITTEE ON
INCOME SECURITY AND FAMILY SUPPORT
of the
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 13, 2007
__________
Serial No. 110-11
__________
Printed for the use of the Committee on Ways and Means
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COMMITTEE ON WAYS AND MEANS
CHARLES B. RANGEL, New York, Chairman
FORTNEY PETE STARK, California JIM MCCRERY, Louisiana
SANDER M. LEVIN, Michigan WALLY HERGER, California
JIM MCDERMOTT, Washington DAVE CAMP, Michigan
JOHN LEWIS, Georgia JIM RAMSTAD, Minnesota
RICHARD E. NEAL, Massachusetts SAM JOHNSON, Texas
MICHAEL R. MCNULTY, New York PHIL ENGLISH, Pennsylvania
JOHN S. TANNER, Tennessee JERRY WELLER, Illinois
XAVIER BECERRA, California KENNY C. HULSHOF, Missouri
LLOYD DOGGETT, Texas RON LEWIS, Kentucky
EARL POMEROY, North Dakota KEVIN BRADY, Texas
STEPHANIE TUBBS JONES, Ohio THOMAS M. REYNOLDS, New York
MIKE THOMPSON, California PAUL RYAN, Wisconsin
JOHN B. LARSON, Connecticut ERIC CANTOR, Virginia
RAHM EMANUEL, Illinois JOHN LINDER, Georgia
EARL BLUMENAUER, Oregon DEVIN NUNES, California
RON KIND, Wisconsin PAT TIBERI, Ohio
BILL PASCRELL JR., New Jersey JON PORTER, Nevada
SHELLEY BERKLEY, Nevada
JOSEPH CROWLEY, New York
CHRIS VAN HOLLEN, Maryland
KENDRICK MEEK, Florida
ALLYSON Y. SCHWARTZ, Pennsylvania
ARTUR DAVIS, Alabama
Janice Mays, Chief Counsel and Staff Director
Brett Loper, Minority Staff Director
______
SUBCOMMITTEE ON INCOME SECURITY AND FAMILY SUPPORT
JIM MCDERMOTT, Washington, Chairman
FORTNEY PETE STARK, California JERRY WELLER, Illinois
ARTUR DAVIS, Alabama WALLY HERGER, California
JOHN LEWIS, Georgia DAVE CAMP, Michigan
MICHAEL R. MCNULTY, New York JON PORTER, Nevada
SHELLEY BERKLEY, Nevada PHIL ENGLISH, Pennsylvania
CHRIS VAN HOLLEN, Maryland
KENDRICK MEEK, Florida
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Ways and Means are also published
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unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
__________
Page
Advisory of February 6, 2007, announcing the hearing............. 2
WITNESSES
Anita Crawley, Nashville, Tennessee.............................. 44
Marilyn Bezear, New York, New York............................... 46
Douglas Noble, Gaithersburg, Maryland............................ 49
Tavon Hawkins and Nicole Dodd, Baltimore, Maryland............... 51
______
Timothy M. Smeeding, Ph.D., Director of the Center for Policy
Research, Syracuse University.................................. 69
Gary Burtless, Ph.D., John C. and Nancy D. Whitehead Chair in
Economic Studies, The Brookings Institution, speaking in the
absence of Timothy M. Smeeding................................. 68
Alan Berube, Fellow, Metropolitan Policy Program, The Brookings
Institution.................................................... 80
Angela Glover Blackwell, Esq., Founder and C.E.O., PolicyLink.... 88
Robert Rector, Senior Policy Analyst, The Heritage Foundation.... 93
Jared Bernstein, Ph.D., Director of the Living Standards Program,
Economic Policy Institute...................................... 114
SUBMISSIONS FOR THE RECORD
Americans For Fair Taxation, Conyers, GA, statement.............. 129
Child Welfare League of America, statement....................... 129
Holland, Lary Wayne, statement................................... 135
ECONOMIC OPPORTUNITY
AND POVERTY IN AMERICA
----------
TUESDAY, FEBRUARY 13, 2007
U.S. House of Representatives,
Committee on Ways and Means,
Subcommittee on Income Security and Family Support,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:20 a.m., in
room B-318, Rayburn House Office Building, Hon. Jim McDermott
(Chairman of the Subcommittee) presiding.
[The advisory announcing the hearing follows:]
ADVISORY
FROM THE
COMMITTEE
ON WAYS
AND
MEANS
SUBCOMMITTEE ON
INCOME SECURITY AND FAMILY SUPPORT
CONTACT: (202) 225-1025
FOR IMMEDIATE RELEASE
February 06, 2007
ISFS-1
McDermott Announces Hearing on
Economic Opportunity and Poverty in America
Congressman Jim McDermott (D-WA), Chairman of the Subcommittee on
Income Security and Family Support of the Committee on Ways and Means,
today announced that the Subcommittee will hold a hearing on economic
opportunity and poverty in America. The hearing will take place on
Tuesday, February 13, 2007, in room B-318 Rayburn House Office
Building, immediately after a brief Subcommittee organizational meeting
beginning at 10:00 a.m.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from invited witnesses only.
Witnesses will include experts on issues related to international
comparisons of poverty, the geographical distribution of poor
individuals, income mobility, the relevance of Hurricane Katrina, and
the official definition of poverty. However, any individual or
organization not scheduled for an oral appearance may submit a written
statement for consideration by the Committee and for inclusion in the
printed record of the hearing.
BACKGROUND:
According to the most recent statistics, there were 37 million
Americans living in poverty in 2005, including nearly 13 million
children. After prior years of decline, the number and percentage of
Americans in poverty began to climb after the year 2000, resulting in
an additional 5.4 million Americans living below the poverty line.
Research indicates that poverty, measured both on a relative and
absolute basis, is more common in the United States than in many other
relatively prosperous nations. Additional studies suggest that income
mobility for children born into poverty in the U.S. may be limited, and
that an increasing percentage of poor children have working parents.
While still a particular problem in inner-city and rural areas, poor
Americans have joined the general migration to the suburbs, with the
suburban poor now out-numbering their counterparts in the cities.
Against this backdrop, there continues to be a debate about how to best
define and quantify poverty.
In announcing the hearing, Chairman McDermott stated, ``We need to
work to ensure the American dream can become a reality. Today, too many
of our fellow citizens see that dream slipping away. Those in poverty
feel trapped and the countless millions living paycheck to paycheck
feel they could slip into poverty at any time. I hope this hearing and
others to follow will illustrate the need for change.''
FOCUS OF THE HEARING:
The hearing will focus on the extent and nature of economic
opportunity and poverty in America.
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noted above.
Chairman MCDERMOTT. We will now open the regular meeting
of--this is really our first hearing and we are quite excited
about it because about a year and a half ago, Katrina exposed
the brutal reality of poverty in this country I think in a way,
that most mentioned never really had an opportunity to see it
on television. They saw a side of our country which was quite
surprising. Real people too poor to find a way to avoid the
path of the storm and too forgotten to receive any immediate
help. Even President Bush acknowledged America's shock and
anguish at seeing so many with so little when he went to New
Orleans, when he said we have a duty to confront this poverty
with bold action.
Now, unfortunately, we haven't seen that kind of bold
action, and for that matter, in many respects, any action in
New Orleans. To really to shake us from that lethargy, I feel
like we needed this special hearing in Congress, and with the
American people about the causes, the impacts and the potential
solutions for poverty. If we can develop some level of common
understanding about these issues, perhaps we can unite
Republicans and Democrats under a common cause to actually act.
In today's hearings, as well as future hearings, they will
hopefully play a role in that process. I am certainly not
expecting any kind of immediate consensus on potential remedies
on or even on all of poverty's causes, but I do think we can
confront some of the basic facts here, which we will hear a
few.
Our Nation has one of the highest poverty rates among all
relatively prosperous nations. We will hear testimony today
highlighting that fact as well as the fact that we spend a
smaller percentage of our National wealth addressing poverty
than most undeveloped nations.
Secondly, poverty is more prevalent in some places than
others, but it exists throughout America. It is not located in
a few pockets here and there. Poverty remains a significant
problem, so painfully demonstrated in the Ninth Ward of New
Orleans, but we actually have more poor Americans living in the
suburbs than we do in the cities.
Thirdly, most poor children in our Nation have working
parents. Work might be a requisite to have a chance to escape
poverty, but it does not guarantee it. There are plenty of
people work and kids living in families where both parents work
and still living in poverty.
Finally, to those who say poverty is simply a result of bad
choices by individuals, I want to ask them to remember three
things: Most of us have made mistakes in our life, but we have
gotten a second chance and often a third or fourth chance. The
second chances are a lot harder to come by when you are living
in poverty. Moreover, most people fall into poverty not because
of bad choices, but because of bad luck, the circumstances of
life over which they have really no control: Job loss, divorce,
family illness, can all lead to a family's downward spiral into
poverty.
Finally, the third thing I want you to remember is contrary
to our best hope, there is not equal opportunity in this
country. If you don't have access to a decent school or a safe
neighborhood or a good job, your path to economic self-
certainty is much, much harder. Personal responsibility is
important but so too is society's obligation to help those with
the least.
I look forward to having a discussion with these and other
issues with the hope that greater understanding may bring us
closer to working toward a solution.
Chairman MCDERMOTT. I would now like to yield to Mr. Weller
for any comments that he may have. Mr. Weller.
Mr. WELLER. Thank you, Mr. Chairman, and thank you for
convening this meeting. I certainly want to welcome our
witnesses before us today and appreciate the time they are
taking to be with us.
Today's hearing covers a broad range of issues, including
not only issues relating to poverty, but also economic
opportunity in this country. We have an equally broad set of
experts to discuss these topics, including several who will
provide accounts of their continued struggles to lift their own
families out of poverty, and I look forward to hearing that
testimony.
Even as we explore how to reduce poverty and promote
economic opportunity, it is important to note the progress that
has been made in reducing poverty through welfare reform and
other pro-work policies. Pro-work welfare reforms reduced
poverty since 1996. In the past decade, the overall poverty
rate has fallen by 7 percent. Child poverty rates have dropped
by 13 percent and today over 1.4 million fewer children live in
poverty. Poverty declined sharply among African Americans
Hispanics and families headed by single mothers. Despite these
gains, our ability to make long run progress remains in
question, because more children are born each year into the
type of households most likely to be in poverty, that is,
households headed by single parents.
Today, 37 percent of all children are born to unmarried
parents, which is both an all time high, and a number that will
probably continue to rise. A recent Congressional research
study report on children in poverty, which I would request we
enter into the record for this hearing, shows children in such
households at five times the poverty rate as children living
with married parents. So, we have our work cut out for us.
We should also devote some time to how poverty is measured
and how current programs are effective. We know most government
programs are not counted today when measuring poverty. A
reasonable person might wonder why. Some studies suggest if we
had the full picture of the income and benefits families
receive, the real poverty rate will drop to a low as of 5
percent instead of today's official poverty rate of nearly 13
percent.
Fortunately, we know what works and what doesn't to reduce
poverty. Promoting full-time work and healthy marriage are the
strongest weapons in our arsenal against poverty. Both of which
are more effective than doubling welfare benefits. Achieving
that will require engaging and challenging young adults,
especially like those we will meet, to understand that their
future and our country's future is really in their hands.
Government can and should promote equality of opportunity
while providing a suitable safety net for those in need. No
matter how hard it might try, government cannot ensure equality
of outcome. That part depends on the good judgment and hard
work of families. I look forward to our discussion and learning
how we can increase opportunity for more families to climb up
the economic ladder. Again, I welcome today's witnesses and
thank you for convening this hearing.
Chairman MCDERMOTT. Thank you. We appreciate that and
without objection, we will enter into the record the
Congressional Research Service report that you mentioned. It is
the one which I got the information about the fact that most of
the kids are working in living in families where both parents
are working.
[The information follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman MCDERMOTT. So, there is a good bit of information
I recommended to the Committee to read. If you have nothing
else for bed time reading, it is a good explanation of what is
going on in this country.
We will come to our first panel of witnesses. They are
all--all of your written statements will be entered into the
record, so we would like you to talk for 5 minutes to us and
tell us what is on your mind. The first of the panelists that
we have we have gotten them from a variety of places and tried
to get some spread here about what the kinds of problems people
face.
Let us start, Ms. Crawley with you.
STATEMENT OF ANITA CRAWLEY, NASHVILLE, TENNESSEE
Ms. CRAWLEY. Mr. Chairman and Members of the Subcommittee,
thank you for providing me with the opportunity to share my
story today about my struggles to get out of poverty. My name
is Anita Crowley. About 4 years ago, a number of things
happened at the same time to change my life.
Chairman MCDERMOTT. Is your mike on? If you press----
Ms. CRAWLEY. Okay. Mr. Chairman and Members of
Subcommittee. Thank you for providing me with the opportunity
to share my story today about my struggles to get out of
poverty. My name is Anita Crawley. About 4 years ago, a number
of things happened at the same time to permanently change my
life.
After 12 years of working at Vanderbilt University Medical
Center in a good paying job, I was laid off due to management
decision to upgrade the position for a college graduate. Even
though I was well trained and qualified for the job as a
referral and authorization specialist, I became unemployed.
Around the same time, my marriage of 12 years was ending in
divorce. I decided to go back to school to further my education
so I enrolled in college. I made it halfway through the second
semester and then my youngest daughter was hit by a car and was
hospitalized. My life changed. I was forced to make some hard
decisions. I was a single mom with no support, no income, and
now I have to take care of my injured daughter who suffered
memory loss among other things at the tender age of 6.
I had to take a leave from school to take care of my
daughter. I tried to go back to school part-time, but I could
not take two classes under the Pell grant. So, I had to make
the painful decision to stop and take care of my daughter. I
had used all of the money I had saved. I had to borrow money
from my 401(k) after using all of the resources I had, I was
broke. I could barely afford to feed and shelter my daughters.
After losing my home, my car, my comfortable life as I knew it,
I had no choice but to move back with my mother.
I had to accept low income housing in a very bad
neighborhood. My kids could not go outside to play because of
the constant drug dealing and gunfire. I did everything I could
to provide for my daughters. I had to get on public assistance,
welfare, food stamps, cash benefits, TennCare, Job Search,
Child Care Assistance while I searched for work. If it were not
for my hope, faith in these government supports, I would not
have been able to survive.
Eventually, I got connected to Catholic Charities of
Nashville for their Welfare to Work program. After my training
was completed, I was able to find part-time employment. I am
one of the fortunate people because I was able to find a job. I
am still struggling every day to make ends meat.
Things that would have been helpful: It would have been
helpful to have more education and training assistance. Help
with housing, better housing, a school for smoother transition
from Welfare to Work and more work support.
As soon as I got the job, most of my income supports were
cut. Food stamps, cash benefits and child care services were
cut, forcing me to pay child care expenses and grocery bills. I
was still faced with financial difficulties and pressure to
take care of my children and keep my job. If there was a
smoother transition from Welfare to Work, that would have been
very helpful.
I am now working full-time with Catholic Charities of
Nashville, but only making about $21,000 for my family of four
which is barely above minimum wage.
While my income has gone up with the full-time employment
this January 2007, all of my other support started to go down.
This is not an incentive to work. Some of the value of the
increased salaries is lost because of the cut in supports.
Mr. Chairman, I have tried to take some steps forward, but
so many things are holding me back. I ask that you keep
families like me in mind when you work to create new Federal
policies to address the needs of the poor and the working poor.
We are fighting hard and playing by the rules, but are
still struggling, and any small thing can push us further into
poverty. We need the help of the Federal Government. Local
organizations like Catholic Charities of Nashville simply
cannot do it all.
Thank you for the opportunity to tell my story. I would be
happy to answer any questions you may have.
Thank you.
Chairman MCDERMOTT. Thank you. You landed exactly at 5
minutes. That is perfect.
[The prepared statement of Ms. Crawley follows:]
Statement of Anita Crawley, Nashville, Tennessee
Mr. Chairman and members of the Subcommittee, thank you for
providing me with the opportunity to share my story today about my
struggles to get out of poverty.
Background
My name is Anita Crawley, about four years ago a number of things
happened at the same time to permanently change my life:
After 12 years working at Vanderbilt University Medical Center in a
good paying job--I was laid off due to management's decision to upgrade
the position for a college graduate.
Even though I was well trained and qualified for the job as a
Referral/Authorization Specialist I became unemployed.
Around the same time my marriage of twelve years was ending in
divorce.
I decided to go back to school to further my education, so I
enrolled in college.
I made it half way through the second semester and then my youngest
daughter was hit by a car and was hospitalized.
My Life Changed
I was forced to make some hard decisions. I was a single mom with
no support, no income, and now I had to take care of my injured
daughter, who suffered memory loss among other things at the tender age
of six.
I had to take a leave from school to take care of my daughter.
I tried to go back to school part-time, but I could not take two
classes under the Pell Grant, so I had to make the painful decision to
stop and take care of my daughter.
I had used all the money I had saved, I had to borrow money from my
401k, after using all the resources I had, I was broke.
I could barely afford to feed and shelter my daughters. After
losing my home, my car, my comfortable life as I knew it, I had no
choice, but to move back with my mother.
I had to accept low income housing in a very bad neighborhood, my
kids could not go outside to play because of the constant drug dealing
and gun fire.
I Did Everything I Could to Provide for My Daughters
I had to get on public assistance--Welfare, food stamps, cash
benefits, Tenncare, and Job Search Child Care assistance while I
searched for work.
If it were not for my hope, faith and these government supports, I
would not have been able to survive.
Eventually I got connected to Catholic Charities of Nashville for
their welfare to work program
After my training was completed, I was able to find part-time
employment.
I am one of the fortunate people because I was able to find a job--
but I am still struggling every day to make ends meet.
Things That Would Have Been Helpful
It would have been helpful to have more education and training
assistance, help with housing, a smoother transition from welfare to
work, and more work support.
As soon as I got the job, most of my income supports were cut--Food
Stamps, cash benefits and childcare services were cut, forcing me to
pay higher childcare expenses and grocery bills.
I was still faced with financial difficulties and pressure to take
care of my children and keep my job.
If there was a smoother transition from welfare to work that would
have been very helpful.
I am now working full-time with Catholic Charities of Nashville,
but only making about $21,000 for my family of four.
While my income has gone up with the full-time employment since
January 2007, all of my other supports started to go down. This is not
an incentive to work.
Also, some of the value of the increased salaries is lost because
of the cut in supports
Mr. Chairman, I have tried to take some steps forward, but so many
things are holding me back.
I ask that you keep families like me in mind when you work to
create new federal policies to address the needs of the poor and the
working poor.
We are fighting hard and playing by the rules--but are still
struggling--and any small emergency can push us further into poverty.
We need the help of the federal government.
Local organizations like Catholic Charities of Nashville simply
cannot do it all.
Thank for the opportunity to tell my story--I will be happy to
answer any questions you may have.
Thank you.
Chairman MCDERMOTT. Ms. Bezear.
STATEMENT OF MARILYN BEZEAR, NEW YORK, NEW YORK
Ms. BEZEAR. Good morning. My name is Marilyn Bezear. I live
in Harlem on West----
Chairman MCDERMOTT. I don't think your mike is on. Press--
there you go.
Ms. BEZEAR. Okay. My name is Marilyn Bezear. I live in
Harlem on West 143rd Street. I am 52 years old, and a single
mother. My husband passed away in 1997. I have a 21-year old
daughter named Cha'ta. I am a member of Community Voices Heard.
I am here to tell you my story.
I was working in 1995 as a secretary in Harlem Hospital.
After caring for my husband who died from cancer, I began to
receive public assistance. After 5 years, I was able to get a
position in the transitional job program working for the
Department of Parks and Recreation. The job program lasted for
11\1/2\ months. This program, which came through the Human
Resources Administration, the welfare agency in New York,
allowed me to work toward a goal of bringing home a salary and
not have to rely on public assistance.
One problem, however, was the education program of the
program did not work. I wanted my General Equivalency Diploma
(GED). After this time, I used 6 months on unemployment and
attended adult education where I got my GED.
I am working two jobs. One is a government agency doing
clerical work in New York Department of Sanitation. I work
alongside people that are making much higher salaries with
benefits because I work through a temp agency. I am not
entitled to the same benefits and salary, even though we are
doing the same job. I work 20 hours a week and make $8 an hour.
I also do office cleaning at night for another agency for 15
hours a week for making a minimum of $10 to $15 depending on
the site that I am cleaning.
Together, after taxes, I bring home up to $300 a week. With
this I pay my rent, food, telephone, and payments for the loan
I took off for my daughter to go to college. Even this can be
unstable. There have been times when the temp agency has less
work and I had to find a temporary way to meet my needs like
working part time in the bowling alley on late shift which got
me home at 4:30 in the morning.
I have been in New York City public housing since 1994. If
myself and my neighbors didn't have access to public housing, I
wouldn't be able to stay in the neighborhood that I grew up in.
Even with poor maintenance, service, repairs and security
leading to my daughter recently being robbed in the building I
lived in.
Public housing is really the only access I have to
affordable housing due to the fact of many new high and costly
developments now happening in Harlem due to the salary I bring
home. Right now, one of my high priorities to get an education
for my daughter was the college loans that I had taken out. My
debt is almost $35,000. I knew this would be a struggle, but I
wanted my daughter to have a high education to give her the
opportunity to succeed.
Even with these loans, I still had to take out money for my
weekly salary to help her with food and all of the expenses. It
became very challenging. She ended up leaving college at
Florida because her housing went up, because she has limited
public transportation, and I couldn't afford to buy her a car.
She is now back living at home with me in New York City looking
for a job. Hopefully, she will be attending school in New York
City in the fall to have the opportunity to see the hardship
and other young people encompassing their background.
One of my biggest worries right now is my health care. I no
longer have health insurance because of Medicaid
recertification cut my off by mistake. When my daughter turned
21, she was no longer eligible under my case. So, no one in my
household has health insurance now. The temp agency that I am
working for don't provide health insurance for me and my
family.
Although my daughter still lives with me, because she is
now 21, my case only includes me. My income may be still too
high for one person to make me eligible for Medicaid. I am
waiting to be recertified. This is my only option.
As you see, the struggle that I live through does not come
from one cause and any solution for poverty need to consider
all of these elements. It is all based on trying to achieve
real security in life.
A real living wage would make the security and stability
for me and my family. It is not only by the wage, but the tools
I need to get a better paying job. I work to get my GED and
further access to adult training education to provide me with
security for my life.
Education is the key to the future. My daughter and others
like her would be more secure and self-sufficient if more aid
was available and loan payments didn't make such a burden on
the whole family. The security of health coverage is limited by
unreasonable income levels and people like my daughter are
falling through the cracks.
When she had to leave college, she lost her health coverage
and is no longer eligible under my Medicaid. My access to
housing is insecure. Frequently in my church, we have
discussions about the fear of losing affordable housing. I hear
the conversations on the bus, on the corner and in the stores.
I know this conversation might be happening all over the
country.
I would like to take this time to thank everyone here to
listening to my testimony. I am just one of the many who lives
through these struggles. The challenge of trying to send a kid
to college to work more than one job, making money stretch to
the longest distance. Wages, education, training and health
care are a necessity, and I hope my testimony did not fall on
deaf ears. Thank you.
Chairman MCDERMOTT. Thank you.
[The prepared statement of Ms. Bezear follows:]
Statement of Marilyn Bezear, New York, New York
My name is Marilyn Bezear. I live in Harlem on West 143rd St. in
New York City. I am 52 years old and a single mother, (my husband
passed away in 1997). I have a 21 year daughter named Cha'ta. I am a
member of Community Voices Heard and I am here to tell you my story.
I was working in 1995 as a secretary in Harlem Hospital. After
caring for my husband, who died from cancer, I began to receive Public
Assistance. After five years, I was able to get a position in a
transitional job program working for the Department of Parks &
Recreation. The job program lasted for 11\1/2\ months. This program
which came through HRA, the welfare agency in New York, allowed me to
work toward a goal of bringing home a salary and not have to rely on
Public Assistance. One problem, however, was that the education portion
of the program did not work. I wanted my GED. After this time, I used
the six months on unemployment insurance to attend Adult Basic
Education where I got my GED.
I am currently working two jobs. I am working with a temp agency
doing clerical work in the New York City Department of Sanitation. I
work alongside people that are making much higher salaries with
benefits but because I work through a temp agency I am not entitled to
the same benefits and salary even though we are doing the same job. I
work 20 hours a week and make eight dollars an hour. I also do office
cleaning at night for another agency for 15 hours a week making a
minimum of $10 to $15 dollars an hour depending on the site that I am
cleaning.
Together, after taxes, I bring home up to $300 a week. With this, I
pay my rent, food, telephone and payments for the loan that I took out
for my daughter to go to college. Even this can be unstable. There have
been times when the temp agency has had less work and I have to find a
temporary way to meet my needs like working part-time in a bowling
alley on a late shift getting home at 4:30 in the morning.
I have been in New York City Public Housing since 1994. If myself
and my neighbors didn't have the access to public housing, I wouldn't
be able to stay in the neighborhood that I grew up in. Even with poor
maintenance, services, repairs and security (leading to my daughter
recently being robbed in my building), public housing is really the
only access I have to affordable housing due to the fact of many new
and high cost developments happening now in Harlem and due to the
salary I bring home.
Right now, one of my highest priorities is to get an education for
my daughter. With the college loans that I have taken out, the debt is
almost $35,000 now. I knew that this would be a struggle but I want my
daughter to have a higher education to give her the opportunity to
succeed. Even with these loans, I still had to take out money from my
weekly salary to help her with food and other expenses. It became very
challenging. She ended up leaving college in Florida because her
housing went up and because she had limited public transportation in
her city (we couldn't afford to buy a car). She is now back living with
me in New York and looking for a job. Hopefully she will be attending
school in New York City this fall. To have the opportunity to succeed
shouldn't be such a hardship for my daughter and other young people
like her that come from similar backgrounds.
One of my biggest worries right now is about my healthcare. I no
longer have health insurance because a Medicaid recertification cut me
off by mistake. When my daughter turned 21, she was no longer eligible
under my case. So no one in my household has health insurance now. The
temp agencies that I am working for don't provide health insurance for
me and my family. Although my daughter still lives me, because she is
now 21, my case only includes me. My income may be considered too high
for one person to make me eligible for Medicaid. I am waiting to be
recertified, hoping that I am eligible because it is my only option
right now.
As you see, the struggles that I am living through don't come from
one cause and any solution to poverty need to consider all these
elements. It is all based on trying to achieve real security in life. A
real living wage would provide that security and stability for me and
my family. And it is not only about the wage, but about the tools I
need to get better paying jobs. I worked to get my GED and further
access to adult training and education would provide more security in
my life. Education is the key to a good future. My daughter and others
like her would have be more secure and self-sufficient if more aid was
available and loan payments didn't put such a burden on the whole
family. The security of health coverage is limited by unreasonable
income levels and people like my daughter are falling through the
cracks. When she had to leave college, she lost her health coverage and
is no longer eligible under my Medicaid. My access to housing is
insecure. Frequently in my church, we have discussions about the fear
of losing affordable housing. I hear these conversations on the bus and
in the corner stores and I know these conversations must be happening
all over the country.
I would like to take this time to thank everyone here for listening
to my testimony. I am just one of many who live through these
struggles. The challenge of trying to send a kid to college, working
more than one job and making money stretch the longest distance. Wages,
education, training and healthcare are a necessity. I hope my testimony
did not fall on deaf ears. Thank You.
Chairman MCDERMOTT. Mr. Douglas Noble.
STATEMENT OF DOUGLAS NOBLE, GAITHERSBURG, MARYLAND
Mr. NOBLE. Thank you. Thank you for the chance to speak
today about the difficulties I have had and still are having
with getting a job and moving out of homelessness and into my
own home. My name is Douglas Noble, and I was born 50 years ago
in the middle class community in Silver Spring, Maryland and
went to the local Catholic high school. In 1980, I moved out of
my mother's house and began living on my own, renting my own
apartments, owning my own car, and working full-time for nearly
2 decades.
I am dually diagnosed. That means I have a diagnosed mental
health problem, in my case depression, along with a substance
abuse problem. In my case, I am an alcoholic. I have had
depression all of my adult life. When my depression got really
bad until 1998, I drank a lot to try and control things until I
finally lost control of my life in 2001. I first began losing
jobs and then my apartment. I temporarily moved in with my
mother. The agreement was that I could stay there if I took my
medication and stopped drinking. The medication was too
expensive, and I wasn't ready to stop drinking.
I moved out of my mother's house and began staying in the
warehouse where I was working. That went on for some time until
I broke my foot. In December of 2001, I fell and shattered my
right foot so badly that I was in and out of the hospital many
times. After the hospital, I moved into a respite care
emergency shelter and transitional housing. I would like to
point out that the community ministry shelter in Rockville and
the out-patient addiction service program in Rockville both
were very successful in helping me.
A condition of transitional housing was sobriety. So, for
the first time I started to think about stopping drinking. For
the year, I worked on my dual diagnosis and graduated from the
program I was in. The foot injury was still giving me problems
and preventing me from working full time. Given that I had
worked for many years and was now disabled, I applied and
received Social Security disability income, approximately $800
a month. Social Security Disability Insurance (SSDI) gave me
enough income and access to health insurance to live in a
temporary group home paying for rent and expenses. Health
insurance was paid for, my doctors' visits and medications.
In 2005, my depression was under control with medication,
but my foot was still really bothering me. I started working on
new goals, taking my medication for depression, taking college
classes, getting a job and moving into my own home. I began
taking graphics arts classes at a community college and began
working seasonal jobs. I was meeting my goals and things were
looking much better. Late in 2005, the Social Security
Administration (SSA) determined that I was no longer disabled
and canceled my benefits along with my health insurance. It has
been a real struggle since then.
Even though my foot bothers me when I stand on it for a
while, my caseworker says that it is probably not worth
appealing the decision after SSA has made up their minds.
I am still living in temporary housing and working with an
employment counselor. I saved a little money from a job I had
over the holidays and from the remainder of my SSDI it is
enough to cover my living expenses and the medications for
depression, it costs a lot and is getting more and more
expensive.
I have worked most of my life and had some setbacks, but I
am committed to returning to work and getting my own home.
Friday I had a job interview that looks promising. It pays
enough for rent and expenses and has health insurance. With
that in place, I can move into my own apartment. Without it,
life just stays a lot more difficult.
Thank you.
[The prepared statement of Mr. Noble follows:]
Statement of Douglas Noble, Gaithersburg, Maryland
Thank you for the chance to speak today about the difficulties I've
had and still are have with getting a job and moving out of
homelessness and into my own home. My name is Douglas Noble and I was
born fifty years ago in a middle class community in Silver Spring,
Maryland and went to the local catholic high school. In 1980, I moved
out of my mother's house and began living on my own, renting my own
apartments, owning my own car and working full time for nearly two
decades.
I'm dually diagnosed, that means I have a diagnosed mental health
problem--in my case depression--along with a substance abuse problem--
in my case I'm an alcoholic. I've had depression all my adult life.
When my depression got really bad in 1998, I drank a lot to try and
control things, until I finally lost control of my life in 2001. I
first began losing jobs and then my apartment. I temporarily moved in
with my mother. The agreement was that I could stay there if I took my
medication and stopped drinking. The medication was too expensive and I
wasn't ready to stop drinking. I moved out of my mother's house and
began staying in the warehouse where I was working. That went on for
some time until I broke my foot.
In December 2001, I fell and shattered my right foot so badly that
I was in and out of the hospital many times. After the hospital, I
moved into a respite care, emergency shelter and transitional housing.
A condition of transitional housing was sobriety. So, for the first
time I started to think about stopping drinking. For two years I worked
on my dual diagnoses and graduated from the program I was in. T he foot
injury was still giving me problems and preventing me from working full
time. Because I had worked for many years and was now disabled, I
applied and received Social Security Disability Income, approximately
$800. SSDI gave my enough income and access to health insurance to live
in a temporary group home, paying for rent and expenses. Health
insurance was paying for my doctors' visits and medication.
In 2005, my depression was under control with medication, but my
foot was still really bothering me. I started working on new goals:
taking my medication for depression, taking college classes, getting a
job and moving into my own home. I began taking graphics arts classes
at a community college, and began working season jobs. I was meeting my
goals and things were looking much better.
Late in 2005, the Social Security Administration determined that I
was no longer disabled and cancelled my benefits, along with my health
insurance. It's been a real struggle since then. Even though my foot
bothers me when I stand on it for a while, my case worker says that
it's probably not worth appealing the decision after SSA has made up
their minds.
I'm still living in temporary housing and working with an
employment counselor. I saved a little money from a job I had over the
holidays and from SSDI. It's enough to cover my living expenses and the
medication for depression that costs a lot and is getting more and more
expensive.
I've worked most my life and had some set backs. But, I'm committed
to returning to work and getting my own home. Friday I had a job
interview that looks promising. It pays enough for rent and expenses
and has health insurance. With that in place, I can move into my own
apartment. Without it, life just stays a lot more difficult.
Chairman MCDERMOTT. Thank you very much.
Mr. Hawkins and Ms. Dodd, do you want to talk together? You
can split the time any way you want.
STATEMENT OF TAVON HAWKINS AND NICOLE DODD
Mr. HAWKINS. Good morning. Thank you for giving me the
opportunity to testify. My name is Tavon Hawkins. My fiance and
I participate in the Center For Fathers, Families and Workforce
Development, Baltimore Building Strong Family Program. The
program provides us with relationship skills building and a
great deals of emotional support. My parents were not together
when I was growing up. My father was not active in my life. The
absence of my father made me realize the importance of a father
figure. I may not have had a father in my life, but I do
realize the importance of being there for my son. The Building
Strong Family Program has helped me learn that I need to be not
only good father, but also a good partner to Nicole.
My fiance and I have 2 years--been together for 2\1/2\
years. Just recently had our first child. During our time
together, I have been employed on and off. Most of the
employment I have been able to obtain is seasonal. I have a
misdemeanor offense on my record and it makes it hard for me to
find long-time employment. I am the provider for my family and
at times--at times I find that hard to make ends meet.
Ms. DODD. Good morning. Thank you for giving me the
opportunity to testify. My name is Nicole Dodd. My fiance and I
have participated in the Baltimore Building a Strong Family
program. The program helped us to strengthen our relationship
by teaching us the right ways to talk to each other when we are
angry and frustrated. I have worked often on my adult life. I
have experience. However, I do not have a high school diploma.
I realize that that is stopping me for really getting a good
job. I know the importance of having a high school diploma, but
since I have a child, I don't have the child care and cannot
afford to pay for it. Social services will not assist me unless
I take my fiance to child support.
I do not want to do that because Tavon takes good care of
our child. I think--I think that that will be a slap in his
face. I am committed to our relationship and know that we will
make it regardless of our struggles, and I am thankful for the
Building of a Strong Family program for helping us to see that.
We will be getting married on March 24th, 2007.
[The prepared statement of Mr. Hawkins and Ms. Dodd
follows:]
Statement of Tavon Hawkins and Nicole Dodd, Baltimore, Maryland
Mr. Chairman and Members of the Subcommittee:
Thank you for giving me the opportunity to testify. My name is
Tavon Hawkins. My fiance and I have participated in the Center for
Fathers, Families and Workforce Development's (CFWD) Baltimore Building
Strong Families program. The program provided us with relationship
skill building and a great deal of emotional support.
My parents were not together when I was growing-up. My father was
not active in my life. The absence of my father made me realize the
importance of a father figure. I may not have had a father in my life,
but I do realize the importance of being there for my son. The Building
Strong Families Program has helped me learn that I need to be not only
a good father but also a good partner to Nicole.
My fiance and I have been together for 2\1/2\ years and just
recently had our first child. During our time together I have been
employed on and off. Most of the employment I have been able to obtain
is seasonal. I have a misdemeanor offense on my record and it makes it
hard for me to find long term employment. I am the provider for my
family and at times I find it hard to make ends meet.
______
Testimony of Nicole Dodd
Mr. Chairman and Members of the Subcommittee:
Thank you for giving me the opportunity to testify. My name is
Nicole Dodd. My fiance and I have participated in the Center for
Fathers, Families and Workforce Development's (CFWD) Baltimore Building
Strong Families program. The program helped us to strengthen are
relationship by teaching us the right way to talk to each other when we
are angry and frustrated.
I have worked off and on all of my adult life. I have work
experience; however I do not have my high school diploma. I realize
that this is stopping me from really getting a good job. I know the
importance of having a high school diploma, but since having my child I
do not have childcare and cannot afford to pay for it. Social Services
will not assist me unless I take my fiance to child support. I do not
want to do this because Tavon takes good care of me and our child and I
think that would be a slap in the face to him.
I am committed to our relationship and know that we will make it
regardless of our struggles and I am thankful to Building Strong
Families for helping us to see this. We will be getting married on
March 24, 2007.
Chairman MCDERMOTT. Okay. Thank you very much for your
testimony, and thank you all for your testimony.
I would like to ask Ms. Bezear. One of the things that I
think that is hard for us to understand is how does somebody
live on $300 a week in New York City?
Ms. BEZEAR. You are right, because it is a--really, really
a struggle. Like I stated, with that money I pay my rent and I
do my----
Chairman MCDERMOTT. Tell me specifically, you are living in
public assisted housing?
Ms. BEZEAR. I live in public housing.
Chairman MCDERMOTT. So, it is a percentage of how much
money you have that goes to your pay? How much rent do you pay
a month?
Ms. BEZEAR. Right now I pay $285.
Chairman MCDERMOTT. So, one week is for rent. What else do
you to have pay for?
Ms. BEZEAR. I have to pay for my telephone, food expenses
because I am not entitled to food stamps because my income is
so high. I am not going to--like I stated, I also have to pay
for my daughter's college loans.
Chairman MCDERMOTT. Let me ask about the food. What is the
level at which food stamp cuts off? It sounds like you have got
$100 a month. That is too much to get food stamps?
Ms. BEZEAR. Exactly. It is too much. It is too much. They
go on the level of how much you make. So my--what they consider
to be hundred--1,200 added up, that is too high. So, I am not
entitled to food stamps. That is how they work it in New York
City. So, as I stated, the money I do have, it is a struggle
because I have to pay college loans for my daughter, so that is
why I think more money should be going to affordable--more into
affordable housing for people and for colleges for people like
me and my daughter.
Chairman MCDERMOTT. How did you get a loan for colleges for
your daughter?
Ms. BEZEAR. Well, through Sallie Mae. Through Sallie Mae.
The college loan place. Since she is an independent child, they
considered, okay, then I was working at the time so they don't
really--they go by your income, but they want to make sure you
have good credit and you can pay the loan back. So, as I said,
most of my money goes to paying the loans back. That is why she
is not in college, because it was expensive and she had to come
back home. So, once again, I think I feel there should be more
affordable colleges and lower interest rates for college loans.
Chairman MCDERMOTT. Your health care is by the emergency
rooms of New York City hospitals?
Ms. BEZEAR. It is for Medicaid.
Chairman MCDERMOTT. You are still on Medicaid?
Ms. BEZEAR. I was. I was on Medicaid but I am not on
Medicaid any more.
Chairman MCDERMOTT. Because you don't have a child.
Ms. BEZEAR. Medicaid, they cut me off by mistake. They cut
me off by mistake because the recertification. I sent my--what
they call--you send recertification through the mail. When I
sent it through the mail, they lost it. They cut me off. When I
went to the clinic, I found out I was cut off. I didn't realize
it until I had the clinic appointment. When she turned 21, they
cut me off and they consider me single. Since they consider me
single, they state they are going to go by income because my
daughter is no longer on my income on my case.
Chairman MCDERMOTT. Mr. Hawkins and Ms. Dodd, how do you
live now? I didn't hear your income level. How do you get by?
Ms. DODD. Right now we are living with a family member.
Chairman MCDERMOTT. So, you are living in somebody else's
house?
Ms. DODD. Yes.
Chairman MCDERMOTT. Neither of you have employment at this
point?
Ms. DODD. No, sir.
Chairman MCDERMOTT. What kind of employment--are you in any
kind of training program or any kind of program where you might
have assistance to get in to employment like the one that Ms.
Crawley was talking about?
Ms. DODD. The Build a Strong Family program, it helps you
with employment and things like that.
Chairman MCDERMOTT. Your health care presently?
Ms. DODD. No.
Chairman MCDERMOTT. Neither of you have access to health
care?
Ms. DODD. No.
Chairman MCDERMOTT. Do you have access to health care?
Ms. CRAWLEY. Yes, sir.
Chairman MCDERMOTT. Because of----
Ms. CRAWLEY. Well, I still have TennCare, and they approved
me until 18 months after I started. Well, I had to work on my
job and they only go ahead and give it to me for 18 months. I
guess that is just their law or policy there. So, everything
else was cut off except our TennCare.
Chairman MCDERMOTT. Okay. Thank you.
Mr. Weller.
Mr. WELLER. Thank you, Mr. Chairman.
Again, welcome to our panelists, and I want to commend each
of you for your presentation. I remember the first time I
appeared before a legislative Committee and how nervous I was.
I want to congratulate each of you on how well you presented
yourself in talking about something personal, which is your
daily lives.
We are limited in time so I would like to direct my
questions to Mr. Hawkins and Ms. Dodd. First I want to
congratulate you on your plans to get married. That is
wonderful news. You have got a little boy now, a 4-month-old, I
understand. Congratulations. He is doing well?
Ms. DODD. Yes.
Mr. WELLER. Congratulations.
Mr. McDermott kind of started on a question I was
interested in directing to both of you. Tell us more about this
program at the Baltimore Center for Fathers Families and
Workforce Development. What do they offer and have they made
some changes in your life? Do you feel they have helped you?
Ms. DODD. Yes. Actually, they made a big change in our
lives. First, coming to people who you really don't know, just
letting your feelings out on life. They actually--they take you
in and they sit and one on one and you have your conversations
with the facilitators. They kind of pinpoint everything that
you really need. Like, well, housing, where we are still
working on that. On housing situation. Jobs.
On the limit of working on that--as I stated, my son is
only 4 months now. Child care is kind of hard. Actually we
really haven't looked at different day care providers and
things like that, but normally we--they don't take you until
you are about 6 months to a year.
So, that left me out of work for that long. They are trying
to work on different pinpoints. They are helping us with the
wedding and things like that. Things that we need, expenses,
and things like that.
Mr. WELLER. Mr. Hawkins, looking at Ms. Dodd's testimony,
you must be a pretty good father. Pretty good dad.
Mr. HAWKINS. Yes.
Mr. WELLER. The program that you are in--this Baltimore
program, does it help you find ways to be a better father?
Mr. HAWKINS. You have little sessions. You have little
videos, and you sit back and talk about like what would you do
different when it comes down to your child, how would you raise
your child from how that you have been raised. So, it basically
helps you out with a lot because actually getting to sit down,
like you said before, in front of people that you don't know
and express your feelings on life and what you remember and how
can you become better. How can you become better for your
child?
Mr. WELLER. You have indicated in comments regarding this
program that the program helps you in searching for jobs and,
Mr. Hawkins, you indicated you have been looking.
Mr. HAWKINS. You can go up and ask RUN for their training
and once you complete that, you can verify your job.
Mr. WELLER. For you, what has been your biggest challenge
in finding full-time employment?
Mr. HAWKINS. I guess, like before the misdemeanor charge I
have. So, it played a major part like trying to find a job with
a criminal background. It is a little hard.
Mr. WELLER. Ms. Dodd, in your statement, you indicated that
you do not have a high school diploma.
Ms. DODD. Right.
Mr. WELLER. Are you working to obtain a GED?
Ms. DODD. Actually, well, we go back--we are supposed to be
looking for a program so I can get my GED.
Mr. WELLER. Is this Baltimore Center--do they have a
program that they sponsor or do they help?
Ms. DODD. Yes. From my understanding, they help me find a
program, so----
Mr. WELLER. Then your goal is to have your own----
Ms. DODD. Salon.
Mr. WELLER. Have you worked in a salon? Have you been able
to have experience----
Ms. DODD. No. I haven't worked in a salon. I started to go
the hair school. So, you have your basics and all of that, but
I worked out of a house a lot.
Mr. WELLER. The programs where you would learn these
skills, do they require a GED before you can enter the program?
Ms. DODD. No, they don't.
Mr. WELLER. I see my time has expired. Thank you for being
here. You both have presented yourself very well.
Chairman MCDERMOTT. Thank you. Mr. McNulty.
Mr. MCNULTY. Thank you, Mr. Chairman.
Mr. Noble, thank you for being here today and for sharing
very personal aspects of your life. I know that you are taking
medication for your depression. What are you currently doing
with regard to your addiction to alcohol?
Mr. NOBLE. I go to self-help groups, and I have a close
community of friends that I communicate with on an almost daily
basis, almost every day.
Mr. MCNULTY. How is that coming along? How long have you
been sober now?
Mr. NOBLE. Since December of 2001.
Mr. MCNULTY. Congratulations.
Ms. Bezear, I would like to follow up on the Chairman's
questions about just the practicality of trying to live on that
limited income for you and for your daughter, and if it is not
too personal--if it is too personal, just tell me so, but if it
is not too personal, can I ask you about the diet that you are
able to afford on such a restricted income? Is that a struggle?
Ms. BEZEAR. Of course it is a struggle. It just--I am just
barely managing. Like because right now, my priority like I
said, was trying to get a better education for my daughter so
she won't have to go through the same thing I am going through.
I am paying college loans. I am doing my food and everything
with the money I make, and so I barely get by on what I do. I
work two jobs, and I bring home a limited amount of money, that
is what the $300 is what I bring home after taxes taken out.
So, it is very limited.
Mr. MCNULTY. I presume that your nutrition needs therefore
are a major concern?
Ms. BEZEAR. Of course it is. As I said, it is hard. I am
barely making it, but I am able to like kind of do what I gotta
do. Okay, like that. That is basically what I--basically what I
do right now.
Mr. MCNULTY. On another matter, you don't have health
insurance. You don't have Medicaid. What do you do if you get
sick or your daughter gets sick?
Ms. BEZEAR. There is nothing I could do right now because I
am waiting for results and like I said, I am hoping they don't
say that my Medicaid that--$300 is no money but through
Medicaid, they say you got to work a certain amount and now
that my daughter is 21, she is no longer on my case now. So,
that is when they took her off, and that is one thing like I
would like to state that I think there should be programs where
kids like her, they are going to school, they should still
have--continue with their Medicaid and health insurance.
Mr. MCNULTY. Thank you very much. Thank you, Mr. Chairman.
I just wanted to thank you for your leadership on these issues
through the years, and I look forward to working with you in
your role as Chairman of this Committee, and I have been in
public life a long time at the local, State and national
levels, and people today ask me what my priorities are, and
they think I am going to mention some project in the district
or something. It goes back to the basics. In the year 2007, in
the richest Nation on the face of the Earth, no one should be
hungry. No one should be homeless. No one should be without
adequate health care, and I believe that, under the leadership
of Chairman McDermott, you will see some attention to these
issues.
Thank you very much.
Ms. BEZEAR. Okay. Thank you.
Chairman MCDERMOTT. Mr. Herger.
Mr. HERGER. Thank you very much, Mr. Chairman, and Mr.
Chairman, I want to congratulate you on your Chairmanship. I
enjoyed very much the 6 years that we spent together here, and
I recognize and want to congratulate you on your priorities in
these areas. These areas certainly remain my priorities as
well, so I thank you for this hearing.
I want to just commend each and every one of you for being
here this morning, and even though there are very difficult
situations that each of you have found yourselves in and, I
might mention, for even those of us up here, no matter where
you are, we find ourselves in difficult situations. When we
come to this Earth, I think each of us has this little bag of
challenges that we have, and everyone's is different. Yet, each
and every one of us has them, and I want to thank you for the
positive ways, as we have heard in your testimony, that you are
working to deal with your challenges of rolling up your
sleeves, of working to help yourselves better the situations
that have been most challenging in your lives, and I would just
like to ask you: With what experience you have had and with
where you have been, do you have any recommendations? There is
nothing like hindsight.
We look back and we say, ``Gee, if I had to do that over
again, I would do it this way, and I wish we would have had
more common sense back when we were younger than we have now,''
but again, that is how we all are, but having said this, are
there any of you who would like to give any comments on maybe
what you would do differently or recommendations to others that
you might do to help yourselves and that others might do to
help themselves? For example, education, we know that is
important, or some of these decisions we make.
I want to commend the two of you, Mr. Hawkins and Ms. Dodd,
for your working together.
Mr. Hawkins, we heard from you, how you mentioned that, for
whatever reason, you did not have a father in your life, but
yet, you have learned from that that you want to be a father
and are a father to your son. How commendable.
Mr. HAWKINS. Thank you.
Mr. HERGER. If we could just incorporate that into our
communities. Being a father of nine and being married 31 years,
boy, it is a challenge being married, more a challenge to my
wife than it is to me, but the challenges of working together,
the counseling you mentioned the two of you have had, we all go
through that, and yet, that staying together and working to
make it, how rewarding that is. So, I am kind of going around
and around here. Are there any things that you would do
differently or things that you see that would help to make your
life and others' better if you could?
Mr. HAWKINS. I am not even sure at this point.
Ms. DODD. For me, education.
Mr. HERGER. Education?
Ms. DODD. Education.
Mr. HERGER. So, what would you have done differently if you
had it to do over again or recommend to others, I might say?
Ms. DODD. Sit in classrooms.
Mr. HERGER. Pardon?
Ms. DODD. Sit in the classrooms.
Mr. HERGER. Stay in the classrooms. We see that, and that
is really the key to doing well, education.
I want to commend you. I understand you are getting that
high school diploma, and this idea--I want to commend you--
college is so expensive with children, all the money that goes
out, but yet, that is really such a key.
Ms. BEZEAR. Yes, it is. Uh-huh.
Mr. HERGER. Ms. Bezear, do you have any comments?
Ms. BEZEAR. Well, first, I think that the interest rates on
loans are very high. There should be lower interest rates on
kids that want to go to college. I think everybody--school is a
necessity that you need in life to achieve something, because
without--even with a GED, you need more than that. You need
college; you need a college degree, and right now, that is
something I want to get, but I cannot do that simply because I
am working a job, and I am trying to maintain a life style for
my daughter, and for me doing that, I want her to succeed in
her life where I did not.
So, I think there should be more programs for kids, for the
blue collar kids and mostly lower interest rates on college
loans.
Mr. HERGER. Well, my time is up, but really what each of
you are doing are, really, in your ways, being role models by
the fact that you are working for your life and for others
around you, and I want to commend you.
Mr. Noble, just a last comment here. There are so many
today who struggle with this chemical imbalance and the
different things that cause depression. I want to thank you for
your hanging in there and for being drug free and alcohol free
for these years.
Again, I want to thank each of you for coming here and your
courage. Thank you very much.
Thank you, Mr. Chairman.
Chairman MCDERMOTT. Mr. Lewis.
Mr. LEWIS OF GEORGIA. Thank you very much, Mr. Chairman,
and thank you, Mr. Chairman, for holding this hearing today. I
appreciate your work, your leadership, your vision, your
dedication, to this issue.
I appreciate each and every one of you for being here
today, and Ms. Crawley, Ms. Bezear, I appreciate your emphasis
on education. I happen to believe that education is a great
equalizer.
Ms. BEZEAR. That is right.
Mr. LEWIS OF GEORGIA. Ms. Crawley, I attended school in
Nashville for 6 years. I grew up on a farm, very poor, in rural
Alabama, and moved to Nashville in 1957 when I was 17 years
old, and I want to welcome you here----
Ms. CRAWLEY. Thank you.
Mr. LEWIS OF GEORGIA [continuing]. And thank you for being
here.
I do not understand it. I do not understand how people
survive. I do not understand how you make ends meet. I know you
believe, with your faith and everything, that you can make your
way out of nowhere, but can you just tell me what it is like to
survive each and every day?
Ms. CRAWLEY. Yes. Well, my faith is a big part of my life,
and I depend on what my belief is to get me through the day, so
I depend on that, first of all. I always put that first, and I
just do what I have to do. It is hard being a single mom with
two kids, and even though I work full-time, and I have a good
job and they pay way more than minimum wage, it is still not a
lot, and with children, you have to have child care.
If I work a full-time job, I have to have child care, which
is very expensive, so it is hard with that. At the end of the
month, I do not have hardly any money, but I have family that
is in a better situation who can help me, and I just do what I
have to do, and like I said, my faith, I believe, takes me
through, and I know that to be. That is just my strength right
there, and I hope for--I want to go back to school, and I plan
on going back to school this fall because I want a better life
for my children. They deserve a better life, so that is what I
am working for.
Mr. LEWIS OF GEORGIA. When I was growing up, I heard my
mother and father say over and over again ``Go to school. Get
an education so you will not have to go through what I am going
through.''
Ms. CRAWLEY. Right.
Mr. LEWIS OF GEORGIA. I like that idea that you have been
hopeful and are looking to the future. You want things to be
better for your children.
Ms. Bezear, tell me what it is like--I do not understand.
How can you live in New York City? It is a very expensive
place. I think the Chairman raised the question. How can you
live in New York City on what you are making?
Ms. BEZEAR. As she said it, it is faith. Okay. You all make
this totally--it is really a struggle.
Mr. LEWIS OF GEORGIA. It is an everyday struggle.
Ms. BEZEAR. An everyday struggle. I go through it every
day. Again, I am going to work making sure I got things in my
household, things like that. A phone is a necessity. I have to
have a phone in my house. Okay. That is a necessity. I have to
have that. As far as everything else, like for me to buy a new
pair of sneakers, I do not buy that for myself because I cannot
afford to do that for myself, okay? So, as I say, it is a
struggle, and I am barely making it by. So, that is why I place
so much emphasis on education because education is the key for
all of us, for my children and her children and all our
children.
Mr. LEWIS OF GEORGIA. The two of you have been working. I
wonder whether you have ever claimed the earned income tax
credit when you have filed your taxes. You have?
Ms. BEZEAR. Yes, I have.
Ms. CRAWLEY. Yes.
Mr. LEWIS OF GEORGIA. Other family members and neighbors
are claiming it?
Ms. CRAWLEY. I think so.
Ms. BEZEAR. Yes. We do work like that in community voices,
tell people about the earned income credit and stuff like that
let them know what they are entitled to out there. Like a lot
of people did not know about earned income credit. It just
recently came out that they got earned income credit, so that
is one thing we had. We had community voices. We had talked to
them about the earned income credit and how to go about it, and
let them know that they are entitled to this money because that
money is out there.
Mr. LEWIS OF GEORGIA. That is a very good thing to do.
Mr. Chairman, you may be interested in knowing our
Subcommittee is going to hold a hearing on earned income tax
credit this afternoon.
Chairman MCDERMOTT. Oh, good. Maybe they can stay around
and listen, and they can get some good testimony about it.
Mr. LEWIS OF GEORGIA. Thank you, Mr. Chairman.
Chairman MCDERMOTT. Yes.
Next, Mr. Camp.
Mr. CAMP. Thank you very much, Mr. Chairman.
I want to thank all of you for coming here to testify. It
is not easy to come before a Committee of the Congress and talk
about your life, but it really is helpful to us to give us some
insight into what we can do best to help you and others that
are similarly situated, and, I wanted to ask, if it is not too
personal, one of the common themes we have seen about poverty
is that often people do not finish high school, and Ms. Dodd, I
think you said, if you had one thing you would do over, you
would stay in school.
What pressures--if you can just talk about, maybe not
necessarily what you did, saw or faced, but what pressures are
there that caused that to be such a big thing that so many
students do not finish high school? We find that that is often
a decision that has long-reaching consequences. If you could
just, each of you, sort of talk about that, what sort of
pressures, and Ms. Crawley, why don't we start with you.
Ms. CRAWLEY. Okay. Well, for me, it was, of course, that my
daughter was hit by a car, so I could not finish school. I
finished high school, but if I could go back, I would go to
college as soon as I finished high school, and I would not
wait. I got a job at Vanderbilt, and I thought it was a pretty
good job, and I got comfortable, and I got settled in, and I
was not thinking that I would lose my job years later because I
did not get a college degree.
So, I would definitely finish college, but it is hard, and
later on, when you have kids and a family, and of course, I did
not know that I would be divorced with two kids. I just did not
know that would happen.
So, for me, I would definitely--it is just hard trying to
raise kids and feed them because, when I had my kids, my life
became them. I wanted them to have everything in life that I
did not, and I want them to have such a better life than I do,
so I always--right now, I try to look for a better school for
them, so they are in Magna schools even though--I cannot afford
private schools, so I try to do the next best thing.
So, everything for me is just for them. I do everything for
them so they can have a better life and a good life, and it is
hard because there are a lot of things that they want, and I
cannot get it for them because I cannot afford it, so----
Mr. CAMP. All right. Thank you very much. Ms. Bezear.
Ms. BEZEAR. Okay. Me? Okay.
It was like--for me, it was like maybe just peer pressure.
Okay. I dropped out. I came back after I thought about it. I
seen what I was doing, and I knew, in order for me to get a
job, I needed something better than just--I needed to get my
GED, so I went back to school to get my GED, and so that is
why, once again, I stress education because I want to be a role
model for my daughter, so I cannot be a role model saying I
dropped out of school and am staying home, so I chose to go
back to school, to get a job, once again, to be a role model
and let her see what I am doing so she could follow that and
have a suitable and better life.
Mr. CAMP. All right. Thank you.
Mr. Noble.
Mr. NOBLE. Yes. As far as education goes, there was a lot
of pressure on me to go to school when I was in high school,
and a situation occurred in my senior year of high school where
my parents split up and where my father was not in the house
and my brother got really sick, and I stopped going my senior
year, but there was still a lot of pressure on me by my mom,
and she wanted me to go back, and so I went back.
I got my GED in 1978 here in the State of Maryland, and I
got a job, and I worked for many years, and I took some classes
at college, but then my drinking got progressively heavier, and
I kind of lost interest. I just became interested in bringing
home money and not improving my status, and eventually, it got
so that my very life was in doubt because of my addiction.
So, since I have been sober, I have been able to go back to
college, take college courses. I have not been able to get a
job because of the courses yet, but it has not hurt. I have
been able to get the Pell grant, too.
Mr. CAMP. All right. Thank you.
Mr. Hawkins.
Mr. HAWKINS. Well, I guess, for me, it was finances.
College, school--going to school costs, so I guess, for me, it
was like trying to find a job to actually have the money to go
to college. Once I get situated, though, where I do find a good
job to take care of my son, to get him situated, then I will go
back to college to finish trying to pursue my dream.
Mr. CAMP. All right. Ms. Dodd.
Ms. DODD. For me, it was not peer pressure. I did
everything because I wanted to do it. If I had just stayed in
that Spanish class--I did not think that was a credit I needed
to graduate. If I had stayed in that class just to see, I would
have it. That was my only reason. I went to the twelfth grade.
I did not have my Spanish credit to graduate, and that was the
only reason, and by the time I was to go to summer school, they
did not have Spanish as a class that I could pick up, so----
Mr. CAMP. All right. Thank you.
Thank you, Mr. Chairman.
Chairman MCDERMOTT. Ms. Berkley.
Ms. BERKLEY. Thank you, Mr. Chairman, and I also want to
thank all of you for being here. This cannot be an easy thing
to do, because I cannot imagine coming in front of a
congressional Committee, a group of strangers looking at you,
and sharing these experiences.
I keep thinking every time I listen to your stories that if
not for the grace of God--I came from an immigrant family. They
could not speak English. My dad has a ninth-grade education,
but the breaks came my way, and they just--so much of this has
to do with luck and staying healthy and not having broken homes
and being able to keep it together, and there are certain
tipping points in all of our lives where it just tips, and
there does not seem to be anything you can do about it, but I
think that is the purpose of Government. Government is supposed
to provide that safety net and not have anybody in this country
fall through the cracks, and I think that is where we need to
step up to the plate. I do not think this country can afford to
lose a single one of our citizens to bad luck, bad fortune, bad
breaks, and it is our responsibility to make sure everybody has
the opportunity and the ability to--it is not only to reach
that American dream, but just to be able to tap into whatever
part there is of them to move them in a forward position and
take care of our families.
I am the mother of two kids, both of them in college right
now. I know what it is like when they are asking you for
things, and the tuition is beyond what you ever dreamed tuition
could possibly be and knowing how important it is, yet, knowing
you have also got to eat.
So, when I meet with my welfare-to-work moms in my district
of Las Vegas--and I have got a relatively wealthy district, and
yet, there are so many of my own constituents who are just
getting by or not getting by, but when I meet with my welfare-
to-work moms, what they tell me is--when I say, ``What are the
two things that you need more than anything?''
Obviously, they need good education and this and that, but
what they need is child care to take care of their kids, so
they can get out of the house, and transportation because it
does not do you any good if you get the job training and you
cannot get to work.
So, I think one of the things that we should be considering
as a Committee, as time goes on, is how we are going to provide
people with child care so you can get out of the house, get
your GED and get the job that you want, and you need to take
care of that little one and transportation to get to work, and
that is the very least that you should expect from your
Government and that your Government should be able to provide
to you.
So, I thank you very much again for being here. You make me
proud, and you make me embarrassed at the same time that this
Nation has not done enough for its citizens, and I thank you
for being here.
Ms. BEZEAR. Thank you.
Chairman MCDERMOTT. Mr. Porter will inquire.
Mr. PORTER. Thank you, Mr. Chairman, and I, too, appreciate
you all being here today.
I am from the State of Nevada, and we have unique
challenges as does every community. What I appreciate so much
is the fact that you are here today so we can learn from you,
and I need your help.
What can we do to improve access? I know there are multiple
Government agencies. There are different faith-based
organizations, and I was in a meeting the other day in the
Budget Committee where we look at the moneys being spent in
this country, and we are spending about $600 billion, which is
a lot of zeros--and I am not sure how many zeros--$600 billion
a year on welfare programs. If you figure there are about 20
million poor kids, all with a face, all with a family, all with
individual challenges, we are spending somewhere between
$20,000 and $30,000 per poor child a year across this country.
How much of that is really going to the child? I am very
frustrated and very concerned. That is a lot of money a year,
and I am sure that children would like to see some more of that
money. So, I guess my question is:
What can we do as the Federal Government to help access, to
make it easier so we can help you cut through layers and layers
of red tape, whether it be from the Federal side and also from
the faith-based side? I know, as deep-faithed myself and as, I
believe, most everyone here does today, we depend a lot on our
church, I am Catholic, and it is a great network, but what can
we do to help you? What can you teach us so we can help you
have better access to some of these programs? There is a lot of
money out there that is going someplace, and it is not all
going where it should go. So, that is my question.
Ms. Crawley, would you have an idea?
Ms. CRAWLEY. Sure, I think a smoother transition from like
the Welfare to Work. If it was not such--when you start working
and you are thinking, great, you get income, well, you have all
of these other things that take your income immediately like
child care--child care is so expensive--and then you have,
like, child care and insurance. Like my insurance, they did let
me keep it for 18 months.
Well, it expires this year, and the insurance where I work
is so expensive that I will not be able to afford it because it
is like $200 a paycheck, and I do not make that much now, just
$21,000, and I do not know how I will be able to afford it. So,
if there were programs out there for people who are starting to
work but still need some support from the Government, maybe
insurance or some help with child care--maybe if the Government
did not pay all of the child care or all of the insurance but
would give us some help, those are the things that can kind of
hold you back, because even though you are working a full-time
job and you are making money, you are still having to spend so
much money in all of those areas. You almost feel like you are
not getting ahead.
Mr. PORTER. So, child care is really where you need help?
Ms. CRAWLEY. Yes.
Ms. BEZEAR. Okay. Like she says, child care is a necessity.
I think it is high job wages. The wage in New York is just too
low. You cannot survive on--what is it? $7.00. We need higher
wages, and they keep saying we have programs out here, okay,
different programs. There are programs. A lot of people do not
know about the programs. They are not accessible to these
programs.
Everybody does not have computers in their houses to find
those different programs. Okay. There should be more job
training and computer training so people will know how to find
these programs. They say they are out there. They say, ``Well,
do you have a computer at home?'' If you do not have a computer
at home, you do not know how to find these different places.
So, with me, I think it should be more job training, high
living wages and more computer training for people who want to
find out about different things to make their lives so they
will not have to be such a struggle.
Mr. PORTER. Thank you.
Mr. Noble.
Mr. NOBLE. Yes. I would say the job training, I agree with
Ms. Bezear, what she just said, about the job training, and if
there were a program that I could have gotten into when I
realized that I could function, okay--again, that I did not
have to drink and that I could function--I think if I had been
directed into that program and they said, ``Look, we will teach
you this, and then after you learn this, we will get you a
job.'' I know that sounds simple, but I wish that that was the
situation.
Then another issue that is important to me is health care
because, like I say, I have not had health care since 2005. I
just had it up until then. At first, I was covered under the
State social seniors services, and then I got--when I was
awarded SSDI, I had health care, but then when that got cut
off, I have not had health care.
So, I have got to be doubly careful as to how I take care
of myself. Of course, it is important all the time, and a
couple times, I have gone to a local community clinic when I
have had some real troubling significant colds, and I thought I
may have had an ear infection, and so I went there, and those
have come in really handy a couple times, and that is how I
have been able to get by.
Thank you.
Mr. PORTER. Thank you. Mr. Hawkins.
Mr. HAWKINS. Well, I feel like everyone should be treated
equally. Everyone should be given a chance to learn a certain
skill, to learn many things in their lives. I just feel--like I
said before, as far as like you finding a job, I still feel
like some of the wages are too low because it is like, okay,
you have a place. You are renting a house. Half the time your
check is not even enough to cover your gas and electric and
your rent. So, I just feel like we just need assistance in a
lot of areas.
Mr. PORTER. Ms. Dodd.
Ms. DODD. Yes, basically the same thing as everyone said.
Child care is really a major part. That is the biggest issue.
Like, actually, it is real high, so regardless like they said,
whatever job that you do have, after your rent, gas and
electric, your check is gone. With child care, you have to find
a way to maintain that. You do have cover charges, expenses,
late fees--oh, gosh--all in one bunch, yes.
Chairman MCDERMOTT. Thank you very much. Mr. Davis.
Mr. DAVIS. Thank you, Mr. Chairman.
Ladies and gentlemen, Mr. Porter, my colleague from Nevada,
and a number of my other colleagues, have raised the question
of what Government can do, how Government can make certain
programs work more efficiently. I was thinking, as I heard him
ask the question, and as I heard others ask the question, one
thing the Government can do is stop doing harm.
One thing the Government can do is stop cutting programs
that need to be sustained and that need more money. One thing
the Government can do is to stop moving in the wrong direction,
and I made some notes just to remind me, and I wanted to share
some things with you that you probably are not aware of and
that most people in the audience are not aware of.
When I first came to the Congress in 2003, we spent about a
year arguing over something--it is pretty amazing. We were
arguing over whether families making less than $26,000 a year
should get another $400 worth of tax credit for their children,
and you would think that would not be a big argument. We were
not allowed to even vote on it at first, and then we had to
spend a year trying to push, and Mr. Rangel, the Chair of the
Committee, worked very hard on this, and I worked on it. Mr.
Rangel was kind enough to let this freshman Member from Alabama
work with him on the issue. It took us a year to make it
happen.
There is something else you may not know. There was a vote
in the last Congress, and the purpose of the vote was to save
money to help do some of the things we had to do after Katrina,
and you all may not know how the Congress saved some of the
money. There was a decision made to go to 13 million families
who were on Medicaid, a program for low-income people, it helps
them get health care, and the Congress went to those 13 million
people and said, ``You need to pay more money to go to the
doctor. You need to do a higher co-pay,'' and it is estimated
that 65,000 of those people will now fall off the program
because they cannot make the co-pay.
Well, in fact, I have got right here a copy of a document
related to the President's budget that he submitted just last
week, and I was looking through the summary that the Budget
Committee prepared on what the President wants to do, and I
noticed that, on pages 10 through 12, there are three pages'
worth of cuts to everything from low-income energy assistance
to raising copayments, again, for people on Medicaid.
Later on in this document, it talks about the fact that,
with 9 million children who do not have health insurance, the
President does not want to put enough money on the table to
cover even the ones we are already providing coverage for.
Ms. Bezear, you talked about how much money it costs to go
to school. There is a program called the ``Perkins Loan'' that
helps a lot of families at junior colleges go to school, and
the President wants to cut out the program all together, and I
could go on and on and on. There are a lot of--I just do not
want to let the institution off the hook.
I am very proud of all of you for being here, and I
certainly want to join in all of the nice things that people
have said about you, but I do not want to let those of us
sitting on this dais off the hook. I do not want to let this
hearing go by without saying to you:
As for everything that I have described to you, Congress
votes on it. Congress gets to cast a vote, and I left an
important one out. Even though there is no one here this
directly affects, it appears, there was a vote in the Congress
about 7 months ago that said that American citizens, children
who were born in this country--if their parents came here
illegally, there was a vote that would prevent them from
getting food stamps any longer, and that just struck me as a
somewhat bizarre choice because, as you know, if you are born
here, you are a citizen, and you do not control where you are
born, and I do not recall a complementary vote to abolish
hunger with those kids.
So, I just want to end my time by saying please do not have
the illusion that these things just happen, that these choices
get made. They are a function of real live people whom you
elect to office, casting votes and making decisions and putting
money in one pot as opposed to another pot, and I know this
Chairman and the leadership of this Committee is committed to
reversing that direction, and it is, in my opinion, high time
that we reversed it.
Thank you.
Chairman MCDERMOTT. Thank you. Mr. Stark.
Mr. STARK. Thank you, Mr. Chairman, and congratulations on
your new position, one that I held back in the early seventies,
and it was a proud time, and I want to thank the panel for
joining us today and sharing some of your experiences.
We are going to hear later--you might want to stick
around--from some people who are going to suggest that you are
not really poor. They are going to talk about the fact--I will
bet all of you have a television. Just imagine that. You all
have a telephone? Why is that? You have a garbage disposal? We
did when I was a kid. My brother was the garbage disposal.
How many of you have a dishwasher? We had a dishwasher in
my home back in the thirties. I was it. So, I know about those
expensive things that you can provide people that are supposed
to suggest that you are not in poverty.
I hope that we will not be so inhumane in treating people.
I just want to point out to you--because you have all mentioned
education, and we talked a year or 2 ago about the fact that,
of all of the students who entered high school this past
September in the United States, across the land, of those
children who are not white, only half will ever graduate, and
that has been going on for a number of years, and tell me,
because you are struggling with this, what does a youngster--
let us say he or she drops out when they are about to be a
sophomore.
Maybe they have got eighth grade reading and math skills.
What do they do? Will this young lady maybe get pregnant and
really have no way to get an education and support? What does a
young guy do?
Mr. Hawkins, what does a young guy do? He drops out of high
school. He is 15 or 16. What is there for him?
Mr. HAWKINS. Nothing. Basically, nothing.
Mr. STARK. Trouble, maybe?
Mr. HAWKINS. Living on the streets.
Mr. STARK. Yes. So, we have got a big job ahead of us, and
you will help us just by reinforcing our commitment to try and
do the right thing, and thank you so much for taking the time
for being here. I appreciate it.
Mr. Noble, I think this Committee and one of its other
Subcommittees is going to demand parity for mental health care
and Medicaid/Medicare and insurance so that we can expand
treatment for people who need other than acute care treatment,
and I hope that helps, too.
Thanks, Mr. Chairman, for a very fascinating panel.
Mr. WELLER. Mr. Chairman.
Chairman MCDERMOTT. Yes, Mr. Weller.
Mr. WELLER. Mr. Chairman, my good friend from Alabama, Mr.
Davis, was sharing some examples of actions by this Congress
over the last few years, and one statistic I would like to
share with those on the panel--it maybe something you may not
know--is today we spend about $600 billion providing needs-
based assistance to Americans. That is both at the State and
Federal level.
In 1996, when welfare reform was passed into law and passed
by a Republican Congress, and signed into law by a Democratic
President, I considered it a bipartisan accomplishment. The
Federal Government spent a little over $268 billion in
providing assistance to needs-based benefits for families. In
2004, we invested $427 billion, so we increased funding over a
period of almost 10 years by $160 billion in additional help to
low-income families on needs-based benefits. So, I thought it
was something you may not know as well.
Thank you, Mr. Chairman.
Chairman MCDERMOTT. Thank you, all of you, for coming.
As Mr. Stark has said, we started with a panel like this
because we wanted to hear some real people and hear what people
actually on the ground deal with. So, thank you all for coming.
It is difficult to sit and share your personal experiences with
the pain that goes with it, but it is useful to us to know and
for us to know as something to think about when we are working
on law. So, thank you very much for coming.
Our next panel is comprised of a number of experts on the
whole question of poverty. The snow in northern New York made
it impossible for one of our people to get here, Dr. Smeeding
from Syracuse, but he is replaced by Dr. Burtless from the
Brookings Institute.
Chairman MCDERMOTT. Please take your seats up here at the
table, and we will begin. We are facing four votes over in the
Congress. It was supposed to start 5 minutes ago, but it has
not moved, so we hope that we can get started with you, and get
as much of you done before we have to run off. As you know,
today is the day we are voting on the Iraq War, which has
something to say about the--or we are not voting on it. We are
going to talk about it for a few days but, ultimately, vote
about it, and so it has made this a little bit difficult.
Why don't we start with you, Dr. Burtless. Thank you for
filling in on such short notice, and the floor is yours for 5
minutes.
STATEMENT OF GARY BURTLESS, THE BROOKINGS INSTITUTION
Mr. BURTLESS. I am very honored to testify before this
Subcommittee. As you said, I am an economist at the Brookings
Institution. Tim Smeeding cannot be here, and I am a very
imperfect substitute for him. Let me just briefly discuss three
points that he raised in his prepared testimony.
Where does the United States stand in the world poverty
tables, both with respect to overall poverty in the country and
with respect to child poverty?
Second, what factors help to account for the relative
standing of the United States in the poverty league standings?
Finally, what can purposeful public policy do to alleviate
measured poverty in a country? Tim here looks specifically at
what the United Kingdom has done over the last decade.
Let me pass over details of how poverty ought to be
measured in an ideal world, and let us just talk about how we
can measure poverty across countries with the statistics that
are available to us. Let me say, parenthetically, that these
statistics are available to us because of the hard work and
energy of Tim Smeeding.
The definition actually available to us measures relative
poverty. How many people have, after taxes, cash and near cash
incomes that place them below one-half the median income in a
country? Median income is measured to adjust for differences
in-household size, and it reflects the taxes that people have
to pay, and it counts the cash and near cash benefits that they
receive.
This diagram shows overall poverty under this definition.
Poverty is higher in the United States than it is in all but
one of the other 20 countries in the graph. The only exception
is Mexico, which is, by a very wide margin, the poorest country
of the 21 in the table. The United States has a poverty rate
overall of about 17 percent. The average poverty rate of all 21
countries is a little less than 11 percent.
How did we get so far above other advanced countries? The
United States has an even worse relative performance when we
look at the child poverty rate. Again, only one of the other 20
countries has a child poverty rate above that in the United
States, and again, it is Mexico. The average poverty rate among
children in all 21 countries is a little less than 12 percent.
In the United States, the child poverty rate is about 22
percent.
Question Number 2 is: What explains the relatively poor
performance of the United States in the poverty league tables?
Why do we have so much more poverty? Tim highlights two
factors. One is the prevalence of low-paying jobs in the United
States. A second factor is that the United States spends
relatively little on the programs that would directly reduce
poverty in working age households and, in particular, in
households that contain children.
This chart shows spending on cash and near cash public
programs that provide transfers to non elderly households in
these countries. It excludes spending on Medicaid and
education, but it includes near cash benefits, for example,
those on food stamps and housing assistance. It also includes
tax benefits like the earned income credit.
The United States is the second line from the bottom in
this chart. Only Mexico spends less as a proportion of its
national income. The United States over the era covered by this
chart spent between about 2.8 percent and 3.8 percent a year,
higher during recessions, less at the end of long expansions.
The other English-speaking countries here--Canada, Australia,
the United Kingdom--spent about twice as large a share of their
national income, and Northern European countries spent about 3
times the share of national income.
The spending differences are refleced, as this chart shows,
in how prevalent poverty is amongst people who are less than 65
years old in a society. The countries that spend the smallest
proportions of their national incomes on these kinds of direct
poverty alleviation programs also have the highest rates of
poverty amongst non elderly people in the population. The
relationship can hardly be surprising. If public programs top
up the cash and near cash incomes of the unemployed and the
working poor, then fewer of them will be poor.
What about a country that takes a very determined stand and
says, ``Well, let us try to reduce child poverty in any way
that we know how?'' Tim points out that the United Kingdom has
an experience that sheds light on this question. In about 1997,
about a decade ago, Prime Minister Blair and his government
committed that nation to achieving a dramatic reduction in the
British child poverty rate. This chart shows that using a
variety of policies, including some that imitated earlier
programs in the United States, Britain made great progress. Our
earned income credit was imitated largely by the British.
Britain was able to dramatically reduce the prevalence of child
poverty so that now it is less than it is here in the United
States.
Thank you.
Chairman MCDERMOTT. Thank you.
[The prepared statement of Mr. Smeeding, as presented by
Mr. Burtless follows:]
Statement of Timothy M. Smeeding, Ph.D., Director of the Center for
Policy Research, Syracuse University
I. Introduction
Chairman McDermott and members of this Subcommittee, I thank you
for the opportunity to testify before you. I sincerely applaud your
willingness to examine the issue of poverty in the United States in
comparative perspective. I hope my testimony is of great use to those
on this panel and others who care about our most economically
vulnerable families and disadvantaged children, especially.
The United States has a long tradition of measuring income poverty
and weighing the effectiveness, successes, and failures of government
policies aimed at poverty reduction. But for the most part,
examinations of United States domestic antipoverty policy are
inherently parochial, for they are based on the experiences of only our
nation in isolation from the others. The estimation of cross-nationally
equivalent measures of poverty and the comparison of programs that help
reduce poverty, provide a unique opportunity to compare poverty rates
and the design and effectiveness of American social policy and
antipoverty policy with the experiences of other nations. The
Luxembourg Income Study (LIS) database, which undergirds this paper,
contains the information needed to construct comparable poverty
measures for more than 30 nations. It allows comparisons of the level
and trend of poverty and inequality across several nations, along with
considerable detail on the sources of market incomes and public polices
that in large part shape these outcomes.
In this paper we use cross-national comparisons made possible by
the LIS to briefly examine America's experiences in fighting poverty in
the face of substantial and rising economic inequality, in a cross-
national context. In so doing, we compare the effectiveness of United
States antipoverty policies to those of similar nations elsewhere in
the industrialized world. We attempt to answer the following questions:
Do other countries have an ``official'' poverty line in the sense
that the United States does, or do they define poverty in a sort of de
facto sense based on eligibility for various government programs?
How do poverty rates in other countries compare with the United
States poverty rates?
What are the big drivers of poverty in the United States compared
to other countries, with low wages, low-skill immigrants, and large
numbers of single-parent families being the most prominent candidates?
We believe that there are lessons about antipoverty policy that can
be learned from cross-national comparisons. While every nation has its
own idiosyncratic institutions and polices, reflecting its values,
culture, institutions, and history, wide differences in success and
failure are evident from the comparisons that follow. And, there is
evidence that such policies are becoming internationalized in their
spread and evaluation (Banks, et. al. 2005; Francesconi and van der
Klaauw 2007).
We begin by reviewing international concepts and measures of
poverty, as they relate to the main measures used in domestic United
States discourse. We follow with a discussion of the relationship
between policy differences and outcome differences among the several
countries, and consider the implications of our analysis for
antipoverty policy in the United States. While all nations value low
poverty, high levels of economic self-reliance, and equality of
opportunity for younger persons, they seem to differ dramatically in
the extent to which they reach these goals. Most nations have
remarkable similarities in the sources of national social concern:
births outside of wedlock and lone parent families; older women living
alone; high unemployment; immigration pressures; low wages; and the
sustainability of social expenditures in the face of rapid population
aging and rising medical care costs. But they also exhibit differences
in the extent to which working age adults mix economic self-reliance
(earned incomes), family support, and government support to avoid
poverty. And, in such comparisons the United States does not always
look very supportive of work or low-income families.
II. Cross-National Comparisons of Poverty and Inequality: Methodology
and Measurement
Who Measures Poverty and How?
Differing national experiences in social transfer and antipoverty
programs provide a rich source of information for evaluating the
effectiveness of alternative social policies in fighting poverty. While
most rich nations share a concern over low incomes, poverty measurement
began as an Anglo-American social indicator. In fact, ``official''
measures of poverty (or measures of ``low-income'' status) exist in
very few nations. Only the United States (U.S. Bureau of the Census
2003b) and the United Kingdom (Department of Social Security 1996;
Department of Work and Pensions 2005) have regular ``official'' poverty
series. Statistics Canada (2004) publishes the number of households
with incomes below a series of ``low-income cutoffs'' on an irregular
basis, as does Australia.
In Northern Europe and Scandinavia the debate centers instead on
the level of income at which minimum benefits for social programs
should be set and on the issue of ``social exclusion'' (Atkinson,
Cantillon, and Marlier 2005). Northern European and Scandinavian
nations do not calculate low income or poverty rates. Most recognize
that their social programs already ensure a low poverty rate under any
reasonable set of measurement standards (Bjorklund and Freeman 1997).
While there is no international consensus on guidelines for
measuring poverty, international bodies such as the United Nations
Children's Fund (UNICEF), the United Nations Human Development Report
(UNHDR), the Organization for Economic Cooperation and Development
(OECD), the European Statistical Office (Eurostat), the International
Labor Office (ILO), and the Luxembourg Income Study (LIS) have
published several cross-national studies of the incidence of poverty in
recent years. A large subset of these studies is based on LIS data.\1\
For purposes of international comparisons, poverty is almost always
a relative concept. A majority of cross-national studies define the
poverty threshold as one-half of national median income. In this study,
we use the 50 percent of median income to establish our national
poverty lines. We could have selected 30 or 40 percent of national
median income as our relative poverty threshold because it is closer to
the ratio of the official United States poverty line to median United
States household (pre-tax) cash income. This ratio was only 27-28
percent in 2000, as compared to 50 percent in 1963 (Smeeding 2006;
Appendix Table 1). However, we have decided to stay with the
conventional 50 percent level in most of our analyses. Alternatively,
the United Kingdom and the European Union have selected a poverty rate
of 60 percent of the median income (Eurostat 2000, Atkinson et al.
2002). Previous research suggests more or less the same results
regardless of the measure chosen (Smeeding 2006).
While the United States likes to think of itself using an
``absolute'' poverty measure, there is no one absolute poverty measure.
All poverty measures are, in some sense, relative and are chosen to be
appropriate for the context in which they are used. The World Bank and
the United Nations Millennium Development movement define poverty in
Africa and Latin America using an income threshold of $1 or $2 per
person per day, and in Central and Eastern Europe a threshold of $2 or
$3 per day. In contrast, the absolute United States poverty line is six
to nine times higher than these standards and the European poverty line
is almost double the United States line as a percent of median income.
While we do not provide absolute poverty comparisons below, they also
show the United States as having amongst the highest levels of poverty
amongst all rich nations (Smeeding, 2006; Rainwater and Smeeding,
2004).
Other Measurement Issues
Comparisons of poverty across nations with LIS are based on many
choices. A poverty line, a measure of resources such as (market and
disposable) incomes, and an equivalence scale to adjust for family
size, are all important precursors to accurate cross-national
measurement of poverty status.
Poverty measurement is based on the broadest income
definition that still preserves comparability across nations. The best
current definition is disposable cash and near cash income (DPI) which
includes all types of money income, minus direct income and payroll
taxes and including all cash and near cash transfers, such as food
stamps and cash housing allowances, and refundable tax credits such as
the earned income tax credit (EITC).2,3 We use this income
definition in the analyses which follow.
For international comparisons of poverty, the
``household'' is the only comparable income-sharing unit available for
almost all nations. While the household is the unit used for
aggregating income, the person is the unit of analysis. Household
income is assumed to be equally shared among individuals within a
household. Poverty rates are calculated as the percentage of all
persons of each type who are members of households of each type with
incomes below the poverty line. We calculate the poverty rate for all
persons and for children (17 and under) using this same poverty line.
Equivalence scales are used to adjust household income
for differences in needs related to household size and other factors,
such as the ages of household members. In the United States poverty
literature, a set of equivalence scales is implicit in the official
poverty lines, but these are neither consistent nor robust (Citro and
Michael 1995). For our cross-national analysis of relative poverty
rates, however, we use a consistent scale, which is much more commonly
used in international analyses. After adjusting household incomes to
reflect differences in household size, we compare the resulting
adjusted incomes to the 50 percent of median poverty line. The
equivalence scale used for this purpose, as in many cross-national
studies, which include both children and elders, is a single parameter
scale with a square-root-of-household-size scale factor.\4\
We do not address either the well-being of poor in terms of
hardships, or mobility in or out of poverty. Several recent cross-
national poverty studies suggest that mobility in and out of poverty is
lower in the United States than in almost every other rich country
(Bradbury, Jenkins, and Micklewright 2001; Goodin et al. 2001).
III. Data
The data we use for this analysis are taken from the Luxembourg
Income Study (LIS) database, which now contains almost 130 household
income data files for 30 nations covering the period 1967 to 2002
(www.lisproject.org). Using this data one can analyze both the level
and trend in poverty and low incomes for a considerable period across a
wide range of nations. Because we are computing the level of relative
poverty, and real living standards for several major policy relevant
groups, we have selected 13-21 nations for this paper, each with a
recent 1999-2000 LIS database. One can find relative poverty rates for
all of the 30 LIS countries just by going to the LIS website and
looking at the ``key figures'' at: (http://www.lisproject.org/
keyfigures/povertytable.htm).
IV. Results: Level of Overall and Child Poverty
Relative poverty rates in 21 nations are given in figures 1 and 2
for all persons and for children. The overall poverty rate for all
persons using the 50 percent poverty threshold varies from 5.4 percent
in Finland to 20.2 percent in Mexico. The poverty rate is 17.0 percent
in the United States, the second highest of all nations and the highest
of all rich nations. The average rate of poverty is 10.8 percent across
the 21 countries (Figure 1).
Higher overall poverty rates are found as one might expect, in
Mexico, but also in Anglo-Saxon nations (United States, Australia,
Canada, Ireland, and the United Kingdom), and southern European nations
(Greece, Spain, Italy) with a relatively high level of overall
inequality. Still, Australian Canadian and British poverty are about
12-13 percent and are, therefore, below the United States levels.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The lowest poverty rates are more common in smaller, well-
developed, and high-spending welfare states (Sweden, Finland) where
they are about 5 or 6 percent. Middle level rates are found in major
European countries, where social policies provide more generous support
to single mothers and working women (through paid family leave, for
example), and where social assistance minimums are high. For instance,
the Netherlands, Austria, Belgium, and Germany have poverty rates that
are in the 8 to 9 percent range, while France is at 7 percent. Even the
former Soviet block nations of Estonia, Poland and Slovenia, and Taiwan
have much lower poverty rates than does the United States.
On average, child poverty is a slightly larger problem than is
overall poverty in these nations, but the cross-national patterns are
very similar (Figure 2). After Mexico, the United States child poverty
rate is at 21.9 percent compared to the 11.8 percent average over these
21 nations. European child poverty rates are lower and Anglo-Saxon
rates higher among these nations, but the United States is more than
4.0 percentage points higher than any other rich nation.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Moreover, note that the story is not one of poor immigrants, as two
nations with substantially higher fractions of children born to
foreigners, Canada and Australia, have child poverty rates that are
both 14.9 percent, a full 7 percentage points less than the United
States rate.
We do not present trends in poverty rates here for any nations, but
in many nations though not all, child poverty has risen since 2000.
This is most certainly the case in the United States but not in the
United Kingdom (see Section VI below).
V. Towards Explanations: Cross-National Spending Patterns, and Relation
of Spending and Pay to Poverty
We have seen clearly different patterns of poverty in the Unites
States relative to other nations. What explains these differences? In
short, the explanations are related to two things: the amount of
support we give to the poor especially the working poor, and the level
of wages paid in the United States compared to other nations.
Redistributive social expenditures vary greatly across nations. The
available evidence indicates that social expenditures (health,
education, cash and near cash support) as a fraction of total
government spending in OECD nations, ranges from 0.67 in Australia to
0.90 in Denmark and Sweden. That is, 67 to 90 percent of all government
spending is made up of redistributive cash or in-kind benefits (Osberg,
et. al. 2004). Thus, the topic of social expenditure is about most of
what most governments actually do.
We present the trend in non-elderly cash and near cash (food,
housing) benefits for OECD countries back over the past 20 years, using
data from the OECD (2004) in comparable format in Figure 3. Here 17
OECD nations--all of the major nations except for the Central and
Eastern Europeans--have been grouped into 6 clusters: Scandinavia and
Finland (Finland, Norway, Sweden); Northern Europe (Belgium, Denmark,
Netherlands); Central and Southern Europe (Austria, France Germany,
Italy, Greece, Luxembourg, Spain); Anglo Saxony (Australia, United
Kingdom and Canada); the United States and Mexico.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Scandinavian and Northern Europeans follow similar patterns--
high levels of spending showing responsiveness to the recession of the
early 1990s in Sweden and Finland, and a tapering after these events.
The Central and Southern Europeans and the Anglo-Saxon nations show
remarkably similar spending patterns, again with expenditures rising in
the early 1990s, but overall at a level distinctly below that the other
two groups. The United States is significantly below all these others
and, by the late 1990s is spending at a level closer, in terms of a
fraction of GDP per capita, to Mexico than to the other richer OECD
nations.
These figures illustrate the wide differences that one can find for
both levels and trends in social spending, using figures that abstract
from financing of health care, education and retirement for the
elderly. They also correspond very closely to the measures of money and
near-money income poverty used in the analytic literature in this area,
including that presented above.
A substantial fraction of the variance in non-elderly cross-
national poverty rates appears to be accounted for by the cross-
national variation in the incidence of low pay (Figure 4).
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Because the United States has the highest proportion of workers in
relatively poorly paid jobs,\5\ it also has the highest poverty rate,
even among parents who work half time or more (Burtless, Rainwater, and
Smeeding 2001; Smeeding 2006). On the other hand, other countries that
have a significantly lower incidence of low-paid employment and also
have significantly lower poverty rates than does the United States.
But, the prevalence of low-pay workers is, in fact, not the only
reliable predictor of poverty rates. While low pay is a good predictor
of United States poverty rates, and while poorly-educated workers do
not do well at keeping their families from poverty based on earnings
alone, other factors, such as the antipoverty efforts of the
government, are also important predictors of the poverty rate (Figure
5). Here we see that higher social spending reduces poverty.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
As a result of its low level of spending on social transfers to the
non-aged, the United States again has a very high poverty rate. Even
though social spending in general has an inverse correlation with
poverty rates, different patterns of social spending can produce
different effects on national poverty rates. Antipoverty and social
insurance programs are in most respects unique to each country. There
is no one kind of program or set of programs that are conspicuously
successful in all countries that use them. Social insurance, universal
benefits (such as child allowances), and social assistance transfer
programs targeted on low-income populations are mixed in different ways
in different countries. So, too, are minimum wages, worker preparation
and training programs, work-related benefits (such as childcare and
family leave), and other social benefits.
The United States differs from most nations that achieve lower
poverty rates because of its emphasis on work and self-reliance for
working-age adults, regardless of the wages workers must accept or the
family situation of those workers. For over a decade, United States
unemployment has been well below the OECD average, and until recently
American job growth has been much faster than the OECD average. The
strong economy coupled with a few specific antipoverty devices (like
the expanded EITC) has produced most of the United States overall and
child poverty reduction in recent years, though it is decidedly below
the effects found in other nations (Smeeding 2005; 2006). Simply put,
The United States does not spend enough to make up for low levels of
pay, and so we end up with a relatively higher poverty rate than do
other nations.
VI. A Tale of Two Countries
While acknowledging that the United States has greater poverty than
other industrialized nations, many defenders of American economic and
political institutions have argued that inequality plays a crucial role
in creating incentives for people to improve their situations through
saving, hard work, and investment in education and training Without the
powerful signals provided by big disparities in pay and incomes, the
economy would operate less efficiently and average incomes would grow
less rapidly. In the long run, poor people might enjoy higher absolute
incomes in a society where wide income disparities are tolerated than
in one where law and social convention keep income differentials small
(Welch 1999). According to this line of argument, wide income
disparities may be in the best long-term interest of the poor
themselves.\6\ But, of course, there is no evidence that this is true
(Burtless and Jencks 2003), and indeed there is some good historical
evidence that higher social spending produces higher rates of economic
growth and higher social well-being (Lindert 2004).
Our lower-income citizens' ``real'' incomes are at or below the
incomes that most poor people receive in other rich countries that have
less inequality (Smeeding 2005; 2006). The supposed efficiency
advantages of high inequality have not accrued to low-income residents
of the United States, at least so far. While the real incomes of
families with children did rise in the latter 1990s (Blank and Schoeni
2003) they fell again after 2000, and most of the gains have been
captured by Americans much further up the income scale, producing a
conspicuously wide gap between the incomes of the nation's rich and
poor children, elders, and adults.
In recent years, the United Kingdom and especially the United
States economies have performed, in fact, better than many other
economies where income disparities are smaller. Employment growth (even
since 2001)has been relatively faster, joblessness lower, and economic
growth higher than in many other OECD countries where public policy and
social convention have kept income disparities low. Figure 6 compares
child poverty in the United States using the same ``absolute'' or
``real'' poverty standards--the United States official poverty line
(about 38 percent of United States median income in 1997) with the
United Kingdom poverty line set at 60 percent of United Kingdom median
income in 1996-1997.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
In the United States we show official Census Bureau poverty
estimates that reflect the current official United States income
definition. Because United Kingdom incomes are about 67 percent of
United States incomes in 1996, this turns out to be just about the same
?real' poverty standard.\7\
We noted earlier that these nations were very near the top ranked
nations in terms of child poverty (Figure 2). We also note that child
poverty in both nations began to fall without the help of policy from
the mid to the late 1990's owing mainly to the strong wage growth and
tight labor markets in both countries (Figure 6). But, then the
patterns of child poverty beyond 2000 differ completely.
Why so? In 1997, Prime Minister Blair announced his nation would
rid itself of high child poverty, and he instituted a wide set of
policies to reduce child poverty. In 1999, they began to be
implemented. By 2000-2001, child poverty in the United Kingdom (15
percent) was just about the same as in the United States measured
against this same `real' resource level. But as we entered the 21st
century, and when both economies--and especially United States economic
growth--turned sour, the United Kingdom continued to have policy driven
reductions in child poverty while the United States poverty decline
stopped and even reversed. The poverty rate for United Kingdom children
has fallen to 11 percent by 2004, while the official United States
child poverty rate was 17.6 at percent in 2005 according to the United
States Census estimates. The 2005 estimate for the United Kingdom are
not available, but projections show an even lower child poverty rate
for 2005 once these figures are released in April of this year
Five years earlier, these low-income United Kingdom kids were worse
off than were United States kids in real terms (Smeeding and Rainwater
2004). The reason for their improvement is that they have a leader who
has set a national goal of improving living standards, and eradicating
child poverty in Britain over the next decade; and who has matched his
political rhetoric with some large measure of real and continuing
fiscal effort that has already had an important impact (Waldfogel, et
al. 2006; Francesconi and van der Klaauw 2007). In Britain, Prime
Minister Blair has spent an extra .9 percent of GDP for low-income
families with children since 1999 (Hills 2003). Nine tenths of a
percent of United States GDP is about $120 billion. This is
substantially more than we now spend on the EITC, food stamps, child-
care support and TANF combined. The result of this spending in Britain
is that child poverty rates in 2000 were 45 percent below their 1999
level, while real living standards for these children and employment of
these mothers also rose (United Kingdom, Department of Work and
Pensions 2005; Francesconi and van der Klaauw 2007). The real
consumption levels of these children also increased dramatically over
this period (Waldfogel, et al. 2006).
VII. Summary and Conclusions
As long as the United States relies almost exclusively on the job
market to generate incomes for working-age families, changes in the
wage distribution that affect the earnings of less skilled workers will
inevitably have a big negative effect on poverty among children and
prime-age adults. Welfare reform has pushed many low-income women into
the labor market and they have stayed there as TANF roles continue to
fall. Even with the $25.4 billion spent on TANF today, less than $10
billion is in the form of cash assistance; the rest is now in the form
of child care, transportation assistance, training and other services
(Pear 2003). While the switch from cash to services has undoubtedly
helped account for higher earnings among low-income parents, it has not
helped move many of them from poverty. In fact, serious gaps still
exist, especially in the childcare arena and in family leave policy
Labor markets alone cannot reduce poverty because not all of the
poor can be expected to ``earn'' their way out of poverty. Single
parents with young children, disabled workers, and the unskilled all
face significant challenges earning an adequate income, no matter how
much they work. The relationship between antipoverty spending and
poverty rates is of course complicated, but the evidence discussed
above is very suggestive. United States poverty rates, especially
amongst children, are high when compared with those in other
industrialized countries. Yet United States economic performance has
also been good compared with that in most other rich countries. As the
British have demonstrated, carefully crafted public policy can
certainly reduce poverty if the policy effort is made.
Of course, the high direct and indirect costs of our child poverty
are now widely recognized in public debate (Holzer, et al. 2007). The
wisdom of expanding programs targeted at children and poor families
depends on one's values and subjective views about the economic,
political, and moral tradeoffs of poverty alleviation. It is hard to
argue that the United States cannot afford to do more to help the poor;
particularly those that also help low-skilled workers. But is has not
done so, so far (Shapiro and Parrott 2003; Holzer, et al. 2007). If the
nation is to be successful in reducing poverty, it will need to do a
better job of combining work and benefits targeted to low-wage workers
in low-income families (e.g., see Ellwood 2000; Danziger, Heflin, and
Corcoran 2000). There is already evidence that such programs produce
better outcomes for kids (Clark-Kauffman, Duncan, and Morris 2003;
Francesconi and van der Klaauw 2007; Waldfogel, et al. 2006).
Given the political disposition of the American public, a 5 percent
overall relative poverty rate is not a plausible goal. A gradual
reduction in the overall poverty rate from 17 percent overall and 21
percent for children, to a level of 10-12 percent using the 50 percent
of median standard is certainly feasible, however. Although this rate
would represent a considerable achievement by the standards of the
United States, it is worth remembering that a 12 percent overall
poverty rate is higher than the average overall and average child
poverty rates in the 21 nations examined here, and would put us just
below the poverty levels of our Irish, Australian, British, and
Canadian counterparts.
Endnotes
\1\ See for UNICEF (2005), Bradbury and Jantti (2005) for the
United Nations (1999); for the OECD, see Forster and Pellizzari (2005);
for the European Union, see Eurostat (2000) and, for LIS, Jantti and
Danziger (2000), Smeeding (2005, 2006), and Rainwater and Smeeding
(2004).
\2\ See Atkinson, Rainwater, and Smeeding (1995) and Canberra Group
(2001) for more on this income definition and its robustness across
nations. Note that the use of this ``LIS'' disposable income concept is
not unique to LIS alone. Eurostat and OECD have independently made
comparisons of income poverty and inequality across nations using
identical or very similar measures of net disposable income.
\3\ This income definition differs from the Census income
definition used in most poverty studies. Still, the internationally
comparable measure of income does not subtract work-related expenses or
medical care spending. In particular, there is no account for provision
of or costs of childcare. The EITC and similar refundable tax credits
and nearcash benefits such as food stamps and cash housing allowances
are included in this income measure, however, as are direct taxes paid.
\4\ Formally, adjusted disposable income (ADPI) is equal to
unadjusted household income (DPI) divided by household size (S) raised
to an exponential value (e), ADPI = DPI/Se. We assume the value of e is
0.5. To determine whether a household is poor under the relative
poverty measure, we compare its ADPI to 50 percent of the national
median ADPI. National median ADPI is calculated by converting all
incomes into ADPI and then taking the median of this ``adjusted''
income distribution. The equivalence scale that we employ is robust,
especially when comparing families of different size and structure
(e.g., elders and children). See Atkinson, Rainwater, and Smeeding
(1995) for detailed and exhaustive documentation of these
sensitivities.
\5\ There are no figures for low pay in the other nation studied
here, especially none for Mexico.
\6\ A lucid presentation and analysis of this viewpoint can be
found in Okun (1975). See also Welch (1999).
\7\ Notice that these estimates are entirely consistent with those
presented in Figure 2 earlier for the United Kingdom 1999 and United
States 2000, using the LIS data. The difference is that we can go
beyond the LIS to later years now using these comparable figures fro
these two nations alone.
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Chairman MCDERMOTT. Our next witness is Mr. Berube. Did I
pronounce it right.
Mr. BERUBE. ``Bah-rue-bee.''
Chairman MCDERMOTT. Berube.
STATEMENT OF ALAN BERUBE, FELLOW, METROPOLITAN POLICY PROGRAM,
THE BROOKINGS INSTITUTION
Mr. BERUBE. Thank you, Mr. Chairman and other Members of
the Committee. My name is Alan Berube. I am a fellow also at
the Brookings Institution, and I am Research Director for the
Metropolitan Policy Program there. I am going to make three
brief points in my oral testimony.
First, a significant fraction of poor families in America
live in environments of extreme concentrated poverty. Second,
at the same time, the locus of U.S. poor and low-income
populations is shifting toward the suburbs, and third, I think
public policies can confront specific challenges to economic
mobility that arise from this new geography of poverty.
So, to begin, the Federal Government's definition of
``poverty,'' as you all know, measures a family's resources
against an assessment of its basic needs. For most Americans,
though, I think the idea of poverty also elicits visions of
inner cities, Appalachia, the Mississippi Delta, American
Indian reservations. That is to say that poverty describes
places as well as people, leading researchers to find
concentrated poverty as the proportion of poor people who live
in very poor neighborhoods, those where at least 40 percent of
all individuals are below the poverty line, and in the words of
one researcher, the measure identifies the poor who not only
have to cope with their own poverty, but also that of those
around them.
Nationwide, about 1 in 10 poor individuals in 2000 lived in
communities of such extreme poverty, and though that rate fell
during the nineties, concentrated poverty remains widespread
today as the example New Orleans made clear. Indeed, 48 of 50
States and 46 of the Nation's 50 largest cities contained at
least one area of concentrated poverty in 2000. In Fresno,
California, for instance, nearly half of the poor residents of
that city lived in extremely poor neighborhoods.
Researchers have identified a series of problems arising
from concentrated poverty, including worker disconnection from
jobs and job networks, higher priced and lower quality local
goods and services, local schools that are at greater risk for
failure, negative health outcomes, and elevated costs for local
governments to create municipal fiscal burdens.
While these highly distressed urban and rural areas remain
a significant feature of the U.S. poverty landscape worthy of
our continued attention, recent decades have also seen a steady
shift of the Nation's low-income populations toward suburbia.
In a recent study that we conducted at Brookings, it found
that, for the first time in 2005, a majority of poor residents
in the Nation's 100 largest metropolitan areas actually lived
in the suburbs. In fact, many cities such as Detroit, Los
Angeles, Miami, and Washington, D.C. all have fewer residents
living in poverty than their suburbs do.
I know some might consider the suburban poor to have
escaped the problems associated with inner city and remote
rural poverty. Evidence suggests that they, too, face other
unique challenges. First, many suburban, low-income families
remain stuck on what some people call the ``wrong side of the
region''--to the south, areas like Atlanta, to the east in
regions like Washington, D.C.--and they face housing, education
and transportation challenges not dissimilar from their inner
city counterparts.
Second, social services providers in most regions are still
concentrated in central cities. Even smaller, often faith-
based, suburban providers struggle to serve growing numbers of
local families in need, and third, low-income workers in the
suburbs are often forced to double and triple up in single-
family housing due to a lack of affordable rental units there.
In recent months, the issue of economic mobility in America
has drawn new attention. I think that focus has been fueled by
estimates that, for instance, only 20, perhaps 25 percent of
children who were born into the bottom fifth of the Nation's
income distribution will achieve at least a median income as
adults. Most studies and evaluations conclude that
neighborhoods, themselves, communities, have smaller effects on
the economic mobility of the poor than do family
characteristics.
So, I think, therefore, public policies that foster healthy
family environments and more equitable opportunities for
children regardless of where they live, such as early education
or labor market supports for disconnected adults, deserve
primary consideration. Yet, I believe public policy can also
confront particular challenges of place that may blunt the
impact of more universal investments and mobility.
First, targeted wage boosts can expand low-wage workers'
neighborhood options, and an enhanced earned income tax credit,
for instance, could make more housing in more neighborhoods
affordable to working families, especially if a portion of the
credit were delivered throughout the year. Second, programs
that provide temporary support and training to low-income
families, such as those funded under TANF and the Workforce
Investment Act, should serve workers and employers across city
and suburban lines.
I think Congress could examine information sharing and
incentives within these programs with an eye toward growing
more high-performing regional institutions, workforce
intermediaries--Project QUEST in San Antonio, WIRE-Net in
Cleveland are a couple of examples.
Third, participation gaps could be narrowed in key supports
like the earned income and child tax credits, food stamps,
subsidized health insurance especially for the suburban working
poor where those gaps may be greater. Congress could require
Federal agencies to more closely track participation in these
programs, strengthen incentives to achieve higher participation
rates and provide modest supports in nonprofits, such as the
Center for Economic Progress in Chicago, that facilitate
program involvement for working families.
So, in closing, I would like to thank the Subcommittee for
the opportunity to testify, and I look forward to your
questions.
Chairman MCDERMOTT. Thank you.
[The prepared statement of Mr. Berube follows:]
Statement of Alan Berube, Fellow, Metropolitan Policy Program,
The Brookings Institution
Mr. Chairman and other members of the Committee, thank you for the
invitation to testify today on the changing geography of poverty in the
United States and its implications for economic mobility and well-
being, the subject of recent research we have conducted at the
Metropolitan Policy Program at the Brookings Institution.
In this testimony, I will make three points regarding poverty,
geography, and mobility in the United States.
A significant fraction of poor families in America live
in environments of extreme, concentrated poverty.
At the same time, the locus of U.S. poor and low-income
populations is shifting toward the suburbs, along with Americans in
general.
Each geographic setting provides both challenges and
opportunities for promoting the economic mobility of low-income
families, with attendant implications for public policy.
The enduring challenge of concentrated poverty
The federal government's definition of poverty measures a family's
resources against an assessment of its basic needs. For most Americans,
though, the image of poverty entails more than these individual or
family circumstances. It also elicits visions of inner cities,
Appalachia, and American Indian reservations. That is, poverty
describes places as well as people. What is more, poverty implies
something about the local conditions faced by many poor individuals and
families in these places: unsafe neighborhoods, failing schools,
substandard housing, inadequate private services, and diminished
community hope.
Concentrated poverty represents the confluence of these two ideas
of poverty in America. It concerns the tendency, in many corners of our
country, for poor populations to be clustered into very poor
communities. While Hurricane Katrina and its aftermath in the city of
New Orleans motivated much of the recent focus on concentrated poverty
and its effects, many poor Americans face the double burden of family
and community distress in a wide variety of places, both urban and
rural.
As defined by Paul Jargowsky of the University of Texas-Dallas, the
statistical measure of concentrated poverty expresses the proportion of
poor people who live in neighborhoods where at least 40 percent of all
individuals live below the poverty line. In his words, the measure
identifies ``the poor who not only have to cope with their own poverty,
but also that of those around them.''
Nationwide, about one in ten individuals below the poverty line in
2000 lived in communities of such extreme poverty. That rate fell
during the 1990s, after roughly doubling between 1970 and 1990.\1\ The
strong economy in the latter half of the decade, coupled with policy
reforms that broke up the most severe concentrations of distressed
inner-city housing, appear to have weakened the link between poverty
and place in most major metropolitan areas.
---------------------------------------------------------------------------
\1\ Paul Jargowsky, ``Stunning Progress, Hidden Problems: The
Dramatic Decline of Concentrated Poverty in the 1990s'' (Washington:
Brookings Institution, 2003).
---------------------------------------------------------------------------
As the example of New Orleans made clear, however, a significant
fraction of poor families--especially poor minorities--continue to live
in areas of extreme poverty. Moreover, these pockets of distress can be
found in every corner of the country. Indeed, 46 of the nation's 50
largest cities contained at least one neighborhood that met the 40-
percent concentrated poverty threshold. At the moment, my program at
Brookings is collaborating with the Federal Reserve System to study the
causes and effects of concentrated poverty across America, in
communities as varied as Rochester, NY; Miami, FL; the Mississippi
Delta; McKinley County, NM; and Fresno, CA. Fresno was the only U.S.
city with a higher degree of concentrated poverty than New Orleans
before the storm, with almost half of its poor residents living in
extreme-poverty neighborhoods.
The forces that gave rise to these communities are numerous,
diverse, and well-studied, including:
The long-term economic decline of former urban
manufacturing centers \2\ and rural areas that depended on agriculture
and extraction industries;
---------------------------------------------------------------------------
\2\ See, e.g., John Kasarda, ``Urban Industrial Transformation and
the Underclass.'' Annals of the American Academy of Political and
Social Science 501 (1989): 26--47.
---------------------------------------------------------------------------
Suburbanization and out-migration of middle-class
households from cities in the 1970s and 1980s; \3\
---------------------------------------------------------------------------
\3\ See, e.g., Kathryn Nelson, ``Racial Segregation, Mobility, and
Poverty Concentrations.'' Paper presented at the Annual Meeting of the
Population Association of America (1991).
---------------------------------------------------------------------------
Housing, lending, and land-use policies that reinforced
patterns of racial and ethnic segregation; \4\
---------------------------------------------------------------------------
\4\ See, e.g., Douglas Massey and Mitchell Eggers, ``The Ecology of
Inequality: Minorities and the Concentration of Poverty, 1970-1980.''
American Journal of Sociology 95 (1990): 1153-1189; Rolf Pendall,
Robert Puentes, and Jonathan Martin, ``From Traditional to Reformed: A
Review of Land Use Regulations in the Nation's 50 Largest Metropolitan
Areas'' (Washington: Brookings Institution, 2006); Margery Austin
Turner, Susan J. Popkin, and G. Thomas Kingsley, ``Distressed Public
Housing: What It Costs to Do Nothing'' (Washington: Urban Institute,
2005); Glenn Canner, ``Redlining: Research and Federal Legislative
Response.'' Staff Studies 121 (Board of Governors of the Federal
Reserve System, 1982).
---------------------------------------------------------------------------
New waves of lower-skilled immigrants and refugees to the
U.S. in the latter part of the 20th century; \5\ and
---------------------------------------------------------------------------
\5\ See, e.g., Audrey Singer, ``The Rise of New Immigrant
Gateways'' (Washington: Brookings Institution, 2004).
---------------------------------------------------------------------------
Secular trends in family formation that resulted in more
children growing up in single-parent, single-earner households,
especially in inner-city neighborhoods.\6\
\6\ See, e.g., William Julius Wilson, When Work Disappears (New
York: Alfred A. Knopf, 1996).
The consequences of growing up and living in environments of
extreme poverty may vary as widely as the factors themselves that gave
rise to these communities. Nonetheless, researchers have identified a
series of problems evident in most areas of high poverty that result
from their concentrated economic disadvantage, and that affect not only
the inhabitants of these neighborhoods, but their surrounding areas as
---------------------------------------------------------------------------
well:
Concentrations of lower-income households and less-
skilled workers lead the private sector to disinvest in these
communities. In turn, fewer mainstream businesses compete for their
purchases, raising prices for some basic goods and services. The
disinvestment may also widen the ``spatial mismatch'' between workers
in these neighborhoods and growing employment centers.\7\
---------------------------------------------------------------------------
\7\ Keith Ihlanfeldt and Daniel Sjoquist, ``The Spatial Mismatch
Hypothesis: A Review of Recent Studies and their Implications for
Welfare Reform.'' Housing Policy Debate 9(4)(1998): 849-92; Matt
Fellowes, ``From Poverty, Opportunity: Putting the Market to Work for
Lower-Income Families'' (Washington: Brookings Institution, 2006).
---------------------------------------------------------------------------
Low levels of labor force attachment may sever these
areas from the informal networks that help workers find good jobs and
advance in their careers. Some argue that these high levels of
joblessness change community norms about work, so that children under-
invest in the education and training necessary for labor market
success.\8\
---------------------------------------------------------------------------
\8\ Philip Kasinitz and Jan Rosenberg, ``Missing the Connection:
Social Isolation and Employment on the Brooklyn Waterfront.'' Social
Problems 43(2)(1996): 180-196; Wilson, When Work Disappears.
---------------------------------------------------------------------------
Even with the expanded school choice options available
today, children who live in extremely poor urban neighborhoods
generally attend neighborhood schools where nearly all the students are
poor. This places students at greater risk for failure, as expressed by
low standardized test results, grade retention, and high drop-out
rates. These schools struggle to attract the best personnel, endure
high rates of student mobility that frustrate classroom stability, and
must operate additional systems to cope with disorder and the social
welfare of their students.\9\
---------------------------------------------------------------------------
\9\ Brian Jacob, ``The Challenges of Staffing Urban Schools.'' The
Future of Children, forthcoming 2007; Ruth Lupton, ``Schools in
Disadvantaged Areas: Recognizing Context and Raising Quality'' (London:
LSE Centre for the Analysis of Social Exclusion, 2004).
---------------------------------------------------------------------------
High-poverty areas generally exhibit higher crime rates,
especially violent crime. In these neighborhoods, the social penalties
for criminal activity may be lower, and reduced access to jobs and
quality schools may lower the opportunity costs of crime.\10\
---------------------------------------------------------------------------
\10\ Ingrid Ellen and Margery Austin Turner, ``Does Neighborhood
Matter? Assessing Recent Evidence.'' Housing Policy Debate 8(4)(1997):
833-866; Robert Sampson and William J. Wilson, ``Toward a Theory of
Race, Crime, and Urban Inequality.'' In J. Hagan and R. Peterson, eds.,
Crime and Inequality (Stanford University Press, 1995).
---------------------------------------------------------------------------
People in areas of extreme poverty experience negative
health outcomes at much higher rates. This owes partly to the stress of
being poor and marginalized, and partly to living in an environment
with dilapidated housing and high crime. Researchers have associated
the incidence of depression, asthma, diabetes, and heart ailments with
living in these neighborhoods.\11\ Others have found that these
neighborhoods may serve to increase the risk of premarital childbearing
among young female residents, and decrease their rates of marriage.\12\
---------------------------------------------------------------------------
\11\ Roberto Quercia and Lisa Bates, ``The Neglect of America's
Housing: Consequences and Policy Responses.'' Working Paper 2002-02
(University of North Carolina at Chapel Hill, 2002); Deborah Cohen et
al., ``Neighborhood Physical Conditions and Health.'' Journal of
American Public Health 93(3)(2003): 467-71.
\12\ Scott Smith and Kyle Crowder, ``Neighborhood Effects on Family
Formation: Concentrated Poverty and Beyond.'' American Sociological
Review 64 (1999): 113-132.
---------------------------------------------------------------------------
As research from municipal finance experts has shown,
concentrations of poverty generate high costs for local governments.
These higher costs appear in areas such as welfare, health, and public
safety, and can divert resources from the provision of other public
services and raise tax burdens on local businesses and non-poor
residents.\13\
---------------------------------------------------------------------------
\13\ Janet Pack, ``Poverty and Urban Public Expenditures.'' Urban
Studies 35(11)(1998): 1995-2019; Pascale Joassart-Marcelli, Jennifer
Wolch, and Juliet Musso, ``The Fiscal Consequences of Concentrated
Poverty in a Metropolitan Region.'' The Annals of the Association of
American Geographers 95(2)(2005): 336-356.
---------------------------------------------------------------------------
The suburbanization of poverty
In keeping with these statistics on concentrated poverty, urban and
rural visions of poverty in America tend to dominate popular
perceptions and media accounts. Such viewpoints were well-supported in
1970, when central cities and rural areas contained roughly four in
five poor Americans.\14\
---------------------------------------------------------------------------
\14\ U.S. Census Bureau, Historical Poverty Tables, Table 8:
Poverty of People, by Residence.
---------------------------------------------------------------------------
As described above, these areas remain a significant feature of the
U.S. poverty landscape, especially the most distressed portions. Yet
recent decades have seen a steady shift of the nation's overall low-
income population towards the dominant geography of American life
today: suburbia.
The findings from a recent study we conducted at the Brookings
Institution amplify this shift.\15\ Focused on the nation's 100 largest
metropolitan areas (home to two-thirds of U.S. population), the study
found that between 1999 and 2005 the poverty rate in these areas rose
overall, with similar increases in central cities and suburbs. In 2005,
central-city residents remained about twice as likely as their suburban
counterparts to live below the poverty line.
---------------------------------------------------------------------------
\15\ Alan Berube and Elizabeth Kneebone, ``Two Steps Back: City and
Suburban Poverty Trends, 1999-2005'' (Washington: Brookings
Institution, 2006).
---------------------------------------------------------------------------
As to the location of the overall poor population, however, the
study found that in 2005, 52 percent of metropolitan residents living
below the poverty line were found in suburbs, versus 48 percent in
central cities. This signaled a notable tipping of poor populations
towards the suburbs since 1999, when a bare majority of the
metropolitan poor lived in cities.
None of these findings discounts the continuing incidence of
poverty in smaller cities, towns, and rural areas. But nationwide
today, a plurality of poor Americans live in suburbs. And it certainly
challenges conventional notions of poverty as solely an urban issue to
find that cities like Detroit, Los Angeles, Miami, and Washington, D.C.
all have fewer residents living below the poverty line than their
suburbs do.
This ``tipping'' did not occur overnight, of course, and is rooted
in several broader changes in American society and metropolitan
economies. Among the chief factors are:
Population continues to suburbanize. Over the past 15
years, suburbs of America's major metropolitan areas have grown roughly
twice as fast as their central cities.\16\ The sheer scale and pace of
suburban growth has absorbed a broader economic cross-section of the
nation's population.
---------------------------------------------------------------------------
\16\ Suburbs of major metropolitan areas grew by roughly 24 percent
from 1990 to 2004, compared to 12 percent for their central cities. See
William H. Frey, ``Metro America in the New Century: Metropolitan and
Central City Demographic Shifts Since 2000'' (Washington: Brookings
Institution, 2005).
---------------------------------------------------------------------------
Employment is suburbanizing. Not surprisingly, jobs--
especially low-paying jobs--have followed people to the suburbs. In
2002, more than half of all employment in metropolitan areas was
located at least 10 miles from the downtown. Lower-wage industries like
retail, hospitality, and personal services account for the bulk of job
growth in many fast-growing suburbs.
Immigrants are suburbanizing. In longstanding immigrant
gateways like Boston, Chicago, and New York, newcomers to the United
States most often started in central-city neighborhoods with their
compatriots, eventually graduating to suburbia as they achieved middle-
class status. Today, immigrant populations are growing most rapidly in
Sunbelt metro areas without a real history of immigration, like
Atlanta, Charlotte, and Dallas. In these regions, lower-skilled
newcomers are skipping the city altogether for jobs and residences in
booming suburban areas.\17\
---------------------------------------------------------------------------
\17\ See Singer, ``The Rise of New Immigrant Gateways.''
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Municipal distress is suburbanizing. Finally, in a number
of older metropolitan areas, particularly those in the Northeast and
Midwest, slow job growth, aging housing and infrastructure, and inner-
city problems have produced growing low-income populations in their
``first suburbs.'' Along many dimensions, these places today look more
urban than suburban.\18\
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\18\ Rob Puentes and David Warren, ``One-Fifth of the Nation:
America's First Suburbs in Transition'' (Washington: Brookings
Institution, 2006).
As a newer phenomenon, suburban poverty and its effects have
received much less attention from the research community. In some
respects, the suburban poor might be considered to have ``made it,''
escaping or avoiding altogether the problems associated with inner-city
or remote-rural poverty.
Nonetheless, initial evidence suggests a few unique challenges
associated with having a low income in the suburbs.
First, a low-income family's move from the city to the suburbs does
not always involve moving up on indicators of neighborhood quality.
Many major metropolitan areas today see high-income households and
higher-wage employment concentrate on one side of the region, while
lower-income housing, limited job opportunities, and fiscal distress
gather on the other side. These axes--from north to south in regions
like Atlanta and Chicago, and from east to west in regions like St.
Louis and Washington, DC--do not respect city/suburban boundaries. In
this way, suburban low-income families stuck on the wrong side of the
region can face similar challenges as their inner-city counterparts
finding quality housing, decent schools for their children, and
competitively-priced local goods and services. In particular, limited
access to public transportation in the suburbs, or even reliable
private transportation, may constrain their employment and child-care
opportunities.\19\
---------------------------------------------------------------------------
\19\ About 20 percent of the poor, and 12 percent of the near-poor
(with incomes between 100 and 200 percent of the poverty line) live in
households without access to an automobile. Alan Berube and Steven
Raphael, ``Access to Cars in New Orleans'' (Washington: Brookings
Institution, 2005).
---------------------------------------------------------------------------
Second, suburban locations may impede families' access to the
services and supports that help them weather temporary income losses.
Research by Scott Allard at Brown University shows that social services
providers remain concentrated in central-city neighborhoods, lagging
the movement of important parts of their potential client base into the
suburbs.\20\ Recent media coverage of suburban poverty increases has
highlighted the stress placed on smaller, often faith-based providers
in these communities from trying to serve burgeoning numbers of low-
income families.\21\ These access issues loom especially large for
suburban areas in the Midwest and South where recent job losses have
created pressing needs among formerly middle-income workers and
families.
---------------------------------------------------------------------------
\20\ Scott Allard, ``Access to Social Services: The Changing Urban
Geography of Poverty and Social Services Provision'' (Washington:
Brookings Institution, 2004).
\21\ See, e.g., Diane Suchetka, ``Poverty Jumps in Suburbs of
Cleveland.'' The Plain Dealer, December 7, 2006; Peg Tyre and Matthew
Phillips, ``Poor Among Plenty.'' Newsweek, February 12, 2007.
---------------------------------------------------------------------------
Third, whereas employment opportunities may be more plentiful for
the working poor in fast-growing suburbs, appropriate housing is often
scarce. Though these communities employ large numbers of low-wage
workers, single-family owner-occupied housing, mostly for middle- and
upper-income families, predominates. Exclusionary zoning laws in many
suburban communities have limited the development of affordable rental
housing there.\22\ As a result, families are doubling and tripling up
in order to afford single-family housing, and confronting community
opposition in the process.\23\ Research suggests a link between such
overcrowded housing conditions and negative health outcomes for
children and adults, and possibly children's educational performance as
well.\24\
---------------------------------------------------------------------------
\22\ Pendall, Puentes, and Martin, ``From Traditional to
Reformed.''
\23\ See, e.g., Audrey Singer, ``Reforming Immigration Policy''
(Washington: Brookings Institution, forthcoming 2007).
\24\ UK Office of the Deputy Prime Minister, ``The Impact of
Overcrowding on Health and Education: A Review of the Evidence and
Literature.'' Housing Research Summary 210 (2004).
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Geography and efforts to promote economic mobility
A key focus of this hearing, and indeed social policy in general,
concerns the prospects for economic mobility among poor and low-income
families in the United States. On this question, Americans continue to
express their faith in ours as a society of opportunity, with 80
percent of those polled in a recent survey agreeing that: ``. . . it's
still possible to start out poor in this country, work hard, and become
rich.'' \25\
---------------------------------------------------------------------------
\25\ See the ``Class Matters'' series at www.nytimes.com/
classmatters. The Times also reports that of the 400 Americans
identified as the country's richest in 2005 by Forbes magazine, the
majority--255--were not the inheritors of significant wealth. Nina
Munk, ``Don't Blink. You'll Miss the 258th-Richest American.'' The New
York Times, September 25, 2005.
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Yet recent research has called into question how well the United
States lives up to this reputation. For instance, a recent study by
researchers at the London School of Economics finds a far stronger
relationship between fathers' and sons' earnings in the United States
than in several northern European countries, Canada, and even
stereotypically class-bound Britain.\26\ U.S. researchers' findings
generally suggest that over the past 25 years, a child born into a low-
income family had about a 20- to 25-percent chance of earning above
median income as an adult, and a less-than-5-percent chance of moving
into the highest fifth of the income distribution.\27\
---------------------------------------------------------------------------
\26\ Still, the researchers find a higher intergenerational partial
earnings correlation in the U.S. (0.289) than in Britain (0.271).
\27\ Chul-In Lee and Gary Solon, ``Trends in Intergenerational
Income Mobility.'' NBER Working Paper 12007 (January 2006); Tom Hertz,
``Trends in the Intergenerational Elasticity of Family Income in the
United States.'' Industrial Relations 46(1)(2007): 22-50.
---------------------------------------------------------------------------
Within generations as well, evidence points to low and possibly
declining rates of upward mobility. One study finds that of families
who started in the bottom fifth of the income distribution in 1988,
more than half remained there in 1998, and fewer than one-quarter
managed to achieve at least middle-income status by the end of the
decade.\28\
---------------------------------------------------------------------------
\28\ Katherine Bradbury and Jane Katz, ``Women's Labor Market
Involvement and Family Income Mobility When Marriages End.'' New
England Economic Review Q4 (2002): 41-74.
---------------------------------------------------------------------------
As one recent paper has argued, however, evidence of low economic
mobility does not, in itself, establish a case for nor guide
interventions to help low-income families proceed up the economic
ladder.\29\ Indeed, evidence on why economic status is relatively fixed
across and within generations is critical for designing effective
policies to ensure more equitable opportunities, especially for the
poor.
---------------------------------------------------------------------------
\29\ Christopher Jencks and Laura Tach, ``Would Equal Opportunity
Mean More Mobility?'' In S. Morgan, D. Grusky, and G. Fields, eds.,
Mobility and Inequality: Frontiers of Research in Sociology and
Economics. Stanford University Press, 2006.
---------------------------------------------------------------------------
What role, then, might the geography of poverty and economic
disadvantage play in shaping prospects for economic and social
mobility? Few research studies examine this exact question.\30\ In
general, most studies reinforce the conclusion of one seminal review of
the ``neighborhood effects'' literature: ``Although the effects of
neighborhood environment are found to be significant in many studies,
they are consistently much smaller than the effects of family
characteristics.''\31\
---------------------------------------------------------------------------
\30\ One study finds a statistically significant but not strong
correlation in eventual educational attainment between children who
grew up in the same neighborhood. Gary Solon, Marianne E. Page, and
Greg J. Duncan, ``Correlations Between Neighboring Children in Their
Subsequent Educational Attainment.'' Review of Economics and Statistics
82(3)(2000): 383-392.
\31\ Ellen and Turner, ``Does Neighborhood Matter?'' p. 854.
---------------------------------------------------------------------------
The Moving to Opportunity (MTO) program offers some recent research
insights on the possible impacts of concentrated poverty. MTO was a
five-city, federally-funded experiment to assist families living in
high-poverty public housing to move to private rental housing in low-
poverty neighborhoods, and to examine the effects on those families.
Parents offered the opportunity to move to low-income neighborhoods
experienced significant improvements in mental health, and teenage
girls experienced health, educational, and behavioral benefits,
compared to their counterparts who were not offered the opportunity to
move (and who, for the most part, remained in public housing).
Conversely, the experiment did not produce significant employment and
earnings gains for adults, or consistent educational performance gains
for all children, versus what the comparison group experienced.\32\ The
MTO findings highlight important negative influences that high-poverty
environments may exert on their inhabitants, while bounding the
economic gains that we might expect over the short- and medium-term
from interventions to improve neighborhood conditions for the very
poorest inner-city families.
---------------------------------------------------------------------------
\32\ See generally, Jeffrey R. Kling, Jeffrey B. Liebman, and
Lawrence F. Katz, ``Experimental Analysis of Neighborhood Effects.''
Econometrica 75(1)(2007): 83-119.
---------------------------------------------------------------------------
The evidence thus implies that to improve economic and social
mobility, public policy should first and foremost aim to provide
incentives and supports that foster healthy family environments and
more equitable opportunities for children regardless of where they
live. In this respect, greater federal support for early education
targeted to low-income children, policies designed to improve the labor
market potential of disconnected young adults, and reforms to expand
the reach and effectiveness of temporary supports like unemployment
insurance, are well-founded and would have disproportionate benefits
for low-income communities as well.
At the same time, I believe that existing and expanded efforts can
support economic mobility by confronting particular issues of place
that could blunt the impact of more universal investments in low-income
families. While many of these do not fall within the strict
jurisdiction of the Subcommittee, they merit mention here as possible
components of a broader anti-poverty strategy, and could include
initiatives designed to:
Expand neighborhood choice. The availability and cost of
appropriate housing dictate the neighborhood opportunities available to
lower-income families, and thus circumscribe in important ways their
educational, employment, and health outcomes.\33\ According to the
National Low Income Housing Coalition, a full-time worker needs to earn
over $16 per hour in order to afford the average rent for a modest,
two-bedroom house or apartment.\34\ Already, the federal Earned Income
Tax Credit (EITC), by providing a substantial boost to the wages of
low-income working families, reduces housing-cost burdens by an
estimated 18 percent.\35\ Further targeted increases to the EITC,
perhaps delivered throughout the year to help families meet monthly
housing costs, could greatly expand quality neighborhood and housing
options for families while maintaining the credit's focus on work. To
ensure that the growing suburban poor have access to appropriate
housing in quality neighborhoods, the Low Income Housing Tax Credit
(LIHTC)--the nation's largest affordable housing production program--
could be recalibrated to deliver more affordable units in opportunity-
rich areas.\36\
---------------------------------------------------------------------------
\33\ For an overview of this argument, see Xavier de Souza Briggs,
``Politics and Policy: Changing the Geography of Opportunity.'' In The
Geography of Opportunity: Race and Housing Choice in Metropolitan
America (Washington: Brookings Institution, 2005).
\34\ National Low Income Housing Coalition, Out of Reach 2006. The
``housing wage'' in major metropolitan areas like San Francisco,
Boston, and Washington was estimated to be far higher than the national
average.
\35\ Michael Stegman, Walter Davis, and Roberto Quercia, ``Tax
Policy as Housing Policy: The EITC's Potential to Make Housing More
Affordable for Working Families'' (Washington: Brookings Institution,
2003).
\36\ See, e.g., Bruce Katz and Margery Austin Turner, ``Rethinking
U.S. Rental Housing Policy'' (Washington: Brookings Institution,
forthcoming 2007).
---------------------------------------------------------------------------
Serve families region-wide. Existing programs to provide
temporary support and training to low-income families, such as those
funded under the TANF block grant and the Workforce Investment Act,
must now serve a more geographically dispersed population than ever
before. The growth of suburban poverty renders critical strategies that
engage low-income families throughout metropolitan areas, and that link
workers to employment opportunities on a region-wide basis. In some
states, regional workforce intermediaries have mounted a successful
track record by identifying employer needs, often within selected
industry growth sectors, and connecting less-skilled workers to the
training needed to secure these jobs. Organizations like Project QUEST
in San Antonio, WireNet in Cleveland, and the Wisconsin Regional
Training Partnership work across jurisdictional lines to meet employer
and worker needs, in recognition of the metropolitan nature of today's
economy.\37\ Congress might consider an expanded role for information
and incentives within these existing programs to seed the creation of
more high-performing regional workforce intermediaries.
---------------------------------------------------------------------------
\37\ See, e.g., Harry J. Holzer, ``Encouraging Job Advancement
Among Low-Wage Workers: A New Approach'' (Washington: Brookings
Institution, 2004).
---------------------------------------------------------------------------
Promote participation in existing work supports. Finally,
expanded efforts to connect low-wage workers and their families to
existing in-work benefits for which they are eligible may address
place-specific barriers as well. The Earned Income and Child Tax
Credits, Food Stamps and other nutritional supports, and subsidized
health insurance all crucially help to narrow the gap between wages and
costs of living for low-income families. Yet informational deficits and
geographical barriers--the trip to a downtown welfare office, for
instance--may depress participation in these programs, especially among
the suburban working poor.\38\ A series of Congressional actions could
help ensure that more eligible families access these programs. First,
appropriate federal agencies could be required to more closely and
frequently track participation rates in these programs, including
variability across states and metropolitan areas. Second, federal
incentives to achieve higher participation among eligible families
could be strengthened, at a minimum, to achieve parity with incentives
designed to reduce program error. Third, Congress could consider direct
support for a growing nationwide network of nonprofit organizations
that conduct outreach and assist families in applying for tax credits
and a growing array of other work supports.\39\
---------------------------------------------------------------------------
\38\ One study finds evidence suggestive of lower participation
rates in the EITC among immigrants in less-dense suburban communities
than among their counterparts in central-city immigrant enclaves. Alan
Berube, ``Tienes EITC? A Study of the Earned Income Tax Credit in
Immigrant Communities'' (Washington: Brookings Institution, 2005).
\39\ The National Community Tax Coalition acts as an umbrella
organization for hundreds of organizations that conduct outreach and
provide free tax assistance to low-income families each year. See
www.tax-coalition.org
In closing, I would like to thank the Subcommittee for the
opportunity to testify today and applaud its work to probe the role of
federal policy in promoting greater economic and social mobility for
low-income families. Keeping in mind the evolving relationship between
poverty and place, particularly as it affects Americans who live in
areas of extreme local poverty, as well as the growing number of
suburban poor, provides critical context and guidance for policy
strategies to ensure greater equality of opportunity. I look forward to
assisting the Subcommittee in this regard, and to answering your
---------------------------------------------------------------------------
questions.
Chairman MCDERMOTT. We are going to have to stop and go and
vote. I am sorry. We will recess for, hopefully, about 30
minutes. So, I hope that the witnesses can stay. We would love
to talk to you again when we come back. We will be back
probably around 12:15 or 12:20, something like that.
So, we will recess for the moment. Thank you.
[Recess.]
Chairman MCDERMOTT. The hearing will come to order.
We have to be out of here in 28 minutes. So, Ms. Blackwell,
you are on.
STATEMENT OF ANGELA GLOVER BLACKWELL, ESQUIRE, FOUNDER AND CEO,
POLICYLINK
Ms. BLACKWELL. Thank you very much, Mr. Chairman and
Committee Members. I am Angela Glover Blackwell, the CEO of
PolicyLink, a national research and action institute that works
very closely with local partners, finding solutions to poverty
and inequity and inequality in America.
For the past 18 months, we have been working in New
Orleans, and we have been working there because our
organization is known for thinking both about how to develop
places so that they are attractive and work well and how to
think about the people at the same time, the integration of the
people and the place strategies.
The work in New Orleans has really affirmed for us that so
much of what we worry about in terms of poverty and opportunity
was unveiled there both in terms of the suffering regarding
poverty and the kind of solutions that we ought to be thinking
about. As we witnessed as a nation what happened when Katrina
hit New Orleans, we were struck by the fact that people were so
sick, so isolated, so vulnerable, and so poor. I think the
American people were shocked and ashamed of what they saw, and
if you take it apart, you can see something very similar to
that in cities all across America, because the relationship
between the isolation and the absence of transportation that
caused people to be so vulnerable when that hurricane hit is
the same thing that causes people to be so vulnerable to
poverty in other communities where they are isolated from jobs
and the other supports that they need.
What we saw in New Orleans was that where you live impacts
opportunity enormously, including how healthy you are and how
long you will live, and as we think about the importance of
place in the context of poverty, what has been interesting, as
was presented in the testimony right before, is that not only
does place matter, but it is surprising the places where it is
beginning to matter even more--older suburbs, suburban
communities, where poverty is growing.
As you think about that assertion that where you live
impacts opportunity, what it is referring to is that it is
absolutely your address that determines whether or not you get
to go to a good school. Some communities have excellent schools
available. Others have terrible schools. Your address
determines whether or not you live in close proximity to jobs,
as do many people who live in suburban areas with job centers.
Your address affects your access to opportunity if you live in
an urban area, an older suburb, a declining city with no real
jobs around. Where you live determines whether or not you are
going to have access to a job that may be distant in terms of
whether or not there is any public transportation to be able to
get you to jobs.
One of the things that was interesting when you think about
New Orleans is so many people asked, ``Well, why didn't people
just get out?'' Well, not only was there not a good public
transportation system, but of those people who were living in
extreme poverty areas, 54 percent of them did not have cars. 63
percent of the elderly who were poor did not have cars. So,
this notion of not having a car and not having a reliable
public transit system absolutely makes a difference in terms of
access to opportunity.
In thinking about strategies, I was interested in hearing
the conversation with the first panel. Certainly, the earned
income tax credit supports the families that are poor. Access
to health insurance and high-quality care, access to child care
are all important, and they are the basics, a living wage that
allows families to be able to move out of poverty, but we also
need to think about broader strategies.
As to the whole notion of transportation, we have noticed
that we need to have transportation systems that do not just go
from city to suburb, because now, sometimes people need to go
from suburb to suburb, and there is a wonderful program called
Job Access and Reverse Commute (JARC) that does just that. This
program has worked in many different States and many different
communities. In fiscal year 2003, JARC funded 101 programs in
35 States, and it is a perfect example of taking the reality of
how where you live impacts opportunity and putting a program in
place that allows people to be able to access jobs. If where
you live impacts opportunity, we certainly want to connect
people from poor communities to opportunity, but it is also
important for low-income to people live in opportunity-rich
communities. We really have not done enough with the low-income
housing tax credit program to encourage States to put that
affordable housing near good schools, near good transit and the
other amenities that are so important for moving forward. Also,
as we think about how to be able to make sure that the housing
choice voucher program really works to connect people to
opportunity, a program in Illinois--the housing opportunity tax
incentive--encourages landlords in opportunity-rich
communities--those with less than a 10 percent poverty rate--to
rent to lower income people so they can live in communities
with good schools and jobs, et cetera.
One last thing I want to mention is that, too often, we
only deal with the poverty issue through poverty programs. Our
infrastructure investments, which we are talking about more and
more--certainly, New Orleans has brought that into sharp
relief. When we are spending dollars on infrastructure--levies,
bridges, transportation--we can do two things. We can make
communities where poor people live more economically
competitive by investing in the infrastructure, but we can also
make sure that job training programs and other supports connect
low-income people to the jobs that are generated through
infrastructure investments. We have to think expansively about
poverty, not just poverty programs but all programs where we
are spending government dollars that allow everybody to
benefit.
Thank you.
Chairman MCDERMOTT. Thank you very much.
[The prepared statement of Ms. Blackwell follows:]
Statement of Angela Glover Blackwell, Esq., Founder and CEO, PolicyLink
Good Morning. I'm Angela Glover Blackwell, founder and CEO of
PolicyLink. PolicyLink is a national nonprofit research and action
institute that helps local and national organizations use policy to
achieve economic and social equity. We are particularly concerned about
the needs of people of color and people in low-income communities. I
also co-chair a task force on poverty that is part of the Center for
American Progress's National Initiative to End Poverty. I thank you all
for this opportunity to speak about ending poverty by creating economic
opportunity.
Just about 18 months ago, one of the worst disasters in our
nation's history unfolded quite literally in black and white: it was
clear not only to the victims, but to all of us watching television
footage that those hardest hit by Hurricane Katrina were black and
poor. The American people were shocked by the picture of raw poverty
and isolation that emerged in the storm's aftermath.
Yet poverty in New Orleans and other Gulf Coast communities existed
long before Katrina. In 2005, nearly one in four New Orleans residents
lived in poverty. Though this figure is troublesome enough, it belies
the racial disparities of the city's poverty (10 percent of whites were
living in poverty compared with 30 percent of African Americans) and
the reality that much of this poverty was concentrated.\1\ According to
a Brookings Institution analysis of 2000 Census figures, over 37
percent of poor New Orleans residents (and over 42 percent of poor
African American residents) lived in ``extreme poverty''
neighborhoods--communities where more than 40 percent of residents were
living below the poverty line,\2\ effectively isolated from good
schools, decent jobs, and the economic and social networks that
facilitate upward mobility. Imagine trying to support a family of four
on $17,050, the federal poverty line in 2000. Now consider that for
poor families in New Orleans' extreme poverty neighborhoods, the
average household income was $9,640 below that threshold.\3\
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\1\ Based on figures from the 2005 American Community Survey,
online at http://www.census.gov.
\2\ Alan Berube and Bruce Katz, Katrina's Window: Confronting
Concentrated Poverty Across America, (Washington, DC: Brookings
Institution, 2005).
\3\ Ibid.
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We are facing a crisis of income inequality, and though post-
hurricane images cast New Orleans as some supreme, unparalleled failure
of the American dream, concentrated poverty is in fact pervasive
nationwide. New Orleans had the second-highest concentrated poverty
rate among large U.S. cities, but number one was Fresno, California,
and many of our other cities--Atlanta, Cleveland, Philadelphia--were
not far behind.\4\
---------------------------------------------------------------------------
\4\ Ibid.
---------------------------------------------------------------------------
My message is straightforward and elegant in its simplicity: The
means exist to put an end to such stark levels of poverty in America.
What we need is the will to do so. While poverty in America is indeed
entrenched, there are many models available for providing economic
opportunity to low-income people. Our existing safety net, which
includes welfare, Social Security, unemployment, and similar programs,
is an essential baseline that we must preserve and expand to ensure
that everyone has the opportunity to participate and prosper, to
support themselves, their families, and their communities. At the same
time, we must build on these income supports with policies that fight
poverty by investing in housing, transportation, and infrastructure.
Our nation's legacy of poverty is long and complex, but one thing
is clear: place matters. Where we live affects our access to
transportation, jobs, good schools, affordable housing, resources like
banks and parks, and enriching amenities like cultural institutions.
Increasingly, place matters not just in our inner cities, but in the
very suburbs that half a century ago began as idyllic enclaves of
American middle-class life. The poverty rate in cities remains twice
that in suburbs--and it is rising in nearly half of large cities and
one third of suburbs--but the number of poor people in suburbs is now
greater than in cities. This increase in poverty is especially
challenging for suburbs that (perhaps unlike inner cities accustomed to
struggling with poverty) lack social service infrastructure, public
transportation to connect residents to jobs, and strong community
organizing networks. At the same time, these suburbs have an
opportunity to study the successes and challenges of urban poverty
programs, and use the lessons of hindsight to craft more strategic
policies.
The rise of suburban poverty also means that poverty is not simply
an urban concern: poverty is regional and requires regional solutions.
Many of the traditional models no longer apply. Jobs, for example, have
increasingly moved from central city business districts to suburbs,
even to distant ``exurbs.'' Commuting patterns that were once
predominantly suburb to city now include ``reverse commutes'' from city
to suburb and, for a growing suburban population of new immigrants and
low-income residents, suburb to suburb.
One promising strategy for connecting low-income residents to
regional job opportunities is Job Access and Reverse Commute (JARC),
which provides grant money to states for programs that help welfare
recipients and low-income workers access jobs and employment services.
JARC has been widely and successfully tested in diverse communities
across the United States. In fiscal year 2003, JARC funded 101 programs
in 35 states, serving approximately 73,000 employment sites.\5\ So many
residents are traveling from city to suburb, suburb to city or suburb
to suburb for work and educational opportunities that we need to expand
our approach to transit from building single ``lines'' to creating a
comprehensive transit ``web'' to serve the region. The federal
government must commit to scaling up programs like JARC to reach the
millions of poor residents who are cut off from job opportunities due
to lack of transportation and the spatial mismatch between jobs and
affordable housing.
---------------------------------------------------------------------------
\5\ Federal Transit Administration, FTA Fiscal Year 2003
Apportionments, Allocations and Program Information: Notice of
Supplemental Information, Changes and Corrections, retrieved from
http://www.fta.dot.gov/grant_programs/4696_ENG_HTML.htm.
---------------------------------------------------------------------------
Along with helping poor residents commute to jobs in neighborhoods
throughout their region, we must strengthen programs and policies that
help those living in concentrated poverty move into mixed-income
communities already rich in jobs and other amenities. America's
affordable housing crisis offers another opportunity for the federal
government to partner with states to reduce poverty and promote
economic mobility. There is tremendous potential--often untapped--for
the Low Income Housing Tax Credit program to build affordable housing
in opportunity-rich communities. The federal government should take an
active role in encouraging states to use LIHTC funds to site affordable
housing in communities that provide economic opportunity for low-income
families, rather than clustering LIHTC projects in high-poverty areas.
Additional tax credits could be offered to states willing to create
models such as the Housing Opportunity Tax Incentive program in
Illinois, which encourages landlords in non-poverty communities to
accept Housing Choice Voucher program (formerly Section 8) tenants.
Landlords in designated ``housing opportunity areas''--that is,
communities with high job growth, a strong economic base, and a poverty
rate of less than 10 percent--can receive a tax credit for renting to
an HCV tenant. To avoid creating new concentrations of poverty, a
maximum of two units or 20 percent of all units in any single property
can qualify for the credit.\6\ A National Housing Trust Fund could do
even more to increase the federal government's commitment to
opportunity through housing.
---------------------------------------------------------------------------
\6\ See Radhika Fox and Sarah Treuhaft, Shared Prosperity, Stronger
Regions: An Agenda for Revitalizing America's Older Core Cities
(Oakland, CA: PolicyLink, 2005).
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Transit oriented development is another way for low-income people
to live in communities of opportunity. TODs are typically high-density,
mixed-use, pedestrian-friendly developments located within a quarter
mile of a transit station. By locating a mix of shops, housing, and
office space around transit hubs, TOD reduces dependence on cars and
promotes vibrant, walkable communities. When TOD is combined with
affordable housing, low-income residents are connected to jobs,
transit, and decent affordable housing. The federal government can
support the creation of pools of tax credits as an incentive to TOD
creation.
Planners, policymakers, and public health officials are realizing
that health, too, is impacted by where one lives--and has a symbiotic
relationship with poverty. Ill health affects one's ability to earn a
living, yet low-income neighborhoods with poor housing and
environmental conditions and few resources further exacerbate health
problems. Communities of opportunities, on the other hand, promote good
health through clean air, neighborhood supermarkets that offer healthy
food choices, and safe streets and parks where residents can walk,
exercise, and play. We know there is an explosion in obesity rates in
the country and we know that obesity is a factor in many life-
threatening diseases. But consider how few poor neighborhoods have
access to supermarkets, farmers markets with fresh produce, or any
options for purchasing groceries other than corner stores that
primarily stock canned goods high in salt and sugar.
One study found that middle and upper-middle income communities in
Los Angeles County have 2.3 times as many supermarkets as low-income
communities. The same study also reported that predominantly white
communities have 3.2 times the supermarkets of predominantly black
communities and 1.7 times those of predominantly Latino communities.
Policies that attract supermarkets to underserved areas promote
physical health by expanding fresh food choices and economic health by
offering job opportunities.\7\
---------------------------------------------------------------------------
\7\ In Rebecca Flournoy, Healthy Food, Healthy Communities:
Improving Access and Opportunities Through Food Retailing (Oakland, CA:
PolicyLink, 2005).
---------------------------------------------------------------------------
Ending poverty also requires that we invest infrastructure dollars
in a way that benefit creates housing, transportation, and job
opportunities for low-income residents. Few people give much thought to
infrastructure until a sinkhole opens up, track work interrupts daily
commutes, or water mains break. Yet, infrastructure is the skeletal
support of communities and regions--and all across America
infrastructure is aging and in need of maintenance, upgrades, and new
construction. Too often, poor people bear the brunt of solutions to
infrastructure problems. Where are new schools built? Is more money
spent on highways and less on public transit? Where are dollars
allocated for upkeep of parks? Who benefits from infrastructure
projects? Who pays? Who decides?
Infrastructure investments that are made where low-income people
live can help those communities become economically competitive. The
process itself of building or maintaining infrastructure creates jobs.
Transportation and telecommunications are infrastructure investments
that can connect low-income communities and communities of color to
jobs and resources throughout the region. But we must be intentional
about maximizing the job creation potential of infrastructure
investments through local hiring and job training programs with the
potential to bring poor people into the workforce.
The rebuilding of West Oakland, California, after 1989's Loma
Prieta earthquake is an example of how the right kind of infrastructure
investment and decision making can reshape the economic and social
outcomes of a community. As a result of dedicated community organizing,
a freeway in West Oakland was not rebuilt along the corridor that had
so badly divided that neighborhood and choked it with vehicle
emissions. Instead it was rerouted through industrial land in the
adjacent Port of Oakland. Furthermore, groundbreaking agreements were
established to promote local hiring and contracting on the construction
of the new road.
Poverty is multidimensional. The causes and the effects of poverty
are myriad, but the solutions are multidemensional and when done right,
multi-beneficial. For example, investing in the construction of a new
hospital in a low-income community--when the project is tied to job
training and local hiring priorities--delivers immediate construction
jobs, eventual health services jobs, and long-term community-based
healthcare. Creating tax credits or other incentives for affordable
housing in mixed-income communities may bring poor families closer to
job opportunities, and also offer their children the chance to attend
high-quality, resource-rich public schools. A recent study from the
Center on American Progress notes that although the typical argument is
a moral one--reducing poverty is fair and just--there is, in fact an
economic imperative to address childhood poverty.\8\ Childhood poverty
results in adverse economic effects for the entire nation. The costs in
lost productivity and economic output, and in increases in crime and
health expenditures are ones we shouldn't have to pay, and won't if we
seize this moment to finally invest the resources necessary to create
true communities of opportunity--and offer everyone the possibility to
participate and prosper in America.
---------------------------------------------------------------------------
\8\ Harry J. Holzer, The Economic Costs of Poverty in the United
States: Subsequent Effects of Children Growing Up Poor (Washington, DC:
Center for American Progress, 2007).
---------------------------------------------------------------------------
Chairman MCDERMOTT. Mr. Rector.
STATEMENT OF ROBERT RECTOR, SENIOR POLICY ANALYST, THE HERITAGE
FOUNDATION
Mr. RECTOR. Yes. I thank you so much for the opportunity to
be here and speak today.
I am going to present a somewhat different perspective on
poverty. The first data I am going to go through comes from
Government surveys from Department of Housing and Urban
Development and from the Energy Department, from the
Agriculture Department.
If we were to take all of the 37 million poor people in the
United States and kind of go to the median household, according
to these surveys, ordinary people, when they hear the word
``poverty,'' are thinking about malnutrition or a lack of
housing, perhaps lacking clothes for your kids to wear--that is
when you are surveying them--but in fact, the typical American
defined as ``poor'' by the Government has a car, has air
conditioning, has a refrigerator, has a stove, has a clothes
washer/dryer, has a microwave, has two color televisions, has
cable or satellite TV, a VCR, a DVD, and a stereo.
Overall, his home is in good repair, according to HUD, and
is not overcrowded. If you ask him, he will say that, during
the previous year, he was able to obtain medical care for his
family whenever he needed it, and by his own report, his family
is not hungry and has not been hungry in the last 6 months and
that he has had sufficient funds to meet all of his essential
family needs. Now, there is a group at the bottom of the
poverty population that would answer negative to some of those
questions, but this is sort of the typical poor person in the
United States.
I will go through some numbers here very quickly. Very
interestingly, 82 percent of poor Americans have air
conditioning. I grew up in the South. We could not afford air
conditioning when I was a boy. We treated it as a luxury. Over
here, I think the most interesting one is close to two-thirds
of all poor Americans in the United States have either cable or
satellite TV. I am not saying that these people do not have to
struggle to make ends meet, but they are also very far away
from extreme deprivation as sometimes represented as their
condition.
Very interestingly, if you look at the housing of American
poor people, we find that they have more housing space per
square foot per person than does the average European, not poor
Europeans, but the average person in Western Europe. They have
more housing space than does that individual. Only about 5
percent of poor people are overcrowded with less than one room
per person. That is the normal definition for ``crowding.''
Now, this is a very interesting chart. This is protein, and
you can take any other nutriment you wanted to, but the little
horizontal line is the recommended daily allowance. We have got
poor kids and non poor kids and protein consumption. In almost
every case, the protein consumption is twice the recommended
daily allowance, and there is virtually no difference between
the very affluent and the poor with respect to protein
consumption. This is a measure of stuntedness. This is low-
income. Whether you are low for height, there is none in our
country.
Just move forward. Typically, in a typical month, 1 child
in 400 in the United States skips one or more meals because the
family lacks funds to buy food. That is regrettable, but it is
only 1 child in 400.
Now, if I can move forward a little bit more, this is the
total expenditure on health, education and cash welfare in the
United States and other countries according to the research of
Tim Smeeding, who was to be here this morning, and he finds
that total welfare benefits per household with children in the
United States are actually higher than in any other nation in
the world. Very interestingly, he, himself, said he was
staggered by that piece of information.
If I could just jump forward a bit more, it is important to
recognize that 26 percent of all poor children in the United
States are the children of immigrants, and close to 12 percent
of all poor children are children of illegal immigrant parents.
Over the last 20 years or so, we have imported 11 million high
school dropouts from abroad, and they have made a staggering
contribution to the poverty levels in this country. About 40
percent of those individuals live in the United States and are
poor as they live here. We will be unable to reduce poverty in
the United States if we continue to have those record levels of
very low-skill immigration, which we have had in the recent
past.
If we were to look at domestic-born individuals what we
find are the major causes of poverty are a lack of work and a
lack of marriage. If, in each poor family with children, a
single parent family, if the mother were married to the father
of that child, according to the data from Fragile Families, 75
percent of those children would be immediately raised out of
poverty by marriage. Also, the other major factor is that,
although poor families do work, they work only about 800 hours
a year, all right? They are working, but they are not working
full time/full year.
Our calculations using Census Bureau data say, if you took
those poor families with children and raised the work level up
to one adult working full time/full year, about 75 percent of
those children would be raised out of poverty immediately.
I think that both work and marriage are things where there
is a potential consensus where we can all agree that those
would have very strong anti poverty effects without undo
expansion to the welfare system and without costly expansions
of welfare, and those are the areas that I would suggest this
Committee focus on as probably the most productive ways for
reducing poverty in the future.
Thank you so much.
Chairman MCDERMOTT. Thank you.
[The prepared statement of Mr. Rector follows:]
Statement of Robert Rector, Senior Policy Analyst, The Heritage
Foundation
My name is Robert Rector. I am a Senior Research Fellow at The
Heritage Foundation. The views I express in this testimony are my own,
and should not be construed as representing any official position of
The Heritage Foundation.
Poverty is an important and emotional issue. Last year, the Census
Bureau released its annual report on poverty in the United States
declaring that there were 37 million poor persons living in this
country in 2005, roughly the same level as the preceding year. To
understand poverty in America, it is important to look behind these
numbers--to look at the actual living conditions of the individuals the
government deems to be poor.
For most Americans, the word ``poverty'' suggests destitution: an
inability to provide a family with nutritious food, clothing, and
reasonable shelter. But only a small number of the 35 million persons
classified as ``poor'' by the Census Bureau fit that description. While
real material hardship certainly does occur, it is limited in scope and
severity. Most of America's ``poor'' live in material conditions that
would be judged as comfortable or well-off just a few generations ago.
Today, the expenditures per person of the lowest-income one-fifth (or
quintile) of households equal those of the median American household in
the early 1970s, after adjusting for inflation.\1\
---------------------------------------------------------------------------
\1\ Comparison of the average expenditure per person of the lowest
quintile in 2001 with the middle quintile in 1973. Sources: U.S.
Department of Labor, Bureau of Labor Statistics, Consumer Expenditure
Survey: Integrated Diary and Interview Survey Data, 1972-73, Bulletin
No. 1992, released in 1979, and U.S. Department of Labor, Bureau of
Labor Statistics, Consumer Expenditures in 2001, Report No. 966, April
2003. Figures adjusted for inflation by the personal consumption
expenditure index.
---------------------------------------------------------------------------
The following are facts about persons defined as ``poor'' by the
Census Bureau, taken from various government reports:
Forty-three percent of all poor households actually own
their own homes. The average home owned by persons classified as poor
by the Census Bureau is a three-bedroom house with one-and-a-half
baths, a garage, and a porch or patio.
Eighty-two percent of poor households have air
conditioning. By contrast, 35 years ago, only 36 percent of the entire
U.S. population enjoyed air conditioning.
Only 6 percent of poor households are overcrowded. More
than two-thirds have more than two rooms per person.
The average poor American has more living space than the
average individual living in Paris, London, Vienna, Athens, and other
cities throughout Europe. (These comparisons are to the average
citizens in foreign countries, not to those classified as poor.)
Nearly three-quarters of poor households own a car; 30
percent own two or more cars.
Ninety-seven percent of poor households have a color
television; over half own two or more color televisions.
Seventy-eight percent have a VCR or DVD player; 62
percent have cable or satellite TV reception.
Seventy-three percent own microwave ovens, more than half
have a stereo, and a more than a third have an automatic dishwasher.
Overall, the typical American defined as poor by the government has
a car, air conditioning, a refrigerator, a stove, a clothes washer and
dryer, and a microwave. He has two color televisions, cable or
satellite TV reception, a VCR or DVD player, and a stereo. He is able
to obtain medical care. His home is in good repair and is not
overcrowded. By his own report, his family is not hungry and he had
sufficient funds in the past year to meet his family's essential needs.
While this individual's life is not opulent, it is equally far from the
popular images of dire poverty conveyed by the press, liberal
activists, and politicians.
As a group, America's poor are far from being chronically
undernourished. The average consumption of protein, vitamins, and
minerals is virtually the same for poor and middle-class children and,
in most cases, is well above recommended norms. Poor children actually
consume more meat than do higher-income children and have average
protein intakes 100 percent above recommended levels. Most poor
children today are, in fact, supernourished and grow up to be, on
average, one inch taller and 10 pounds heavier that the GIs who stormed
the beaches of Normandy in World War II.
While the poor are generally well-nourished, some poor families do
experience hunger, meaning a temporary discomfort due to food
shortages. According to the U.S. Department of Agriculture (USDA), 13
percent of poor families and 2.6 percent of poor children experience
hunger at some point during the year. In most cases, their hunger is
short-term. Eighty-nine percent of the poor report their families have
``enough'' food to eat, while only 2 percent say they ``often'' do not
have enough to eat.
Of course, the living conditions of the average poor American
should not be taken as representing all the poor. There is actually a
wide range in living conditions among the poor. For example, over a
quarter of poor households have cell phones and telephone answering
machines, but, at the other extreme, approximately one-tenth have no
phone at all. While the majority of poor households do not experience
significant material problems, roughly a third do experience at least
one problem such as overcrowding, temporary hunger, or difficulty
getting medical care.
While it is often argued that the U.S. devotes far fewer resources
to social welfare spending than other rich nations, the facts show
otherwise. Per household, social welfare benefits for families with
children (including cash and near cash benefits, education, and health
care) are higher in the United States than in any other nation.
Further, economic inequality, as measured by the ratio of economic
resources available to the least affluent decile compared to the median
household, is not appreciably greater in the U.S. than most other rich
nations once health care and education spending are included.\2\
---------------------------------------------------------------------------
\2\ Irwin Garfinkel, Lee Rainwater, and Timothy Smeeding, ``A Re-
examinaiton of Welfare States and Inequality in Rich Nations: How In-
Kind Transfers and Indirect Taxes Change the Story,'' Journal of Policy
Analysis, and Management, Volume 25, No. 4, 2006. A more detailed
discussion of this issue is presented later in the text.
---------------------------------------------------------------------------
The good news is that remaining poverty can readily be reduced
further, particularly among children. There are two main reasons that
American children are poor: Their parents don't work much, and fathers
are absent from the home.
In good economic times or bad, the typical poor family with
children is supported by only 800 hours of work during a year: That
amounts to 16 hours of work per week. If work in each family were
raised to 2,000 hours per year--the equivalent of one adult working 40
hours per week throughout the year--nearly 75 percent of poor children
would be lifted out of official poverty.
Father absence is another major cause of child poverty. Nearly two-
thirds of poor children reside in single-parent homes; each year, an
additional 1.3 million children are born out of wedlock. If poor
mothers married the fathers of their children, almost three-quarters
would immediately be lifted out of poverty.
While work and marriage are steady ladders out of poverty, the
welfare system perversely remains hostile to both. Major programs such
as food stamps, public housing, and Medicaid continue to reward
idleness and penalize marriage. If welfare could be turned around to
encourage work and marriage, remaining poverty would drop quickly.
Finally, it is important to note the important role immigration
plays in increasing poverty in the United States. Over the last twenty
years, the U.S. has admitted an unprecedented stream of low skill
immigrants, with over 11 million high school drop outs coming to reside
in the U.S. both legally and illegally. This mass influx of low skill
immigrants has led to dramatic a dramatic increase in the number of
poor persons in the nation. Today, more than one in poor child in four
in the U.S. is the child of first generation immigrant parents. Some 12
percent of poor children in the U.S. are the children of illegal
immigrant parents. The U.S. will be unable to make further progress
against poverty as long as this flood of low skill immigration
continues.\3\
---------------------------------------------------------------------------
\3\ Robert Rector, ``Importing Poverty: Immigration and Poverty in
the United States,'' Heritage Special Report, SR9., October 25, 2006.
---------------------------------------------------------------------------
What is Poverty?
For most Americans, the word ``poverty'' suggests destitution: an
inability to provide a family with nutritious food, clothing, and
reasonable shelter. For example, the ``Poverty Pulse'' poll taken by
the Catholic Campaign for Human Development in 2002 asked the general
public the question: ``How would you describe being poor in the U.S.?''
The overwhelming majority of responses focused on homelessness, hunger
or not being able to eat properly, and not being able to meet basic
needs.\4\
---------------------------------------------------------------------------
\4\ See Campaign for Human Development, Poverty Pulse, January
2002, at www.usccb.org/cchd/povertyusa/povpulse.htm. Interestingly,
only about 1 percent of those surveyed regarded poverty in the terms
the government does: as having an income below a specified level.
---------------------------------------------------------------------------
But if poverty means lacking nutritious food, adequate warm
housing, and clothing for a family, relatively few of the 37 million
people identified as being ``in poverty'' by the Census Bureau could be
characterized as poor.\5\ While material hardship does exist in the
United States, it is quite restricted in scope and severity. The
average ``poor'' person, as defined by the government, has a living
standard far higher that the public imagines.
---------------------------------------------------------------------------
\5\ The Census Bureau defines an individual as poor if his or her
household income falls below certain specified income thresholds. These
thresholds vary by family size. In 2002, a family of four was deemed
poor if their annual income fell below $18,556; a family of three was
deemed poor if annual income was below $14,702. There are a number of
problems with the Census Bureau's poverty figures: Census undercounts
income, ignores assets accumulated in prior years, and disregards non-
cash welfare such as food stamps and public housing in its official
count of income. However, the most important problem with Census
figures is that, even if a family's income falls below the official
poverty thresholds, the family's actual living conditions are likely to
be far higher than the image most Americans have in mind when they hear
the word ``poverty.''
---------------------------------------------------------------------------
Ownership of Property and Amenities Among the Poor
Table 1 shows the ownership of property and consumer durables among
poor households. The data are taken from the American Housing Survey
for 2001, conducted by the U.S. Department of Housing and Urban
Development and the Census Bureau, and the Residential Energy
Consumption Survey conducted by the U.S. Department of Energy.\6\
---------------------------------------------------------------------------
\6\ U.S. Department of Commerce and U.S. Department of Housing and
Urban Development, American Housing Survey for the United States: 2001;
U.S Department of Energy, Housing Characteristics, 2001, Appliances
Tables, at www.eia.doe.gov/emeu/consumption.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
As the table shows, some 43 percent of poor households own their
own home. The typical home owned by the poor is a three-bedroom house
with one-and-a-half baths. It has a garage or carport and a porch or
patio and is located on a half-acre lot. The house was constructed in
1967 and is in good repair. The median value of homes owned by poor
households was $86,600 in 2001 or 70 percent of the median value of all
homes owned in the United States.\7\
---------------------------------------------------------------------------
\7\ U.S Department of Commerce and U.S. Department of Housing and
Urban Development, American Housing Survey for the United States: 2001,
Tables 3-1, 3-14.
---------------------------------------------------------------------------
Some 73 percent of poor households own a car or truck; nearly a
third own two or more cars or trucks. Over eighty percent have air
conditioning; by contrast, 35 years ago, only 36 percent of the general
U.S. population had air conditioning. Nearly three-quarters of poor
households own microwaves; a third have automatic dishwashers.
Poor households are well-equipped with modern entertainment
technology. It should come as no surprise that nearly all (97 percent)
of poor households have color TVs, but more than half actually own two
or more color televisions. One-quarter own large-screen televisions, 78
percent have a VCR or DVD player, and almost two-thirds have cable or
satellite TV reception. Some 58 percent own a stereo. More than a third
have telephone answering machines, while a quarter have personal
computers. While these numbers do not suggest lives of luxury, they are
notably different from conventional images of poverty.
Housing Conditions
A similar disparity between popular conceptions and reality applies
to the housing conditions of the poor. Most poor Americans live in
houses or apartments that are relatively spacious and in good repair.
As Chart 1 shows, 54 percent of poor households live in single-family
homes, either unattached single dwellings or attached units such as
townhouses. Another 36.4 percent live in apartments, and 9.6 percent
live in mobile homes.\8\
---------------------------------------------------------------------------
\8\ U.S. Department of Commerce and U.S. Department of Housing and
Urban Development, American Housing Survey for the United States: 2001,
p. 42.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Housing Space
Both the overall U.S. population and the poor in America live, in
general, in very spacious housing. As Table 2 shows, 70 percent of all
U.S. households have two or more rooms per tenant. Among the poor, this
figure is 68 percent.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Crowding is quite rare; only 2.5 percent of all households and 5.7
percent of poor households are crowded with more than one person per
room.\9\ By contrast, social reformer Jacob Riis, writing on tenement
living conditions around 1890 in New York City, described crowded
families living with four or five persons per room and some 20 square
feet of living space per person.\10\
---------------------------------------------------------------------------
\9\ Ibid., p. 46.
\10\ Jacob Riis, How the Other Half Lives (New York: Dover Press,
1971), pp. 6, 41, 59.
---------------------------------------------------------------------------
Housing space can also be measured by the number of square feet per
person. The Residential Energy Consumption survey conducted by the U.S.
Department of Energy shows that Americans have an average of 721 square
feet of living space per person. Poor Americans have 439 square
feet.\11\ Reasonably comparable international square-footage data are
provided by the Housing Indicator Program of the United Nations Center
for Human Settlements, which surveyed housing conditions in major
cities in 54 different nations. This survey showed the United States to
have by far the most spacious housing units, with 50 percent to 100
percent more square footage per capita than city dwellers in other
industrialized nations.\12\
---------------------------------------------------------------------------
\11\ U.S. Department of Energy, Housing Characteristics 1993, 1995,
pp. 46, 47. The figures in the text refer to total living space,
including both heated and non-heated living space.
\12\ United Nations Centre for Human Settlements and the World
Bank, The Housing Indicators Program, Vol. II: Indicator Tables (New
York: United Nations, 1993), Table 5.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
America's poor compare favorably with the general population of
other nations in square footage of living space. The average poor
American has more square footage of living space than does the average
person living in London, Paris, Vienna, and Munich. Poor Americans have
nearly three times the living space of average urban citizens in
middle-income countries such as Mexico and Turkey. Poor American
households have seven times more housing space per person than the
general urban population of very-low-income countries such as India and
China. (See Appendix Table A for more detailed information.)
Some critics have argued that the comparisons in Table 3 are
misleading.\13\ These critics claim that U.S. housing in general cannot
be compared to housing in specific European cities such as Paris or
London because housing in these cities is unusually small and does not
represent the European housing stock overall. To assess the validity of
this argument, Table 4 presents national housing data for 15 West
European countries. These data represent the entire national housing
stock in each of the 15 countries. In general, the national data on
housing size are similar to the data on specific European cities
presented in Table 3 and Appendix Table A.
---------------------------------------------------------------------------
\13\ See Katha Pollitt, ``Poverty: Fudging the Numbers,'' The
Nation, November 2, 1998. Pollitt argues that it is misleading to
compare the living space of poor Americans nationwide to that of
average citizens in major cities in other nations, since European
cities, in particular, have small housing units that are not
representative of their entire nations. However, the author of the
United Nations Housing Indicators report asserts that, in most cases,
the average housing size in major cities can be taken as roughly
representative of the nation as a whole. A comparison of the data in
Table 4 and Appendix Table A would appear to confirm this.
---------------------------------------------------------------------------
As Table 4 shows, U.S. housing (with an average size of 1,875
square feet per unit) is nearly twice as large as European housing
(with an average size of 976 square feet per unit.) After adjusting for
the number of persons in each dwelling unit, Americans have an average
of 721 square feet per person, compared to 396 square feet for the
average European.
The housing of poor Americans (with an average of 1,228 square feet
per unit) is smaller than that of the average American but larger than
that of the average European (who has 976 square feet per unit).
Overall, poor Americans have an average of 439 square feet of living
space per person, which is as much as or more than the average citizen
in most West European countries. (This comparison is to the average
European, not poor Europeans.)
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Housing Quality
Of course, it might be possible that the housing of poor American
households could be spacious but still dilapidated or unsafe. However,
data from the American Housing Survey indicate that such is not the
case. For example, the survey provides a tally of households with
``severe physical problems.'' Only a tiny portion of poor households
and an even smaller portion of total households fall into that
category.
The most common ``severe problem,'' according to the American
Housing Survey, is a shared bathroom, which occurs when occupants lack
a bathroom and must share bathroom facilities with individuals in a
neighboring unit. This condition affects about 1 percent of all U.S.
households and 2 percent of all poor households. About one-half of 1
percent (0.5 percent) of all households and 2 percent of poor
households have other ``severe physical problems.'' The most common are
repeated heating breakdowns and upkeep problems.
The American Housing Survey also provides a count of households
affected by ``moderate physical problems.'' A wider range of households
falls into this category--9 percent of the poor and nearly 5 percent of
total households. However, the problems affecting these units are
clearly modest. While living in such units might be disagreeable by
modern middle-class standards, they are a far cry from Dickensian
squalor. The most common problems are upkeep, lack of a full kitchen,
and use of unvented oil kerosene or gas heaters as the primary heat
source. (The last condition occurs almost exclusively in the South.)
Hunger and Malnutrition in America
There are frequent charges of widespread hunger and malnutrition in
the United States.\14\ To understand these assertions, it is important,
first of all, to distinguish between hunger and the more severe problem
of malnutrition. Malnutrition (also called undernutrition) is a
condition of reduced health due to a chronic shortage of calories and
nutriments. There is little or no evidence of poverty-induced
malnutrition in the United States.
---------------------------------------------------------------------------
\14\ See, for example, A Survey of Childhood Hunger in the United
States (Washington, D.C.: Food Research Action Center, Community
Childhood Hunger Identification Project, 1995) and ``1997 National
Research Study,'' in Hunger 1997: The Faces and Facts (Chicago, Ill.:
America's Second Harvest, 1997).
---------------------------------------------------------------------------
Hunger is a far less severe condition: a temporary but real
discomfort caused by an empty stomach. The government defines hunger as
``the uneasy or painful sensation caused by lack of food.'' \15\ While
hunger due to a lack of financial resources does occur in the United
States, it is limited in scope and duration. According to the USDA, on
a typical day, fewer than one American in 200 will experience hunger
due to a lack of money to buy food.\16\ The hunger rate rises somewhat
when examined over a longer time period; according to the USDA, some
6.9 million Americans, or 2.4 percent of the population, were hungry at
least once during 2002.\17\ Nearly all hunger in the United States is
short-term and episodic rather than continuous.\18\
---------------------------------------------------------------------------
\15\ U.S. Department of Agriculture, Household Food Security in the
United States in 1995: Summary Report for the Food Security Measurement
Project, 1997, p. 5.
\16\ In all cases, the figures concerning hunger in this paper
refer solely to hunger caused by a lack of funds to buy food and do not
include hunger that is attributed to any other cause.
\17\ Mark Nord, Margaret Andrews, and Steven Carlson, Household
Food Security in the United States, 2002, U.S. Department of
Agriculture, October 2003, p. 7. The numbers in the text were taken
from Table 1 of the USDA publication. Many individuals reside in
households where at least one family member but not all family members
experienced hunger. This is particularly true among families with
children where the adults are far more likely than the children to
experience hunger. According to Table 1of Household Food Security in
the United States, 2002, 9.3 million persons lived in a household where
at least one household member experienced hunger; however, not all of
these persons experienced hunger themselves. The number of persons who
experienced hunger individually was lower: 6.8 million people,
including 6.3 million adults and 567,000 children.
\18\ The numbers of persons identified as hungry throughout this
paper correspond to individuals that the USDA identifies as ``food
insecure with hunger.'' The USDA also has a second, broader category:
``food insecure without hunger.'' As the term implies, these
individuals are not hungry. They may, however, at certain times in the
year be forced to eat cheaper foods or a narrower range of foods than
those to which they are ordinarily accustomed. According to the USDA,
7.6 percent of all households were ``food insecure without hunger'' in
2002. Food advocacy groups often inaccurately include the households
that are ``food insecure without hunger'' in the count of households
that are deemed hungry.
---------------------------------------------------------------------------
Some 92 percent of those who experienced hunger in 2002 were
adults, and only 8 percent were children. Overall, some 567,000
children, or 0.8 percent of all children, were hungry at some point in
2002. In a typical month, roughly one child in 400 skipped one or more
meals because the family lacked funds to buy food.
Not only is hunger relatively rare among U.S. children, but it has
declined sharply since the mid-1990s. As Chart 2 shows, the number of
hungry children was cut by a third between 1995 and 2002. According to
the USDA, in 1995, there were 887,000 hungry children: by 2002, the
number had fallen to 567,000.\19\
---------------------------------------------------------------------------
\19\ Nord, Andrews, and Carlson, Food Security in the United
States, 2002, p. 7. Additional data provided by USDA.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Overall, some 97 percent of the U.S. population lived in families
that reported they had ``enough food to eat'' during the entire year,
although not always the kinds of foods they would have preferred.
Around 2.5 percent stated their families ``sometimes'' did not have
``enough to eat'' due to money shortages, and one-half of 1 percent
(0.5 percent) said they ``often'' did not have enough to eat due to a
lack of funds. (See Chart 3.)
Hunger and Poverty
Among the poor, the hunger rate was obviously higher: During 2002,
12.8 percent of the poor lived in households in which at least one
member experienced hunger at some point.\20\ Among poor children, 2.4
percent experienced hunger at some point in the year.\21\ Overall, most
poor households were not hungry and did not experience food shortages
during the year.
---------------------------------------------------------------------------
\20\ Nord, Andrews, and Carlson, Food Security in the United
States, 2002, p. 16.
\21\ Ibid., p. 17.
---------------------------------------------------------------------------
When asked, some 89 percent of poor households reported they had
``enough food to eat'' during the entire year, although not always the
kinds of food they would prefer. Around 9 percent stated they
``sometimes'' did not have enough to eat because of a lack of money to
buy food. Another 2 percent of the poor stated that they ``often'' did
not have enough to eat due to a lack of funds.\22\ (See Chart 3.)
---------------------------------------------------------------------------
\22\ Calculated from USDA food security survey for 2001.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Poverty and Malnutrition
It is widely believed that a lack of financial resources forces
poor people to eat low-quality diets that are deficient in nutriments
and high in fat. However, survey data show that nutriment density
(amount of vitamins, minerals, and protein per kilocalorie of food)
does not vary by income class.\23\ Nor do the poor consume higher-fat
diets than do the middle class; the percentage of persons with high fat
intake (as a share of total calories) is virtually the same for low-
income and upper-middle-income persons.\24\ Overconsumption of calories
in general, however, is a major problem among the poor, as it is within
the general U.S. population.
---------------------------------------------------------------------------
\23\ C. T. Windham et al., ``Nutrient Density of Diets in the USDA
Nationwide Food Consumption Survey, 1977-1978: Impact of Socioeconomic
Status on Dietary Density,'' Journal of the American Dietetic
Association, January 1983.
\24\ Interagency Board for Nutrition Monitoring and Related
Research, Third Report on Nutrition Monitoring in the United States
(Washington, D.C.: U.S. Government Printing Office, 1995), p. VA 167.
---------------------------------------------------------------------------
Examination of the average nutriment consumption of Americans
reveals that age and gender play a far greater role than income class
in determining nutritional intake. For example, the nutriment intakes
of adult women in the upper middle class (with incomes above 350
percent of the poverty level) more closely resemble the intakes of poor
women than they do those of upper-middle-class men, children, or
teens.\25\ The average nutriment consumption of upper-middle-income
preschoolers, as a group, is virtually identical with that of poor
preschoolers but not with the consumption of adults or older children
in the upper middle class.
---------------------------------------------------------------------------
\25\ U.S. Department of Agriculture, Food and Nutrient Intakes by
Individuals in the United States, 1 Day, 1989-91, Nationwide Food
Survey Report No. 91-2, 1995.
---------------------------------------------------------------------------
This same pattern holds for adult males, teens, and most other age
and gender groups. In general, children aged 0-11 years have the
highest average level of nutriment intakes relative to the recommended
daily allowance (RDA), followed by adult and teen males. Adult and teen
females have the lowest level of intakes. This pattern holds for all
income classes.
Nutrition and Poor Children
Government surveys provide little evidence of widespread
undernutrition among poor children; in fact, they show that the average
nutriment consumption among the poor closely resembles that of the
upper middle class. For example, children in families with incomes
below the poverty level actually consume more meat than do children in
families with incomes at 350 percent of the poverty level or higher
(roughly $65,000 for a family of four in today's dollars).
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Table 5 shows the average intake of protein, vitamins, and minerals
as a percentage of the recommended daily allowance among poor and
middle-class children at various age levels.\26\ The intake of
nutriments is very similar for poor and middle-class children and is
generally well above the recommended daily level. For example, the
consumption of protein (a relatively expensive nutriment) among poor
children is, on average, between 150 percent and 267 percent of the
RDA.
---------------------------------------------------------------------------
\26\ Ibid., Tables 10-1, 10-4. Table 4 in the present paper also
provides the ``mean adequacy ratio'' for various groups. The mean
adequacy ratio represents average intake of all the nutriments listed
as a percent of RDA. However, in computing mean adequacy, intake values
exceeding 100 percent of RDA are counted at 100, since the body cannot
use an excess consumption of one nutriment to fill a shortfall of
another nutriment.
---------------------------------------------------------------------------
When shortfalls of specific vitamins and minerals appear (for
example, among teenage girls), they tend to be very similar for the
poor and the middle class. While poor teenage girls, on average, tend
to underconsume vitamin E, vitamin B-6, calcium, phosphorus, magnesium,
iron, and zinc, a virtually identical underconsumption of these same
nutriments appears among upper-middle-class girls.
Poor Children's Weight and Stature
On average, poor children are very well-nourished, and there is no
evidence of widespread significant undernutrition. For example, two
indicators of undernutrition among the young are ``thinness'' (low
weight for height) and stuntedness (low height for age). These problems
are rare to nonexistent among poor American children.
The generally good health of poor American children can be
illustrated by international comparisons. Table 6 provides data on
children's size based on the World Health Organization (WHO) Global
Data Base on Child Growth: Children are judged to be short or
``stunted'' if their height falls below the 2.3 percentile level of
standard height-to-age tables.\27\ Table 6 shows the percentage of
children under age five in developing nations who are judged to be
``stunted'' by this standard.
---------------------------------------------------------------------------
\27\ The World Health Organization uses standard height-for-age
tables developed by the National Center for Health Statistics at the
Centers for Disease Control and Prevention of the U.S. Department and
Health and Human Services.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
In developing nations as a whole, some 43 percent of children are
stunted. In Africa, more than a third of young children are affected;
in Asia, nearly half.\28\ By contrast, in the United States, some 2.6
percent of young children in poor households are stunted by a
comparable standard--a rate only slightly above the expected standard
for healthy, well-nourished children.\29\ While concern for the well-
being of poor American children is always prudent, the data overall
underscore how large and well-nourished poor American children are by
global standards.
---------------------------------------------------------------------------
\28\ M. de Onis and J. P. Habicht, ``Anthropometric Reference Data
for International Use: Recommendations from a World Health Organization
Expert Committee,'' American Journal of Clinical Nutrition, 1996, pp.
650-658.
\29\ Calculation by the authors using National Health and Nutrition
Evaluation Survey III data and WHO standard tables for shortness for
age. Shortness for age is the result of genetic variation as well as
nutritional factors. The World Health Organization standards assume
that even in a very well-nourished population, 2.3 percent of children
will have heights below the ``stunted'' cut-off levels due to normal
genetic factors. Problems are apparent if the number of short children
in a population rises appreciably above that 2.3 percent.
---------------------------------------------------------------------------
Throughout this century, improvements in nutrition and health have
led to increases in the rate of growth and ultimate height and weight
of American children. Poor children have clearly benefited from this
trend. Poor boys today at ages 18 and 19 are actually taller and
heavier than boys of similar age in the general U.S. population in the
late 1950s. Poor boys living today are one inch taller and some 10
pounds heavier than GIs of similar age during World War II, and nearly
two inches taller and 20 pounds heavier than American doughboys back in
World War I.\30\
---------------------------------------------------------------------------
\30\ Bernard D. Karpinos, ``Current Height and Weight of Youths of
Military Age,'' Human Biology, 1961, pp. 336-364. Recent data on young
males in poverty provided by the National Center for Health Statistics
of the U.S. Department of Health and Human Services, based on the
second National Health and Nutrition Examination Survey.
---------------------------------------------------------------------------
Poverty and Obesity
The principal nutrition-related health problem among the poor, as
with the general U.S. population, stems from the overconsumption, not
underconsumption, of food. While overweight and obesity are prevalent
problems throughout the U.S. population, they are found most frequently
among poor adults. Poor adult men are slightly less likely than non-
poor men to be overweight (30.4 percent compared to 31.9 percent); but,
as Chart 4 shows, poor adult women are significantly more likely to be
overweight than are non-poor women (47.3 percent compared to 32
percent).\31\
---------------------------------------------------------------------------
\31\ Interagency Board for Nutrition Monitoring and Related
Research, Third Report on Nutrition Monitoring, Vol. 2, p. VA 219.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Living Conditions and Hardships Among the Poor
Overall, the living standards of most poor Americans are far higher
than is generally appreciated. The overwhelming majority of poor
families are well-housed, have adequate food, and enjoy a wide range of
modern amenities, including air conditioning and cable television. Some
70 percent of poor households report that during the course of the past
year they were able to meet ``all essential expenses,'' including
mortgage, rent, utility bills, and important medical care.\32\ (See
Chart 5.)
---------------------------------------------------------------------------
\32\ Calculated from U.S. Bureau of the Census, Survey of Income
and Program Participation, Extended Measures of Well-being Module,
1998.
---------------------------------------------------------------------------
However, two caveats should be applied to this generally optimistic
picture. First, many poor families have difficulty paying their regular
bills and must scramble to make ends meet. For example, around one-
quarter of poor families are late in paying the rent or utility bills
at some point during the year.
Second, the living conditions of the average poor household should
not be taken to represent all poor households. There is a wide range of
living conditions among the poor; while more than a quarter of the poor
have cell phones and answering machines, a tenth of the poor have no
telephone at all. While most of America's poor live in accommodations
with two or more rooms per person, roughly a tenth of the poor are
crowded, with less than one room per person.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
These points are illustrated in Table 7, which lists the financial
and material hardships among poor households in 1998.\33\ During at
least one month in the preceding year, some 20 percent of poor
households reported they were unable to pay their fuel, gas, or
electric bills promptly; around 4 percent had their utilities cut off
at some point due to nonpayment. Another 13 percent of poor households
failed, at some point in the year, to make their full monthly rent or
mortgage payments, and 1 percent were evicted due to failure to pay
rent. One in 10 poor families had their phones disconnected due to
nonpayment at some time during the preceding year.
---------------------------------------------------------------------------
\33\ Calculated from U.S. Bureau of the Census, Survey of Income
and Program Participation, Extended Measures of Well-being Module,
1998.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Overall, more than one-quarter of poor families experienced at
least one financial difficulty during the year. Most had a late payment
of rent or utility bills. Some 12 percent had phones or utilities cut
off or were evicted.
Poor households also experienced the material problems listed on
Table 7.\34\ Some 14 percent lacked medical insurance and had a family
member who needed to go to a doctor or hospital but did not go; 11
percent experienced hunger in the household; and around 9 percent were
overcrowded, with more than one person per room. Slightly less than 4
percent of poor households experienced upkeep problems with the
physical conditions of their apartments or homes, having three or more
of the physical problems listed in Table 7.
---------------------------------------------------------------------------
\34\ The Survey of Income and Program Participation, Extended
Measures of Well-being Module also contains a question about whether
members of the household needed to see a dentist but did not go.
Because the question does not specify whether or not the failure to
visit the dentist was due to an inability to pay, we did not include
the question in this report.
---------------------------------------------------------------------------
Overall Hardship
Altogether, around 58 percent of poor households experienced none
of the financial or physical hardships listed in Table 7 These families
were able to pay all their bills on time. They were able to obtain
medical care if needed, were not hungry or crowded, and had few upkeep
problems in the home. Another 20 percent of poor households experienced
one financial or material problem during the year. Around 10 percent of
poor households had two financial or material problems, while 12
percent had three or more.
The most common problem facing poor households was late payment of
rent or utilities. While having difficulty paying monthly bills is
stressful, in most cases late payment did not result in material
hardship or deprivation. If late payment problems are excluded from the
count, we find that two-thirds of poor households had none of the
remaining problems listed in Table 7. Some 22 percent had one problem,
and 12 percent had two or more problems.
While it is appropriate to be concerned about the difficulties
faced by some poor families, it is important to keep these problems in
perspective. Many poor families have intermittent difficulty paying
rent or utility bills but remain very well-housed by historic or
international standards. Even poor families who are overcrowded and
hungry, by U.S. standards, are still likely to have living conditions
that are far above the world average.
Cross National Comparisons of Social Welfare Expenditures
Studies that compare the size and effects of the U.S. social
welfare system with welfare in other nations usually restrict the
comparison to cash welfare transfers. This can be misleading. The
difference between the U.S. and other rich nations is not so much in
the level of spending but in the type of spending. Comparatively, the
U.S. spends little on cash aid for the non-elderly but a great deal on
education and medical care. As leading poverty scholars, Timothy
Smeeding, Irv Garfinkel and Lee Rainwater write, ``studies that take
account of only cash transfers are omitting about half of the total
redistribution accomplished by welfare states. . . . Americans are
small spenders on cash support but big spenders on education and
especially health care.''\35\
---------------------------------------------------------------------------
\35\ Garfinkel, et al, 2006, p. 905.
---------------------------------------------------------------------------
The U.S. differs from other rich nations in another important
respect. In European nations, government medical care programs cover
the entire population, rich and poor; whereas, in the U.S., government
directly funds the health care only of the elderly (through Medicare)
and the poor (mainly through Medicaid). Consequently, European social
welfare spending may appear large because their government health care
programs cover everyone, while in the U.S., most working and middle
class families receive health care through employer provided coverage.
A meaningful comparison of expenditures thus must either include
employer provided care or exclude European government expenditures on
the non-elderly middle class.
A third major difference between the U.S. and other rich nations is
that those nations rely far more on regressive indirect taxes, such at
the Value Added Tax, which fall heavily on consumers. These indirect
taxes take back a significant portion of the cash welfare aid these
societies give out. Since nations differ in the degree to which social
welfare benefits are taxed, the best measure of comparison would be a
comprehensive count of post tax benefits.
The pioneering analysis of Garfinkel, Rainwater, and Smeeding
provides the best comparison of social welfare spending in the U.S. and
other countries and its effect on inequality. This analysis provides a
comprehensive post tax count of social welfare spending including:
government pension aid, cash and near cash welfare, public spending on
primary and secondary education, and health care spending including
employer provided coverage. Their analysis finds that the post tax
value of social welfare spending in the U.S. equals around 25 percent
of Gross Domestic Product (GDP) (about 4 to 5 percent points of this
figure represents employer-provided health care). U.S. spending as a
share of GDP is greater than the share in Australia, Canada and the
Netherlands but less than other rich nations. The highest level of
social welfare spending by this measure occurs in Belgium where social
welfare spending is slightly more than 30 percent of GDP.\36\
---------------------------------------------------------------------------
\36\ Ibid., p. 906
---------------------------------------------------------------------------
However, social welfare spending as a share of GDP can be somewhat
misleading since the U.S. has a substantially higher GDP per capita
than most European nations. It is therefore possible for the U.S. to
spend less on social welfare as a share of GDP while still having
higher absolute spending per person. The analysis of Smeeding, et. al.,
finds this is the case. In fact, social welfare spending per capita is
higher in the U.S. than in all the other rich nations studied except
Sweden.\37\
---------------------------------------------------------------------------
\37\ Irwin Garfinkel, Lee Rainwater, and Timothy Smeeding, ``Equal
Opportunities for Children: Social Welfare Expenditures in the English-
speaking countries and Westen Europe,'' Focus, Vol. 23. no. 3, Spring
2005, p. 19.
---------------------------------------------------------------------------
With respect to social welfare spending on children, the picture is
even more favorable for the U.S. In 2000, social welfare spending in
the U.S. (including cash and near cash benefits, primary and secondary
public education, and health care) averaged $23,982 for each household
with children. This spending level exceeded all the other rich nations
in the study; it was nearly twice the Australian level and almost 50
percent higher than the level in France. Smeeding, Garfinkel, and
Rainwater write, ``For those of us who cling to the notion that the
United States welfare state is undersized, the absolute size of the
United States total mean and median welfare state benefits per
household with children--$22,259 [median] (or $23,982 mean)--is
staggering once one includes health and education spending.'' \38\
---------------------------------------------------------------------------
\38\ Irwin Garfinkel, Lee Rainwater, and Timothy Smeeding,
``Welfare State Expenditures and the Distribution of Child
Opportunities,'' Luxembourg Income Study Working Papers Series, No.
379, June 2004, p 18.
---------------------------------------------------------------------------
Their analysis also shows that the widespread belief that the U.S.
is far more unequal than other nations is misplaced, at least with
respect to the bottom half of the income distribution. If all
households are arrayed in order from the lowest to the highest level of
economic resources, the ratio of the income of household at the tenth
percentile from the bottom to the income of the median household is
called the P10/P50 ratio. Including all social welfare spending, the
P10/P50 ratio in the U.S. is 53 percent. This is slightly higher than
the ratios in Australia and Canada, and slightly lower than the ratios
of European countries. The greatest equality by this measure is found
in Sweden which has a P10/P50 ratio of 58 percent.\39\ Smeeding, et al,
conclude that the equality of rich nations is very similar by this
measure, and that cross national differences in the P10/P50 ratios of
rich nations, including the U.S, are ``barely distinguishable.'' \40\
Finally, the fact that the U.S. is richer than the other nations in the
comparison creates the possibility that the absolute economic resources
devoted to U.S. households in the bottom decile may exceed the absolute
resources of comparable households in European nations.
---------------------------------------------------------------------------
\39\ Garfinkel, et al, 2006, p. 908.
\40\ Ibid., p. 907.
---------------------------------------------------------------------------
Smeeding, Garfinkel, and Rainwater conclude, ``what distinguishes
the United States from other rich nations is not so much the overall
level of spending or the degree of inequality of total resources at the
bottom of the income distribution, but rather the kind of resources
being transferred. Comparatively speaking, the United States spends
enough on health care transfers to reduce the economic distance between
low income families and average income families nearly as much as do
other rich nations.'' \41\ The authors do question whether the far
higher per capita medical spending levels in the U.S. actually
translate into higher quality care compared to other nations and find
that issue is, as yet, unresolved.\42\
---------------------------------------------------------------------------
\41\ Ibid., p. 913.
\42\ Ibid., p. 914.
---------------------------------------------------------------------------
Reducing Child Poverty
The generally high living standards of poor Americans are good
news. Even better is the fact that our nation can readily reduce
remaining poverty, especially among children. To accomplish this, we
must focus on the main causes of child poverty: low levels of parental
work and high levels of single parenthood.
In good economic times or bad, the typical poor family with
children is supported by only 800 hours of work during a year: That
amounts to 16 hours of work per week. If work in each family were
raised to 2,000 hours per year--the equivalent of one adult working 40
hours per week through the year--nearly 75 percent of poor children
would be lifted out of official poverty.\43\
---------------------------------------------------------------------------
\43\ Robert E. Rector and Rea S. Hederman, Jr., ``The Role of
Parental Work in Child Poverty,'' Heritage Foundation Center for Data
Analysis Report No. CDA03-01, January 27, 2003.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The decline in marriage is the second major cause of child poverty.
Nearly two-thirds of poor children reside in single-parent homes; each
year, an additional 1.3 million children are born out of wedlock.
Increasing marriage would substantially reduce child poverty: If poor
mothers married the fathers of their children, almost three-quarters
would immediately be lifted out of poverty.\44\
---------------------------------------------------------------------------
\44\ Robert E. Rector, Kirk A. Johnson, Ph.D., Patrick F. Fagan,
and Lauren R. Noyes, ``Increasing Marriage Would Dramatically Reduce
Child Poverty,'' Heritage Foundation Center for Data Analysis Report
No. CDA03-06, May 20, 2003.
---------------------------------------------------------------------------
In recent years, the United States has established a reasonable
record in reducing child poverty. Successful anti-poverty policies were
partially implemented in the welfare reform legislation of 1996, which
replaced the old Aid to Families with Dependent Children (AFDC) program
with a new program called Temporary Assistance to Needy Families
(TANF).
A key element of this reform was a requirement that some welfare
mothers either prepare for work or get jobs as a condition of receiving
aid. As this requirement went into effect, welfare rolls plummeted and
employment of single mothers increased in an unprecedented manner. As
employment of single mothers rose, child poverty dropped rapidly. For
example, in the quarter-century before welfare reform, there was no net
change in the poverty rate of children in single-mother families; after
reform was enacted, the poverty rate dropped in an unprecedented
fashion, falling from 53.1 percent in 1995 to 39.8 percent in 2001.\45\
---------------------------------------------------------------------------
\45\ Robert Rector and Patrick F. Fagan, ``The Continuing Good News
About Welfare Reform,'' Heritage Foundation Backgrounder No. 1620,
February 6, 2003.
---------------------------------------------------------------------------
In general, however, welfare reform has been limited in both scope
and intensity. Even in the TANF program, over half the adult
beneficiaries are idle on the rolls and are not engaged in activities
leading to self-sufficiency. Work requirements are virtually
nonexistent in related programs such as food stamps and public housing.
Even worse, despite the fact that marriage has enormous financial and
psychological benefits for parents and children, welfare reform has
done little or nothing to strengthen marriage in low-income
communities. Overall, the welfare system continues to encourage idle
dependence rather than work and to reward single parenthood while
penalizing marriage.
If child poverty is to be substantially reduced, welfare must be
transformed. Able-bodied parents must be required to work or prepare
for work, and the welfare system should encourage rather than penalize
marriage.
Conclusion
The living conditions of persons defined as poor by the government
bear little resemblance to notions of ``poverty'' held by the general
public. If poverty is defined as lacking adequate nutritious food for
one's family, a reasonably warm and dry apartment to live in, or a car
with which to get to work when one is needed, then there are relatively
few poor persons remaining in the United States. Real material hardship
does occur, but it is limited in scope and severity.
The typical American defined as ``poor'' by the government has a
car, air conditioning, a refrigerator, a stove, a clothes washer and
dryer, and a microwave. He has two color televisions, cable or
satellite TV reception, a VCR or DVD player, and a stereo. He is able
to obtain medical care. His home is in good repair and is not
overcrowded. By his own report, his family is not hungry and he had
sufficient funds in the past year to meet his family's essential needs.
While this individual's life is not opulent, it is equally far from the
popular images of dire poverty conveyed by the press, liberal
activists, and politicians.
But the living conditions of the average poor person should not be
taken to mean that all poor Americans live without hardship. There is a
wide range of living conditions among the poor. Roughly a third of poor
households do face material hardships such as overcrowding,
intermittent food shortages, or difficulty obtaining medical care.
However, even these households would be judged to have high living
standards in comparison to most other people in the world.
Perhaps the best news is that the United States can readily reduce
its remaining poverty, especially among children. The main causes of
child poverty in the United States are low levels of parental work and
high numbers of single-parent families. By increasing work and
marriage, our nation can virtually eliminate remaining child poverty.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
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Members of The Heritage Foundation staff testify as individuals
discussing their own independent research. The views expressed are
their own, and do not reflect an institutional position for The
Heritage Foundation or its board of trustees.
Chairman MCDERMOTT. Dr. Bernstein.
STATEMENT OF JARED BERNSTEIN, DIRECTOR OF THE LIVING STANDARDS
PROGRAM, ECONOMIC POLICY INSTITUTE
Dr. BERNSTEIN. Chairman McDermott and Representative
Weller, I thank you for the opportunity to testify, and I
sincerely applaud your willingness to examine these issues of
great importance to those of us on the panel and to our most
economically vulnerable families. It is a symbol of a just
society that we engage in an accurate assessment of the extent
of material need among our populations. Such an assessment
serves multiple purposes.
First, we want a tool that will tell us, given what we know
about human needs and prevailing living standards, how many
people lack the resources to meet their basic needs. Note that
this framing introduces an absolute measure, meeting basic
needs, but also a relative dimension, prevailing standards to
the question of poverty measurement, and of course, we want to
be able to assess the anti poverty effectiveness of market
forces as well as or nonmarket interventions.
It is widely agreed upon that our current poverty measure
fails to meet these criteria and does so by a long shot. It
does not provide an accurate picture of the extent of material
deprivation, nor does it tell us how far the poor are falling
behind relative to the rest of us, nor does it enable us to
gauge the effectiveness of our anti-poverty initiatives. My
written testimony stresses these key points.
Our approach to measuring poverty is far outdated and fails
to provide an accurate count of the extent that we need in
America. Newer methods that correct many of the problems with
the official measure show more people in poverty than the 37
million officially poor. I recognize that this statement
contradicts some of the data cited in the introductory
statement by Representative Weller, and I am happy to revisit
that.
These improved methods, as implemented by the Census
Bureau, should be adopted to replace the current official
measure. The fact that the current measure is adjusted only for
price changes and not for income growth in tandem with rising
inequality has led to large and growing gaps between the
officially poor and the rest of society. Even while today's
poor have some goods that were out of reach of the poor in
decades past, in relative terms, today's poor are increasingly
left behind in the mainstream.
Efforts to gauge the true cost of meeting an accurate basic
living standard in today's economy yield income thresholds that
are about twice that of the official poverty lines. Relative to
prior years, a significantly larger share of poor children are
living in families with working parents. The income constraints
faced by these working parents underscore the need for an
improved system of work supports, including subsidies for
wages, health care, child care, housing, and transportation.
Getting a little deeper into a critique of the official
measure, these measures were developed in the mid-1960s based
on data from the mid-1950s. Since they have been adjusted
largely just for price changes but not for improvements in
general living standards, they are ever less representative of
relative deprivation. In fact, back in 1960, the official
poverty threshold for a family of four was about half the
median income for a four-person family. Today, at about 20,000
for a family of four with two children, it is 30 percent of the
four-person median and for half of the 30 percent of the median
for a four-person family.
Economist Adam Smith has recognized that, even if the poor
are able to meet their fundamental needs for food and shelter
in such a way as to sustain their lives, they can, by dint of
the economic and the social distance between themselves and the
rest of us, still experience deprivation that is harmful to
society, but to this day, poverty analysts overlook this point,
citing material gains made by the poor of today relative to
those of the past.
Two such analysts writing in 1999 noted that, by the
standards 1971, many of today's core families might be
considered members of the middle class. Another poverty analyst
noted ``Poor people's physical and material well-being is now
considerably better than it was in the late '60s. How else to
explain why so many poor people now have color TVs, air
conditioning in their own homes?''
These comparisons are misleading. They implicitly freeze
the well-being of the poor at a point in time, ignoring
progress in technology, consumption, relative prices, and
opportunities. In short, to ignore the relative economic
distance between the poor and everyone else is to ensure that
they will remain outside the mainstream. Yes, they will not
starve. Many will be housed, and a large majority will watch TV
in color, but they will still be separate and unequal relative
to the majority.
Just in the interest of time, I am going to finish up here.
Most poor families have at least one worker. With welfare
reform, income from work has become much more important to poor
and near poor families. Many more children live in working poor
families, and yet, even in the best of times, gaps are going to
exist between what these working poor families can earn in the
low-wage labor market and what they need to meet their basic
needs as I have discussed. This implies an important role for
work supports. I would be happy to say more about that in Q&A
if it would be useful.
Chairman MCDERMOTT. If we have time.
[The prepared statement of Dr. Bernstein follows:]
Statement of Jared Bernstein, Ph.D., Director of the Living Standards
Program, Economic Policy Institute
Chairman McDermott and members of this Subcommittee, I thank you
for the opportunity to testify. I sincerely applaud your willingness to
examine these issues of great importance to those on this panel and to
our most economically vulnerable families.
It is a symbol of a just society that we engage in an accurate
assessment of the extent of material need among our population. Such an
assessment serves multiple purposes.
First, we want a measurement tool that will tell us, given what we
know about human needs and prevailing living standards, how many people
lack the resources to meet those needs. Policy makers may and do have
different ideas about what should be done about such deficits, but all
would presumably like an accurate count. Note that this framing of the
concept introduces both an absolute (meeting basic needs) and a
relative dimension (prevailing standards) to the question of poverty
measurement.
Second, since it implies underinvestment in the economic well-being
of adults and, in particular, children, poverty can cause long-term
harm to our economy and society. One recent estimate suggested that
child poverty ultimately costs society half-a-trillion dollars in
sacrificed productivity and ancillary costs each year (Holzer,
2007).\1\ It is thus very much in our national interest to measure
poverty's extent as accurately as we can.
---------------------------------------------------------------------------
\1\ Henry Holzer, ``The Economic Costs of Child Poverty,''
Testimony before the U.S. House Committee on Ways and Means. U.S. House
of Representatives, Washington, D.C. 24 January 2007, Accessed 8 Feb
2007, .
---------------------------------------------------------------------------
Third, we want to be able to assess the anti-poverty effectiveness
of market forces and non-market interventions. When policy makers
undertake initiatives to reduce the extent of economic deprivation, an
accurate accounting of the effectiveness of such interventions is
critical. All of us, whether we're members of this panel, taxpayers,
voters, or the targets of these programs themselves, have a vested
interest in their cost effectiveness. Are they accomplishing their
goals? Are they doing so without creating unintended consequences that
threaten to offset the gains? Are we getting the best possible ``bang
for the buck?''
It is widely agreed upon that the current poverty measure fails to
meet these criteria, and does so by a long shot. It does not provide an
accurate picture of the extent of material deprivation, it does not
tell us how far the poor are falling behind relative to the rest of us,
and it does not enable us to gauge the effectiveness of our antipoverty
initiatives.
As a British analyst who reviewed a quarter-century of our poverty
debate summarized, ``The United States got itself the worst of all
worlds--an increasingly mean measure of poverty that also suggested
that U.S. social programs were not making a difference when they were''
\2\ (Glennerster, 2002).
---------------------------------------------------------------------------
\2\ Howard Glennerster, ``United States Poverty Studies and Poverty
Measurement: The Past Twenty-Five Years,'' Social Science Review, March
2002.
---------------------------------------------------------------------------
Key points in this testimony are:
Our current approach to measuring poverty is far outdated
and fails to provide an accurate count of the extent of need in
America.
Newer methods that correct many of the problems with the
official measure show more people in poverty than the 37 million
officially poor (12.6% of the population), including 13 million
children. These methods should be adopted to replace the current,
official measure.
The fact that the current measure is adjusted only for
price changes and not for income growth, in tandem with rising income
inequality, has led to large and growing gaps between the officially
poor and the rest of society. Even while today's poor have some goods
that were out of reach of the poor in decades past, in relative terms,
today's poor are increasingly left behind the mainstream.
Efforts to gauge the true cost of meeting an adequate,
basic living standard in today's economy yield income thresholds that
are about twice that of the official poverty lines.
Relative to prior years, a significantly larger share of
poor children are living in families with working parents. The income
constraints faced by these working parents underscore the need for
increased work supports, including subsidies for wages, health care,
child care, housing, and transportation.
Critique of the Official Poverty Measure
The shortcomings of our poverty measure have been amply documented
and I will only briefly review these critiques (see Bernstein, 2001,
for a thorough review).\3\
\3\ Jared Bernstein, ``Let the War on the Poverty Line Commence,''
The Foundation for Child Development Working Paper Series, June 2001.
The official thresholds were developed in the mid-1960s
based on data from the mid-1950s. Since then they have largely been
adjusted only for price changes but not for improvements in general
---------------------------------------------------------------------------
living standards.
The original poverty thresholds were derived by poverty analyst
Mollie Orshansky, who based the measure on research on food consumption
of low-income families in the mid-1950s. Surveys from the mid-1950s
also revealed that families spent about a third of their income on
food, so she simply tripled the value of the ``economy food plan'' for
a given family size.
Amazingly, with very few changes, and with adjustments for
inflation, the Orshansky measure remains the official poverty measure
to this day. Food consumption represents a much smaller share of family
budgets than was the case 50 years ago (its average share has fallen by
about half),\4\ while housing, transportation, and health care, for
example, comprise larger shares. Simply updating the official
thresholds for this change alone would lead poverty thresholds (and
poverty rates) to be much higher today.
---------------------------------------------------------------------------
\4\ Bureau of Labor Statistics, ``At Issue: Tracking Changes in
Consumers' Spending Habits,'' Monthly Labor Review, September 1999.
---------------------------------------------------------------------------
One problem with the official approach is that as living standards
rise for the rest of society, those deemed poor by an absolute
threshold adjusted solely for price changes will fall behind the rest
of us (this would not be the case with a relative measure, such as 50%
of median income). Back in 1960, the official poverty threshold for a
family of four was about half the median income for a four-person
family. Today, at about $20,000 for a family of four with two children,
it's around 30% of the four-person median.
In an era with sharply growing income inequality, it is worth
contemplating the importance of this development. Why should we be
concerned if our poverty thresholds drift further below the income of
the median household?
The answer is that the concept of deprivation is not solely an
absolute concept; it is a relative one as well. Economists since Adam
Smith have recognized that even if the poor are able to meet their
fundamental needs for food and shelter in such a way to sustain their
lives, they can, by dint of the economic and social distance between
themselves and the rest of us, still experience deprivation that is
harmful to society.
As Smith put it, over two hundred years ago:
``By necessaries I understand not only the commodities which are
indispensably necessary for the support of life, but what ever the
customs of the country renders it indecent for creditable people, even
the lowest order, to be without. A linen shirt, for example, is,
strictly speaking, not a necessary of life. The Greeks and Romans
lived, I suppose, very comfortably, though they had no linen. But in
the present times, through the greater part of Europe, a creditable
day-laborer would be ashamed to appear in public without a linen shirt,
the want of which would be supposed to denote that disgraceful degree
of poverty which, it is presumed, nobody can well fall into, without
extreme bad conduct. Custom, in the same manner, has rendered leather
shoes a necessary of life in England.''\5\
---------------------------------------------------------------------------
\5\ Adam Smith, 1776, ``Wealth of Nations.'' See, http://
www.adamsmith.org/smith/won/won-b5-c2-article-4-ss2.html, for context.
John Cassidy provides this quote in his New Yorker article, Relative
Deprivation, 4/3/06 (http://www.newyorker.com/printables/fact/
060403fa_fact).
---------------------------------------------------------------------------
To this day, some poverty analysts overlook this point, citing
material gains made by today's poor relative to those of the past. Two
such analysts, for example, writing in 1999 noted that ``By the
standards of 1971, many of today's poor families might be considered
members of the middle class.''\6\
---------------------------------------------------------------------------
\6\ W. Michael Cox and Richard Alm, as quoted by Cassidy, ibid.
---------------------------------------------------------------------------
Poverty analyst Doug Besharov notes that ``. . . poor people's
physical and material well-being is considerably better now than in the
late '60s. How else to explain why so many poor now have color TV (93%)
and air conditioning (50%), and own their own homes (46%)?''\7\
---------------------------------------------------------------------------
\7\ Doug Besharov, ``Poor America,'' Wall Street Journal, 24, March
2006.
---------------------------------------------------------------------------
Such comparisons are misleading. They implicitly freeze the well-
being of the poor at a point-in-time, ignoring progress in technology,
consumption, relative prices, and opportunities. In short, to ignore
the relative economic distance between the poor and everyone else is to
ensure that they will remain outside the mainstream. Yes, they will not
starve, many will be housed, and a large majority will watch TV in
color. But they will still be separate and unequal relative to the
majority.
Interestingly, as Fisher points out (2005), subjective measures--
responses from the public as to what it takes to make ends meet--
clearly support a relative component to measuring poverty. For each 1%
increase in national income, these subjective measures grow by 0.6%-
1%.\8\ Much as Adam Smith recognized hundreds of years ago, when
thinking about what constitutes a fair poverty threshold, we
instinctively add a strong relative component. Implicitly, we want to
prevent a growing gap between ourselves and the least well off among
us. Our official poverty measure, however, allows this gap to grow.
\8\ Gordon M. Fisher, ``Relative or Absolute: New Light on the
Behavior of Poverty Lines Over Time,'' Newsletter of the Government
Statistics Section and the Social Statistics Section of the American
Statistical Association, Summer 1996: pp. 10-12.
The official measure ignores the value of some publicly-
---------------------------------------------------------------------------
provided benefits that should be counted as income to their recipients.
As measured by the Census Bureau, under rules established by the
Office of Management and Budget, the official income measure in our
poverty accounts is pretax, post-cash transfer. Thus, it includes the
cash value of government transfers like welfare payments and Social
Security, but omits, for example, the market value of food stamps or
tax benefits like the Earned Income Tax Credit.
These are salient omissions. By excluding such resources, we create
two problems. First, we underestimate the actual resources accruing to
low-income families, and second, we prevent ourselves from observing
the anti-poverty impact of these initiatives.
For these reasons, the omission of these benefits is widely agreed
to be a significant problem with the current measure. There is,
however, some disagreement about how to value of economic resources.
For example, some analysts argue that we should also consider wealth
and service flows from investments, such of the value of housing
consumed by homeowners. Another controversial area, one of some
magnitude, is whether to include the value of publicly provided health
care, and if so, how to calculate it.
The official thresholds fail to account for necessary
expenses associated with work and medical care.
The National Academy of Sciences (NAS), in their work seminal work
on how we might improve our poverty measure, concluded that it made
sense to subtract from income costs associated with work, largely child
care and transportation. This adjustment is particularly germane in an
era when anti-poverty policy is predicated on work in the paid labor
market. Imagine, for example, a single parent who works full time, with
earnings that lift her family above the poverty line. Yet, once we net
out her child-care expenditures, she falls below that line. Such an
example shows that the costs associated with climbing out of poverty
can make the climb that much steeper. Similarly, if her out-of-pocket
medical expenditures pushed her back below poverty, we would want to
account for that spending as well, subtracting it from income before
comparing her income to the poverty threshold (this too was a NAS
recommendation).
The official measure makes no adjustments for
geographical variation in the cost of living.
Though prices differ considerably by region, the official poverty
measure makes no adjustments for the fact that the same level of income
has greater buying power in one area of the country relative to
another. Part of this omission stems from the lack of official inter-
area price deflators, though exciting progress is being made in this
area (see Aten, 2006). Aten finds, for example, that prices in New York
City in 2003 were about the same as those in San Diego, but about 50%
higher than those in St. Louis.
Political constraints are in play here too. Adjusting for inter-
area price differences, areas with relatively lower prices will find
their poverty rates decrease compared to current measures, and this
could lower anti-poverty benefits received by such areas (and vice-
versa, of course, for areas with higher prices), as a range of federal
programs allocate their benefits based on formulae that depend on
calculating numbers of people in poverty.
There are numerous other concerns of a technical nature regarding
the official measure. Poverty analysts have found arguably better
equivalence scales--adjustments for the needs of families of different
sizes and composition--than those used in the current measure. Also,
and this one makes a big difference, many analysts argue that
thresholds should be adjusted for prices using a different version of
the consumer price index than the CPI-U, the current deflator used by
Census. The alternative deflator most often referenced in these
discussion is the CPI-RS, which incorporates in an historically
consistent manner (back to 1978) all of the advances made by BLS in
measuring inflation.
In sum, I can firmly assert that a consensus exists among social
scientists regarding the inadequacy of the current measure. To the
extent we depend on it, we unnecessarily limit our knowledge of the
magnitude and composition of the poor population, the impact of our
programs, and our ability to reach those truly in need.
An Improved Measure
An improved measure would correct these shortcomings. What's needed
is a set of thresholds and an income measure that designates as poor
those families whose members cannot adequately meet their basic needs,
given what we know about human needs and prevailing living standards.
It is critical in this measurement endeavor to avoid a piecemeal
approach: our new measure must deal as comprehensively as possible with
both a complete accounting of available resources on the income side,
as well as expenses on the threshold side. Some analysts, for example,
add near-cash benefits like food stamps, or tax benefits, like the
EITC, to income, and show how this reduces poverty. This may be
analytically useful way to isolate the impact of a particular program,
but it is not an improved measure of poverty. Adjustments to the income
side of the equation must be matched by adjustments to the thresholds.
What would such a measure show? Since any poverty measure
invariably involves normative decisions, there are lots of different
measures. However, it is again widely agreed upon that the NAS
recommendations deal successfully with many of the concerns raised
above. We also benefit from the fact that poverty analysts at the
Census Bureau have operationalized the NAS recommendations, creating
numerous variants based on the NAS suggestions.\9\
---------------------------------------------------------------------------
\9\ Some of this material was in Mishel, Bernstein, and Allegretto,
2006. For a good discussion of the ongoing work at Census and BLS on
these issues, see.
---------------------------------------------------------------------------
The NAS measures have these advantages over the official measure:
The NAS thresholds are based on actual expenditures on
food, clothing, and shelter and thus reflect increases in living
standards (though not to the extent of family budgets, as discussed
below).
The NAS income measure is after-tax, and thus reflects
the poverty reduction effects of tax credits.
They include non-cash benefits in income (though they do
not include the value of publicly provided health care).
They deduct some work expenses, like child care
expenditures for working families, from income and subtract out-of-
pocket medical expenses, including premium payments.
They factor in regional differences in cost-of-living.
As noted, there are many variants to these measures, and the Census
Bureau has generated a consistent time series back to 1999 of 12
different NAS-based approaches. For example, some measures account for
geographical differences while others do not.
A fundamental question for this committee to consider is, relative
to the official measure, do these improved measures generate lower or
higher poverty rates? The answer, shown in Figure 1, is clear: the NAS
measures are uniformly higher than the official measure.\10\ The Figure
shows the range of the 12 measures, which is almost always above the
official. On average over the period covered by the graph, the NAS
rates are about one percentage point above the official rate, implying
about 2.5 million more persons on the poverty rolls.
---------------------------------------------------------------------------
\10\ This figure also appears in Bernstein and Sherman, 2006.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
These measures also tend to change the composition of who is
poor.\11\ Under the NAS because work expenses are subtracted from
income, working poverty rises, especially among single parents facing
child care costs. A similar treatment of out-of-pocket medical spending
leads to higher poverty rates among the elderly. Because more transfers
are counted as family resources, African-American poverty rates are
lower under the NAS measures, though still much higher than those of
whites.
---------------------------------------------------------------------------
\11\ To compare the composition shift, rates must be standardized,
as in this table.
---------------------------------------------------------------------------
A Relative Measure
The NAS measure is a vast improvement in all the ways noted above,
but it too is limited in the extent to which it captures relative
differences between the poor and the rest of society. Another way to
measure poverty--one with great intuitive appeal--tracks the poor while
accounting for changes in prevailing income levels among the non-poor.
Such measures are called ``relative,'' in that they set the poverty
threshold as a percent of the median income, which moves each year,
typically rising in nominal terms. (The NAS measure has a relative
component, as the thresholds are keyed to changes in median consumption
expenditures).
The utility of this measure--and note that it is the norm in
international comparisons--is that it shows how the poor or faring
relative to middle income families, and thus speaks directly to the
concept of ``relative deprivation.''
The 1990s are a good example of the importance of this approach to
poverty measurement. The tight job market, in tandem with a large
expansion of the Earned Income Tax Credit, helped lead to significant
reductions in a comprehensive poverty measure (i.e., one that includes
such transfers as the EITC). But because median family income also grew
quickly over this period, much less relative than absolute progress was
achieved.
Table 1 compares relative poverty to absolute poverty, using
adjusted income measures much like those recommended by the NAS (the
absolute poverty measure here is from unpublished tabulations provided
by Wendell Primus). Absolute poverty fell fairly steeply in the 1990s,
from 15.5% to 10% by this measure. But relative poverty fell only
slightly, from 18.4% to 17.7%.
Relative and Absolute Poverty Measures, 1989-2004
----------------------------------------------------------------------------------------------------------------
Relative (50% of Absolute (NAS
Median) Style) Difference Rel-Abs
----------------------------------------------------------------------------------------------------------------
1989 18.4% 15.5% 2.9%
----------------------------------------------------------------------------------------------------------------
2000 17.7% 10.0% 7.7%
----------------------------------------------------------------------------------------------------------------
2004 18.5% 12.5% 6.0%
----------------------------------------------------------------------------------------------------------------
Changes
----------------------------------------------------------------------------------------------------------------
1989-2000 -0.7% -5.5%
----------------------------------------------------------------------------------------------------------------
2000-04 0.8% 2.5%
----------------------------------------------------------------------------------------------------------------
Souce: State of Working America, 2006/07, Figure 6G. Absolute measure is unpublished, provided by Wendell
Primus. Relative measure by author.
The table shows that the poor made a great deal of ground in
absolute terms: over the 1990s, as low-incomes rose in real terms, more
families made it over the threshold. But the relative measure shows
that low incomes grew at about the same rate as middle incomes, so the
share of poor below half the median changed little over these years.
In other words, the relative measure tracks social/economic
distance between the poor and the middle-class in a way that absolute
measures do not. As such, they quite directly reveal the impact of
changes in inequality on poverty. The share of the population that is
poor in relative terms has hovered around 18% since the mid-1980s,
showing that by this benchmark, many more persons are poor in relative
terms--their income is less than half the median--than in absolute
terms. The fact that such a significant share of our population remains
relatively distant from the mainstream is an important dimension of the
poverty problem.
Family Budgets
Though the official Orshansky poverty measure has gotten by far the
most attention in this debate, budget analysts have a long history of
measuring the amount of income needed to meet a basic standard. This
work, under the rubric of family budgets, has generally been
underutilized in the poverty debate, yet there is much we can learn
from it about the income constraints facing American families today.
In this work, economists (along with nutritionists, health care
experts, etc.) have set out to tally the amount of income needed to
meet a basic living standard, one where a generally accepted set of
material needs is met. As Johnson et al noted, ``most budget standards
have been calculated by building up a budget that would provide
families with a modest, fair, or sufficient income.'' \12\ In our own
work on basic needs budgets for working families, these needs included
decent housing, an adequate diet, child care (when no parental
caretaker is available), health care, transportation, and the money
needed to pay taxes.\13\
---------------------------------------------------------------------------
\12\ David S. Johnson et al, ``A Century of Family Budgets in the
United States,'' Monthly Labor Review, May 2001.
\13\ Bernstein et al, 1999.
---------------------------------------------------------------------------
Obviously, criteria like ``modest,'' ``fair,'' and even
``sufficient,'' are normative judgments, although, as noted above,
family budgets are often based on expert opinion, such as when
nutritionists recommend an adequate diet. But the committee should
recognize that there is simply no ``right'' way to measure such
concepts, including poverty. When we engage in this exercise, we
balance a variety of needs, sensibilities, and political, if not
existential considerations. We recognize that there is a distribution
of well-being, and that it would be unreflective of realistic outcomes
in a market economy to designate, say, everyone below the 80th, or even
the 50th percentile of the income scale as ``poor.'' Yet, it would be
unjust in an affluent, highly productive economy to label only those
facing the most severe material deprivation as poor.
Family budgets attempt to balance these extremes by recognizing
that families who are unable to meet basic needs--and again, as Adam
Smith pointed out, needs that derive in part from societal standards--
face a material disadvantage that government should recognize and
address. In fact, such budgets continue to be used by the Department of
Labor to set eligibility criteria for job training programs (Johnson et
al, 2001).
It is instructive that these budgets are well above poverty
thresholds, usually in the range of two-times their value. For example,
Johnson et al report a family budget for a married couple with two
children of $36,550 in 1998; Allegretto (2005) reports a family budget
for the same family type of just under $40,000 for 2004.\14\ In both
cases, these budget levels are about twice the official poverty
threshold for that family type. In fact, Allegretto's work shows that
while about 9% of the family types she examines are officially poor,
about 30% are below the family budget thresholds.
---------------------------------------------------------------------------
\14\ Sylvia Allegretto, ``Basic Family Budgets: Working families'
incomes often fail to meet living expenses around the U.S.,'' EPI
Briefing Paper, 1 Sept. 2005. Accessed 8 Feb 2007.
---------------------------------------------------------------------------
Does this finding imply that 30% are poor, or materially deprived
in the sense that has been discussed in this testimony? No, for a
number of reasons. First, the family budget standard is higher than the
poverty standard. For example, some of the family budget assumptions
would likely be considered too generous for the poverty debate. Much of
this work uses HUD Fair Market Rents for housing costs, and these
typically give the 40th percentile rent for currently available
rentals. Child care costs are often based on qualified center-based
care; health care includes some measure of non-group premium costs.\15\
The distinction between these two standards--poverty and family
budgets--recalls the views of poverty measurement pioneer Mollie
Orshansky, who viewed her original poverty thresholds as a measure of
income inadequacy, not of income adequacy.\16\ Family budgets are
closer to the latter.
---------------------------------------------------------------------------
\15\ Ibid.
\16\ Fisher, Gordon M. ``The Development and History of the U.S.
Poverty Thresholds: A Brief Overview.'' Newsletter of the Government
Statistics Section and the Social Statistics Section of the American
Statistical Association. Winter 1997: pp. 6-7. Accessed 8 Feb 2007.
---------------------------------------------------------------------------
Second, this research tends to deal only with the threshold side of
the question, and not with the resource side. As such, it lacks the
holistic quality of the NAS work.
But it does provide a common sense benchmark that has had some
considerable impact on the poverty analysis community. The logic of the
family budget work is straightforward and commonsensical: if we take an
objective look at what things cost, it takes an income well above the
poverty threshold to make ends meet. This, and the fact that family
budgets often correspond to roughly twice poverty have led many
analysts to use twice-poverty as a benchmark.
Moreover, there are important public programs that recognize this,
including SCHIP, the public health insurance program for children. The
vast majority of children living in families with incomes below twice
poverty are eligible for the program. A moment's reflection suggests
that this is a stark repudiation of the official poverty threshold. Our
government itself, to our credit, obviously recognizes the inadequacy
of the official measure as a criterion for setting eligibility for
families in need.
Working Poverty
In moving towards a more accurate approach to measuring poverty,
the committee also needs to consider the increasingly important role of
work among the poor and near poor. Though the share of the poor in the
job market has not changed much over time, its composition has changed
a great deal, with many more parents, especially single parents at
work. It is also the case that low-income persons (family income below
twice poverty) are working more hours than in the past, and, most
importantly, a much larger share of their income derives from the labor
market, including wage subsidies. Because more low-income parents
(especially mothers) are working now than in the past, the share of
children in working but poor families has climbed significantly.
Most poor families have at least one worker: 61% of poor families
had at least one worker in 2005 (4.6 million families); 71% of twice-
poor families have at least one worker (14.4 million).\17\ Figure 2
shows that income from work (earnings plus the EITC) for low-income
single mothers with at least two children rose from 45% of income in
1979 to 72% in 2000 (comparison made at business cycle peaks; Mishel et
al, 2006, Table 6.11). This increase is a function of the steep growth
in both the share of single mothers at work in the paid labor market,
and in their annual hours worked.
---------------------------------------------------------------------------
\17\ Please refer to BLS tables, ``Families by Number of Working
Family Members and Family Structure: 2005.''
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
As noted, these trends have meant that more low-income children
have working parents. This is evident in Figure 3 which shows the
percent of poor children in families with a working parent, 1979-
2005.\18\ This share shot up in the 1990s, particularly among poor
families with a single mother. Between the economic peaks of 1989 and
2000, the share of poor children in homes with a working parent
increased from 59 to 71 percent; for kids of single moms, the increase
was from 42 to 61 percent, i.e., from a minority to a solid majority.
---------------------------------------------------------------------------
\18\ Though this is my analysis of CPS data, the figure is based on
work done by the Congressional Research Service.
---------------------------------------------------------------------------
Note also the steady decline in the 2000s, driven again by
employment trends of single mothers (married mothers' employment rates
also fell over this period). The long jobless recovery and the weaker
labor demand over the current recovery has been particularly damaging
to these economically vulnerable families. As their labor market
opportunities have diminished, their family poverty rates have gone up
3.2 points, 2000-05, compared to 1.2 points for the overall family
poverty rate. The problem for them relates closely to the observation
that earnings, and benefits tied to earnings, have become much more
important to the economic well-being of single-mother families.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
In sum, recent experience has shown that these low-income working
families depend on two forces to ensure that their living standards are
rising. First, relative to more economically secure populations, they
depend on tight labor markets and strong labor demand, compelling
employers to provide the jobs and wage advancement they need.
The second point links back to the measurement themes explored in
this testimony. Even in the best of times, gaps will exist between what
any working poor families can earn in the low-wage labor market and
what they need to meet their basic needs, as discussed above. This
implies an important role for work supports.
Work supports are any publicly-provided resource that either boosts
the earnings of low-income workers (like the EITC), or helps offset the
cost of a family budget component, including subsidies for health care,
child care, housing, and transportation. These supports play an
important role in helping to close the needs gap, but their provision
is not always guaranteed, and in the face of budget constraints, many
states have cut back. At the federal level, the most recent budget
offered by the president includes significant cuts in access to SCHIP--
the health coverage program for low-income children and an important
work support for low-income workers whose jobs often fail to provide
family coverage.
Given evidence provided in this testimony regarding the extent of
low-income work, and the material needs of these families,
strengthening the nation's system of work supports would be a highly
useful anti-poverty strategy.
Conclusion
Ours is a nation with one of the strongest, most productive
economies in the world. Yet considerable poverty exists amid the
plenty. By the official measure, one that most consider inadequate to
the task of accurately measure material need, 12.6% of our population,
37 million persons, are poor. As I have argued, a more accurate measure
would show a greater share of persons in need. While one should not be
dismissive of the political constraints pushing back against changing
the official measure, its time has passed, and I urge the committee to
begin taking steps to replace it with a better alternative.
As I have shown, such alternatives have been developed by a team of
researchers at both the Census Bureau and BLS, implementing the seminal
work of the National Academy of Sciences. The advances in poverty
measurement made by these analysts have the potential to vastly improve
our knowledge and understanding of who is poor.
Of course, measurement is a means to an end, and this committee has
shown great interest is taking steps to address poverty amid plenty.
Given the sharp rise in the number of children in working poor
families, I have stressed the importance of ensuring that these
families have enough to not simply pass the poverty threshold, but to
meet their basic needs, as shown in the family budget literature. To
this end, work supports, including wage subsidies along with subsidies
for other basic needs such as housing, health and child care, and
transportation, have proved vital in closing the gap between what low-
income workers earn and what they need.
I urge the committee to examine and strengthen this system. I urge
members to fight back when components of the system are attacked, as
with the inadequate funding of SCHIP in the president's most recent
budget proposal, a change that could lead to lost health care coverage
for over 600,000 children.\19\
---------------------------------------------------------------------------
\19\ Deborah Weinstein, ``What's in the President's Budget for
Human Needs?'' Coalition on Human Needs, 8 Feb 2007. Accessed 8 Feb
2007.
---------------------------------------------------------------------------
By updating our measurement tools and strengthening our system of
supports for working but poor families, we can make important progress
toward reconnecting the economic lives of the most vulnerable among us
to that of the mainstream, a laudable goal indeed.
The author thanks Ross Eisenbrey, Danielle Gao, Mark Greenberg, and
James Lin for helpful comments and research support (Lin). Any mistakes
are my own.
______
Bibliography
Allegretto, Sylvia. ``Basic Family Budgets: Working families'
incomes often fail to meet living expenses around the U.S.'' EPI
Briefing Paper. 1 Sept. 2005.
Bernstein, Jared. ``Let the War on the Poverty Line Commence.'' The
Foundation for Child Development Working Paper Series. June 2001.
Bernstein, Jared and Arloc Sherman. ``Poor measurement: New Census
Report on Measuring Poverty Raises Concerns,'' Economic Policy
Institute, 2006. http://www.epi.org/content.cfm/ib222.
Besharov, Doug. ``Poor America.'' Wall Street Journal. 24, March
2006.
Bureau of Labor Statistics. ``At Issue: Tracking Changes in
Consumers' Spending Habits.'' Monthly Labor Review. September 1999.
Cassidy, John. ``Relatively Deprived: How Poor is Poor?'' The New
Yorker. 3 April 2006.
Fisher, Gordon M. ``Relative or Absolute: New Light on the Behavior
of Poverty Lines Over Time.'' Newsletter of the Government Statistics
Section and the Social Statistics Section of the American Statistical
Association. Summer 1996: pp. 10-12.
Fisher, Gordon M. ``The Development and History of the U.S. Poverty
Thresholds: A Brief Overview.'' Newsletter of the Government Statistics
Section and the Social Statistics Section of the American Statistical
Association. Winter 1997: pp. 6-7.
Glennerster, Howard. ``United States Poverty Studies and Poverty
Measurement: The Past Twenty-Five Years.'' Social Science Review. March
2002.
Holzer, Henry. ``The Economic Costs of Child Poverty.'' Testimony
before the U.S. House Committee on Ways and Means. U.S. House of
Representatives. Washington, D.C. 24 January 2007.
Johnson, David S., John M. Rogers, and Lucilla Tan. ``A Century of
Family Budgets in the United States.'' Monthly Labor Review, May 2001.
Mishel, Lawrence, Jared Bernstein, and Sylvia Allegretto. The State
of Working America. Ithaca: Cornell University Press, 2007.
Smith, Adam. Wealth of Nations. [1776] New York: Prometheus Books,
1991.
Weinstein, Deborah. ``What's in the President's Budget for Human
Needs?'' Coalition on Human Needs. 8 Feb 2007.
Chairman MCDERMOTT. I want to thank all of the panel. We
will have time for one question apiece. Mr. Weller.
Mr. WELLER. Well, thank you, Mr. Chairman.
There is one question that I am going to ask be submitted
for the record. Mr. Smeeding's testimony presented by Mr.
Burtless calls for about $120 billion in additional welfare
spending, and I would be interested in knowing the specifics in
that and, of course, under the PAYGO rules, where we would get
that? So, I will ask for that in writing.
[The information follows:]
February 28, 2007
The Hon. Jerry Weller, Ranking Member
Subcommittee on Income Security and Family Support
Committee on Ways and Means
U.S. House of Representatives
Washington, DC 20515
Dear Representative Weller:
I am writing in response to the questions you sent me on February
23, 2007. Those questions were related to the testimony I gave in
behalf of Professor Timothy Smeeding on February 13, 2007, to the
Subcommittee on Income Security and Family Support.
You asked specific questions regarding the policies adopted by the
United Kingdom (U.K.) to reduce child poverty. Unfortunately, I am not
an expert on British antipoverty policy. Professor Smeeding recommended
two sources of information about those policies in the prepared
testimony I delivered for him on February 13. One source, written by
Jane Waldfogel and others, is ``Family Expenditures Post Welfare Reform
in the UK: Are Low Income Families Starting to Catch Up?'' which
appeared in Labour Economics in 2006. Another is by M. Francesconi and
W. van der Klaauw, ``The Socio-Economic Consequences of `In-Work'
Benefit Reform for British Lone Mothers,'' which appeared (or will
appear) in the Journal of Human Resources in 2007. I think these two
articles describe British policies more accurately than I am able to
do.
You also asked about the cost of adopting the U.K. policies here in
the United States. Professor Smeeding estimated that the U.K. policies
increased British spending by 0.9 percent of the U.K. gross domestic
product. An equivalent change in public spending in the United States
would amount to about $120 billion per year according to his estimates.
This is more than the United States now spends on means tested cash and
near-cash assistance programs that are targeted on families with
children (the EITC, food stamps, child-care support, and TANF). I do
not interpret Professor Smeeding to mean that the United States ought
immediately to expand cash welfare programs by $120 billion a year.
Instead, I think he was trying to give Members and other interested
readers an impression of the scope and expense of the U.K. effort to
reduce its child poverty rate. If the United States were to undertake a
similarly ambitious program to reduce poverty among American youngsters
and hoped to achieve an equally impressive result as has been achieved
by the U.K., we should not be surprised if the price tag is high.
Speaking for myself, I believe the United States could achieve
noticeable reductions in child poverty by offering more generous earned
income supplements to the working poor than are now provided by the
EITC. In particular, I think it would be desirable to offer a more
generous schedule of EITC benefits to low-income parents who can
demonstrate they are working steadily in full-time jobs (jobs where the
work schedule is 32 hours a week or longer). This kind of reform has
the potential to increase the earned plus unearned incomes of low-wage
parents while simultaneously encouraging many of them to find and
remain employed in full-time jobs.
There is no such thing as a free lunch. More public spending for
child poverty requires either higher taxes or lower spending on other
public programs. Like many voters, I have a favorite list of government
programs where I think less spending is both possible and desirable. In
this brief letter it seems impractical, however, to offer a persuasive
justification for the items on that list.
I hope you find these answers responsive.
Very sincerely,
Gary Burtless
John C. and Nancy D. Whitehead Chair
Economic Studies
Mr. Rector, several of Mr. Smeeding's charts suggest the
relative poverty in the United States today mostly resembles
that in Mexico, and I was wondering: Can you tell us how he
arrives at that conclusion and then also compare U.S. spending
on assistance of the poor with other countries?
Mr. RECTOR. Yes. That is the problem with the relative
poverty measure, okay, that, in fact, you can produce these
charts that show that Mexico and the United States have
effectively the same poverty rate when, in fact, the standard
of living in the United States is five times higher, and so the
bar for poverty in the United States is five times higher.
In fact, poor people in the United States have upper middle
class living standards by comparison to Mexico, and it is
because what you are measuring there is inequality. You are not
measuring poverty, and in his better days, Tim Smeeding
actually acknowledges, well, there is a difference between
poverty and inequality. They are not the same thing, but the
relative poverty measure is simply measuring inequality. What
is the standing of the bottom 10 percent compared to, say, the
median household? In all of those comparisons, the United
States is at a disadvantage because we are wealthier than
European nations and certainly wealthier than Mexico.
Therefore, the poverty standard in the United States is higher
than it is in those other standards. Therefore, we have, by
that measure, more poverty even though many of the poor people,
according to that standard, will have higher incomes than, say,
somebody in France who is judged not poor, okay?
Now, you could say, even when you look at an absolute
measure and judge everybody by the same standard, the United
States still, in many cases, does not look that good or it
looks worse than other European countries, but the difference
is very small, and I would be happy to submit to the Committee
standards that use an absolute measure that, in fact, show the
United States has lower poverty overall when compared, say, to
Sweden depending on how you do the measure once you put an
equal bar, but the reality is that Sweden has an income that is
about one-third lower than ours.
Therefore, when you use a relative poverty measure, they
essentially have an easier bar to pass. I think it does not
tell you very much, and it certainly does not tell you about
poverty. It does not tell you about physical deprivation. If
you want to call this ``inequality,'' call it ``inequality.''
That is an accurate description of it. It is not a description
of poverty.
Mr. WELLER. Thank you, Mr. Chairman. I know time is short,
and I will submit some additional questions in writing. Thank
you.
Chairman MCDERMOTT. Thank you.
I just want to ask--I am frustrated because I have got a
good panel here, and I would like to have them fight and figure
out what we are really talking about here.
Is it that we need to call it ``inequality,'' and then we
can say inequality is okay or bad or good or is there really
poverty, and how do you two answer--Mr. Rector says there is
not any poverty in this country except a very small number of
people way down at the bottom.
What is the answer to that?
Dr. BERNSTEIN. If I could make, as quick as I can, a couple
of statements.
First of all, I very strongly disagree, and I think most
economists would disagree with the statement that poverty
should only be measured on an absolute basis, dismissing an
inequality sense. This is a quote from Adam Smith, I think a
pretty good economist to quote in this context.
``By necessities, I understand not only the commodities
which are indispensably necessary for the support of life, but
whatever the customs of the country renders it indecent for
credible people, even the lowest order, to be without.''
It is the way they talked back then, but the point is that
there has to be a relative standard that is embedded in the
poverty measure so that we are also taking into account the
material needs that are common, that are very much a part of
the prevailing set of standards.
Now, also getting to Mr. Rector's point about--I can show
you absolute measures that give you different results, the
National Academy of Sciences and the Census Bureau, as I
mentioned, are doing a really top-notch job of implementing
these recommendations. They spend years figuring out the best
way to improve our poverty measures, taking into account
everything you have heard about on this panel today, and as I
submitted in my written testimony, when you look at their
measures--and they have got twelve of them--and you take an
average, you will find that poverty is about 1 point to 2
points higher than the official measure. So, you can always
cherry-pick and find a measure that shows you what you want,
but this is a group of academics with no skin in the game, on
either side of this debate in an ideological sense, coming
forth with the best definitions that include both absolute and
relative components.
Ms. BLACKWELL. We should be fighting about the solutions,
not about whether or not the problem exists. The first panel
was really illustrative of what we see all across the country.
We know that people lack the resources to be able to provide
for their families in ways that I think we, as a people, think
it means that they can live with dignity. Clearly, we have a
poverty problem in America. We all saw how vulnerable people
were when Hurricane Katrina hit New Orleans. We saw people who
were poor, who were jobless, who were sick, who were isolated,
who were at an extreme disadvantage.
We actually have within our power the ability to do
something--and Representative Weller made that very clear. We
know what to do. We are not doing it. First, we need to make
the investments that begin to pull people out of poverty, and
then we need to make the investments that allow them to be able
to thrive.
Mr. BURTLESS. I think that Mr. Rector is right. If we had
agreed on a ``poverty'' definition back in Abraham Lincoln's
Administration, the United States' poverty thresholds would be
very low. Poverty would be largely eliminated under a
definition that we adopted in 1863. The standards that we
currently have were developed based on U.S. consumption
patterns in the fifties. Forty-five years has elapsed since
then. If you ask Americans how they define ``poverty,'' they
might have in mind poverty in Mexico or poverty in India, but
you ask them ``how much does it take to get by in this country
right now,'' the amount they mention has gone up, more or less,
in line with the rate of increase in median income. Obviously,
they usually mention a lower threshold than the median income
in the country.
So, most Americans do not have the attitude that if we beat
poverty under a definition that would have been adopted in 1860
or 1900 or 1950, we have licked the poverty problem.
Chairman MCDERMOTT. So, is it fair to say, in summation,
that you think Mr. Rector is saying we have licked poverty by a
standard that was set in 1955 or 1960 somewhere and that that
standard really is the problem, if we looked at a present day
standard that made sense with today's economy, that then we
have poverty? Is it?
Mr. BURTLESS. I think the tip-off is saying, ``How rich
America's poor people would look in Mexico!'' Mexico is a
country with one-fifth the income of the United States. I do
not think we would be proud to hear we have conquered poverty
under a definition that would be adopted in Mexico, China, or
India. That achievement would not represent a solution to
America's poverty problem.
Chairman MCDERMOTT. I am sorry. I have to bring this to an
end because there is a Committee coming in here to talk about
the earned income tax credit, which is part of this package.
I want to thank you all very much for not only coming but
staying until Mr. Weller and I could get back. You have made a
real contribution to us, and we thank you for that. We will be
in touch with you again. Thank you.
[Whereupon, at 12:58 p.m., the hearing was adjourned.]
[Submissions for the Record follow:]
Statement of Americans For Fair Taxation, Conyers, Georgia
Poverty levels have for the longest time been measured in terms of
relative income, and not on accumulated wealth.This method of measuring
becomes flawed when millionaires or those who have achieved their
economic goals, drop from the income making scene.According to the
poverty equation, individuals like Ted Turner, Bill Gates and others,
would be officially lumped into the ``poverty level.''
For this reason, income-earning Americans on the way up to meeting
their financial goals, are labeled as ``greedy,'' or ``filthy rich''
monikers, while those with even greater means, are not.This has a
negative effect on economic growth in the creation of jobs spurred on
by the profits of high income earners. Overburdening this group has a
negative impacton the economy and exacerbates the growth of outsourcing
and the removal of jobs to the very people who most need them.
The root culprit for the current and growing situation is our
federal income tax system.It places undo burden on those that can help
raise other individuals out of the poverty level, and at the same time,
rewards those who have accumulated enough wealth to game the
system.True tax reform such as H.R. 25, The Fair Tax, puts in place the
very stimulus our economy and poverty level individuals need while
placing the greater burden on those that can afford the tax.Removing
our income tax system grows our economy by bringing manufacturing and
other high paying jobs back on U.S. soil, and creates the income
earnings potential to a far greater range of skill sets which puts many
outsourced employees back to work.The problem of the rich getting
richer while the poor get poorer is reversed, and a brighter economic
future can be enjoyed by millions more American than our current course
takes us.
Statement of Child Welfare League of America
The Child Welfare League of America (CWLA), representing public and
private nonprofit, child-serving member agencies across the country, is
pleased to submit testimony to the Subcommittee on Income Security and
Family Support. We are pleased to submit our comments to the
Subcommittee as we did with the full Ways and Means Committee last
month. We recommend that statement for a more detailed analysis of the
correlation between poverty and its significance to the child welfare
system.
This is an issue that requires more attention because there are far
too many children and families struggling each and every day. As the
wealthiest nation on earth we cannot be satisfied when we count 13
million children below the official poverty line. We should be even
less satisfied when we calculate the human cost behind these numbers.
The attention of this subcommittee following on the hearings of several
other congressional committees including the full Ways and Means
Committee and the attention to this matter by Chairman McDermott is
greatly appreciated and needed. We look forward to working with you on
this and related issues in the coming months.
Parents and other caregivers require certain economic resources to
provide their children with proper nutrition, adequate housing, and
sufficient health care. Although economic resources provide no
guarantee of a child's healthy development or well-being, poverty is
correlated with a wide range of negative outcomes that begin in
childhood and can forever impact a child's future.\1\ Children raised
in poverty are likely to experience more risks and have fewer
protective factors and resources than children living above the poverty
threshold.\2\
---------------------------------------------------------------------------
\1\ Lieberman Research Worldwide. (1999, April). Assessing public
opinion and perceptions regarding child abuse in America: Final report.
Prepared for the Child Welfare League of America, Washington, DC.
\2\ Parker, S., Greer, S., & Zuckerman, B. (1988). Double jeopardy:
The impact of poverty on early child development. The Pediatric Clinics
of North America, 35 (6), 1227-1240.
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It Is Not A Values Deficit
On January 26, 2006 the ABC Network focused some needed attention
on the subject of poverty in our country. Through the broadcast of
ABC's 20/20 and later on ABC's Nightline, the nation was presented not
with statistics or arguments but human faces on poverty. It was made
all the more compelling because it focused on children. By tracing the
lives of one young person and two children we saw the impact of poverty
on some of the families of Camden, New Jersey. There was one
observation during that broadcast that we would commend to this
subcommittee and indeed to all policy makers. It was a comment by
Dalton Conley, a sociologist who was interviewed for the broadcast. His
observation is of special significance and that sums up this problem in
a phrase: ``There is a common perception that the problem with the poor
folks in the United States is a problem with values. It's not a values
deficit at all; it's really a resource deficit.''
Some will want to ask why these poor families haven't made
different choices in their lives that would presumably remove or keep
them out of poverty. The response is as basic as this; children don't
make choices, rather they are presented with their circumstances at
birth.
Many children raised in poverty begin their lives at a disadvantage
because of inadequate prenatal care, poor maternal nutrition, or birth
complications. They often also face a wide array of familial and other
environmental obstacles, including low levels of parental education,
increased levels of familial stress, poor social support, and limited
community assistance. They may face the burden of unstable housing or
homelessness. They may be growing up in a violent neighborhood. They
may live in circumstances where pre-school and child care are not an
option.
Compared with other children, children living in poverty are more
likely to experience difficulty in school and have a higher high school
drop-out rate. Poverty during early childhood may be more damaging than
poverty experienced later in life because much of the foundation for
learning is built in the early years. Poor children score lower on
measures of vocabulary, language skills, understanding of number
concepts, organization, and self-regulation. In addition, children
living in poverty are more likely to become teen parents, and, as
adults, earn less and be unemployed more frequently.\3\
---------------------------------------------------------------------------
\3\ Ibid.
---------------------------------------------------------------------------
CWLA believes that as a country we must confirm our commitment to
prevent child abuse and neglect and to support children who have been
abused and neglected. A fundamental building block to reaching this
goal is to tackle poverty head-on.
POVERTY AS A NATIONAL ISSUE
In August 2005, for a brief moment, the nation's attention was
focused squarely on the issue of poverty in America. Everyone's eyes
were glued to their television screens as the levees broke in New
Orleans, Louisiana, and significant tragedy unfolded. Images of
individuals and families trapped by floodwaters and testimony of those
mourning the loss of loved ones, homes, and personal belongings
destroyed any ideas of poverty as merely an illusion. This attention
was unfortunately fleeting, however, and the commitments that had been
made to address the poverty issue quickly faded.
In fact, if you were living in Washington, DC, on that August 2005
day, you might have attended a forum hosted by the prestigious
Brookings Institute that included a panel discussion interpreting the
meaning of the new census data on poverty. As has been the case in
other discussions and in other forums over the last several years, much
of that discussion focused on how we measure poverty and whether or not
it is as severe as some would argue. We will not continue that debate
here because, in our view, poverty is severe and the United States is
not doing enough to combat the issue.
CWLA sees poverty as a serious matter that impacts individuals
across the country and shapes the direction we are headed as a nation.
Poverty touches on our economic preparedness, the effectiveness of our
schools, the health of our nation, and--most significantly to CWLA--the
welfare of our nation's children.
In 2005, the national poverty rate stood at 13%.\4\ For children
under the age of 18, the poverty rate was higher at 18%, which meant
that approximately 12.8 million of our nation's children were being
raised in poverty.\5\ For children under the age of 5, the percentage
was even higher at 21%.\6\ One out of five children in the critical
child developmental period of 0 through 5, then, live in poor
conditions that will certainly affect their chances at future success
and well-being.
---------------------------------------------------------------------------
\4\ U.S. Census Bureau, 2005 American Community Survey. (2005).
Data profiles: Selected economic characteristics. Retrieved January 23,
2007, from http://factfinder.census.gov/servlet/ADPTable?_bm=y&-
geo_id=01000US&-qr_name=ACS_2005_EST_G00_DP3&-ds_name=&-redoLog=false&-
format. Washington, DC: Author.
\5\ Ibid.
\6\ Ibid.
---------------------------------------------------------------------------
THE POVERTY DEBATE CONTINUES
We continue to have this debate about how serious poverty is in
America. In a country where the average wedding costs $27,690, the
equivalent of the poverty level for a family of six, we trivialize the
debate and the significance of poverty when we measure how many poor
families have televisions, video cassette recorders or cell phones.
This type of analysis now used in 2007 is not unlike some of the debate
in past discussions. In another decade some said that poverty was not
real because, they argued, some welfare recipients owned Cadillacs. In
reality far too many children will only realize a dream of a quality
education, a safe neighborhood or a better income by watching it
displayed in the latest situation comedy or reality show broadcast on
their television.
We are told how we can do better with the way we spend money and
for that there is no doubt. No problem can be solved by merely throwing
money at it, a truism that applies not just here with our domestic
policies but can also apply when we carry out policies in other
countries. But it is equally certain that too much money is not the
problem. We hear a great deal about how we spend $600 billion in
federal, state and local funds on anti-poverty programs but that figure
is misleading since, for example, it takes into account our spending on
Medicaid costs, a health insurance program.
In 2005 national Medicaid spending totaled $305 billion. That
figure calculates the cost of actual care not the cost of insurance
premiums for the millions of people eligible for Medicaid. It counts a
doctor's treatment or perhaps the average hospital stay of 4.6 days at
an average cost of $20,455. The $305 billion is not spent on an anti-
poverty cash assistance program. Rather, 34 percent of it goes toward
paying a person's long term care costs in a country that has neither a
long term care policy nor an insurance program specifically designed
for it. So it includes the average cost of a nursing home stay at
$65,700 per year. To simply argue that $600 billion is a great deal of
money is to miss out on what our current anti-poverty efforts consist
of, not to mention that fact that we continue to fail to address the
health care challenge this nation has.
POVERTY AND CHILD ABUSE
According to the CWLA Standards of Excellence for Services for
Abused or Neglected Children and Their Families, neglect is defined as
``Failure of parents or other caregivers, for reasons not solely due to
poverty, to provide the child with needed age-appropriate care,
including food, clothing, shelter, protection from harm, supervision
appropriate to the child's development, hygiene, education, and medical
care.''
In 2004, the most recent data available, an estimated 3 million
children were reported as abused or neglected and received an
assessment or screening to determine whether or not there was evidence
of abuse or neglect. Approximately 872,000 children were substantiated
as abused or neglected.\7\
---------------------------------------------------------------------------
\7\ U.S. Department of Health and Human Services, Administration on
Children, Youth, and Families. (2006). Child maltreatment 2004 (Table
2-1). Retrieved January 23, 2007, from www.acf.hhs.gov/programs/cb/
pubs/cm04/index.htm. Washington, DC: U.S. Government Printing.
---------------------------------------------------------------------------
Of the 872,000 substantiated cases of abuse or neglect, 62.4% of
these children experienced neglect, 17.5% were physically abused, 9.7%
were sexually abused, 7% were psychologically maltreated, and 2.1% were
medically neglected. Nearly three-quarters (or 72.9%) of child victims
age 0 to 3 years were neglected--higher than any other age category.\8\
---------------------------------------------------------------------------
\8\ U.S. Department of Health and Human Services, Administration on
Children, Youth, and Families. (2006). Child maltreatment 2004.
Retrieved January 23, 2007, from www.acf.hhs.gov/programs/cb/pubs/cm04/
index.htm. Washington, DC: U.S. Government Printing.
---------------------------------------------------------------------------
The U.S. Department of Health and Human Services is now working on
the Fourth National Incidence Study (NIS) of Child Abuse and Neglect.
The NIS is a congressionally mandated, periodic research effort to
assess the incidence of child abuse and neglect in the United States.
The NIS gathers information from multiple sources to estimate the
number of children who are abused or neglected and to provide
information about the nature and severity of the maltreatment, the
characteristics of the children, perpetrators, and families, and the
extent of changes in the incidence or distribution of child
maltreatment since the previous NIS.
In the third study issued in 1996, a significant correlation was
found between the incidence of maltreatment and family income. It found
that that 47% of children with demonstrable harm from abuse or neglect
and 95.9% of endangered children came from families whose income was
less than $15,000 per year.\9\
---------------------------------------------------------------------------
\9\ Sedlack, A. J. & Broadhurst, D. D. (1996). Third national
incidence study of child abuse and neglect: Final report. Washington,
DC: U.S. Department of Health and Human Services.
---------------------------------------------------------------------------
Children from families with annual incomes below $15,000 as
compared to children from families with annual incomes above $30,000,
were over 22 times more likely to experience some form of maltreatment
that fit the study's harm standard and over 25 times more likely to
suffer some form of maltreatment as defined by the endangerment
standard.\10\ Children from families in the lowest income bracket were
18 times more likely to be sexually abused, almost 56 times more likely
to be educationally neglected, and over 22 times more likely to be
seriously injured from maltreatment than children from higher income
families.\11\
---------------------------------------------------------------------------
\10\ Ibid.
\11\ Ibid.
---------------------------------------------------------------------------
The stress created by living in poverty may play a distinct role in
child abuse and neglect.\12\ Parents who experience prolonged
frustration in trying to meet their family's basic needs may be less
able to cope with even normal childhood behavior problems. Those
parents who lack social support in times of financial hardship may be
particularly vulnerable. Parents who are experiencing problems with
employment are frequently rated by child protective services staff as
being at moderate to high risk of child maltreatment.\13\
---------------------------------------------------------------------------
\12\ Gil, D. G. (1970). Violence against children. Cambridge, MA:
Harvard University Press.
\13\ English, D. (1994). Risk assessment: What do we know? Findings
from three research studies on children reported to child protective
services. In Center for Advanced Studies in Child Welfare and the
Center for Urban and Regional Affairs, Children of the shadows--The
state of children in neglecting families: Conference proceedings.
Minneapolis, MN: University of Minnesota; National Research Council.
(1993). Understanding child abuse and neglect. In G. B. Melton & F. D.
Barry, Protecting children from abuse and neglect: Foundations for a
new national strategy (pp. 132-134). New York: Guilford Press.
---------------------------------------------------------------------------
POVERTY AND KINSHIP AND FOSTER CARE
These findings suggest that we could help alleviate the flow of
children into other parts of the child welfare system by addressing the
core issue of poverty. For those children who are in care, the
challenges and the issue of poverty are no less significant. As of
September 30, 2004, 509,662 children were in foster care in the United
States.\14\ Foster care, when it is the most appropriate service for a
child, should provide a child with protection, care, and nurturance for
a temporary period of time while services are provided to the child's
parents in order to deal with the problems that led to placement.
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\14\ Child Welfare League of America. (2006). Special tabulation of
the Adoption and Foster Care Analysis Reporting System (AFCARS).
Washington, DC: Author.
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When a child cannot remain in his or her own home, it is critical
that the child welfare system work to provide that child with
permanence. All children deserve to be a part of, or have a connection
with, stability and families that are intended to be permanent. Family
foster care and foster care services should emphasize safety and the
well-being of children; recognize that the family is a fundamental
foundation of child rearing; and acknowledge the importance of a
comprehensive, child-centered, family-focused, culturally competent
approach. To fulfill their vital role, then, public child welfare
agencies need to ensure that children in care are protected and cared
for and that they receive the services they need. The agency should
also ensure that the families of the children in care receive services
directed toward early reunification with their child or, as an
alternative, another permanency goal.
To meet these goals, it is clear that families must have the needed
support to help foster children. According to the National Survey of
America's Families (NSAF), only 39% of out-of-home care provider
families have incomes that place them beyond 200% of the poverty level.
Among all families--in-home, foster, and kinship--those involved with
the child welfare system are five times more likely to have income at
only 50% of the poverty level than families in the general
population.\15\
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\15\ U.S. Department of Health and Human Services, Administration
on Children, Youth, and Families. (2005). CPS sample component wave 1
data analysis report. National survey of child and adolescent well-
being. Washington, DC: Author.
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Another significant and growing part of the child welfare system is
the use of kinship care and kinship settings. By definition, kinship
care is the full-time care, nurturing, and protection of children by
relatives, members of their tribes, godparents, stepparents, or any
adults who have a kinship bond with a child. This definition is
designed to be inclusive and respectful of cultural values and ties of
affection. Beyond its formal definition, what kinship care provides is
an opportunity for a child to grow to adulthood in a familial
environment. For many children, it is also a lifeline to a safe and
productive future. It is, therefore, the type of care that we must
nurture and promote in every way possible.
Over six million children are living with a relative who serves as
their caregiver, with approximately four-and-a-half million of these
being grandparents. According to the last census, nearly two-and-a-half
million grandparents report that they are primarily responsible for
their grandchildren. The same census survey reveals that nearly 20% of
these grandparents live in poverty.\16\
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\16\ S. Census Bureau. (2000). Census 2000 summary file 1: Table
P28, relationship by household type for population under 18 Years.
Available from www.factfinder.census.gov. Washington, DC: Author.
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When Congress enacted the Adoption and Safe Families Act (ASFA) in
1997, it gave formal recognition to kinship placements as a permanency
option even though that same act did not extend federal funding to
these placements. The increased urgency that ASFA placed on the goal of
permanency also influenced the increased use of kinship placements.
These families are a vital support for millions of children and are a
key to ensuring the safety and permanency, as well as the nurturing and
well-being, of these children.
According to an Urban Institute analysis,\17\ the poverty rate for
children living in public kinship care or kinship care provided through
the child welfare system is 18%. That is the same as the overall child
poverty rate for children under 18%. For private kinship care--those
kinship families not coming through the public child welfare system--
the poverty rate is 31%. When compared to non-kin foster parents,
kinship families are much more likely to be low income (defined as 200%
of the poverty level or lower), single, and older. In all instances,
poverty certainly creates additional burdens and challenges for these
families who have opened their homes and are providing a vital service
to these children. If we continue to adhere to the goals of the federal
Adoption and Safe Families Act and we recognize kinship placements as a
permanency option as we should, we must provide accompanying federal
financial support.
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\17\ Main, R., Macomber, J. E., & Geen, R. (2006). Trends in
service receipt: Children in kinship care gaining ground. Washington,
DC: Urban Institute.
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YOUTH AFTER FOSTER CARE
For too many older children in foster care the exit from the system
will come only when they reach the age of 18. More than 22,000 young
people leave foster care annually because they age out of the
system.\18\ Although data is sometimes sparse, we know of common
challenges for these young people from several studies. In one national
survey, 25% of foster youth reported having been homeless at least one
night in the two-and-a-half to four years after exiting foster
care.\19\ In a national survey, only 54% of former foster youth had
completed high school,\20\ and in another study, 3 in 10 of the
nation's homeless adults reported a foster care history.\21\
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\18\ Child Welfare League of America. (2006). Special tabulation of
the AFCARS. Washington, DC: Author.
\19\ Cook, R. (1991). A national evaluation of title IV-E foster
care independent living programs for youth. Rockville, MD: Westat Inc.
\20\ Ibid.
\21\ Roman, N. P. & Wolfe, N. (1995). Web of failure: The
relationship between foster care and homelessness. Washington, DC:
National Alliance to End Homelessness.
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FOSTER CARE AND EDUCATION
Children and youth in foster care are also challenged when it comes
to education outcomes. Placement in out-of-home care may create issues
around mobility and stability in a child's education arrangements. For
example, a three-year study of youth aging out of care by Chapin Hall
indicated that over one-third of young adults reported five or more
school changes.\22\ Another study of the Chicago school system (also by
Chapin Hall) indicated that over two-thirds of children and youth
included in the study had switched schools shortly after their initial
placement.\23\ This kind of instability, along with the challenges of
poverty, creates greater barriers to successful education outcomes.
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\22\ Courtney, M. E., Terao, S., & Bost, N. (2004). Midwest
evaluation of the adult functioning of former foster youth: Conditions
of youth preparing to leave state care. Chicago: Chapin Hall Center for
Children at the University of Chicago.
\23\ Smithgall, C., Gladden, R. M., Howard, E., Goerge, R., &
Courtney, M. (2004). Educational experiences of children in out-of-home
care. Chicago: Chapin Hall Center for Children at the University of
Chicago.
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In fact if you watch the ABC 20/20 report you see the genuine
impact one of the children featured who attends kindergarten on the
first day and walks in without every experiencing pre-school or even
basic child care. He is challenged and indeed scared by his
surroundings and although he knows his threes he is challenged when
asked to name the three times a day when he eats.
That kind of a start on life, that start on education can have a
lasting effect and is not a question of choices that adults make but
the reality of limited options a child is given.
A 2001 Washington state study is typical of other research in its
findings, which showed that youth in foster care attending public
schools scored 16 to 20 percentile points below nonfoster youth in
statewide standardized tests at grades three, six, and nine.\24\ Over
one-third of young people in a Midwest Study had received neither a
high school diploma nor a GED by age 19, compared to fewer than 10
percent of their same-age peers in a comparable national sample.\25\
The Northwest Alumni Study found that of the foster care alumni
studied, 42.7 percent completed some education beyond high school, 20.6
percent completed any degree or certificate beyond high school, 16
percent completed a vocational degree and 1.8 percent completed a
bachelor's degree. This completion rate for a bachelor's degree
compares to 24 percent among the general population of the same age as
those surveyed in the study.\26\ CWLA believes that these results offer
strong evidence that efforts to improve the education outcomes for
these children and youth in foster care must be a part of our national
strategy to improve education and to reduce poverty.
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\24\ Burley, M., & Halpern, M. (2001). Educational attainment of
foster youth: Achievement and graduation outcomes for children in state
care. Olympia, WA: Washington State Institute for Public Policy.
\25\ Courtney, M.E., Dworsky, A., Ruth, G., Keller, T., Havlicek,
J., & Bost, N. (2005). Evaluation of the adult functioning of former
foster youth: Outcomes at age 19. Chicago, IL: Chapin Hall Center for
Children at the University of Chicago.
\26\ Pecora, P. Kessler, R., Williams, J., O'Brien, K., Downs C.,
English, D., White, J., Hiripi, E., White, C.R., Wiggins, T., & Holmes,
K. (2005). Improving Family Foster Care: Findings from the Northwest
Foster Care Alumni Study Alumni Study. Seattle, WA: Casey Family
Programs.
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HEALTH STATUS OF CHILDREN AND PARENTS
Children and parents living in poverty are less likely to have
access to adequate health and mental health care. The lack of
comprehensive health services for both children and parents increases
entry into the child welfare system and makes it more difficult for
children in the system to attain long-term health, stability, and
permanency.
The first three years of life are crucial to a child's brain
development and early mental health status.\27\ There are an astounding
number of children living in poverty during this critical period.
Moreover, the 2005 U.S. Census Survey reported 11.2% of children as
uninsured, despite widespread eligibility for Medicaid or SCHIP.\28\
Lack of health insurance or limited health insurance coverage
contributes needlessly to an increasing number of children in the child
welfare system with an unmet health need as well as placement of
children in the child welfare system solely to obtain essential mental
health services.\29\ Increased access to health and mental health care
improves a child's chance for permanency.\30\
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\27\ National Child Welfare Resource Center for Family Centered
Practice. (2003). Family centered child welfare. Washington, DC:
Author.
\28\ DeNavas-Walt, C., Proctor, B., and Hill Lee, C. (2006).
Income, Poverty, and Health Insurance Coverage in the United States:
2005. Current Population Reports (pp. 60-231). Washington, DC: U.S.
Government Printing Office.
\29\ United States General Accounting Office. (2003, April). Child
welfare and juvenile justice: Federal agencies could play a stronger
role in helping states reduce the number of children placed solely to
obtain mental health services. Report to Congressional Requesters (14).
Washington, DC: Author.
\30\ Vandivere, S., Gallagher, M., and Anderson Moore, K. (2004).
Changes in children's well-being and family environments. Snapshots of
America's Families III, No. 18. Washington, DC: Urban Institute.
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Poverty also correlates with increased rates of mental illness and
substance abuse among parents,\31\ leaving them less ready to handle
the stressors associated with raising children. The children of parents
with substance abuse or mental health concerns are therefore more
likely to be victims of abuse or neglect. Availability of comprehensive
mental health care reduces caregiver stress and increases a child's
chance for healthy development and stable placement.\32\ Helping
children to overcome the obstacles created by the presence of poverty
in their early lives means increasing services to address the mental
health and substance abuse treatment needs of these children and their
parents.
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\31\ DeBellis, M. D., Broussard, E. R., Herring, D. J., Wexler, S.,
Moritz, G., & Benitez, J. G. (2001). Psychiatric co-morbidity in
caregivers and children involved in maltreatment: A pilot research
study with policy implications. Child Abuse & Neglect 25 (7): 923-44.
Chicago: The International Society for Prevention of Child Abuse and
Neglect.
\32\ McCarthy, J. (2003). Creating effective systems for mental
health care and services. Best Practice Next Practice. Washington, DC:
National Child Welfare Resource Center for Family Centered Practice.
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CWLA POLICY GOALS
For a list of some of our immediate recommendations we refer the
subcommittee to our testimony submitted to the Ways and Means Committee
on January 24, 2007. What we seek and we believe all policymakers seek,
is to more fundamentally address the issue of poverty. We cannot be
caught up in a battle of statistics of how well we are doing as a
nation. Instead we need to focus on the children who face the reality
of being born behind all the rest of us. There is no simple solution or
silver bullet that can fix all this. There needs to be a comprehensive
approach that addresses all of the challenges that a child in poverty
inherits on his or her first day of life. That solution involves more
than making different choices. It is as we quoted before, not a values
deficit but a deficit of resources.
Statement of Lary Wayne Holland
THE breakdown of the traditional family should be studied closely
as a potential cause of poverty. The various States have begun to
utilize the various programs under Title IV of the Social Security Act,
including Part D, as a tool to generate revenue for growing
bureaucracies instead of a tool to combat poverty by providing only to
needy families.
The way the current Title IV-D program is being administered by the
many States has led to taxpayers funding the breakdown of the family by
making the incentives greater for separation than the incentives for
marriage and jointly raising children in a traditional setting.
Finally, there is a direct link between increased taxation and
poverty. ``Building a strong economy--and helping the poor--means
keeping taxes and government spending low.'' (Source: Mathew Ladner,
``Want to reduce poverty? Lower those tax rates.'' Christian Science
Monitor [December 15, 2006].)