[Senate Hearing 114-698]
[From the U.S. Government Publishing Office]
S. Hrg. 114-698
RENEWING COMMUNITIES AND PROVIDING
OPPORTUNITIES THROUGH INNOVATIVE SOLUTIONS TO POVERTY
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON
HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
JUNE 22, 2016
__________
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
RON JOHNSON, Wisconsin Chairman
JOHN McCAIN, Arizona THOMAS R. CARPER, Delaware
ROB PORTMAN, Ohio CLAIRE McCASKILL, Missouri
RAND PAUL, Kentucky JON TESTER, Montana
JAMES LANKFORD, Oklahoma TAMMY BALDWIN, Wisconsin
MICHAEL B. ENZI, Wyoming HEIDI HEITKAMP, North Dakota
KELLY AYOTTE, New Hampshire CORY A. BOOKER, New Jersey
JONI ERNST, Iowa GARY C. PETERS, Michigan
BEN SASSE, Nebraska
Christopher R. Hixon, Staff Director
Patrick J. Bailey, Chief Counsel for Governmental Affairs
Joshua P. McLeod, Professional Staff Member
Gabrielle A. Batkin, Minority Staff Director
John P. Kilvington, Minority Deputy Staff Director
Katherine C. Sybenga, Minority Chief Counsel for Governmental Affairs
Portia R. Bamiduro, Minority Senior Counsel
Lynn L. Sha, Minority Legislative Assistant, Office of Senator Carper
Laura W. Kilbride, Chief Clerk
Benjamin C. Grazda, Hearing Clerk
C O N T E N T S
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Opening statements:
Page
Senator Johnson.............................................. 1
Senator Carper............................................... 3
Senator Ernst................................................ 16
Senator Tester............................................... 20
Senator Peters............................................... 26
Senator Lankford............................................. 31
Prepared statements:
Senator Johnson.............................................. 45
Senator Carper............................................... 47
WITNESS
Wednesday, June 22, 2016
Robert L. Woodson Sr., Founder and President, Center for
Neighborhood Enterprise........................................ 6
Peter L. Ochs, President, Capital II, Inc........................ 7
Ron Haskins, Ph.D., Senior Fellow, Brookings Institute........... 9
Olivia Golden, Executive Director, Center for Law and Social
Policy......................................................... 11
Alphabetical List of Witnesses
Golden, Olivia:
Testimony.................................................... 11
Prepared statement........................................... 67
Haskins, Ron:
Testimony.................................................... 9
Prepared statement........................................... 56
Ochs, Peter L.:
Testimony.................................................... 7
Prepared statement........................................... 53
Woodson, Robert L. Sr.:
Testimony.................................................... 6
Prepared statement........................................... 48
APPENDIX
Chart referenced by Mr. Haskins.................................. 57
Charts referenced by Mr. Haskins................................. 61
Chart referenced by Senator Johnson.............................. 87
Chart referenced by Senator Johnson.............................. 88
Chart referenced by Senator Johnson.............................. 89
Responses to post-hearing questions for the Record
Mr. Woodson.................................................. 90
Mr. Haskins.................................................. 94
RENEWING COMMUNITIES AND PROVIDING
OPPORTUNITIES THROUGH INNOVATIVE
SOLUTIONS TO POVERTY
----------
WEDNESDAY, June 22, 2016
U.S. Senate,
Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 10:01 a.m., in
room SD-342, Dirksen Senate Office Building, Hon. Ron Johnson,
Chairman of the Committee, presiding.
Present: Senators Johnson, Lankford, Ayotte, Ernst, Sasse,
Carper, McCaskill, Tester and Peters.
OPENING STATEMENT OF CHAIRMAN JOHNSON
Chairman Johnson. Good morning. This hearing will come to
order.
I want to thank all of the witnesses for taking the time to
attend and for your thoughtful testimonies. I am looking
forward to hearing them and looking forward to hearing your
answers to our questions.
The mission statement of this Committee is relatively
simple: to enhance the economic and national security of
America. I believe they are inextricably linked. My approach to
solving problems is always to look for the areas of agreement.
And, based on the subject matter of this hearing, I think it
is, probably, good to start with an area of agreement.
I do not care where you fall on the political spectrum, as
Americans, we share the same goal. We all want a safe,
prosperous, and secure America. We are concerned about each
other. No political party has a monopoly on compassion. We all
want all of our fellow citizens to succeed and to have the
opportunity to build a good life for themselves and their
families.
So, I mean, I would like to start there, because it is
true. And, if you start and you look for areas of agreement, it
is just a whole lot easier to find common ground on the areas
of disagreement. And, we might find a few of those areas as we
get into the testimonies.
The other thing that is pretty much inherent in somebody,
like myself, who comes from a manufacturing background--I solve
an awful lot of problems--I understand the problem-solving
process. You never solve a problem until you, first, properly
identify it, properly define it, understand the reality, and
admit you have the problem.
So, I was hoping to have a couple of easels here to display
them, but I do have a couple of graphs. I just want to start
there. But, let us look at the reality and ask ourselves some
questions.
The first one is the number of Americans in poverty. And,
as a government, we started measuring poverty in, I think,
1959. And, you can see that, based on this graph\1\, when we
first started measuring it, we had about 39.5 million Americans
in poverty and the poverty rate was 22.4 percent. And, you can
see the number of people in poverty--and the poverty rate--was
falling, quite precipitously, through the early 1960s, because
we had a booming economy. We had the ``Baby Boomer'' generation
growing up after World War II and things in America were
looking up. But, still, we are a compassionate society. The
poverty rate--the number of people in poverty--was still too
high, so, collectively, we decided to embark on a--and I know
these numbers are, somewhat, subject to dispute--exactly what
the numbers are--but, somewhere in
the--in nominal dollars--$13 trillion to $19 trillion or $20
trillion ``War on Poverty''.
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\1\ The chart referenced by Senator Johnson appears in the Appendix
on page 87.
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Now, I think you have to ask yourself a question. I mean,
did it work? We started passing some of the means-tested
programs in about 1964 and continued to pass a piece of
legislation in 1965 and 1966. Back then, in today's dollars, we
were spending somewhere around $30 billion, per year, on some
of those programs. We, basically, doubled that spending,
starting in about 1966, after all of these programs were
passed.
I just want to refer people to the next chart\2\, because I
think this shows--and, again, this is just the reality of what
has happened since we embarked on a--again, whatever that
number is--$13 trillion to $19 trillion or $20 trillion ``War
on Poverty''. Basically, you can see that the number of people
in poverty went from about 29.5 million people--we are up to
about 47 million people. But, I realize the population has
increased, so that is probably not the best measure. So, what
about the poverty rate? Well, you can see that that has pretty
much flatlined around the 15-percent level. We are a little
under 15 percent, right now, today.
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\2\ The chart referenced by Senator Johnson appears in the Appendix
on page 88.
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Now, I realize there is some dispute, in terms of how you
actually measure poverty. Do you put, on top of what people
earn, the welfare payments? Obviously, welfare payments, in
terms of total income, pull people above that poverty line.
But, from my standpoint--I thought the goal of the ``War on
Poverty'' was to get people out of poverty on their own--
working and basically earning their own success. And, of
course, those people that cannot help themselves--people that
are never going to be able to make it on their own--obviously,
we want to continue to help those folks to live a good life.
So, again, those are just sort of the basic facts.
And, the other line I want to point out here is the--and,
this is, actually, Daniel Patrick Moynihan who started pointing
this out. I know, as a social scientist, he started talking
about out-of-wedlock birth rates in the mid-1960s. He paid kind
of a heavy professional price for doing so, but he noted that
the out-of-wedlock birth rate had gone from 4 percent to 8
percent.
He was alarmed by it, because--if you are concerned about
poverty--it is true that, if you have an intact family, you
have a far lower probability of being in poverty than someone
struggling as a single parent trying to take care of their
kids. And, that is not a value judgment on single-parent
families--just, as it relates to poverty, you are going to have
a lower probability of being in poverty if you have an intact
family. Since the ``War on Poverty''
began--now, I think--last year, I think, we were up to 40.6
percent of births occurring out of wedlock. I do not think that
is a positive metric of success.
So, again, with kind of that basis--I think those are
pretty indisputable numbers. The causes and the results will
probably be disputed, but that is really the purpose of this
hearing: to try and lay out some realities and to try and agree
on as much as we possibly can. And, again, I will go back to
that goal. We all want a safe, prosperous, and secure America.
We are concerned about each other. We want to help people that
cannot help themselves. We want to help people to help
themselves. We are a compassionate society.
And, with that, I will turn it over to Senator Carper.
OPENING STATEMENT OF SENATOR CARPER
Senator Carper. Thank you, Mr. Chairman. Thank you very
much for holding this hearing today.
It is great to see some of you again. Dr. Haskins, it is
great to see you, Ron--and Olivia Golden as well. And, Peter
Ochs, we welcome you here. And, Mr. Woodson, you are great to
join us. And, thank you all for your work in these vineyards.
Ron Haskins and I had a chance to work together pretty
closely, back in the 1990s, during the Clinton Administration--
and along with the then-Governor from Wisconsin, Tommy
Thompson, who was also Chairman of the National Governors
Association (NGA). I was one of his successors. And, he and I
worked closely together on welfare reform then, along with a
guy named John Engler, who was the Governor of Michigan at the
time.
President Clinton used to say that work should pay more
than welfare. People would be better off going to work than
staying on welfare. And, if you think about what folks faced,
prior to our welfare reform initiatives in the 1990s, the
smart, rational decision for a lot of people was to stay on
welfare. And, if you think about it, you go to work, what do
you gain? You gain the right to pay taxes. You gain the right
to pay for your health care. You probably lose Medicaid and you
probably have to figure out how to pay for health care for
yourself and your kids. You have to worry about
transportation--how to get to work. You have to figure out that
childcare and pay for that as well.
And so, we pretty much had a system that encouraged people
to get on welfare and to stay on welfare--and a lot of people
did
that. And, what we tried to do in my State--and in 49 other
States--was to ensure that people were better off by going to
work.
And, in my State--in Delaware--we were given the
opportunity to experiment, broadly. And, we did. We created a
Family
Services Cabinet Council, which involved a lot of members of my
cabinet--one of whom, Carmen Nazario, was later stolen by
Olivia Golden to go to work for her.
But, we started--before children were born--a statewide
campaign on teenage pregnancy. We placed a huge focus on
parenting training--starting in hospitals--literally, where
babies were born, before moms went home with their children--
and, hopefully, with dads. We had parenting training in our
prisons. We found
out--along with the late George Voinovich, who just died last
week and who served on this Committee. George and I found out
that about half of the kids in our States--in the country,
actually--who were eligible for Head Start were not being
funded by Head Start. So, we used State money to fully fund
eligible 4-year-olds for Head Start.
There was a big push for mentoring programs--all kinds of
things that we did. And, we also changed Medicaid eligibility,
so that, when people would go to work, they would not lose
their Medicaid eligibility right away. The Earned Income Tax
Credit (EITC)--one of the best anti-poverty programs, I think,
we have ever had. States have introduced their own version of
that to, again, make sure that work pays more than welfare.
But, the idea there was to change the incentives. It helped
to launch welfare reform in the midst of, maybe, one of the two
longest economic recoveries in the history of our country. And,
we raised the minimum wage during that period of time, because
we wanted work to pay more than welfare.
I think I may have mentioned we--I know, Peter, you have
done a lot of work in prisons. And, I had a huge interest in
corrections. I still do. And, we did all kinds of things, in
our prisons, to better ensure that, when the guys and gals--
inmates came out of prison, they were better parents--not just
better criminals. So, those are some of the things that we
worked on at the State level.
Not everybody likes the Affordable Care Act (ACA). One of
the things that I like about the Affordable Care Act--among
others--is that, when people actually do go to work and get off
of welfare, they have health care. They do not give up their
health care. It is a big deal. It is a really big deal. And,
they can sign up for Medicaid. And, if their income rises over
135 percent of the poverty line, they can sign up and
participate in the exchanges in their State. So, the deal here
is try to use some common sense and to use our hearts at the
same time.
And, I will close with this. There is a verse of scripture
that I quote in here from time to time. The Chairman has heard
it a number of times. And, it is Matthew 25: ``When I was
hungry, did you feed me? When I was naked, did you clothe me?
When I was thirsty, did you give me to drink? When I was a
stranger in your land, did you take me in? ''
And, I think we have a moral imperative--whatever our faith
is--to the least of these in our society. But, given the fact
that we still have a big budget deficit, we have a fiscal
imperative to meet that moral imperative in a fiscally
responsible way. And, that is what we are trying to do. And,
this is a shared partnership--not just the Federal Government,
not just the States, not just the faith community, and not just
nonprofits. It is all of us, including the people, themselves,
who are on welfare and want to be able to become self-
supporting and self-sustaining.
President Obama is going to sign into law, legislation, at
11:15 this morning, that the White House and I worked on for
the last 4 years: the Frank R. Lautenberg Chemical Safety for
the 21st Century Act, which amends the Toxic Substance Control
Act of 1976 (TSCA). He was kind enough to ask me to come and to
be there for the signing ceremony. And, I am asked to choose
between two of my favorite children: that legislation, which I
cared about and worked hard on--along with a bunch of my
colleagues--and the subject here, which I have been focused on
for years. And so, I wanted to start my morning with you.
I thank you very much, Mr. Chairman, for giving me a chance
to say a few things. And, we look forward to hearing from you
and, probably, to communicating with you later on. God bless
you all and thank you all for joining us.
Chairman Johnson. Thank you, Senator Carper. My guess is
that we both have written statements\1\ we would like to enter
into the record. Without objection, do you want to----
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\1\ The prepared statement of Senator Johnson appears in the
Appendix on page 45.
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Senator Carper. Let us do it\2\.
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\2\ The prepared statement of Senator Carper appears in the
Appendix on page 47.
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Chairman Johnson. There we go.
It is the tradition of this Committee to swear in
witnesses, so if you would all rise and raise your right hand.
Do you swear the testimony you will give before this
Committee will be the truth, the whole truth, and nothing but
the truth, so help you, God?
Mr. Woodson. I do.
Mr. Ochs. I do.
Mr. Haskins. I do.
Ms. Golden. I do.
Chairman Johnson. Please be seated.
Our first witness is Robert Woodson. And, I do have to
point out I have a bunch of these books that I am happy to give
to all of the Senators. This is a wonderful book. It is called
``The Triumphs of Joseph''. In it, Mr. Woodson describes a
number of community-based organizations (CBOs)--often faith-
based--that were started by people who found redemption, turned
their lives around, and
then, turned their own personal redemption into helping other
people--one person at a time.
So, since I met you in a Senate Budget Committee hearing--
was that about 4 or 5 years ago?--Mr. Woodson was kind enough
to give me a book. Now, it has paid off dividends, because I
bought hundreds of these things and I keep handing them out.
But, I really recommend all of the Senators to pick one up.
And, I will give it to the other witnesses as well.
But, Robert Woodson is Founder and President of the Center
for Neighborhood Enterprise. Mr. Woodson has dedicated his life
to helping low-income people address the problems of their
communities. For more than four decades, he has promoted the
principles of self-help and neighborhood empowerment as well as
the importance of the institutions of civil society. Mr.
Woodson.
TESTIMONY OF ROBERT WOODSON,\1\ FOUNDER AND PRESIDENT, CENTER
FOR NEIGHBORHOOD ENTERPRISE
Mr. Woodson. Thank you, Senator, for the opportunity to
address this Committee. I come to you, with my testimony, as
someone who has worked as a civil rights activist. And, also I
have worked as a corrections officer (CO) and as a trained
social worker in the poverty industry. So, my experience is
first-hand.
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\1\ The prepared statement of Mr. Woodson appears in the Appendix
on page 48.
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The fact is, we have spent $22 trillion, in the past 50
years, on programs to aid the poor. And, 70 cents of every
dollar goes, not to the poor, but to those who serve poor
people. And, they ask, not which problems are solvable, but
which ones are fundable. So, with our structural disincentives
for people to move out of poverty, we have created a commodity
out of poor people. To fund the solution, therefore, we must,
first of all, diagnose the problem properly. You cannot
generalize all poor people. There are four categories of poor
people.
There are those who are just broke--those whose character
is intact. They have lost a breadwinner or a factory has moved
out
of town. People like that use the welfare system as it was
intended--as an ambulance service, not a transportation system.
Category two are people whose character is intact, but they
look at the perverse incentives for achieving. Once they do,
they will lose benefits. And so, they conclude that the numbers
do not work. And, they stay on welfare.
Category three are people who are either physically or
mentally impaired. They need help.
Category four are people who are morally and spiritually
impoverished and, therefore, require some special intervention.
The problem is, people on the left tend to look at all poor
people as if they are category one, while people on the right
tend to look at them as if they are all category four. And so,
we miss each other. It is important for us to understand the
problem and the type of poverty we are addressing.
The group of people that concerns society most and are the
most costly to us, is people in category four. And, these are
the people that are the subject of my organization's efforts.
We specialize in helping to promote transformation. If you just
try to apply programs or give money directly to people who have
some moral failings, you injure them with the helping hand.
It is important, therefore, to look at an alternative way
to help people in category four. But, we cannot find solutions
for them by turning to our universities or professionals, who
parachute in the programs they desire. The solutions are found
in the community suffering the problem.
At the Center for Neighborhood Enterprise, we do not do
what the poverty industry does. They engage in what I call
``failure studies''--or needs assessments. If you study
failure, all you can produce is failure. So, we go into high-
crime, low-income neighborhoods and we identify the real anti-
poverty warriors.
One is the mom that lives in public housing, has 5
children, and was abandoned by her husband, at age 23, to rely
on welfare. She gets off of welfare and then sends all five
kids to college. Another, is the mom who has two children and
sleeps in cars and in homeless shelters--yet her two girls
graduate valedictorian and salutatorian and go on to succeed.
Another, is Kurt Moore, a man who spent 13 years in prison, but
came out, came to Christ, and then, started a small business,
where he now employs 20 people in an auto detailing business.
These are the real anti-poverty experts. Therefore, we must
go into those neighborhoods and look for the anti-poverty
experts, by exploring the capacities of poor people. And, once
we find these experts, it is important to bring them to the
table and to find out, from them, the source of their ability
to achieve against the odds. And then, we must find what
policies promote the expansion of these ``centers of moral
excellence'', as opposed to always relying upon the advice of
experts that never talk to the people suffering the problem.
Chairman Johnson. Thank you, Dr. Woodson.
Our next witness is Peter Ochs. Mr. Ochs is President of
Capital III, Inc. and Seat King. In 2005, Capital III began
utilizing inmate manufacturing labor from a State prison in
Hutchinson, Kansas. His programs help foster economic, social,
and spiritual capital, while teaching inmates a marketable
skill.
TESTIMONY OF PETER L. OCHS,\1\ PRESIDENT, CAPITAL III, INC.
Mr. Ochs. Thank you. Thank you for being here.
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\1\ The prepared statement of Mr. Ochs appears in the Appendix on
page 53.
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At the age of 40, I came to the realization that I was
successful economically, but I was not satisfied with life.
And, I think that was a result of not focusing on two other
forms of capital: social and spiritual capital.
I define social capital as those things that money cannot
buy: great relationships, ambition, a goal in life, and the
ability to live in harmony with your fellow man. Spiritual
capital, as I define it, is just the moral code by which we
live. It is ``love your neighbor as yourself,'' as it were. So,
with this newfound ambition, 20 years ago, we changed the focus
of our company from being just an economic enterprise to one
with what we would call a ``triple bottom line'', where we
create economic, social, and spiritual capital.
So, in 2005, we had a manufacturing company, in a small
Kansas town, that was growing rapidly. And, we simply could not
find enough labor to supply that business with people, so we
moved inside of a prison. And, it did not take me very long to
understand--if I am honest with you, I moved into that prison
simply for economic reasons, but, within a few months, I
understood that the men that were incarcerated there were not
much different than myself.
And so, we took this opportunity to really put into
practice the creation of economic, social, and spiritual
capital. Let me define, briefly, for you, how we do that inside
of the prison setting.
If you are an inmate and work for the State of Kansas, you
make 50 cents a day. If you work for us, you will make
somewhere between $8 and $15 an hour--and that is set by the
State of Kansas. In addition to the inmate winning, the State
of Kansas wins. They take 25 percent of the gross salary for
room and board. So, if you make $10 an hour as an inmate, the
State of Kansas will take $2.50 for room and board. This year,
our inmates will pay the State of Kansas more than $1 million
in room and board. That is about 7 percent or 8 percent of the
budget of that particular prison.
The third entity that benefits is us. We get a steady,
hardworking labor force that shows up on time every day. And,
the last party to benefit is society, in itself. Restitution,
child support, etc. comes out of their wage, if they owe that.
So, that would be a summary of economic capital. Let me
talk about social capital for just a moment.
Inmates--we train them in welding, sewing, electronics, and
computer-aided design. So, we have classes and they are
learning those skills as they work for us.
Family relationships are, probably, one of the greatest
social capital benefits we have seen. It costs 17 cents a
minute, if you are an inmate, to talk to your family. So, if
you make 50 cents a day, you spend no time talking to your
family over the telephone, OK? So, our average inmate probably
spends 30 to 45 minutes, per day, visiting with their family--
primarily, doing homework with their kids we found.
Disciplinary actions in the prison are down, substantially.
If you have a disciplinary action, you cannot work for us for
90 days. So, what you wind up doing is going back to 50 cents a
day instead of $10 an hour, let us say.
We also sponsor and teach classes on personal improvement:
fathering, finances, interpersonal skills, etc.
We think that recidivism is down. While we do not have
specific empirical studies on that, we have employed 14 inmates
that have come out of our manufacturing company inside of the
prison on the outside--in our civilian workforce. Two of those
14 have been re-incarcerated. That has been over a period of 5
years. So, that is 14 percent. And, I think, as you know,
recidivism rates, in most States, are north of 60 percent.
Kansas is in the low 30 percent, but I think the reason for
that is this ability for private company investment ``private
investment company ability''--that allows for people to work in
private companies.
I would also tell you that, when an inmate leaves our
employment, he, typically, has $5,000 to $10,000 saved up in
the bank. We have tried to do the best we can to teach him some
kind of a moral code. And, when he leaves, we do our best to
get him a job. So, he has some money, he has a job, he has a
mentor lined up, and he has some cash in the bank. The
recidivism rates have to be declining, rapidly.
I can also not overestimate the importance of self-esteem.
Let me just finish up with spiritual capital. The most
requested thing from our inmates is for some kind of guidance
and teaching on moral codes, spiritual improvement, and
guidance. And, we have started a seminary inside of the prison.
We will graduate eight students from that seminary. It is a 3-
year, rigorous program. They will graduate next month. Those
inmates have now become the primary mental health counselors in
that prison, because of State budget cuts. Those dollars have
gone away.
Let me just, quickly, finish by encouraging you to consider
three things. I do think we need criminal justice reform. Many
of the inmates working for us, I do not think, need to be
there. They should be out in society.
And, second, I think, if we want to have a great
rehabilitation record in prisons, it needs to be a partnership
between government, private industry, and the faith-based
community, doing, essentially, what we are doing. We have seen
great results there.
And, third, I think the elimination of poverty--economic,
social, and spiritual poverty--is not an outside-in thing. It
is an inside-out thing.
If we do not transform the mind, the heart, and the soul of
the inmate, we are not getting done what we need to get done.
Thank you.
Chairman Johnson. Thank you, Mr. Ochs. It sounds like you
are at the forefront of prison reform.
Our next witness is Dr. Ron Haskins. Dr. Haskins is Senior
Fellow in the Economic Studies Program and Co-Director of the
Center on Children and Families (CCF) at the Brookings
Institution.
Mr. Haskins spent 14 years on the staff of the House Ways
and Means Committee's Subcommittee on Human Resources and has
served as Senior Advisor to the President for Welfare Policy at
the White House. Dr. Haskins.
TESTIMONY OF RON HASKINS, PH.D.,\1\ SENIOR FELLOW, BROOKINGS
INSTITUTION
Mr. Haskins. Thank you very much, Mr. Chairman and Ranking
Member Carper. I am glad to be here. It is a privilege to
testify on this important topic.
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\1\ The prepared statement of Mr. Haskins appears in the Appendix
on page 56.
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I was asked, by staff, to cover four topics: spending on
means-tested programs, basic trend data on poverty and
opportunity, the importance of action by local communities, and
whether evidence-based policies can improve our success in
fighting poverty. Other than that, I can talk about anything I
want to in my 5 minutes, so---- [Laughter.]
I have provided some scaled-down figures, from my
testimony, to the Members and I am going to refer to those.
So, first, is total spending. I gave you a chart\2\ that
shows the total spending of the top-10 means-tested programs.
The Members should have it in front of them. The bottom line
is, it increased every year. It has increased, dramatically,
over the entire period since 1962. It has increased, from about
$18 billion, to $609 billion. This does not include State
spending. Between the Federal Government and the States, on
means-tested programs--loosely called welfare programs--we
spend about $1 trillion a year--and rising.
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\2\ The chart referenced by Mr. Haskins appears in the Appendix on
page 57.
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Now, we did have a substantial drop for the first time.
That is, probably, because of the great additional spending
that we had in the stimulus bill that was enacted in 2009. I
think we will pick up spending again. It already started last
year and it will continue. So, we spend a lot of money.
The second thing, I think, that is really important for
this Committee to understand is that spending on social
programs and spending on children, as a percentage of all
Federal spending, is declining. And, the reason that is
happening is because spending on Social Security, Medicare, and
Medicaid--I call them the ``big three.'' They have no budget
and no control. They just grow and they are squeezing all other
Federal spending--except interest. Between those three programs
and interest, we will spend 62 percent of Federal revenues--
this is according to the Congressional Budget Office (CBO)--in
2025. So, we have to do something about that. It looks good
right now, but it is going to get worse.
The second thing I want to talk about is poverty and
opportunity. It is true, as the Chairman said, that, if you
look at the official poverty rate, we have not made much
progress. But, I think that is very misleading. I think we
should look at a broader definition of poverty. There are
several available from the U.S. Census Bureau called the
Supplemental Poverty Measure (SPM).
And, if you do that--if you look at Chart 5\1\--it is the
third chart here, but it is five and I did not want to confuse
the Members. It is five in my testimony. This was done by the
Center on Budget and Policy Priorities (CBPP). It shows what
happens to the official poverty measure when you include the
benefits from means-tested programs that I just described to
you. And, the answer is, for everybody, poverty declines 45
percent--and, for kids, it declines 40 percent.
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\1\ The chart referenced by Mr. Haskins appears in the Appendix on
page 61.
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Even more directly, in Chart 6\2\, this shows--and it is
done by the Congressional Research Service (CRS)--untouched by
anybody's biased hands. And, what it shows is that, if you look
at life in a state of nature, for single-mother families--this
is only single-mother families--they are the most poverty-
stricken group. They are five times as likely to be poor.
``Life in a state of nature'' means just based on their own
earnings--a huge poverty rate--almost half last year, all
right? And then, if we start including the government benefits,
it steps down all of the way. It steps down between 50 percent
to 48 percent.
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\2\ The chart referenced by Mr. Haskins appears in the Appendix on
page 61.
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And, that is why, generally speaking, I think we have a lot
of incentive built into our structure of the work support
programs plus earnings--which are up because we have more low-
income families working now than we had in the past--in part,
because of welfare reform. That strategy, I think, is the
single most effective strategy that we have discovered so far--
except Social Security.
And, that leads to the shocking conclusion: If you give
people money, they will be less poor. That is what Social
Security does. But, if you want them to earn it, and then,
subsidize their income, this is the way to do it. We figured
that out. We could improve it, but it is a great way to do it.
I want to say one word about mobility. We have very little
mobility. It has not changed. It is not getting worse, but we
have less mobility than many countries--especially from the
bottom to getting higher. We have very good data showing that
the probability of a kid born to the bottom 20 percent--whose
parents' income is in the bottom 20 percent--it is roughly
$23,000 this year--has twice the chance of being in poverty
when they grow up--twice the chance, at 43 percent, instead of
20 percent. You would expect the bottom fifth to be just 20
percent, but it is 43 percent.
So, we need to do something about opportunity. We made
progress against poverty, I think, way more than progress
towards opportunity. That is something that we really need to
focus on.
The next thing I want to talk about is communities. I only
have a few things to say. Bob wrote the book on community
initiatives. And, if you really want to know about communities,
do not just read his book--go see the communities that he has
worked in, with great success. But, implementation is always
local. So, we need more control of Federal money at the local
level and at the State level. I think we should figure out a
way to do that and to do it successfully--based on evaluation--
so that the groups that Bob works with--and other local
groups--can have a lot more flexibility and be more effective
in what they do.
I mentioned, in my testimony, a study by economist Raj
Chetty, which shows that communities across the United States
have huge differences in mobility, based on things like their
public schools, the percentage of married-couple families in
the community, and so forth--identified many factors. So, this
is very important. Communities should be a part of a poverty
strategy.
And, lastly, I just want to say one word about evidence.
Evidence is more important now than it has ever been--and
Congress recognizes that. Congress has passed at least five
pieces of legislation, in the last 2 years, that increase our
use of evidence. We have more successful programs, which have
been shown by rigorous studies to be a success, than we have
ever had in the past. That is a good foundation. The role of
Congress should be to make sure that grant funds are spent on
those programs that have a strong record of success, that we
continue to evaluate those programs, and that we open Federal
data systems in the Federal Agencies and the U.S. Census Bureau
to more research. That would allow us to learn a lot more than
we know now.
Thank you, Mr. Chairman.
Chairman Johnson. Thank you, Dr. Haskins.
Our final witness is Olivia Golden. Dr. Golden is Executive
Director at the Center for Law and Social Policy (CLASP). Dr.
Golden served as Commissioner of the Administration on
Children, Youth, and Families (ACYF) and then as Assistant
Secretary for Children and Families at the U.S. Department of
Health and Human Services (HHS). She has served as an institute
fellow at the Urban Institute and has served at the Federal,
State, and local levels. Dr. Golden.
TESTIMONY OF OLIVIA GOLDEN,\1\ EXECUTIVE DIRECTOR, CENTER FOR
LAW AND SOCIAL POLICY
Ms. Golden. Thank you very much. Chairman Johnson, Ranking
Member Carper, and Members of the Committee, thank you for the
chance to testify on this crucial topic.
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\1\ The prepared statement of Ms. Golden appears in the Appendix on
page 67.
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You have heard that I am Executive Director of the Center
for Law and Social Policy and that I have also led these
programs at the Federal, State, and local levels as well as
studied their effectiveness as a researcher. So, I wanted to
draw on all of those in making four main points in my written
testimony.
First--and this is a point that Ron just made as well--the
nation's core economic security programs are highly effective.
As Ron said, when you measure them right, they cut poverty
almost in half, they improve nutrition and health care for
millions of people, and they promote work.
And, from the research perspective, there is a growing body
of rigorous research showing that these supports have positive
effects on children's health, their education, and their work
outcomes many years later. For example, expanding health
insurance coverage for low-income children has large effects on
high-school completion, college attendance, and college
completion.
The second main point is that changes in the economy, which
have fostered low-wage jobs that are unstable, lack sufficient
hours, and require volatile, last-minute job changes, mean that
high employment rates do not translate into low poverty rates.
In fact, the majority of people who get help from the core
safety net programs are working--they are just earning too
little to make ends meet. Nearly 70 percent of poor children,
today, live in families with at least one worker. So, their
problem is not a reluctance to work. It is low wages, insecure
jobs, or too few hours.
The third main point is that community-based innovations
are the most effective when they build on the foundation of a
strong safety net. Research demonstrates that families who are
highly vulnerable and face multiple challenges--often the focus
of intensive community programs--are especially likely to need
health and mental health services. And, they are also likely to
need financial support to meet basic needs, such as food and
shelter, while they address more long-term changes in their
lives.
So, a priority, in supporting community innovation, should
be expanding Medicaid in all States, ensuring continued support
for a strong Supplemental Nutrition Assistance Program (SNAP),
and providing other economic supports. I wanted to give an
example from my own experience to illustrate the point.
When I led the District of Columbia's child welfare
system--so dealing, every day, with the tragedies of child
abuse and neglect--in the years before the Affordable Care Act,
I found it tragic when a child would enter our care because her
mother had an untreated mental health problem, like depression.
If that parent had been able to get treatment earlier, the
child might have been spared the trauma of maltreatment and the
trauma of being removed from her family.
But, in the absence of health care for everyone, we could
only try small-scale innovations to help very few. Today,
though, not only the District, but the 31 States that have
expanded Medicaid, have an extraordinary opportunity to meet
the health and mental health needs of vulnerable families. At
CLASP, we are partnering with both community innovators and
State and Federal policymakers to seize this opportunity.
The fourth and final point is that, in order to reduce
poverty and expand opportunity, Congress should avoid bad
ideas--those that the evidence demonstrates do not work--and
should seize opportunities that build on research and
experience. Starting with the bad ideas that evidence suggests
do not work, the available evidence suggests that block grants
do not work for core safety net programs. Their appropriations
shrink, drastically, over time and they cannot respond to
economic downturns.
So, during the recent ``Great Recession'', for example,
SNAP and Medicaid, which are not block grants, provided greater
support to States, communities, and families as need rose. But,
the capped Temporary Assistance to Needy Families (TANF) block
grant, which allowed, as Senator Carper discussed, opportunity
for innovation at the beginning--now its value has shrunk by a
third
and it left families and States without resources during the
recession--just when they needed help the most.
Overly flexible approaches, like block grants or large-
scale waivers, can also divert funds from a program's core
mission. And, they are not well-suited to national goals like
ensuring that every American starts life healthy and well-
nourished. Instead--and Ron talked about this--they contribute
to disparate life chances, based on where a child is born.
So, to reduce poverty and to renew communities, Congress
needs to tackle the economic headwinds facing workers and to
fill remaining gaps in the safety net. My testimony identifies
five ``next steps'': to ensure access to high-quality child
care and early education, to expand effective workforce
development programs and career
opportunities, to tear down financial barriers to post-
secondary success--that is a key aspect of work--to fix gaps in
the safety net for the neediest Americans, and, finally, to
establish minimum standards for wages and job quality--so that
jobs support, rather than destabilize, families. And, I am
thrilled that Mr. Ochs added a sixth, which would be to reduce
incarceration and conduct criminal justice reform.
Thank you and I look forward to your questions.
Senator Carper [Presiding.] Thank you all. Those are
wonderful testimonies and we are grateful to hear them--
grateful that you are here.
I just was trying to write down, while you spoke, some
things that we agree on. I like to start by saying, ``Well,
what do we agree on? '' One, we need to think with our hearts,
but also with our heads. We need to remember this is a shared
responsibility. It is not all on the Federal Government. It is
a broadly shared responsibility with others. It includes State
and local governments and it includes individuals and families.
It includes the faith community, nonprofits, and so forth.
Almost every one of you has, basically, said that we
should--just not in so many words: ``Find out what works. Do
more of that. Find out what does not work and do less of that,
too.'' There is a fair amount of agreement here. I am not
surprised and I am actually encouraged by that.
I am going to start, Dr. Golden, with you. And, I am going
to ask you to--thinking about what Speaker of the House Paul
Ryan, the former Chairman of the Ways and Means Committee--
where Ron worked for, what, 14 years?--has proposed. And, what
I would like for you to do for us--each of you, starting with
you, and then Ron, and Mr. Ochs, and Mr. Woodson, but I--
mention a thing or two you like about the proposal and maybe a
concern that you have about what is being proposed--and very
briefly--very succinctly.
I am going to have to run out of here to run and vote and
then head for the White House, but we will lead off with that,
please.
Ms. Golden. So, I think what I like is that he is focusing
on poverty. And, I would say something that he has proposed,
before, that I like--and that there is bipartisan support for--
is expanding the Earned Income Tax Credit, which is a work
incentive, to be much greater for adults without children. But,
that is not in this current plan. It is a past agreement.
Senator Carper. All right. We did a fair amount of work on
the Earned Income Tax Credit, as you know, late last year.
Ms. Golden. Absolutely. That was truly important.
Senator Carper. Some of it was program integrity work, but
also, I think, the idea was to make it permanent.
Ms. Golden. Yes. And, that is a truly important
accomplishment, both for promoting families' work, because that
is one of the things that helps people work more--and it
reduced poverty by a great deal.
In terms of concerns, I think the plan is inaccurate about
the success of the safety net. That is a point both Ron and I
made. It is in my testimony, with a lot of research about the
dramatic reductions in poverty as a result of the safety net
and the way the safety net supports work.
It does not recognize the extent to which low-income people
today are working. And so, what we need are work supports and
improvement in low-wage jobs. And, it turns to solutions that
actually do not have evidence in terms of words about
flexibility and requirements for work, rather than what we know
about what succeeds for work.
So, for example, Congress passed a bipartisan workforce
bill that says that what you really need is the capacity to
succeed in a post-secondary credential. That is what you need
to succeed in a job. So, I would say those are concerns.
Senator Carper. OK. Great. Thank you. Thank you so much.
Dr. Haskins, same question--a couple of things you like
about this proposal and maybe one that you have a concern
about. And then, we will go to Peter Ochs.
Mr. Haskins. The emphasis on evidence, I think, is
terrific. We have, residing in Federal data systems in all of
the Agencies and in the Census Bureau, a treasure of
information that, as a study by Chetty, which I mentioned in my
testimony, points out, could be used to learn a lot more about
poverty, the solutions to poverty, and how to increase
opportunity. So, I think that, first, that is a good thing.
Second, he wants to strengthen work requirements in food
stamps and housing. We have very modest work requirements in
both programs now. They should be stronger. I was recently a
part of a group of Brookings Institute and the American
Enterprise Institute (AEI)--bipartisan--eight liberals and
eight conservatives. We met for 15 months, five times, in New
York and Washington to develop a comprehensive plan for
reducing poverty and increasing opportunity.
And, the liberal side agreed with more work requirements,
on the condition that no one lose their benefits without being
offered a job. That strikes me as a good bargain. I do not know
how the Committee would feel about that, but I think it is
worth it, because everybody needs to get this message from the
welfare programs: They have to work. They cannot just stay on
welfare.
Senator Carper. OK, thank you.
Mr. Haskins. Third, the emphasis on local initiative and
local programs, I think, is well-placed. We need more local
energy. I agree, somewhat, with Olivia. I am concerned about
block grant States, which have not done a great job with the
TANF block grant. I do not think that their decisions have been
completely responsible.
Senator Carper. I would agree.
Mr. Haskins. So, I think what we ought to do is give 5 or
10 States the option of having much more flexibility in the use
of Medicaid, food stamps, housing, and so forth. And, they
would have to present a plan about exactly what they are going
to do and how they are going to spend the money so that at
least there would be a plan. Right now, there is no plan for
TANF States to do whatever they want to, so they spend the
money on child protection and all kinds of other things. And
then, once they do that, they cannot get it back to spend on
welfare for recessions and other purposes.
So, it is a compromise. I think it is a reasonable
compromise. If we do not enlist local government, local
citizens, and local business, we are not going to be successful
in reducing poverty.
Senator Carper. All right, thank you. Thank you.
Mr. Ochs. And then, I am going to have to run--two minutes
and then I am going to have to run, but----
Mr. Ochs. Yes, sir.
Senator Carper. Go ahead, please.
Mr. Ochs. I am unfamiliar with the specifics of Congressman
Ryan's proposal, so I really could not comment on that. But, I
can just tell you, as an entrepreneur, the less regulation you
can put on us, the more jobs we will create.
Senator Carper. All right.
Mr. Woodson, just very briefly? I have 1 minute and I have
to run. Please go ahead.
What do you like and----
Mr. Woodson. I like Paul Ryan's antipoverty agenda, because
it consolidates programs and lets recipients apply in one place
for the services they need, so they do not have to run all over
the place to qualify for numerous programs. I like that part of
it. And, I also think it devolves responsibility to a
government level that is closer to the people.
What I do not like about the plan is that--I do not think
local government is any less bureaucratic than national
government. I support charitable tax credits, where the
allocation of resources is devolved directly to taxpayers, who
can write off a portion of their tax liability and give that to
an organization in their community.
We had bipartisan agreement on this back in the 1990s, but
the Bush Administration walked away from it. I think we should
reconsider charitable tax credits that devolve responsibility
and authority to individuals who donate, rather than having the
government involved.
Senator Carper. OK.
I thank you all. I would love to stay here. And, we are
going to be following up with you--probably each of you--to
further pull great ideas out of your fertile minds.
And, I like to say that everything I do, I know I can do
better. The same is true of all of us. The same is true of all
of our Federal programs--however well-intentioned. So, what we
want to do is ``find out what works, do more of that; find out
what does not work and do less of that.'' And, you have given
us a lot of good things to think about.
So, thank you. Thank you for your work in these vineyards
as well--and your personal example--your personal life and your
business life.
All right, I think the next person up is a lieutenant,
retired--so lieutenant colonel in the Army--and her name is
Joni Ernst. And, she is a wonderful Member of this Committee.
Senator Ernst.
OPENING STATEMENT OF SENATOR ERNST
Senator Ernst. Thank you, Ranking Member Carper.
And, I would like to thank all of our witnesses today as
well. This is a topic that I have a very special interest in,
of course. Iowa--I am intent on combating rural poverty. And,
what we have seen--and just using some numbers--going back a
few years--but, in the 2013-2014 school year, just in my home
community--the community that I live in--about 65 percent of
our primary grade school children were enrolled in the free and
reduced lunch program. And, statewide, we see about 41 percent
of our children participating in that program.
So, that is an indication of where we are as a State--and
poverty--and those that qualify for those needed programs. But,
I do want to dive in a little bit more. We need to talk about
it a lot more. We have to come together and really work on some
of these issues. So, I am glad you are here, today. I love the
passion that we hear from all of you, so thank you very much
for that.
One of the foundations of our country's identity--and a
number of you have really hit upon this--regardless of anyone's
background--is that we understand that everyone that works hard
should have an opportunity to succeed. And, I am glad that some
of you have stated that, today--and that we will work on
improving the programs designed to help those that are really
in need.
And, I would like to start the questioning with Mr. Woodson
and Mr. Haskins, please. As you know, the Federal Government,
operating through 13 different agencies, oversees 80 different
programs designed to serve low-income Americans. And, according
to the Government Accountability Office (GAO), these programs
are too fragmented and overly complex for clients to navigate
and for program managers and policymakers to assess program
performance.
I would love to hear some of your opinions on that as well
as what potential limitations the complexity of these programs
presents to the folks, as they seek to understand how to
utilize this system. And, what suggestions could you offer as a
means to reduce the programmatic duplication? So, a lot of
issues there--a lot of duplicative programs. How do we make it
easier to navigate?
Mr. Woodson. Well, I would like to just start with, I
think, what Paul Ryan has recommended. There should be,
wherever possible, some consolidation and coordination of these
programs.
But, more importantly, the programs, themselves, must be
reformed. I will give you one example. The system today is
designed for self-perpetuating foster care. Seventy percent of
everybody in prison has spent some time in the foster care
system. Everyday, a half-million kids are in foster care. These
are programs financed by the Federal Government and run by the
State. I want to just walk you through how the problems of
these young people not only continue, but expand within the
system.
Only 3 percent of children coming into that system have any
psychological dysfunction. But, the moment that they come into
the system, after being abandoned and neglected by their
parents, they experience three or four or five moves. The more
they move, the more they decline and the more the system moves
them deeper in--from foster care, where the reimbursement rate
is $15,000 a year, then to a $20,000 reimbursement rate, in a
group home, etc. The more the system destroys the child, the
more value the child is to the providers of services to the
poor.
A solution is what my friend Pastor Soaries in Somerset,
New Jersey has done, where the church has taken on its original
role as a community hub and it has operated a system of foster
care and adoption, where there is no attrition rate of foster
families and more children are moving into adoption. I think we
need to look at models of re-privatization of government
programs by devolving responsibility back to the church and
some of the other neighborhood institutions--where outreach
originated until the Federal Government took them over.
The more we can devolve government roles back to private
charity and back to private institutions, the better the
outcomes will be. We could go step by step through a number of
program areas and look at prospects for re-privatization.
Senator Ernst. Thank you. I appreciate that input. Dr.
Haskins.
Mr. Haskins. First, the 80 programs are definitely
excessive. They are overlapping, redundant, and all of that--
and it would be good to try to reduce them. The only time that
I know about--successfully reducing the number of programs--was
back in welfare reform, in 1996. We killed, I think, three
daycare programs. We did not cut them. We put all of the money
in one place, gave it to the States, and gave them more
flexibility in using the money.
I think most people agree that that has been a successful
thing. Congress has added more money several times since then.
So, I think that was a good approach. And, that is, roughly,
the approach that Paul Ryan would like to take--to consolidate
programs and give more control to the States.
But, I want to caution that, once you give the States more
flexibility, they will use it. And, they may use it in ways
that you do not like--that the Congress does not like. This has
been a particular concern of Democrats. It would be very
difficult--I think, impossible--as long as Democrats control
the Presidency or the House of Representatives, to pass
legislation that creates these kind of big block grants.
So, I think the way to go is demonstrations. If you could
show that these are more effective ways to do it and that the
States and localities have good ideas--including not just the
government, but using more of the money in the private sector
as well, with voluntary agencies and so forth, which we have
thousands and thousands in the United States--that will be a
good way to do it.
Senator Ernst. Yes.
Mr. Haskins. Can I say one thing about foster care?
Senator Ernst. Sure.
Mr. Haskins. Yesterday, the House passed--I believe they
have since already passed the Family First Prevention Services
Act of 2016. It has other things in there. But, listen, this is
really important.
Title IV-E has a bunch of open-ended entitlements. It,
roughly, pays to take the kids out of their homes. The States
cannot get money out of that, until they at least reduce the
parents' rights and take the kid out of the home. IV-B is
supposed to be for services and prevention and it is tiny. It
has hardly grown at all.
So, years ago, Mr. Johnson, a member of the Ways and Means
Committee, proposed letting the States have more flexibility to
use that money, so they did not have to remove the kids from
the home and so they could use it for prevention and treatment.
And, Democrats did not like it. They killed the bill every time
we tried to pass it and Olivia will probably tell you why.
But, I still think this is a solid idea. And, this
legislation we passed opens a little hole in that Title IV-E,
so the States can get money out of IV-E to use for prevention
and treatment and to avoid the very problem that Bob is talking
about. Once you take the kids out of the home, it is, ``Katy,
bar the door.'' You do not know what is going to happen. I
think, if you are totally honest, you admit that.
But, anyway, we ought to learn how to use prevention better
than we do now. I think we can all agree on that.
Senator Ernst. Right.
Ms. Golden. And, one of the keys--so, to take prevention--
back to your original question--Medicaid and the Medicaid
expansion is one important source of prevention. So, I agree
that the new Family First Prevention Services Act of 2016
offers an opportunity to do a little bit of helping parents
upfront. And. those States that also have access to Medicaid
services, because of the expansion, can then put those things
together.
So, that takes me back to your question about what to do
with this complexity. And, I think, the first headline I want
to say is that I spend a lot of time working with six States--
Governors and legislators of both parties--Idaho, North
Carolina, South Carolina, Illinois, Colorado, and Rhode
Island--which have done a great job of delivering Medicaid and
food assistance--SNAP--which are
the--and childcare subsidies, to some degree--in a way that is
much more seamless for the States and for families. They did
not need changes in Federal laws.
And, one of the big things they discovered was there were a
lot of myths about the Federal law. In fact, the core Federal
programs, typically, are there for a reason, like to make sure
that every American does not go hungry or can get health care.
And, when a State is committed to making that less burdensome
and more effective, they can find ways to do it. I mean, there
are lots of examples.
One simple one is that it is much more burdensome, both for
workers and for families, if you make people bring in their pay
stubs from work every time. They, probably, need both health
care and food assistance. If you can copy those documents,
technologically, or use----
Senator Ernst. Right.
Ms. Golden [continuing]. The data system, it is much
quicker.
Senator Ernst. Great.
Ms. Golden. So, I think that is the headline.
The second really short headline I will pose----
Senator Ernst. Yes, very quick.
Ms. Golden [continuing]. Is that, usually, when you look at
any chart that has a long list of programs, what it will have
is a couple of big ones and then small ones. And, the small
ones are typically there because the real problem is not enough
resources. So, when you are trying to address, say, the fact
that child care just reaches 1 in 6 eligible children, the
Congress may create a small program for a particular targeted
group.
But, I think one of the important ways to solve that is by
making sure that the core programs are resourced enough so that
you do not have to add lots of additional other little pieces
to get to those core priorities.
Senator Ernst. Very good. Well, I appreciate all of your
input today.
I apologize for going over. This is a very important topic,
Senator Johnson. Thank you, Chairman, for bringing this
forward. I think we need to explore a lot of these ideas and
have some very good discussions on it.
But, thank you all very much for being here.
Chairman Johnson [Presiding.] Thank you, Senator. And, make
sure you pick up your ``Triumphs of Joseph.'' [Laughter.]
As long as we are on this topic, though, Dr. Woodson, did
you mention Irene Pernsley in this conversation? I was voting.
Did you talk about the story on page 28 of your book?
Mr. Woodson. No. And, that is an example of what I talked
about.
Chairman Johnson. Just quickly----
Mr. Woodson. I am from Philadelphia and I worked as a
trained social worker in that system. And, many years ago,
there was a young social worker, Ms. Irene Pernsley, whose 17-
year-old daughter had a baby out of wedlock. And, they placed
that child up for adoption, assuming that the child would find
a loving home. That healthy baby boy went into the system.
Irene Pernsley later became the Commissioner of Social
Services for the city of Philadelphia. Eighteen years later, a
friend who was a consultant told Irene that there was a child
in the system named Pernsley--and asked if she had any
relatives in the system. She said, ``No, my grandson was
adopted 18 years ago.'' The consultant said, ``Well, there is a
Pernsley here.''
That healthy child had remained in the system for his
lifetime. Four people attempted to adopt him, but--because the
child was getting high reimbursements from the local agency.
Irene sought information from the agency, which she was
funding, and they denied her access to information about her
own grandson. That child was a commodity in that system.
The agency that had him in its care lost its license. But,
this is a typical example of the kind of perverse incentives
that exist within the system. Fifty-three of these well-
established social service agencies have been put into court-
ordered receivership--including the one in Washington, D.C.--
because of their injury to children.
Ms. Golden. We brought it back. We are so proud of bringing
it back.
Mr. Woodson. Yes. Right.
Ms. Golden. Yes--and wrote about that.
Mr. Woodson. But, the point is, they were in court-ordered
receivership.
One final point: these group foster homes, around the
country, are the primary source of sex trafficking. Pimps wait
outside these group homes, run by the State, on Friday and
Saturday nights so that girls--13 years old and 14 years old--
can crawl out of windows and get into their cars in the city of
Atlanta and dance in strip clubs and prostitute themselves.
This is the kind of outrage that we are tolerating in society
that goes unrecognized and unaddressed as we talk about the
professionalization of service delivery.
The only answer to that, is to take the responsibility away
from the government--whether it is Federal, State, or local--
and devolve authority and resources directly into the hands of
private churches, where there are higher levels of
accountability. We must find a way of devolving authority from
the government. We have been doing it wrong for 50 years. Now,
it is time to go back to what worked, prior to the government
getting involved.
Chairman Johnson. But, again--just to summarize--a child
was given up for adoption as an infant. Eighteen years later,
that same child was not adopted and was in foster care.
Mr. Woodson. Exactly.
Chairman Johnson. We know the benefits of adoption compared
to foster care. Senator Tester.
OPENING STATEMENT OF SENATOR TESTER
Senator Tester. Thank you, Mr. Chairman.
Montana must be in a different country, because our foster
parents do not get paid enough money----
Ms. Golden. Right.
Senator Tester [continuing]. To keep a foster kid. It is
not a money-making proposition. The foster parents, in Montana,
are doing it out of love for those kids and that is the only
reason they are doing it.
And, I would also just say that if there is a kid that is
put in the foster care system, where the hell is the oversight?
Where is the Mayor? Where is the Mayor of Philadelphia?
Mr. Woodson. Right.
Senator Tester. Where is the Mayor of Atlanta, if these
kids are being prostituted?
These people are not doing this stuff in a vacuum. If they
are doing it----
Mr. Woodson. Right.
Senator Tester [continuing]. There needs to be oversight.
And, I do not know which came first--the chicken or the egg--
and I do not know which came first--the government or the
churches. I do not know if the churches were doing it--and quit
doing it--and the government took it over--or if the government
swept it away from them--but, the truth is, the real problem
here is poverty. That is the real problem. And, there are some
other issues, too, but I do not want to get into those.
I mean, this is a high-powered panel here. I want to talk
about--in Montana, it is, probably, no different than in the
inner city. We have reservations that have 80 percent
unemployment. Businesses do not want to move there. When it
comes to hope, there is not much of it. And, consequently,
poverty--housing, water, you go down the list--it is not a
place people covet.
So, how do we turn that around? I would like the people on
this panel to give me the three most important things that need
to be done--whether it is at the Federal, State, or local
level--to encourage businesses to come to create good-paying
jobs to lift these people out of poverty. I just want you to
give me your top three.
Ms. Golden. So, my three--should I----
Senator Tester. Yes.
Ms. Golden. I would say--and these come--while I do not
know Montana really well, I have worked a lot in Idaho, so--and
rural----
Senator Tester. Just give me your top three, as it applies
to New York City--I do not care. Just give me your top three.
Ms. Golden. The whole country.
First, I do think that it is crucial to focus on babies and
young children. Everywhere--including in rural communities--
young children and their parents are the poorest. And so, one
of the pieces is to focus on early childhood: home visiting,
early Head Start, etc.
Second, you have put your finger right on the set of issues
surrounding jobs, which, I think, is crucial. And so, one piece
of that, I think, is about improving jobs, themselves--the
minimum wage and job quality--strategies that--paid sick days.
But, the other part is about ensuring that people get the
skills and the training, so they are able to succeed at work.
And, that is not just about workforce programs. It is also
about community colleges and post-secondary education.
And, I actually do know that Montana is really interested
in career and technical education strategies, including in the
Indian communities--around the reservations--to help make
powerful connections----
Senator Tester. OK.
Ms. Golden [continuing]. All of the way to school.
Senator Tester. OK.
Ms. Golden. And, again, I am not sure if this is three or
four, but I would also say that using subsidized and
transitional job strategies, where you need them--because
sometimes what you need--people need to eat while they are
learning and building skills. And so, whether it is
apprenticeships, on-the-job training, or transitional jobs,
that is an important piece as well.
Senator Tester. OK. Mr. Haskins.
Mr. Haskins. OK, I think trying to convince businesses to
come to the reservation is a losing proposition. Why would they
do it?
Senator Tester. That is correct.
Mr. Haskins. People are not trained. There are all kinds of
environmental problems, transportation issues, and so forth.
Senator Tester. So, what do----
Mr. Haskins. So, here is what I would do: First, training
is crucial, like Olivia said. The training has to be in
consultation with local business and it has to be providing
skills for jobs that are available in the local economy. That
is number one.
Senator Tester. Amen.
That is right. That is correct. I could not agree with you
more.
Mr. Haskins. OK, good.
Senator Tester. It does not do any good to train people to
do theater set designs----
Mr. Haskins. I am glad to be correct. I wish I could tell
you something new.
Ms. Golden. Right.
Senator Tester [continuing]. If there are no theaters,
right?
Right on. Keep going.
Mr. Haskins. All right. The second thing is to forget about
taking business to the people. Reservations should set up
transportation. They should develop relationships with
businesses that are within 50 miles or whatever. And, they
should have transportation that they can arrange--small buses
or vans or something--to take people to their jobs and to bring
them back.
Senator Tester. OK.
Mr. Haskins. I think that would be a much more successful
strategy.
And then, the third thing, which you know very well, is to
develop businesses using Native Americans on the reservation,
itself. A lot of reservations do this. On some of them, it is
gambling and industries associated with gambling, but others
are associated with tourism, showing interesting things that
are part of their handicrafts--crafts that the tribes make. So,
developing businesses on the reservation would be a third thing
I would do.
Senator Tester. OK, that is good. Peter.
Mr. Ochs. Yes, we have several manufacturing companies. I
can tell you, 5 or 6 years ago, literally, we supplied products
to original equipment manufacturers, OK? So, we would provide
products to people that build other things, which the consumer
is going to buy.
Over the last--let us say, 10 years--those original
equipment manufacturers, who we were producing for, have come
to us and just literally said, ``You have to reduce your price
by this or that, etc.'' OK?
Senator Tester. Right.
Mr. Ochs. And, basically, we have seen a lot of that going
offshore, OK?
Senator Tester. Yes.
Mr. Ochs. I am a manufacturing guy, so----
Senator Tester. Fair trade policies, is that where you are
heading?
Mr. Ochs. I am sorry?
Senator Tester. Fair trade policies, is that where you are
heading with this?
Mr. Ochs. Well, I am a free-market guy, so I think that is
one thing. I think it boils down to the American people. Do you
want to pay $20 for a pair of jeans that were made in China or
$40 for a pair of jeans that were made in the United States? I
am going to put it back on the American people.
Senator Tester. OK.
Mr. Ochs. There are some businesses abusing the system. I
agree. But, overall, the free market is alive and well in the
United States of America.
Senator Tester. Yes.
Mr. Ochs. And, until Americans say, ``We are going to buy
American''----
Senator Tester. Yes.
Mr. Ochs [continuing]. I think we have a problem.
Senator Tester. Yes. OK.
Mr. Woodson. People just do not look at price. People want
to know the value of goods and the work that they provide. The
first of my three recommendations is to create violence
reduction and civil order--returning civil order to a
community. Nobody can operate a business if there is not civil
order.
Senator Tester. I would agree with that. Yes, keep going.
Mr. Woodson. The way you do that is to empower the people
inside of those same cultural and geographic zip codes who have
demonstrated that they can help transform and redeem people.
And then, once a heart has been transformed, opportunity works.
And, the same is true with drug addiction. Drug addiction
has risen--not only in low-income communities, but all over the
country. The answer is not professional therapeutic
intervention--it is moral restoration. And, again, for this, I
would look to local institutions.
The third element is transportation--similar to the program
of Pastor Jerome Smith's church, in the Senator's city of
Milwaukee. This church is providing vans to take people out to
where the jobs are, but it is also promoting personal
restoration.
So, those would be my three recommendations.
Senator Tester. Well, I appreciate you guys--I am sorry I
was not here for your opening remarks and your testimonies, but
I appreciate you being here. I appreciate your perspectives.
We deal with a lot of frustrating things in Washington,
D.C.--and excuse me for going over, Mr. Chairman--but poverty
is one of those tough nuts to crack, I have to tell you,
because we
are talking about Indian Country, where we have 70 or 80
percent--I am sure the inner cities are the same way.
And, there are so many challenges that you do not know what
to do first. You do not know whether to rebuild the K-12
education or to do the preschool education. You do not know
whether to empower the community colleges and the technical
colleges, to be able to get a well-trained workforce with jobs
that actually can employ people, or whether to put it in
transportation and police protection--or in spiritual
reinvigoration. It is all part of the equation.
But, I do want to thank you guys. I think this is a good
discussion and I think this is an opportunity to start to
figure out ways we can bore down to really make a difference.
The only other thing I would add to all of your comments is
that the Federal Government cannot fix people's problems alone.
We need help from the people on the ground to make this happen.
If we work together, we can make it happen. Thank you all.
Mr. Woodson. Thank you, Senator.
Ms. Golden. Thank you.
Chairman Johnson. Thank you, Senator Tester.
If you just wait for 2 seconds--I want to answer--because I
know Mr. Ochs answered a question from Senator Carper, in terms
of what we can do, and he said that we could reduce the
regulatory burden.
Now, I was talking to one Wisconsin paper manufacturer.
Just four regulations, issued recently, are costing that paper
manufacturer the equivalent of $12,000 per year, per employee.
Now, the Wisconsin paper association came up with cost
estimates--somewhere between $12,000 and $22,000 is the cost
per year, per employee, of the regulations issued over the last
5 years. So, that regulatory burden is massive. And, if we can
reduce that, you will have more money going to people's
paychecks as well.
Senator Tester. And, I would say it depends on what the
regulation is. If that regulation there is downshifting costs
to the next generation, that regulation needs to be enforced.
If that regulation is regulation for the sake of regulation,
you are exactly right.
Chairman Johnson. We have a $2 trillion regulatory burden--
which is about $14,800 per household--so it is massive.
Again, I want to thank all of you.
And, Senator--whoops. Rats. [Laughter.]
Give that to him--page 28. [Laughter.]
Thank you.
Mr. Ochs, in your testimony, you were talking about how one
of the reasons that you did this was because you could not find
enough people for your manufacturing plant. I have been in
manufacturing for 30-some years. It was many years before I
could hire enough people. I have traveled around the State of
Wisconsin, tirelessly. There is not one manufacturing plant I
visited, in 6 years of traveling around the State, that can
hire enough people. That is an unbroken record--not one.
Mr. Ochs. Right.
Chairman Johnson. Why? What is your evaluation of that? I
mean, we are talking about jobs. We are talking about all of
these opportunities. Why can manufacturers not hire people? I
have my own theories. I would like to hear yours.
Mr. Ochs. Sure.
I think, first, we have really turned from a production
society to a consumer society, OK? So, one factor is that
everybody is thinking consumption instead of production--and
manufacturing is, primarily, production.
I think, also, in some sense, manufacturing is a difficult
job. It is, oftentimes, a physical job. And, why work for $15
an hour doing that when you can work for $15 an hour doing
something else? In our case, we were in a small town and we
just simply did not have the labor resources there.
And, I will second your motion on regulatory burden. It is
difficult for us to compete, as a small business--and small
businesses create most of the jobs in the country, as we know--
to compete with the large institutions. We have, literally,
seen large companies who love the regulatory burden, because
they can afford it and they can stand it, but they know the
small guys cannot.
Chairman Johnson. It is a barrier to entry----
Mr. Ochs. Yes, it is a barrier to entry.
Chairman Johnson [continuing]. And, to competition.
Mr. Ochs. Yes.
Chairman Johnson. And, again, the numbers are, I suppose,
somewhat disputable, but I would say they are also undeniable.
I mean, when you talk about people--$12,000 to $20,000 per
year, per employee--just from the regulations issued over 5
years. And, you can argue about specific regulations, but $2
trillion--a number of studies put it at that--divided by the
number of households--$14,800 per year, per household. It is a
massive regulatory burden and that is money that could be in
people's paychecks.
Ms. Golden. On the ``why,'' Senator Johnson--one of the
things that we do a lot of work on at CLASP is career
pathways--on how you can create a pathway where somebody, who
is starting out in a school system that is not giving them what
they need--that does not have the basic requirements----
Chairman Johnson. Are we talking about school choice?
Ms. Golden. No, I am talking----
Chairman Johnson. I have other questions for you.
Ms. Golden. OK, great.
Mr. Haskins. Could I add something really quickly?
I was in Wisconsin 2 years ago, meeting with the State
legislature. And, they invited a manufacturer, who told an
anecdote about needing welders. And, he said good welders could
make $60,000 to $70,000 a year.
Chairman Johnson. Yes, right.
Mr. Haskins. And, he said they are always short because
they----
Chairman Johnson. Yes.
Mr. Haskins [continuing]. Cannot get trained people.
Chairman Johnson. Yes.
Mr. Haskins. He said he would even be willing to train
them, but then, they go to another plant, so----
Chairman Johnson. So, here is my----
Ms. Golden. And, we used to have----
Chairman Johnson. Here is my theory on the case: First of
all, we tell our kids, you have to get a 4-year degree, which
implies that working in a factory is somehow second-class
status. Nothing could be further from the truth. All work has
value.
We pay people not to work. Let us put up a chart.\1\ As
long as we are talking about this, let us put up the one from
the head of the Pennsylvania welfare department. I think, Dr.
Woodson, you might have been in the Budget Committee hearing a
number of years ago. This is a study done--households headed by
a single mom, in Pennsylvania--shows the welfare cliff.
---------------------------------------------------------------------------
\1\ The chart referenced by Senator Johnson appears in the Appendix
on page 89.
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And, basically, just to quickly summarize--and it is kind
of a difficult chart to read, but, for a single mom, in
Pennsylvania, it was marginally beneficial for her to make up
to $29,000. Past that point, because of the increase in taxes
and the reduction in welfare benefits, there was no marginal
value. She did not put another penny in her pocket until she
was able to make $69,000 per year.
So, you have that massive gap. It pays to keep working up
to $29,000. Past that point, somebody who is economically
rational would sit there and go, I am not going to work
anymore.
Ms. Golden. It is not----
Chairman Johnson. Very few people go from $29,000 up to
$69,000. It does not happen all that often. So, that would be,
certainly, my evaluation of why manufacturers cannot get enough
workers. We denigrate the trades. We do.
I was head of the ``Partners in Education Council'' of our
chamber. And, we actually had an initiative--first, life
skills, but then, the next step after high school was--we
asked, ``How do we give kids and their parents the information
they need about all of their options after high school--above
and beyond just 4-year degrees?''
And so, I must have, in these meetings, said a hundred
times, ``We have to stop denigrating the trades.'' I had made
the comment, and 5 minutes later, a very sympathetic school
administrator was talking about a young man and, basically,
said, ``Well, Bill is kind of struggling in school. I mean, let
us face it; all he is ever going to be is a mechanic.''
Now, fortunately, the head of Oshkosh Tire was at the other
end of the table. And, she goes, ``Hey, I need those
mechanics.'' At which point, the administrator goes, ``Oh, that
is not what I meant.'' Unfortunately, that is exactly what she
meant.
So, again, it is an attitude we have inbred in our culture
that says that there are first-class and second-class ways of
realizing your full human potential. Nothing could be further
from the truth. All work has value.
And, by the way, in Wisconsin, so many manufacturers pay
for the training. You leave high school, you go into
manufacturing, and you do not have to get $30,000 into debt.
You can actually get a job, you can start making money, and
then, the company, themselves--because they cannot find
workers--they will pay for your education. You never have to go
into debt. But, we do not tell our kids that. We tell our kids,
you have to get a 4-year degree. And, we have done a huge
disservice.
I have more time, so I will turn it over to Senator Peters
right now.
OPENING STATEMENT OF SENATOR PETERS
Senator Peters. Well, thank you, Mr. Chairman.
And, thank you to the panel for your testimony here, today,
on a very important topic: how we make sure that everybody in
this country has the opportunity to achieve whatever their
version of the American dream is. So, people should have the
opportunity to do that.
Mr. Ochs, I would like to just ask you to talk a little bit
about some of your programs, because this is an issue that I
have thought a great deal about--and I am concerned about, when
it comes to folks who have gone to prison and are paying their
price to society, which they should. These are individuals that
have done something wrong. They need to pay their price--do
their time.
But, what we find is that, too many of them, when they get
out, they find out that they are actually serving a lifetime
sentence. It is not a sentence for 5 years or 10 years or
whatever it may be. And, it does not seem to be dependent upon
whether or not they get skills as well. Now, you provide some
wonderful skills for the folks that you have talked about. I
appreciate your comments on that and it is wonderful to have
those skills, but, my experience is that it does not matter
when they get out, but that employers are simply unwilling to
hire somebody who has spent some time in prison.
The whole system is premised on second chances--that if you
have done your time, you should have a second chance to be able
to get back on your feet. And, I know a number of young men and
women want to do that, particularly, young men in some of the
cities in my State, who never get that chance ever.
Now, you have talked about hiring some individuals and I
applaud you for doing that with your company. I also applaud
you for your statement that you help folks get jobs when they
get out. But, if you could tell us some of the impediments that
you find for these individuals--because, I assume, they are
having a difficult time getting hired--just like they are in
Michigan. What can we do to help these individuals and to help
employers hire these individuals--to give them the second
chance that the system is premised on?
Mr. Ochs. Sure.
The greatest impediment is that they have a felony on their
record----
Senator Peters. Right.
Mr. Ochs [continuing]. And so, who wants to hire a felon?
Senator Peters. Right.
Mr. Ochs. And, I know you are familiar with ``ban the
box.'' And, we are, probably, for that.
I would say that, before that, I think we just need to
educate the business community that these are not all bad
people. There is a stigma in society and somehow we have to get
over that stigma in society that says that because this person
came out of prisons and has felonies, he is not worth hiring.
We are working amongst the businesses we know and the
nonprofits we know to try to reduce that. We, literally, have a
group--because of the ability to not hire people, we think
there is a great opportunity for felons coming out of prison to
get jobs, but they need training, they need mentorship, and
they need some kind of accountability, I think, for a year,
maybe, after they are out.
We just had a gentleman that was in for 47 years. He came
out. We hired him. He went back in 3 months later. And, he
wrote me a long apology and he said, ``Pete, I am sorry, but I
cannot live outside anymore. I have been inside too long.''
And, the system--there is no rehabilitation inside of the
prison system. And, I think it starts inside of a prison. We
have to start training. We have to, some way, create economic,
social, and spiritual capital inside of the prison. And so, we
have to incentivize businesses, nonprofits, or faith-based
people to get in there and do that, OK? When they come out,
there needs to be some kind of a re-entry ramp that helps them,
for a period of time, to do that, I think.
Ms. Golden. And, I would just add, if I may----
Senator Peters. Yes, please.
Ms. Golden [continuing]. Because I am very much hoping we
can touch base afterwards, to work together on this--we just
did a forum, sponsored by CLASP and others, with young people,
including those who had been incarcerated--and others. And, I
would underline exactly what you said about ``ban the box'' and
reaching out to employers, but also about the role of education
and training.
And, I mean, it think is also an important point for
Senator Johnson's theme, which is that preventing the initial
incarceration is also about work opportunities, training, and
job opportunities, because people who are incarcerated--not
only does it disproportionately hit communities of color hard,
but it disproportionately hits people without a high school
diploma. It is about school discipline. It is about the ways in
which you interrupt that.
And so, I am just tremendously excited to see the interest
in this room, in thinking about how employment strategies and
training--and that happens before, that happens during, and
that happens after--can be solutions.
The only other solution I would mention is that we hear a
lot from young people--both before and after--about health,
mental health, and trauma. And so, I would also put those on
the list of strategies that are part of the solution.
Senator Peters. Thank you.
Mr. Woodson. Senator.
Senator Peters. Mr. Woodson.
Mr. Woodson. There are several barriers--to presume re-
entry. One important factor is a prisoner's contact with his
natural support system--his family.
Some of those 2.3 million incarcerated individuals must pay
as much as a dollar a minute to make telephone calls home. Two
companies make $1.2 billion providing telephone service to
inmates. It is outrageous. My daughter lives in Costa Rica. It
costs me nothing to call her. It would be a dollar a minute if
she were in prison. And, that is a burden on families.
The second barrier is that, if you come out of prison and
you have a trade--and if you were a plumber or electrician, for
example--you lose your license to operate. Ohio Governor John
Kasich came together with Democrats and Republicans and passed
legislation that would restore the licenses of former inmates.
Some who are released from prison do not have
identification. They do not have a driver license, so they
cannot get to work. Yet, it can take up to 6 months for a
person coming out of prison just to get a driver license.
So, there are practiced barriers that we place in their
path that can be easily addressed. Occupational licensing must
be restored, identifications should be easier to get, and the
fees for telephone calls to families from prison must be
lowered. Currently, those calls represent a $1.2 billion
industry. In addition to the profits of community firms, 40
percent of the money from inmates goes to those prisons. It is
the biggest fleecing of inmate families in America. This is a
national outrage that is being ignored.
Senator Peters. Well, I appreciate all of your comments on
this. And, I also appreciate the comments on ``ban the box,''
which is going to be critical to at least give an individual
the opportunity to interview and not to be thrown out before
they even get a chance to make their case to somebody. And,
presumably, if they make their case, an employer may be
impressed and say, ``I am willing to take that chance.''
But, nevertheless, even with the training and all of the
aspects that you have brought up--which are all very important
points--you still get to the point where an employer feels
like, ``I do not know if I want to take this risk with someone
who has this felony--even though they have interviewed well and
come across as sincere.''
I mean, is there something that we should be doing to make
it easier for those employers that are on that edge? And, I am
sure you have all seen this.
Dr. Golden, do you have an idea?
Ms. Golden. Well, I guess I have two thoughts.
One is that people who have had the experience, like Mr.
Ochs, are very powerful ambassadors----
Senator Peters. Right.
Ms. Golden [continuing]. To other employers.
Senator Peters. Right.
Ms. Golden. And, we have seen that work in other arenas.
I think the second thing that I would say--and this is
partly because we have been working with States on workforce
strategies that take advantage of some of the opportunities
that Congress authorized--for example, for on-the-job training
or subsidized employment. Sometimes, if the employer has a
tryout opportunity, as part of training and skills--and, as a
part of that training and skills, if somebody is working and
they get to see them, that is also important.
Transitional jobs, similarly, give somebody the comfort
that, not only do they look good on paper, but they have
actually worked--either in my organization or for a supervisor
somewhere else.
So, I think those are--I do not think there is a single
perfect answer----
Senator Peters. Right.
Ms. Golden [continuing]. But, I think those are pieces of
it.
Senator Peters. Yes, go ahead.
Mr. Ochs. In Kansas, I think we have a $2,400 tax credit
for a new employee. And, that is useful, for us, because that
covers the training costs for that first 4, 5, or 6 months. And
so, of course, tax credits are great--and are a great
incentive. So, that would be something you could consider also.
Senator Peters. Now, of course, you hire some folks that
come out. You said you hired 14, I believe, in your testimony.
Mr. Ochs. Yes.
Senator Peters. You employ considerably more in the prison,
I would imagine. As folks are coming out, how do you make the
decision as to who to hire? They have worked for you in the
prison? And, is that, in some way, instructive for us to have
other employers use that sort of process?
Now, obviously you are in a different position, because you
have actually seen them work and you have the opportunity to
supervise them----
Mr. Ochs. Sure.
Senator Peters [continuing]. But, are there still some
lessons that may be helpful to us, as we think about helping
folks actually get employed with these----
Mr. Ochs. Yes. We have just simply made the commitment,
personally, that if they come out of that prison and they
parole to Hutchinson, Kansas, where our main office is and
where our main manufacturing facility is, we will hire them. We
will make a space for them, OK?
Once again, I think a trial period where you would not be
subject to the unemployment situation and the laws, etc.--that
would be helpful. Tax credits would be helpful. I think it is
just a matter of the business community needing to start
educating each other on how these are--it is a great supply of
labor--and however we can do that. It is an education thing.
Senator Peters. Right.
Mr. Ochs. I have lots of friends that are fellow business
owners and I just, literally, get on the phone and say, ``Here
is Joe. He is coming out. He is a good guy. He has worked for
me. You need to give him a chance.''
Senator Peters. That is great.
Mr. Ochs. And, they employ them.
Senator Peters. Great.
Mr. Ochs. And, we do that throughout cities in Kansas.
Mr. Woodson. Senator, I would not undervalue your presence,
as policymakers, in the communities we serve. I have the
pleasure of taking Congressman Paul Ryan, every month, to site
visits in a different city. And, just the fact that he came and
visited a program helped to validate it. And, I am sure similar
visits by Senator Johnson and others, who would take the time
to visit our programs, would serve as a means of validating
them and highlighting their importance. That is something
beyond your legislative role, but it could make an important
difference.
Senator Peters. Right.
Mr. Woodson [continuing]. Your reputation helps to validate
what we do.
Senator Peters. Great. Thank you so much. Thank you for all
of your answers.
Chairman Johnson. So, Senator Peters, let me describe a
program that is actually working--doing exactly what Robert
Woodson is talking about. And, we named it after his book. We
called it the Joseph Project.
And, it was teaming up with Pastor Jerome Smith of Greater
Praise Church of God in Milwaukee, Wisconsin. And, what Pastor
Smith does is he identifies, he vets, and he screens, but then
he gets people to commit to turning their lives around. And
then, what we do, with our Senate staff, we go in as a
constituent service a 1-week training program.
We teach them soft skills. We teach them interview skills.
And then, we set them up with interviews. And, they are getting
jobs. They are getting real careers. It has actually been so
successful that the Sheboygan County Economic Development
Corporation donated two vans to provide the transportation.
The program is still in its infancy. We have had, I think,
10 of these different training programs. He starts with about
60 individuals and then, again, by screening, vetting and,
again, getting them to commit to succeed, he winnows it down to
about 12 people. And, generally, those training sessions have
somewhere between 12 and 20 people. And, it actually works--
other than our Senate staff just doing it as constituent
service, there is no government funding--there is no government
program. It is just an individual, community-based and faith-
based program helping people, one person at a time.
One of the individuals, whose name is Willy--one of the
graduates--I just saw him up at Nemak, a company in Sheboygan,
Wisconsin--he said that he had gone through, literally--he
said, ``I would need your hands to get the number of
fingers''--the number of job-training programs and placement
programs he has gone through. And, he said that the difference
between this program and those--it kind of gets to what you are
talking about, in terms of the foster care system--is that the
people in the Joseph Program, they are not concerned about
their program, they are not concerned about their government
funding, and they are not concerned about themselves. He said,
``They are just concerned about us.''
But, again, that is a community-based and faith-based
program that actually works--no government involvement other
than, as Robert talked about, you are using the Senate office
to highlight success--and it actually works. Senator Lankford.
OPENING STATEMENT OF SENATOR LANKFORD
Senator Lankford. Thank you. Thank you, Mr. Chairman.
Thank you all for being here and for the work that you do
all of the time in dealing with poverty issues across the
country.
Mr. Haskins, let me bring this up to you first. There are
some interesting studies that you have done dealing with just
marriage--two-parent households, one-parent households, and
what I believe you call the three norms. I did not hear you
mention it earlier in your testimony. I had to slip out for a
vote and then come back--and want to make sure we come back to
that, because I want to make sure I have this right.
I believe, in your study, you have identified three norms:
if someone completes high school, if they have a job, of any
type, working full-time, and if they delay parenthood until
marriage, they have a 71 percent success rate in getting out of
poverty. I want to make sure that number is correct and have
you be able to highlight that.
Mr. Haskins. Yes, it is. It depends on the year that you do
it. This is based on a representative sample of the American
population and it just describes how, if people meet those
three criteria, they have over a 70 percent chance, depending
on the year, of avoiding poverty--not getting out of it--of
avoiding it--in any given year, when you do this study.
And, conversely, if they violate all three norms, they
have, like, a 10 percent chance of being--I am sorry, about a
70 percent chance of being in poverty. So, yes--and it is just
correlational. It just describes what the actual situation is.
So, the implication is, if we could get kids educated, if
they waited until 21 and married before they had a baby, and if
they worked full-time at whatever job they could get, they
would avoid poverty.
Ms. Golden. And, just may I add to that----
Senator Lankford. Sure.
Ms. Golden [continuing]. Because, I think the point that it
is correlational is really important, because, one of the
things that I highlighted, in my testimony, is that about 70
percent of poor kids live in families where somebody is
working, but they are often not able to get enough hours.
And so, full-time work, for most low-wage workers, is not a
choice. I actually just talked to someone the other day who is
working 3 days a week, trying to live and get by, here in D.C.,
and go to school the rest of the time----
Senator Lankford. Right.
Ms. Golden [continuing]. And, they just cannot get more
hours. So, I do think that the evolution of low-wage work, in
terms of hours and schedules, is very important.
In terms of single-parent families, I do want to highlight
that about 5 million children are poor in married couple
families. And so, the percentages are different, in part, of
course, because it is so much harder to raise kids and work
full-time, but I do want to highlight that, for a large chunk
of poor children, the challenge is hours and wages.
Senator Lankford. OK.
Ms. Golden. And so, we need to really focus on that.
Senator Lankford. Yes. For someone like myself, who grew up
in a single-parent household--which, by the way, today is my
mom's birthday, so I can say happy birthday to her, as well.
But, she worked incredibly hard----
Ms. Golden. Yes.
Senator Lankford [continuing]. To be able to raise my
brother and I in a single-parent household--and also just to
set an example and to set the character traits.
Ms. Golden. Yes.
Senator Lankford. It just goes back to something, Robert
Woodson, you have said multiple times--that I have heard you
say. It is not a matter of going into a neighborhood and saying
that everyone here is not successful.
Mr. Woodson. Exactly.
Senator Lankford. That is not true. There are good examples
in every neighborhood and in every community where people have
beat the odds on it. And, what I am trying to look at, with
this research--and what you had mentioned before, Dr. Haskins--
was the evidence. What are the things that we know work?
Finishing high school, having a full-time job, and delaying
having children until you are married.
You also had mentioned, I think, in some of your evidence--
if I remember the number right--there is a five times higher
poverty rate for those that are in a single-parent household
than there is for those that are in a two-parent household.
Correct? Not correct?
Mr. Haskins. Yes, that is correct. That is correct. Dr.
Golden likes to state how many kids live in married couple
households. Fine. But, the odds are that, if you get married
and if you stay married, your financial situation will be much
better. And, by the way, we now have huge research--I have been
alive long enough to know that this has changed, dramatically.
The academic world used to think that marriage was not that
big of a deal for child development. Now, there is almost
universal agreement that it has a huge impact on children. Kids
who are reared by married-couple families do better, in many
important respects, than kids who are reared by single parents.
I used to work in the Bush Administration. And, the
President wanted to talk about the importance of marriage. The
first thing he always said was, ``The hardest job in America is
being a single parent and I admire single parents.'' So, he did
not want to cast any aspersions----
Senator Lankford. Never.
Mr. Haskins [continuing]. On single parents. But, the facts
are the facts. And, if you are talking to kids--if they want to
do the best by their children and for their own well-being--
they will get married, they will not have children outside of
marriage, and they will maintain their marriage once they are
married.
Senator Lankford. Because that worked for them.
Ms. Golden. And, I think the two conversations are
connected, because the high incarceration rates for young men
are a very big contributor to young women's and young men's
inability to become a stable couple.
Senator Lankford. Right, not having that same connection.
Ms. Golden. So, that is a solution----
Senator Lankford. I want to come back to another barrier on
that.
Ms. Golden. Right.
Senator Lankford. Mr. Woodson, were you going to say
something as well?
Mr. Woodson. Yes, I just think--and Ron and I have had this
discussion many times before. What concerns me about the
academic community is that they do not study situations where
there are cohorts of low-income families that have demonstrated
that data is not destiny. There are some who have started life
in that disadvantaged group, but who found surrogate ways to
cope and to rise up.
I saw the success rate of a public housing development,
where residents sent 460 kids to post-secondary education and
witnessed the dramatic reduction of teen pregnancy in that
development. But, I did not see researchers coming into
circumstances like that to study the successes of people, in
spite of their situations. ``60 Minutes'' can find them, the
networks can find them, but our academic community does not
seem to be interested in studying the successes of people in
those situations.
Senator Lankford. Do you think it is because they want a
big sample and want to show a large statistic, rather than
trying to look at one area and say that it was successful? And
then, you cannot really, statistically, extrapolate that
everywhere--though you can find what you have identified
extremely well--is this house and this house----
Mr. Woodson. Exactly.
Senator Lankford [continuing]. Next-door to each other,
dramatically different outcomes--had the same situation, same
neighborhood, and same family dynamic, but this family worked
and this family did not.
Mr. Woodson. Exactly.
Senator Lankford. These kids succeeded and got out and
these did not. What happened?
Mr. Woodson. Exactly. That is what we should be asking. It
seems to me that the research community should make their
protocols fit the reality of the people, rather than requiring
the people to meet their criteria and protocols.
Senator Lankford. So, let me ask you a question as well--
and that deals with marriage penalty. We still have areas, in
Federal tax law--in means testing and such--where there are
marriage penalties.
Interestingly enough, if you are a veteran and you have a
service-related disability--with a veteran, there is actually a
marriage bonus that is there. So, that incentivizes marriage in
the veterans system. But, in other areas, Social Security
Disability Insurance (SSDI) being one of those, there is a
marriage penalty that is built into it.
Are there other areas of the Federal tax code that you
think would disincentivize marriage? I would hope there is
nothing built in there that would disincentivize full-time work
or disincentivize getting a high school education.
So, when I look at those three factors, based on what you
are identifying--let us just talk about the marriage penalty.
Are there any areas in the marriage law, right now--or things
that you have seen--that would disincentivize marriage--from
the Federal code?
Ms. Golden. I think Congress fixed the major Earned Income
Tax Credit issues, so I think that is something to take credit
for.
Mr. Haskins. I do not think it is exactly fixed, but I
think, in general, the negative effects of the tax code on
marriage are vastly overstated. We have a very good research
study based on--the only way to know is to do a national
probability sample----
Senator Lankford. Right.
Mr. Haskins [continuing]. So, it is representative. If you
do that, the EITC, for most couples, actually provides an
incentive to marry, because, when they are--this is based on
cohabitating couples below 200 percent of poverty. I can send
you the reference. And, believe it or not, they, generally--
about 70 percent of them have an incentive to marry, because
their EITC goes up. And, the reason is that the way that EITC
works----
Senator Lankford. Right.
Mr. Haskins [continuing]. Is it increases, throughout a
range, up to about----
Senator Lankford. Social Security Disability Insurance goes
in the other direction. If you are on SSDI----
Mr. Haskins. Yes.
Senator Lankford [continuing]. And you go into marriage,
then there is a penalty on that. You get a reduction.
Mr. Haskins. Yes.
Senator Lankford. So, it disincentivizes marriage in the
disability rules.
Mr. Haskins. There were lots of situations like that in the
past. Well, we have some like that in work, as well, as this
chart that the Chairman showed earlier shows.
Senator Lankford. The cliff.
Mr. Haskins. Yes, but if you look at an actual sample of
people--the Urban Institute has done this--there are not people
that get all of these benefits----
Ms. Golden. Right.
Senator Lankford. Right.
Mr. Haskins [continuing]. Especially males. So, you can
make up cases and make it look like the tax code is really
providing huge disincentives, Senator, for both work and for
marriage, but when you actually look at a sample of people that
have various characteristics and how much welfare they actually
get, there is not that much disincentive.
Ms. Golden. And, just to reinforce that, my written
testimony has a long review of the research on work incentives.
And, I think, actually, there are some actual mistakes in this
chart--when we saw it before--which we can get back to you on.
But, even separate from that, I think Ron's point is the
key point. When you look across low-income people, the Earned
Income Tax Credit increases with work, particularly, in those
States that have taken the Medicaid expansion. There is no
longer the big disincentive that you lose your health
insurance. So, there is support for work for the large majority
of people that you find in a sample.
Coming back to full-time work--particularly, for childcare,
because childcare is something that you are going to need to
work full-time in many families--either households with both
parents or with a single parent. It is far too expensive to be
able to do, even with a pretty steady job, at a low wage. And
so, the need is just far greater than what is available. And
so, someone can get to a place where their childcare subsidy is
no longer available.
And, the law is flexible enough to let States fix that, but
it is a dollar problem. The dollars for childcare have been
going down and we need more there. But, I think that is
something that Congress could do to support incentives for
work--but I think that is kind of the main gap to fill.
Senator Lankford. Well, I would just only say this, if I
can make one quick statement. I spoke to my mom earlier today,
obviously, on her birthday, to wish her a happy birthday. And,
she said, ``What are you working on, today? '' I said, ``Well,
actually, we are working on terrorism and poverty, today.''
[Laughter.]
And, she said, ``If you could fix both of those for me,
that would be a good birthday.'' [Laughter.]
Chairman Johnson. How old is your mom?
Senator Lankford. I am not supposed to say.
Chairman Johnson. Oh, OK.
Senator Lankford. So, let us just say that she is older
than I am, so I will---- [Laughter.]
I will leave it at that. But, we will pray she has a good
day, in the days that we can.
Chairman Johnson. But, there is a certain point where all
of a sudden it becomes a moment----
Senator Lankford. We are not at the ``badge of honor''
level yet, but----
Chairman Johnson. OK, good.
Senator Lankford [continuing]. But, I will still protect
the lady's age. [Laughter.]
Chairman Johnson. So, picking up on Senator Lankford's line
of questioning, we did get the charts--better late than never.
I just want to go down the line. So, there again you have
the line of demarcation--our ``War on Poverty.'' Well-
intentioned--no doubt about it. I have often said that the
definition of the Federal Government ought to be the law of
negative unintended consequences.
You look at those three metrics: poverty rates, the number
of people in poverty, and out-of-wedlock birth rates. I mean,
you cannot look at those three metrics and say that those are
metrics of success. But, I would just kind of like to go down
the line. What is the explanation for out-of-wedlock birth
rates going from 8 percent to over 40 percent once we
instituted these ``War on Poverty'' programs? Dr. Woodson.
Mr. Woodson. First of all, we have to understand that
aberrant behavior was never associated with poverty. Prior to
the 1960s, the black community was often used a moral barometer
of the country. If you look at the 10 years of the Great
Depression, when we had a 25 percent unemployment rate and a
negative Gross National Product (GNP)--the black community's
actual marriage formation rate increased over that of whites
during that decade. So, obviously, race relations and poverty
are not related--or correlated--with aberrant behavior.
But, all of that changed in the 1960s. And, I do not have
time to walk you through it, but, what happened was, social
planners began to detach work from income and promoted welfare
as a right, rather than stop-gap insurance. And, with regard to
black families, it was viewed as almost reparations that they
were entitled to.
Among the academic social planners, the definition of a
nuclear family was interpreted as being racist. People were not
encouraged to work or to marry. Welfare went up at a time when
unemployment in New York was 4 percent among black males. But,
yet, welfare dependency saw a spiral up as the government
encouraged people to sign-up on the roles. The social planners
at Columbia University--Frances Fox Piven, Richard Cloward, and
the others, who oppose our free market system--said that, if
they could promote the mindset of entitlements, that could
force the Nation into income redistribution.
This is documented in Fred Siegel's book, ``The Future Once
Happened Here.'' And, there are other writings that tell the
story of what happened in the black community when we fell off
of this cliff. In 1965, 85 percent of all black families had a
man and a woman raising children. Yet, at a time when civil
rights laws were passed and the government spent all of this
money on its antipoverty programs, the black family steadily
declined.
Chairman Johnson. Mr. Ochs, do you have any thoughts on
that before I--have any theories on that?
Mr. Ochs. It is a lack of fatherhood, from our perspective.
And, when we interview our inmates and say, ``What is the main
thing you missed growing up? Why are you in prison? ''--I think
it is a lack of fatherhood.
Back to your previous question, with regard to why are
there not manufacturing companies, in 2009, we laid off
approximately 25 percent of our workforce due to the recession.
Approximately 9 months later, we started hiring them back. We
were only able to hire back about 50 percent, because the ones
that had gone on unemployment benefits--and whatever other
thing--said, ``It is not worth that extra few bucks.'' And,
they were averaging $16 or $17 an hour.
Chairman Johnson. Well, I heard the exact same story from a
painting contractor from Fond du Lac, Wisconsin, who, finally,
got a couple of big jobs and went to hire all of his crew back.
None of them would return. And, they were very honest and said,
``Well, it does not pay until our unemployment benefits run
out.'' To add insult to injury, he lost those two jobs to those
same workers, who did them for cash. Again, that is the
reality. Those are the unintended consequences. Dr. Haskins.
Mr. Haskins. Yes, the standard explanation for what has
happened with the family is both cultural and economic. So, in
terms of culture, our values have changed very dramatically.
It used to be, in the old days, that--when I went to high
school, if a young girl became pregnant, the parents often sent
her away. It was shameful. And, there was much less premarital
sex. There was much more early marriage. All of those things
have changed very dramatically. Sex did not go out of style,
but marriage did. Our marriage rates have plummeted, for every
group of women, except for college-educated women. They still
have very high marriage rates.
So, there have been big changes in values. And then, if
you--in culture--but there are also big----
Chairman Johnson. Let me just say, could it be, though,
because a single mom--a young woman can actually get benefits
from the government and it is a little less necessary for her
to have a husband?
Mr. Haskins. It could, but----
Mr. Woodson. So, look----
Mr. Haskins. Let me finish, Bob.
Chairman Johnson. I mean, could that be a part of the
problem?
Mr. Haskins. Yes, it could. But, then, it is hard to
explain why it is that whites have had such dramatic increases
in the past, say, 15 years when, under the theory that Bob
gives you, it should have happened a long time ago, because
they could have gotten those benefits before--but they did not.
And, now, more recently, whites are following the same
path--so are Hispanics--as blacks did. And, they are,
gradually, catching up, in terms of non-marital births and low
marriage rates.
Chairman Johnson. Again, so, for millennia, you had husband
and wife and intact families. And then, all of a sudden--boom,
we just have this breakdown of that, basically, foundational
building block of a society. You are not seeing any
correlation? It just kind of happened? The water changed or
just----
Mr. Haskins. No.
Chairman Johnson [continuing]. Things just happened or----
Mr. Haskins. Wait. I am not saying that welfare does not
play a role. There are incentives that are unfortunate and it
does play a role. Why do we look for single explanations? This
is a very complex issue.
Chairman Johnson. Well, I am not----
Mr. Haskins. There are lots of things that contribute to
it. It is not just one----
Chairman Johnson. I know, but there are a lot of programs
that might have contributed to that.
Ms. Golden. Right. Sure.
Chairman Johnson. Dr. Golden.
Ms. Golden. Sure. Let me give you a couple of points on
that and then on one of the others.
I think the other thing to headline is that everybody,
including poor people, are having babies much later than they
ever did. The teen birth rate is the lowest it has ever been. I
think, sometimes, people get the picture that what we are
seeing is people having babies young. We are not. Everybody is
postponing childbearing a great deal.
And so, then you get to the question of, do we want to have
an economy where, really, a young woman and a young man cannot
have stable enough economic lives to feel they can get married
and have a family until they are in their late 20s or at 30--or
do we want a world where getting married at 24 or 25 would work
for people?
So, I do think--and Ron makes this point--that the
causality, about how the economy has changed, how that has
affected people's choices, and how the culture has changed--and
I would add incarceration, because, when I talk to young
women--I still remember conversations--people would say, ``We
cannot get married, because it means providing for somebody
else.''
And so, I do think that it is important to note that the
solutions out there--I think the evidence--the research
evidence about what has shown success, in terms of marriage
rates, is about dramatic economic improvements and jobs--and I
do think reforms in incarceration would be helpful----
Chairman Johnson. With incarceration, that is a chicken-
and-egg type of situation, because Mr. Ochs is talking about
how the primary reason that you are hearing people give about
why they are in prison--they kind of attribute it to the fact
that they did not have a father in the home.
Ms. Golden. Well, I think, in general, poverty for young
kids is a chicken-and-egg phenomenon.
Chairman Johnson. I am asking Mr. Ochs.
Ms. Golden. Sorry.
Chairman Johnson. Was that, basically----
Mr. Ochs. Yes, definitely. And, I think part of the
success----
Chairman Johnson. So, the breakdown of the family could
result in higher crime rates, which would lead to higher levels
of incarceration. I mean, it really is a chicken-and-the-egg
type of thing.
Ms. Golden. And, researchers tried----
Chairman Johnson. I want to talk about other unintended
consequences.
A little story from my own experience. We, as our business,
used to employ people--what we called, in Wisconsin, Huber Law.
But, people there are serving time. And, unlike moving our
plant into the prison, we would bring the prisoners. And,
oftentimes these were from the county jail. And, oftentimes,
they were people who had served a longer sentence and this is
what they were doing the last 6 months to a year--an incredibly
successful program.
From my standpoint, there were a number of lives that were
turned around with that. But, then, social justice advocates--
putting pressure on the big companies--that come in and audit a
manufacturer, like myself, found out that we were actually
employing people from prison labor. And, they felt that was
some sort of forced servitude. And so, in order for us to
maintain those contracts, we had to stop doing that. I mean,
think of that. Again, a very negative unintended consequence
from social justice advocates--did not really help people,
whatsoever.
Part-time work. How many different programs, Dr. Woodson,
are there, in the Federal Government, which incentivize
employers not
to have full-time workers, because once--this gets back to
over-regulation. Once you go above 20 hours a week, once you
are--Obamacare side effect, correct? How many manufacturers now
are--or businesses, in general, are not going above 50
employees, because of all of these government programs and
regulations that prevent that? Does anybody want to speak to
that?
Mr. Woodson. I do not have an answer for that.
Chairman Johnson. Mr. Ochs.
Mr. Ochs. Now, we employ several hundred people, so we are
above the 50. But, that has been a definite deterrent to going
above 50 people. And, you had asked the first question--I am
sorry--related to----
Chairman Johnson. I am just talking about unintended
consequences, right now.
Mr. Ochs. Yes.
Chairman Johnson. Part-time work--Huber Law. Do you have a
program like that, in Kansas?
Mr. Ochs. Yes, we call it work-release. And, that is still
alive and well in Kansas. We started with work-release and then
moved from the work release into the prison.
Ms. Golden. And, we have talked a lot, with employers,
about scheduling because, as we talked about earlier, part-time
work is a huge challenge for families. And, increasingly, with
technology, it is not just part-time, but part-time with no
notice about schedules or hours. And, I think what we hear from
employers is not--and I think this is consistent with the
research--not about regulation, but about choices that they
have made, perhaps, without thinking through always----
Chairman Johnson. Trust me--regulation is a big component
here. I mean, trust me--I know, firsthand, and I talk to a lot
of people.
Ms. Golden. Sure. And, we talk mostly to retail, health
care, and those sectors. We have not talked as much with the
manufacturing industry, because the part-time issues are very
intense in the retail sector, for example.
Chairman Johnson. Dr. Haskins, you talked about--give
people money, they will be less poor. I think that is one of
the debates, when you are talking about poverty rates--people
in poverty--out of poverty. Do you tack on the transfer
payments that they are getting, in terms of the assistance? All
of a sudden they are out of poverty. I think the better
definition would be out of poverty and out of dependency.
From my standpoint, I thought the goal of the ``War on
Poverty'' was to not just give people money, so they have--so,
based on the total amount of take, not just that they are not
at the poverty level anymore, but that you actually move them
out of poverty. You make them independent. Can you just comment
on that?
I mean, by the way, is that not the better goal--to get
people to become independent?
Mr. Haskins. Yes, it is a much better goal. Yes, I do not
have any problem with the goal, but the problem is that we have
so many people--OK, think that we have--half of our children,
at some point, are going to be in a female-headed family, all
right? Not at any point in time, but over time.
So, would you rather have them on welfare or not have them
have any public support? Or, would you rather have public
programs that are now bipartisan, in the sense that they
strongly emphasize work and then they subsidize work, because
those mothers often have limited skills and limited work
experience--and the most they can make is $10 an hour or so--
but, because they get subsidies from the Earned Income Tax
Credit--which they only get if they work--that it brings their
income up and it allows them to escape poverty?
I would rather have them earn enough so that they can
completely escape poverty without public benefits, but we do
not have enough jobs like that. So, I think this is a
reasonable transitional thing. Hopefully, when they get older,
they will develop skills and experience and they can get better
jobs.
Chairman Johnson. Well, let us talk about the minimum wage.
There is a proposal out there for a $15 an hour minimum wage.
President Obama is recommending $10.10. CBO, evaluating his
proposal, thought it would cost somewhere between half a
million and a million jobs. The study shows that $15 an hour
would cost 6.6 million jobs by the end of the decade.
That is a real problem. I know Andy Pudzer, the Chief
Executive Officer (CEO) of Carl's Jr., is writing an awful lot
of articles talking about how that is actually affecting--where
it has been put in place, how it is actually affecting, for
example, fast-food restaurants. People are coming and they are
saying, ``You have to cut my hours, because my income is coming
up to that point and I am losing benefits.''
I mean, is that not really the real-world result of that
type of thing?
Ms. Golden. We have actually been writing on that question,
because, in fact, you do need the minimum wage increase and the
benefits for people. And, we have actually----
Chairman Johnson. Does that not bother you--a study that it
would cost 6.6 million jobs? So, if you have----
Ms. Golden. I think it is not consistent with the----
Chairman Johnson. It does not bother you?
Ms. Golden. I think it is not consistent with the bulk of
the research. I think, one of the things that the research
suggests is that increases for some of the particular groups we
have focused on today--low-wage mothers, poor families, etc.--
and I think, on the question of benefits, we have actually been
looking at that in a couple of places. And, typically, again,
if you have more income, you are not going to need quite as
much, in the way of your childcare subsidy. And so, the two
things will work together and will help reduce the public
investment, somewhat. But, people, depending on their
circumstances, will still need help.
Chairman Johnson. Do you know what the average profit, per
employee, in a fast-food restaurant is?
Ms. Golden. In what jurisdiction? In general?
Chairman Johnson. Just nationally.
Ms. Golden. I do not know the national number, no.
Chairman Johnson. It is $6,300, per employee. That means,
if you take a 2,000-hour--over the course of a year--work week,
that is a $3 increase. So, just increasing the minimum wage, in
a fast-food restaurant, by $3, you wipe out the profitability.
That does not work for business.
Ms. Golden. Yes, I think we find that businesses vary in
their perspective on that----
Chairman Johnson. If you increase----
Ms. Golden [continuing]. And, that ``high road'' employers
think that the investment is worth it, in terms of less
turnover and more success. But, I know there are many different
perspectives on that subject.
Chairman Johnson. Yes. I just have a real concern when you
start having the Federal Government get involved in any
marketplace--again, the law of negative unintended
consequences, which I think that chart proves as well.
I think I have pretty well covered the points I wanted to
make. I will just give everybody a chance to conclude. We will
start with you, Dr. Golden. And, we will kind of walk down.
Just give kind of a minute summary.
Ms. Golden. Well, thank you.
First of all, I am extraordinarily pleased that the
Committee is focusing on poverty. And, to hear the
conversation--Mr. Ochs' commitment on prison issues. There is
just a lot to work on here.
I think I would highlight the successes of the safety net--
that, when you look at the actual effects, with the right
numbers, you see poverty cut in half. And, I would highlight
the multigenerational, positive effect that result when
children get nutrition, health care, and income through the
Earned Income Tax Credit--when they are not going hungry. There
is now a lot of rigorous research showing that that has effects
down the road.
And so, to me, the crucial things to do next are: to focus
in on young children, to focus in on workforce training,
development, and opportunities to move up, to fill some key
gaps in the safety net, to improve job quality--not just wages,
but also scheduling--and to make sure, in terms of post-
secondary--what I think, actually, you were talking about--the
need for credentials that employers can use, for example, in
manufacturing. I actually would share that as an important
goal--and something we should work on.
Chairman Johnson. OK, thank you. Dr. Haskins.
Mr. Haskins. Again, I agree. Thank you for holding this
hearing. It is very important for Members to hear all sides of
these arguments.
I did not talk about prisons, but I am glad that came up.
That is an extremely important topic. It is one of the biggest
disadvantages that black males face. In fact, there is now a
huge amount of research literature showing that black males
respond much more poorly to living in a single-parent family
than daughters do. So, black males have this disadvantage piled
on disadvantage. And, helping them with prison, especially by
keeping them out--if we can, giving them shorter sentences, and
helping them when they get out--the very kind of thing Mr. Ochs
just talked about--it is very important.
I want to emphasize that I still think the very best thing
that we have done to reduce poverty, especially amongst single
moms, is to have strong work requirements, and then, to
subsidize their income with the Earned Income Tax Credit,
daycare assistance, and the system that we have already put in
place.
I do not think we have talked enough about birth control.
We now have highly successful methods of birth control. If
young women can avoid pregnancy--which they say they want to--
and even if they have babies out of wedlock later, they will be
older, they will be more skilled, and they may have a better
job. There are all kinds of advantages. Birth control is going
to be a big part of the solution, I think.
And, finally, I want to emphasize, once again, we can learn
a lot. We are learning a lot, now. We will learn a lot more in
future years. We have priceless data, in various Federal
systems and Agencies--and from the Census Bureau--that, if we
could analyze that data--because we have better access and
Congress has made it easier for researchers to study it--we
will learn a lot and it will be helpful in reducing poverty.
Chairman Johnson. And, first of all, information, which we
are trying to provide here, is powerful. Birth control--I am a
cosponsor of the--over-the-counter prescriptions. I think those
things are key.
And, you are right. The impediments we have put in place
for people that are formerly incarcerated is just--I know Dr.
Woodson talked about a number of them. There are so many more.
I mean, there are just so many more. We really need to address
that. I am an original cosponsor of the Fair Chance to Compete
for Jobs Act of 2015, to ``ban the box'' as well.
So, Mr. Ochs.
Mr. Ochs. Three things. If you want to end poverty, create
jobs. And, if you want to create jobs, incentivize small
businesses to do that. So, I would encourage you to lower
taxes. Our effective tax rate is north of 40 percent. If you
gave me another 10 percent or 15 percent, we would roll that
back into growing the business and creating more jobs.
Chairman Johnson. You figure you are paying your fair
share.
Mr. Ochs. Yes.
Chairman Johnson. Yes.
Mr. Ochs. And, reduce the amount of regulation. It is
stifling.
Chairman Johnson. It is. Dr. Woodson.
Mr. Woodson. I think we need to look to a new source of
information and new experts. With all due respect to my
colleagues from the left and the right, who come together in
academic institutions and define themselves as being the
premier poverty experts, that is a misnomer. I think the real
experts are the people who are in those communities that are
the anomalies and who demonstrate that they are in poverty, but
not of poverty.
So, we need to recognize a new group of experts, who are
solely focusing on studying capacity and studying people who
are achieving against the odds. They are the source of new
information that can help us find a way out of poverty. We must
provide recognition and support for the real poverty experts--
and those who live in the same cultural and geographic zip code
as those experiencing the problem--and empower them to achieve
it.
Chairman Johnson. Well, thank you, Dr. Woodson. And, by the
way, we will be giving our other witnesses your book. And, I
think they will see some of those wonderful examples----
Mr. Woodson. I doubt it.
Chairman Johnson [continuing]. Of wonderful people helping
change people's lives, one person at a time.
So, again, I want to thank all of the witnesses. I enjoyed
the hearing. I hope you did as well.
This hearing record will remain open for 15 days, until
July 7 at 5 p.m., for the submission of statements and
questions for the record.
This hearing is adjourned.
[Whereupon, at 11:57 a.m., the Committee was adjourned.]
A P P E N D I X
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