This is an interesting article: Twelve Steps to Cutting Poverty in Half.
I have listed the steps from the article below and included my comments in italics. As you would expect, the list of steps are far reaching and may not offer a balanced solution that would actually be achievable in the real world of politics and limited resources. But, some of the recommendations are good and the overall point that it is ridiculous to have so may poor people in such a wealthy nation is exactly right. In addition, the article addresses how to pay for only a limited number of the steps and does not lay out a complete plan for accomplishing the steps.
Here are key excerpts from the twelve recommendations:
1. Over a 10-year period, raise and index the minimum wage to half the average hourly wage–that would presently be $8.40 an hour. The report notes that for most of the 1960’s and 1970’s a worker with a full-time minimum wage job could lift a family of three above the poverty line. Now it’s at its lowest level in real terms since 1959. I think this is a good suggestion. The argument against an increased minimum wage is that it would put small business owners out of business. From what I have read elsewhere, this has not been supported by evidence in places where the minimum wage has been increased. Of course, that may be because some small business owners are not actually paying the minimum. I would think, though, that rather than raising the national minimum wage to half the national average hourly wage that this be considered on a regional or state basis. The average wage in California and New York will be very different from the average wage (and correspondingly the cost of living) in Mississippi. The cost to society that is not considered here is that if we are not careful, the overall cost of living will increase as employers raise prices to compensate for increased costs and the poor stay relatively poor even with more actual dollars. Go shopping for food or housing in London sometime and you will feel the pinch of a high cost of living.
2. Expand the Earned Income Tax Credit and Child Tax Credit. The EITC is an earnings supplement that raises incomes and helps low-income working families build assets. The Task Force recommends tripling the EITC for childless workers and expanding help to larger working families. The Child Tax Credit provides a tax credit of up to $1,000 per child but provides no help to the poorest families. It should be made fully refundable so that it’s available to all low- and moderate-income families. (Currently people with incomes below $10,000 do not receive this credit. “Totally absurd,” Edelman said. “This is a powerful anti-poverty step…. It will get over 3 million people out of poverty just from that one, single public policy step alone.”) Doing all of the above would move as many as 5 million people out of poverty.
Absolutely raise the EITC! I am not sure about expanding to larger working families - you have to consider the impact of financially incentivizing people to have more than 2 children. If people are poor, then it is likely that they cannot afford to support a large family, even with an expanded EITC, so other solutions should be found for larger families rather than a blanket expansion. As for the child tax credit, I do not support making this refundable. It would be better to take the funds that would be paid out if the child tax credit were refundable and put them into the expanded EITC. It is dangerous to effectively offer someone $1,000 a year to have a child. At least the EITC requires people to be earning income to receive the benefit and thus there is an incentive to work. Incidentally, the comment that people with incomes below $10,000 currently do not receive this credit is misleading - people with incomes below $10,000 do not pay any taxes and so do not benefit from a reduction in their taxes. It is not that they are not eligible.
3. Promote unionization by enacting the Employee Free Choice Act. This would require employers to recognize a union after a majority of workers signs cards authorizing union representation. “It’s very important that we get this legislation enacted this year,” Edelman said. “Unions are absolutely a backbone of getting fair labor standards and fair wages in our country.” My internal jury is still out on unionization. I can see valid points on both sides of the issue.
4. Guarantee child care assistance to low-income families and promote early education for all. Federal and state governments should guarantee child care help to families with incomes below about $40,000 a year. “We’re not going to achieve this unless communities take the initiative with civic leadership to pull that together,” Edelman said. “We would have an Innovation Fund as part of that effort.” The funding would be about twice the level of current federal funding for quality state initiatives. This childcare expansion would raise employment among low-income parents and help nearly 3 million parents and children escape poverty. I think this is a good idea. The risks lie in making sure that the children receive good quality care. This ability to take advantage of the free child care should also be linked to employment outside of the home to ensure that this is in fact a help for working families to get out of poverty and not just a hand out.
5. Create 2 million new “opportunity” housing vouchers, and promote equitable development in and around central cities. Nearly 8 million Americans live in neighborhoods where at least 40 percent of residents are poor. We should seek to end such concentrated poverty. Over the next ten years, the federal government should fund 2 million new “opportunity vouchers” designed to help people live in opportunity-rich areas. “The housing vouchers that we currently have reach only a quarter of the people who are eligible,” Edelman said. “People should also be able to choose where they live, they should be able to live near the jobs and get to the jobs.” Any new affordable housing should be in communities with employment opportunities and high-quality public services, or in gentrifying communities. The evidence does not necessarily support the benefits of housing vouchers. After listening to NPR's Justice Talking program on the issue, I have listened to both sides of the argument and I think that there are better alternatives for alleviating poverty.
6. Connect disadvantaged and disconnected youth with school and work. About 1.7 million poor youth ages 16 to 24 were out of school and out of work in 2005. The federal government should restore Youth Opportunity Grants to help the most disadvantaged communities and expand funding for effective and promising youth programs–with the goal of reaching 600,000 disadvantaged youth through these efforts. A new Upward Pathway program would offer low-income young people opportunities to train in fields that are in high-demand and provide needed public services. Depending on the costs involved, it makes sense that training youth in practical skills that are in short supply will benefit both the students and society. The specific areas trained and job placement assistance will be important considerations.
7. Simplify and expand Pell Grants and make higher education accessible to residents of each state. Low-income youth are much less likely to attend college than their higher income peers, even among those of comparable abilities. Pell Grants play a crucial role for lower-income students. The Pell grant application process should be simplified, and the grants gradually raised to reach 70 percent of the average costs of a four-year public institution. States should develop strategies to make post-secondary education affordable for all residents, following promising models already underway in a number of states. Pell Grants are a good alternative where the student has demonstrated that aptitude to be successful in college. Many college students, from all walks of life, are in college because it seems like the logical next step after high school. But, for many students it is just a waste of time and they should have considered other alternatives, such as going directly into the work force or completing trade school. Not everyone is cut out for a college education and not everyone benefits from a college education - our society would benefit from understanding that distinction.
8. Help former prisoners find stable employment and reintegrate into their communities. The United States has the highest incarceration rate in the world–600,000 prisoners are released to their communities each year. Most are low-income, minority men returning to high-poverty communities. Two-thirds are rearrested within three years and about half return to prison. States should not bar former prisoners from receiving public benefits like food stamps or deny them the right to vote. All states should develop comprehensive reentry services aimed at reintegrating former prisoners with full-time, consistent employment. This is a good step in reducing poverty and crime if prisoners reintroduced into society can be prevented from reoffending. However, I fear that a steady job may not be enough. In some parts of American society, it seems that the cycle of violence and crime are endemic and a steady job may not be enough for people to break out of it when they are back in that environment. We should also consider how to heal the community as a whole rather than only focusing on former prisoners.
9. Ensure equity for low-wage workers in the Unemployment Insurance system. Approximately 35 percent of the unemployed, and a smaller share of unemployed low-wage workers, receive unemployment insurance benefits. States should reform eligibility rules that screen out low-wage workers, broaden eligibility for part-time workers and workers who have lost employment as a result of compelling family circumstances, and allow benefits to continue when workers are in programs that upgrade their skills and qualifications. I admit that I do not know enough about the unemployment laws to comment. It may be that there are sound reasons for excluding certain groups of workers from the program.
10. Modernize means-tested benefits programs to develop a coordinated system that helps workers and families.A functional safety net should help people get into or return to work and ensure a decent level of living for those who cannot work or are temporarily between jobs. Our current system fails to do so. The government should simplify and improve benefits access for working families and improve services to individuals with disabilities. The Food Stamp Program should be strengthened to improve benefits, eligibility, and access. And the Temporary Assistance for Needy Families Program should be reformed to shift its focus from cutting caseloads to helping needy families find sustainable employment. Expanding the benefits programs is not necessarily the way to alleviate poverty. I think that the ideas which focus on educating people and assisting with work training and placement are better suited to reducing poverty in the long term than expanding the food stamp program. Of course, my knowledge of the food stamp program is very limited and if it is not currently paying out enough for people to get basic sustenance then of course it should be expanded. If the limitations are that people are not able to get everything they want but have enough to get what they need, then I see no reason for expansion. The aftermath of Hurricane Katrina showed us that although the majority of needy people act responsibly with the assistance they are given, an alarmingly large number of people are out to cheat the system and take advantage in any way that they can. Because of this risk, I am wary of programs that expand what people can get rather than expanding access for ways for people to work to help themselves. When you are giving something away for nothing, people will always find a way to play the system. It is sad but true.
11. Reduce the high costs of being poor and increase access to financial services.Lower-income families often pay more than middle and high-income families for the same consumer products. Federal and state governments should address the foreclosure crisis through expanded mortgage assistance programs and by new federal legislation to curb unscrupulous practices. The federal government should also establish a $50 million Financial Fairness Innovation Fund to support state efforts to broaden access to mainstream goods and financial services in predominantly low-income communities. Rather than government regulation in this area, the better step would be solid financial education for low-income people (actually, for everyone). Once people understand how the system works, and learn how to budget and plan, then they can learn to live within their means. To the extent that their means are not enough, then they can also be assisted in learning what their options are (education, job placement, etc.).
12. Expand and simplify the Saver’s Credit to encourage saving for education, home ownership and retirement. For many families, saving for purposes such as education, a home, or a small business is key to making economic progress. The federal “Saver’s Credit” (a relatively new tax provision which matches voluntary contributions to retirement savings accounts with a tax credit) should be reformed to make it fully refundable. This Credit should also be broadened to apply to other savings vehicles such as individual development accounts, children’s saving accounts, and college savings plans. I see no reason to make this credit fully refundable. Logically, if you are not making enough money to owe any taxes then you probably cannot afford to put money away for retirement. This would not reduce poverty.
