A Fundamental Barrier

Rich Kids Stay Rich, Poor Kids Stay Poor

By Ben Casselman and Andrew Flowers

 

On Friday, a team of researchers led by Stanford economist Raj Chetty released a paper on how growing up in poverty affects boys and girls differently. Their core finding: Boys who grow up in poor families fare substantially worse in adulthood, in terms of employment and earnings, than girls who grow up in the same circumstances. (The Washington Post has a good write-up of the paper and its implications.)

But beyond its immediate conclusions, the paper, like much of Chetty’s recent work as part of his Equality of Opportunity Project, points to a deeper truth: In the U.S., where you come from — where you grow up, how much your parents earn, whether your parents were married — plays a major role in determining where you will end up later in life.

 

Take, for example, the chart below. . .read more here.

Public benefits. . . truly public

Over the weekend I heard a news program reporting that 26% of Americans use a local food pantry on a regular basis.  Of those who resort to charity centers for food stuffs a significant majority were also employed.  Given the number of people who use our pantry and the tons of food we distribute annually, these realities don't surprise me at all.

Ironically, and I would say tragically, far too many of our neighbors work but don't earn enough to properly care for themselves or the their families.  We often hear the flip side/"upside" of this very negative wage and labor reality in Dallas: labor costs in Texas are low; potential employees abundant, especially among the unskilled. 

Do the math.  A single person earning $10-12 an hour on a full-time job finds it very difficult to make ends meet each month.  If the job offers no benefits, the challenge is even tougher.  Add in a family and the mountain cannot be scaled without support from other sources. 

The Texas culture typically chaffs at the mention of "public benefits."  Texans typically don't appreciate "welfare." 

But, maybe we aren't looking at such benefits properly. 

If wages are too low for a significant portion of the workforce to make a life and we continue to depend on that sector of the workforce to make our community work, then public benefits actually benefit all of us in direct and indirect ways. 

Taken further, public benefit programs that place purchasing power in the hands of those at the very bottom of our city's economic pyramid ensure that those dollars surge into the local economy, and very quickly. 

The fact is poor people spend what money they do have. 

In 2010, according to the Texas Hunger Initiative, Dallas County left over $500,000,000.00 of purchasing power on the table due to the fact that all those eligible for the U. S. Department of Agriculture's Supplemental Nutrition Assistance Program (SNAP--food stamps) did not enroll to receive the benefits available and designed for working people.  Statewide the total unclaimed benefits ran into the multiple billions!

We need to understand a couple of things about that very significant pool of cash. 

First, these dollars flow back to Texas from Washington, D. C. when claimed by and used by the state.  When we fail to enroll an eligible person, we allow tax dollars that we've already sent to the federal government be redeployed in some other part of the country.  The very small cost to Texas to leverage these benefits back to Dallas is more than worth it to recapture funds we've already invested or set aside for the purpose of assisting low-income Texans. 

Second, and even more powerful, the half-billion unclaimed dollars are not just lost to our neighbors, but they are lost to the retail grocery businesses in our city.  Why these businesses don't insist on better performance by Texas is beyond me. 

And, this is just one public benefit resource available to the working poor in Dallas.  The Earned Income Credit tax program, health care programs, child care subsidies, housing support and other public efforts to benefit the lowest wage earners among us, actually end up benefiting us all. 

When families are financially stronger, the local economy reflects that strength in many ways that impact every aspect of our community's life and quality. 

Properly understood, public benefits turn out to be public indeed.

If I were the next Superintendent of the Dallas Public Schools

Can you imagine the enormity of such a challenge?  To move into our school district, so riddled by poverty, economic and educational disparity, high drop out rates and very low outcomes on producing college-ready graduates--talk about a challenge.

I agree with those who identify poverty as the biggest challenge facing our district, its students and our next district leader. 

What would I do if I were the next superintendent of DISD?  Here's my short list of action items to plant in the school culture over the first 5 years.

1.  Identify "master teachers" already at work in the schools.  Every school has them.  Everyone knows who they are.  But how do we leverage their success to benefit other faculty members, as well as students who will never benefit from the experience of their classrooms?  There is a way to infiltrate and inject the attitude, methods and commitment of master teachers through and into the rest of the teaching team.  Call leading teachers into the leadership mix of each campus.  Then, keep track of outcomes.

2.  Establish an on-the-ground, at-the-campus, working relationship with the Texas Department of Health and Human Services, as well as other public agencies.  In short, move the offices of public benefits to the schools, or at least establish certification or enrollment days for parents from low income families to be able to register for various benefits that can help stabilize poor families for the benefits of students.  Make things easier to access and more customer friendly.  If poverty is our biggest challenge, then let's decide together to attack it systematically!  Why  should eligible parents have to go to an office located somewhere else, to deal with strangers regarding CHIP registration, or Food Stamp enrollment, or assistance with childcare, or housing, or EITC filings?  Those at the top benefit from financial counselors.  Why shouldn't those at the bottom enjoy similar services from benefits counselors.  The key to this campus transformation would be to let parents know that enrollment in benefits is not only for them and their children, but also for the entire school and its success. 

3.  Position principals to function as campus leaders with clear expectations linked to individual student improvement and progress, rather than to the next standardized test.  Each student learns at a different pace and in a different way.  Measure student improvement and index school leaders' performance to the creation of a culture of excellence that encourages students to grow and excel in their own styles over a longer course of evaluation.

4.  Don't shortchange the extra-curricular.  One of the reasons low-income students don't achieve more readily has to do with what I call "experience disparity" when compared to more affluent students.  Learning must take place outside the classroom, as well as inside.  Vocabulary is developed in a process of discovering life both in books and in the laboratory that is our world.  Poor kids need more experienced-based educational opportunities. Let's provide them what they need.  Then, let's tie what is discovered "out there" to what we are doing "in here." Restore music, art, theater and PE in every school no matter what it takes to fund excellence in these important developmental areas of study, expression, performance and curiosity.

5.  Incentivize learning performance and parent involvement with some sort of value added benefit.  Parent involvement with PTA or volunteering at school should be rewarded with something of immediate value, like discount coupons to local stores or gift cards that can be used to buy books, groceries or school clothes.  We make a grave error if we take our eye off the wicked curve ball called poverty.  Reward performance by returning something of real value.

6.  Form a closer working relationship with the City of Dallas, Dallas County, surrounding ISDs, businesses, corporations and universities.  Find ways to engage these other, huge institutions for the immediate benefit of our students today. 

7.  Develop a clear communications strategy for challenging students again and again regarding the importance DISD's mission and vision.  Repeatedly invite every student into the battle.  Rehearse and re-imagine the success that awaits us all if we learn to work together.

8.  Initiate a comprehensive evaluation of middle level administrators to the end that more resources find their way to the classrooms, the teachers and the students.  Schools should not settle for being a job factory for adults.  Streamlining away ineffective efforts, programs and departments should be top of the list for any new leader.  This means our new leader must be tough, proven and ready for battle!

9. Partner with community based non-profits like Avance and The Concilio here in Dallas to organize, train and equip parents to become the primary advocates for their children and for the education of their children.  Community organizing to ensure quality public education should never be considered a threat, but rather an expression of partnership and cooperation.  Getting parents and other community leaders involved will be a key component of any successful administration. 

I suppose my ideas are too simple.  And, I admit I enjoy the luxury of not being in the position of leadership.  But, I care about these children, and I understand the powerful negative impact of poverty on families and school systems.

Kevin

Many people don't understand the challenges facing "poor" people.  Actually, I cringe at the word "poor" simply because of how we reserve its use for stereotypical understandings of persons who live with the constant disadvantage of little or low income.  In my book and around CitySquare we've long ago recognized that everyone is rich and everyone is poor, just in different ways, dimensions and measures. 

But, to my point.  The wonderful people who cross our paths daily are fundatmentally the same as the people with almost unlimited means who support our work at CitySquare.  What follows is another story about a very special neighbor who is doing his part to make our community stronger.  I gotta tell you, people like Kevin keep me going!  I've known him for over a decade now.  Michelle Kopel,  one of our leading neighbor advocates, wrote this short report.

Kevin McCarver is a 40-year-old, single African American who is developmentally disabled. He graduated from high school in 1996. He has been visiting our Resource Center and Food Pantry for years.

Kevin receives $674 in SSDI, $40 in SNAP (food stamp) benefits, and is a recipient of Section 8 housing which makes him responsible for $192 in rent each month.

Kevin is a regular at our Resource Center.  He visits us to supplement his food needs . More importantly he enjoys the personal contact and fellowship with our staff and volunteers. Kevin always takes time to visit with staff, and we all have taken him under our wing.


When the Resource Center implemented the $5 administration fee, Kevin stated that he was happy to "give back, and help us to help more people." Kevin actually puts a five dollar bill in an envelope with our name on it as soon as he receives his monthly check.

He has told our staff, that he loves us and looks forward to his monthly visits. He has taken ownership in our Resource Center and in the community.

Situations such as Kevin's illustrate that our organization is concerned with not only providing quality food and counsel, but even more with providing a gathering place that strengthens our community one person at a time.

Public benefits benefit all of us. . .

We live in a society that provides some benefits, though limited, for the poorest and weakest among us. 

That said, we often over look the fact that these benefits designed to lift "the poor" also benefit the rest of us. For example, SNAP funds (food stamps) are spent in retail grocery stores who benefit from the purchases the public benefits make possible.  SNAP is a huge positive to Kroger's bottom line, resulting in jobs, dividends to share holders and economic growth in the community overall. 

What is true of SNAP funds is also true of other public benefits received by low-income families.  In fact, one of the quickest methods for injecting life into any economy is by means of direct benefits to those at the bottom of the economic ladder.  For some reason most of us don't understand or give much thought to this economic reality. 

Texas is not too proficient at claiming the benefits from the federal government that should be coming back to us.  I say "back," because the benefits are funded by taxes we've already paid.  When our state fails to enroll, certify and qualify eligible persons for the benefits for which they qualify, the result is a significant capital lost to our state's economy. 

And, it is clear that our record of recovering those benefits is not good. 

Here's the sad news about Texas and unclaimed federal dollars across a broad array of public benefits annually: 

SNAP (food stamps) $2.4 billion unclaimed

Energy assistance  $568.7 million unclaimed

Childrens' Health insurance  $1.2 billion unclaimed

Children's Medicaid  $866.2 million unclaimed

Adult Medicaid (aged & disabled) $523.6 million

Medicare Part D Low-Income RX  $236 million

Pell Grants for college tuition $349.3 million

For a grand total, conservatively estimated at $6.1 billion annually!

We fail to enroll all of the eligible participants and we loose the funding for Texas.  As a result, tax dollars that I pay leave Texas and benefit other states.  During tough economic times for our state, this loss is completely unacceptable. 

In addition, each of these funds, once claimed and spent, possess and exhibit a "multiplier effect" in the economy.  In other words, these funds and their impact on the economy multiply as they circulate and are spent and respent through various sectors of our economy.  

Here's the multiplier factor for several of these funds designed to assist the poorest and weakest among us:

SNAP (food stamps) spent in retail grocery stores has a multiplier effect of 1.95 per dollar spent.

CHIP's multiplier effect is 3.17 per dollar spent.

Adult Medicaid--3.17 per dollar.

Energy assistance--2.25 per dollar.

Pell Grants--3.15 per dollar.

Medicare RX--2.67 per dollar. 

The overall impact of these public benefits beyond the aid to poor families themselves includes a stimulus to the economy of the state in real dollars and in new jobs.  When we fail to draw down these benefits, we fail our own economy and we act in opposition to our own interests as tax payers.

We can do better. We should start by simply understanding the reality behind the numbers.

What we do

The most common question that I'm asked about CitySquare is a simple, but important one:  "What exactly do you do?"

We spend a good bit of our time answering that key question.  Usually we refer people to our website (http://www.CitySquare.org/).  Often we arrange for a tour that provides us the opportunity to provide a more detailed answer.  In an elevator we talk about our four major areas of concern:  Health, Hunger, Housing and Hope--the 4Hs!

In almost every case the best way to answer the question is to invite a neighbor who knows CitySquare  because of their personal experience in receiving our services.

Here's an example of just that sort of answer.  I share it in an attempt to answer the question one more time!  After you watch and listen, share it with your friends, your business network, your church and your other associates.

As you watch and listen, notice how a number of options fell into place for our friend, including AmeriCorps.

Poverty

Poverty is a strange and elusive thing.  I have tried to write about it, its joys and its sorrows, for thirty years now; and now I could probably write about it for another thirty years without conveying what I feel about it as well as I would like.  I condemn poverty and I advocate it; poverty is simple and complex at once; it is a social phenomenon and a personal matter.  Poverty is an elusive thing, and a paradoxical one. 

We need always to be thinking and writing about it, for if we are not among its victims its reality fades from us.  We must talk about poverty because people insulated by their own comfort lose sight of it.  So many good souls who visit us tell us how they were brought up in poverty, but how, through hard work and cooperation, their parents managed to educate all the children--even raise up priests and nuns for the Church.  They contend that healthful habits and a stable family situation enable people to escape from the poverty class, no matter how mean the slum they may once have been forced to live in.  The argument runs, so why can't everybody do it?  No, these people don't know about the poor.  Their concept of poverty is of something as neat and well-ordered as a nun's cell.

Dorothy Day

from "The Faces of Poverty," in Loaves and Fishes (1963)

reprinted in The Catholic Worker (May 2010)

The poverty trap. . .

One of our organizational goals is to move toward the day, as quickly as possible, when the minimum wage inside Central Dallas Ministries is a "living wage." 

But, what exactly does that mean in real dollars? 

Often, in such discussions, people will throw out a range of $12-$15 an hour. 

John Greenan, Executive Director of the Central Dallas Community Development Corporation, sent me a link to what follows as it appeared on Aaron M. Renn's provocative blog, Urbanophile. 

Poverty is complicated when you are living in its midst.  Poverty is awfully hard to escape, harder than the vast majority of Americans can even begin to understand. 

What follows should give us great pause.

Megan Cottrell: Don’t Fall in the Poverty Trap – You May Never Get Out

[ Megan Cottrell's One Story Up blog might be one of the most important in the United States. It is certainly a must-read for anyone in Chicago. She covers housing and poverty, two un-glamorous subjects that have all but been abandoned by newspapers. These aren't topics beloved of urbanist blogs either, but they are critical to understanding our cities and building successful lives for all citizens. As Megan notes, the phenomenon she describes affects up to 40% of all Chicagoans. I encourage you to check out her work. ]

Until you earn about $40,000 a year, you’re pretty much stuck in poverty, an economist’s numbers show.

In fact, until you get past $40,000 a year, any raise or higher paying job you get might actually sink you deeper into poverty.

Take a look at this story from economist Jeff Liebman, who now works in the Obama Administration.

The poverty trap is still very much a reality in the U.S.

A woman called me out of the blue last week and told me her self-sufficiency counselor had suggested she get in touch with me. She had moved from a $25,000 a year job to a $35,000 a year job, and suddenly she couldn’t make ends meet any more. I told her I didn’t know what I could do for her, but agreed to meet with her. She showed me all her pay stubs, etc. She really did come out behind by several hundred dollars a month. She lost free health insurance and instead had to pay $230 a month for her employer-provided health insurance. Her rent associated with her section 8 voucher went up by 30% of the income gain (which is the rule). She lost the ($280 a month) subsidized child care voucher she had for after-school care for her child. She lost around $1600 a year of the EITC. She paid payroll tax on the additional income. Finally, the new job was in Boston, and she lived in a suburb. So now she has $300 a month of additional gas and parking charges. She asked me if she should go back to earning $25,000.

To continue reading and to view a very revealing graph, click here.