History > 2014 > USA > Economy > Poverty (I)

Erika McCurdy, 40, of Chattanooga, Tenn.,

until recently made $9 an hour as a nurse’s aide,

not enough to keep her family above the poverty line.

Photograph:

Billy Weeks for The New York Times

Low-Wage Workers Are Finding Poverty Harder to Escape

NYT

MARCH 16, 2014

https://www.nytimes.com/2014/03/17/
business/economy/low-wage-workers-finding-its-easier-to-fall-into-poverty-and-harder-to-get-out.html

The Expanding World

of Poverty Capitalism

AUG. 26, 2014

The New York Times

The Opinion Pages | Contributing Op-Ed Writer

In Orange County, Calif., the probation department’s “supervised electronic confinement program,” which monitors the movements of low-risk offenders, has been outsourced to a private company, Sentinel Offender Services. The company, by its own account, oversees case management, including breath alcohol and drug-testing services, “all at no cost to county taxpayers.”

Sentinel makes its money by getting the offenders on probation to pay for the company’s services. Charges can range from $35 to $100 a month.

The company boasts of having contracts with more than 200 government agencies, and it takes pride in the “development of offender funded programs where any of our services can be provided at no cost to the agency.”

Sentinel is a part of the expanding universe of poverty capitalism. In this unique sector of the economy, costs of essential government services are shifted to the poor.

In terms of food, housing and other essentials, the cost of being poor has always been exorbitant. Landlords, grocery stores and other commercial enterprises have all found ways to profit from those at the bottom of the ladder.

The recent drive toward privatization of government functions has turned traditional public services into profit-making enterprises as well.

In addition to probation, municipal court systems are also turning collections over to a national network of companies like Sentinel that profit from service charges imposed on the men and women who are under court order to pay fees and fines, including traffic tickets (with the fees being sums tacked on by the court to fund administrative services).

When they cannot pay these assessed fees and fines – plus collection charges imposed by the private companies — offenders can be sent to jail. There are many documented cases in which courts have imprisoned those who failed to keep up with their combined fines, fees and service charges.

“These companies are bill collectors, but they are given the authority to say to someone that if he doesn’t pay, he is going to jail,” John B. Long, a lawyer in Augusta, Ga. active in defending the poor, told Ethan Bronner of The Times.

A February 2014 report by Human Rights Watch on private offender services found that “more than 1,000 courts in several US states delegate tremendous coercive power to companies that are often subject to little meaningful oversight or regulation. In many cases, the only reason people are put on probation is because they need time to pay off fines and court costs linked to minor crimes. In some of these cases, probation companies act more like abusive debt collectors than probation officers, charging the debtors for their services.”

Human Rights Watch also found that in Georgia in 2012, in “a state of less than 10 million people, 648 courts assigned more than 250,000 cases to private probation companies.” The report notes that “there is virtually no transparency about the revenues of private probation companies” since “practically all of the industry’s firms are privately held and not subject to the disclosure requirements that bind publicly traded companies. No state requires probation companies to report their revenues, or by logical extension the amount of money they collect for themselves from probationers.”

Human Rights Watch goes on to provide an account given by a private probation officer in Georgia: “I always try and negotiate with the families. Once they know you are serious they come up with some money. That’s how you have to be. They have to see that this person is not getting out unless they pay something. I’m just looking for some good faith money, really. I got one guy I let out of jail today and I got three or four more sitting there right now.”

Collection companies and the services they offer appeal to politicians and public officials for a number of reasons: they cut government costs, reducing the need to raise taxes; they shift the burden onto offenders, who have little political influence, in part because many of them have lost the right to vote; and it pleases taxpayers who believe that the enforcement of punishment — however obtained — is a crucial dimension to the administration of justice.

As N.P.R. reported in May, services that “were once free, including those that are constitutionally required,” are now frequently billed to offenders: the cost of a public defender, room and board when jailed, probation and parole supervision, electronic monitoring devices, arrest warrants, drug and alcohol testing, and D.N.A. sampling. This can go to extraordinary lengths: in Washington state, N.P.R. found, offenders even “get charged a fee for a jury trial — with a 12-person jury costing $250, twice the fee for a six-person jury.”

This new system of offender-funded law enforcement creates a vicious circle: The poorer the defendants are, the longer it will take them to pay off the fines, fees and charges; the more debt they accumulate, the longer they will remain on probation or in jail; and the more likely they are to be unemployable and to become recidivists.

And that’s not all. The more commercialized fee collection and probation services get, the more the costs of these services are inflicted on the poor, and the more resentful of the police specifically and of law enforcement generally the poor become. At the same time, judicial systems are themselves in a vise. Judges, who in many locales must run for re-election, are under intense pressure from taxpayers to cut administrative costs while maintaining the efficacy of the judiciary.

The National Center for State Courts recently issued a guide noting that while the collection of fines and costs is “important for reasons of revenue,” even more important is the maintenance of “the integrity of the courts.”

In dealing with more serious crimes involving substantial sentences, the rising costs of maintaining and building new prison facilities has prompted many state governments, and even the federal government, to turn to the private prison industry.

This industry, which began to grow in the early 1980s, now faces significant problems. As incarceration rates drop, and as some states adopt more lenient sentencing practices, the industry is struggling to find new ways to fill vacant cells.

Take the Corrections Corporation of America, which is listed on the New York Stock Exchange and reported revenues of $1.69 billion in 2013. The firm describes itself as “the nation’s largest owner of privatized correctional and detention facilities and one of the largest prison operators in the United States behind only the federal government and three states.”

In its 2013 annual report, C.C.A. was clear about the problems facing the company: “under a per diem rate structure, a decrease in our occupancy rates could cause a decrease in revenue and profitability. For the past three years, occupancy rates have been steadily declining in C.C.A. facilities, from 90 percent in 2011, to 88 percent in 2012 and 85 percent in 2013.”

These numbers reflect the brutal math underlying profit margins in private prisons. The “revenue per compensated man-day” for each inmate rose by 35 cents from $60.22 in 2012 to $60.57 in 2013. But expenses “per compensated man-day” rose by 70 cents from $42.04 to $42.74, for a net decline in operating income for each inmate from $18.18 a day to $17.83.

In combination with declining occupancy rates, the result was a dip in total revenue from $1.72 billion in 2012 to $1.69 billion in 2013.

The founders of C.C.A. include Tom Beasley, a former chairman of the Tennessee Republican Party. One of its early investors was Honey Alexander, who is married to Senator Lamar Alexander, Republican of Tennessee. Alexander, according to the Sunlight Foundation, has received in excess of $63,000 from C.C.A. employees and the company PAC since his election to the Senate in 2002.

Poverty capitalism and government policy are now working on their own and in tandem to shift costs to those least equipped to pay and in particular to the least politically influential segment of the poor: criminal defendants and those delinquent in paying fines.

Last year, Ferguson, Mo., the site of recent protests over the shooting of Michael Brown, used escalating municipal court fines to pay 20.2 percent of the city’s $12.75 million budget. Just two years earlier, municipal court fines had accounted for only 12.3 percent of the city’s revenues.

What should be done to interrupt the dangerous feedback loop between low-level crime and extortionate punishment? First, local governments should bring private sector collection charges, court-imposed administrative fees and the dollar amount of traffic fines (which often double and triple when they go unpaid) into line with the economic resources of poor offenders. But larger reforms are needed and those will not come about unless the poor begin to exercise their latent political power. In many ways, everything is working against them. But the public outpouring spurred by the shooting of Michael Brown provides an indication of a possible path to the future. It was, after all, just 50 years ago — not too distant in historical terms — that collective action and social solidarity produced tangible results.

    The Expanding World of Poverty Capitalism, NYT, 26.8.2014,
    http://www.nytimes.com/2014/08/27/opinion/
    thomas-edsall-the-expanding-world-of-poverty-capitalism.html

How to Get Kids to Class

To Keep Poor Students in School,

Provide Social Services

 

AUG. 25, 2014

The New York Times

The Opinion Pages | Op-Ed Contributor

By DANIEL J. CARDINALI

ARLINGTON, Va. — FOR the 16 million American children living below the federal poverty line, the start of a new school year should be reason to celebrate. Summer is no vacation when your parents are working multiple jobs or looking for one. Many kids are left to fend for themselves in neighborhoods full of gangs, drugs and despair. Given the hardships at home, poor kids might be expected to have the best attendance records, if only for the promise of a hot meal and an orderly classroom.

But it doesn’t usually work out that way. According to the education researchers Robert Balfanz and Vaughan Byrnes at Johns Hopkins, children living in poverty are by far the most likely to be chronically absent from school (which is generally defined as missing at least 10 percent of class days each year).

Amazingly, the federal government does not track absenteeism, but the state numbers are alarming. In Maryland, for example, 31 percent of high school students eligible for the federal lunch program had been chronically absent; for students above the income threshold, the figure was 12 percent.

Thanks to groundbreaking research compiled by Hedy Nai-Lin Chang, the director at Attendance Works, we have ample proof that everything else being equal, chronically absent students have lower G.P.A.s, lower test scores and lower graduation rates than their peers who attend class regularly.

The pattern often starts early. Last year in New Mexico, a third-grade teacher contacted the local affiliate of Communities in Schools, the national organization that I run, for help with a student who had 25 absences in just the first semester. After several home visits, we found that 10 people were living in her two-bedroom apartment, including the student’s mother, who had untreated mental health issues. The little girl often got lost in the shuffle, with no clean clothes to wear and no one to track her progress. Nor was there anything like a quiet place to do homework.

Embarrassment and peer pressure turned out to be the most immediate problem. By buying new clothes to replace the girl’s smelly old ones, we were able to help her fit in and get her to school more often. We found additional community resources for both the third grader and her family, including a mentorship group, a housing charity and mental health experts for her mother. As her home life stabilized over the second semester, the absences all but stopped, and at the end of the year she moved up with her class.

Her situation is common, but there are nowhere near enough happy endings. That’s because policy makers usually treat dropout rates and chronic absenteeism as “school” problems, while issues like housing and mental health are “social” problems with a different set of solutions.

To bridge this divide, our community school model seeks to bring a site coordinator, with training in education or social work, onto the administrative team of every school with a large number of poor kids. That person would be charged with identifying at-risk students and matching them up with services that are available both in the school and the community.

This approach is effective and affordable: at Communities in Schools, which operates in 26 states and the District of Columbia, 75 percent of the students whose cases we manage show improved attendance. We provide our services at an average cost of $189 per student per year, a cost that is shared among government agencies and community partners to minimize the impact on school budgets.

It’s relatively easy to find these at-risk students. That’s because poverty is not evenly distributed; it is increasingly concentrated in specific neighborhoods. According to 2012 census estimates, 7.9 million children live in neighborhoods where at least 30 percent of residents are poor.

Chronic absenteeism tends to follow the same pattern. In Florida, for instance, 15 percent of public schools are home (or not home) to 52 percent of chronically absent students. This grotesque fact paradoxically makes it easier for us to focus our resources: We can effectively reach the most at-risk students with minimal waste or overlap. Politicians of all stripes are beginning to recognize the potential of this approach. Mayor Bill de Blasio of New York City, a Democrat, plans to open 40 community schools at a cost of $52 million, while in Michigan, Gov. Rick Snyder, a Republican, has announced a major expansion of a program that puts workers from the state’s Department of Human Services inside struggling public schools.

We do not need to reinvent the wheel to solve this problem. Child Trends, an independent research institute, recently conducted a nationwide study to identify the most effective strategies for school-based provision of social services. Just 1.5 million kids are receiving these services. The number should be much higher.

The key is to put dedicated social-service specialists in every low-performing, high-poverty school, whether they are employed by the school district or another organization. This specialist must be trained in the delivery of community services, with continued funding contingent on improvement in indicators like attendance and dropout rates.

Putting social workers in schools is a low-cost way of avoiding bigger problems down the road, analogous to having a social worker in a hospital emergency room. It’s a common-sense solution that will still require a measure of political courage, something that all too often has itself been chronically absent.
 

Daniel J. Cardinali is the president of Communities in Schools.

A version of this op-ed appears in print on August 26, 2014,
on page A23 of the New York edition with the headline:
How to Get Kids to Class.

    How to Get Kids to Class, NYT, 25.8.2014,
    http://www.nytimes.com/2014/08/26/opinion/
    to-keep-poor-kids-in-school-provide-social-services.html

Philadelphia’s Success

in Helping the Homeless

Gets a Philanthropic Boost

MAY 7, 2014
The New York Times
By JON HURDLE

PHILADELPHIA — There’s a straight line that goes from David Drap to David Brown, but you cannot find it in most other cities.

Mr. Drap, 43, could be seen recently assembling pieces of plywood around a twin mattress under a highway overpass, trying to build a shelter amid detritus left by a half dozen other homeless people. Mr. Brown, 57, lived on the streets for 25 years until he finally found housing through Project HOME, a local nonprofit organization. He now lives in a building with a computer lab, a library and a fitness room.

What the two men have in common is a city that has had conspicuous success in providing housing for the homeless and where some well-heeled donors have stepped up to contribute to a cause that has often been off the radar for many wealthy philanthropists.

On Wednesday, two such philanthropists, John and Leigh Middleton, who sold their family cigar business for $2.9 billion in 2007, were awarded the prestigious Philadelphia Award, whose previous recipients have included the city planner Edmund Bacon and the conductor Leopold Stokowski. The Middletons were recognized for their support for a variety of local causes, including giving $30 million to Project HOME, this city’s leading advocacy organization for the homeless.

The size of the donation — one of the largest in homeless philanthropy — will help Project HOME double the number of its apartments for homeless people, open a new medical center and leverage additional public and private funds that the organization hopes will eventually total $300 million.

“The best philanthropy is clearheaded and hard-nosed,” Mr. Middleton, 59, said in an interview. “This is about results, not about good intentions.”

Mr. Middleton said that Project HOME, which celebrates its 25th anniversary this year, has already shown results by helping some 8,500 people get off the streets in a city that has the highest poverty rate, 26 percent, among the 10 largest cities in the country.

Potential donors of millions or even tens of millions of dollars are put off because they think homelessness is an overwhelming problem that is the responsibility of government to solve, he said.

“They think this is an impossible venture, almost like Don Quixote jousting with windmills,” Mr. Middleton said. “It’s so daunting to people that they get discouraged and don’t try. They might give half a million or a million but not the 10 million that they are capable of giving.”

Despite the high poverty rate, Philadelphia has the lowest number of homeless people per capita among seven large American cities with similar poverty and housing problems, according to data from Project HOME.

In 2013, Philadelphia’s homeless population declined by 2.3 percent from 2012, while it rose 27 percent in Los Angeles and 13 percent in New York, according to the data.

“They are an influential organization,” Nan Roman, president of the National Alliance to End Homelessness, said of Project HOME. “If you have a stronger community with better education opportunities, health care and housing that’s affordable, you’re not going to have many homeless people.”

Mr. Brown is one success. He now lives in his own 450-square-foot apartment in a renovated building in North Philadelphia where 58 other formerly homeless people also live on their own.

“This home is very important to me,” Mr. Brown said. “When you get something like this, you want to hold on to it.”

The organization’s success, Mr. Middleton said, is attributable in part to the effectiveness of its management, led by Sister Mary Scullion, a Roman Catholic nun who is known for her ability to cajole politicians and business leaders into supporting her clients.

“When Mary asks you to do something, it’s only really a question of how fast you say yes,” Mr. Middleton said.

Last month, 1,250 people, including business and government leaders, attended the organization’s anniversary celebration at a Philadelphia hotel, raising about $2.1 million. Guests included Jim Yong Kim, president of the World Bank, and the singer Jon Bon Jovi, who earlier that day opened JBJ Soul Homes, Project HOME’s latest housing center, whose $16.6 million construction cost was paid for, in part, by Mr. Bon Jovi’s foundation.

Mr. Middleton said his donation was driven in part by his confidence that the organization had the potential to inspire solutions to homelessness beyond Philadelphia.

“We have somebody who is truly a national leader in the field — not only a national practitioner but also a national thought leader,” he said, referring to Sister Mary, a member of the Sisters of Mercy.

Listing “scalability” among his philanthropic goals, Mr. Middleton said he would like to see other cities use Project HOME’s methods. “We put the stake in the ground in Philadelphia,” he said.

Abandoning previous attempts to keep their donations anonymous, the Middletons are now trying to change wealthy donors’ attitude toward homelessness.

“We think we need to be more public to try to get it to be more of a top-of-mind issue and to try to convince people that you can in fact solve this problem,” he said.

And by taking a holistic approach to homelessness, Mr. Middleton said he hoped that more big donors could be persuaded to support the cause.

“It’s not just about putting a shelter over people’s heads,” he said. “It’s about dealing with each of these discrete problems. You have to educate people, you have to provide medical treatment, you have to provide employment opportunities.”

A version of this article appears in print on May 8, 2014,

on page A17 of the New York edition with the headline:

Philadelphia’s Success in Helping the Homeless

Gets a Philanthropic Boost.

    Philadelphia’s Success in Helping the Homeless
    Gets a Philanthropic Boost,
    NYT, 7.5.2014,
    http://www.nytimes.com/2014/05/08/us/
    philadelphias-success-in-helping-the-homeless-gets-a-philanthropic-boost.html

50 Years Into the War on Poverty,

Hardship Hits Back

The New York Times
APRIL 20, 2014
By TRIP GABRIEL

TWIN BRANCH, W.Va. — When people visit with friends and neighbors in southern West Virginia, where paved roads give way to dirt before winding steeply up wooded hollows, the talk is often of lives that never got off the ground.

“How’s John boy?” Sabrina Shrader, 30, a former neighbor, asked Marie Bolden one cold winter day at what Ms. Bolden calls her “little shanty by the tracks.”

“He had another seizure the other night,” Ms. Bolden, 50, said of her son, John McCall, a former classmate of Ms. Shrader’s. John got caught up in the dark undertow of drugs that defines life for so many here in McDowell County, almost died of an overdose in 2007, and now lives on disability payments. His brother, Donald, recently released from prison, is unemployed and essentially homeless.

“It’s like he’s in a hole with no way out,” Ms. Bolden said of Donald as she drizzled honey on a homemade biscuit in her tidy kitchen. “The other day he came in and said, ‘Ain’t that a shame: I’m 30 years old and carrying my life around in a backpack.’ It broke my heart.”

McDowell County, the poorest in West Virginia, has been emblematic of entrenched American poverty for more than a half-century. John F. Kennedy campaigned here in 1960 and was so appalled that he promised to send help if elected president. His first executive order created the modern food stamp program, whose first recipients were McDowell County residents. When President Lyndon B. Johnson declared “unconditional war on poverty” in 1964, it was the squalor of Appalachia he had in mind. The federal programs that followed — Medicare, Medicaid, free school lunches and others — lifted tens of thousands above a subsistence standard of living.

But a half-century later, with the poverty rate again on the rise, hardship seems merely to have taken on a new face in McDowell County. The economy is declining along with the coal industry, towns are hollowed out as people flee, and communities are scarred by family dissolution, prescription drug abuse and a high rate of imprisonment.

Fifty years after the war on poverty began, its anniversary is being observed with academic conferences and ideological sparring — often focused, explicitly or implicitly, on the “culture” of poor urban residents. Almost forgotten is how many ways poverty plays out in America, and how much long-term poverty is a rural problem.

Of the 353 most persistently poor counties in the United States — defined by Washington as having had a poverty rate above 20 percent in each of the past three decades — 85 percent are rural. They are clustered in distinct regions: Indian reservations in the West; Hispanic communities in the Rio Grande Valley of Texas; a band across the Deep South and along the Mississippi Delta with a majority black population; and Appalachia, largely white, which has supplied some of America’s iconic imagery of rural poverty since the Depression-era photos of Walker Evans.

McDowell County is in some ways a place truly left behind, from which the educated few have fled, leaving almost no shreds of prosperity. But in a nation with more than 46 million people living below the poverty line — 15 percent of the population — it is also a sobering reminder of how much remains broken, in drearily familiar ways and utterly unexpected ones, 50 years on.

A Scarred Landscape

Much of McDowell County looks like a rural Detroit, with broken windows on shuttered businesses and homes crumbling from neglect. In many places, little seems to have been built or maintained in decades.
Continue reading the main story

Numbers tell the tale as vividly as the scarred landscape. Forty-six percent of children in the county do not live with a biological parent, according to the school district. Their mothers and fathers are in jail, are dead or have left them to be raised by relatives, said Gordon Lambert, president of the McDowell County Commission.

Beginning in the 19th century, the rugged region produced more coal than any other county in West Virginia, but it got almost none of the wealth back as local investment. Of West Virginia’s 55 counties, McDowell has the lowest median household income, $22,000; the worst childhood obesity rate; and the highest teenage birthrate.

It is also reeling from prescription drug abuse. The death rate from overdoses is more than eight times the national average. Of the 115 babies born in 2011 at Welch Community Hospital, over 40 had been exposed to drugs.

Largely as a consequence of the drug scourge, a problem widespread in rural America, the incarceration rate in West Virginia is one of the highest in the country.

“Whole families have been wiped out in this county: mother, father, children,” said Sheriff Martin B. West.

“These are good people, good families,” Sheriff West, an evangelical pastor, said of his lifelong neighbors. “But they get involved with drugs, and the next thing you know they’re getting arrested.”

The sheriff’s wife, Georgia Muncy West, has a historical link to the war on poverty. Her parents, Alderson and Chloe Muncy, were the first beneficiaries of the modern food stamp program, traveling to Welch to collect $95 in coupons. Ms. West, one of 15 children, said that unlike many current families, hers remained intact even through the leanest times. She went to work the Monday after she graduated from high school, sent her two children to college and served on the county school board.

As coal mining jobs have declined over half a century, there has been a steady migration away from the mountains. McDowell County’s population is just 21,300, down from 100,000 in the 1950s. Those who stayed did not have the education or skills to leave, or remained fiercely attached to the hollows and homes their families had known for generations.

Alma and Randy McNeely, both 50, tried life in Tennessee. But they returned to McDowell County to be close to their large extended family.

The couple married when they were 16. In a family photo album, Ms. McNeely appears in her white wedding dress as if headed to the junior prom. Turning the album’s pages for a visitor, she apologized for its lack of captions. “Mama couldn’t write, so, you know, there ain’t no names in it,” she said.

Ms. McNeely, whose long, dark hair is gathered behind, is known as Maw for being a surrogate mother to many in Hensley, a dot of a community. Her home is a few small rooms under a metal roof, clinging to a hillside.

Her husband worked in sawmills before a back injury in 1990. His disability payments, some $1,700 a month, are the family’s only income.

After marrying, the couple had two children. Their daughter, Angela, gave birth at 14 and was expelled from a Christian school, her mother said. Now, Ms. McNeely is raising Angela’s daughter, Emalee Short, who is 15.

A high school sophomore, Emalee dreams of being a veterinarian or maybe a marine biologist. The house and yard ring with the yelps of a dozen Chihuahuas and other small dogs, some of them strays dropped off by neighbors.

A confident teenager in a “Twilight” T-shirt, Emalee is enrolled in Upward Bound, the federal program that offers Saturday classes and summer school for bright students aspiring to college. “I want to be one of the ones who gets out of here,” she said. “I don’t want people to talk about me” — meaning the recitation of damaged young lives that is a regular part of catching up.
Photo
John F. Kennedy, then a senator running for president, with miners near Mullens, W.Va., in 1960. Credit Hank Walker/Time Life Pictures, via Getty Images
Continue reading the main story

Another photo in the album shows Randy Jr., the McNeelys’ son, known as Little Man. Little Man dropped out of high school six months shy of graduation, “with me sitting here crying,” Ms. McNeely said. He has been in and out of jail but is one of the lucky ones who have found work, at a junkyard run by a family friend.

Although Ms. McNeely encourages her granddaughter to aim for college, which would mean leaving McDowell County, she said that “her other mommy and daddy” — meaning Emalee’s biological parents — “and all her aunts and uncles, they don’t want her to go.”

“They’re scared she’s going to get hurt,” Ms. McNeely said.

Food Stamps and Coal

Many in McDowell County acknowledge that depending on government benefits has become a way of life, passed from generation to generation. Nearly 47 percent of personal income in the county is from Social Security, disability insurance, food stamps and other federal programs.

But residents also identify a more insidious cause of the current social unraveling: the disappearance of the only good jobs they ever knew, in coal mining. The county was always poor. Yet family breakup did not become a calamity until the 1990s, after southern West Virginia lost its major mines in the downturn of the American steel industry. The poverty rate, 50 percent in 1960, declined — partly as a result of federal benefits — to 36 percent in 1970 and to 23.5 percent in 1980. But it soared to nearly 38 percent in 1990. For families with children, it now nears 41 percent.

Today, fewer than one in three McDowell County residents are in the labor force. The chief effort to diversify the economy has been building prisons. The most impressive structure on Route 52, the twisting highway into Welch, is a state prison that occupies a former hospital. There is also a new federal prison on a mountaintop. But many residents have been skipped over for the well-paying jobs in corrections: They can’t pass a drug test.

Sheriff West, a former coal miner who presided over a magistrate court before he was elected sheriff in 2012, said the region’s ills traced back to many failures by elected officials, including local politicians who governed by patronage and state leaders in Charleston, the capital, who took the county’s solidly Democratic voters for granted and never courted them with aid.

The sheriff and other members of McDowell County’s small elite are not inclined to debate national poverty policy. They draw conclusions from what is in front of them.

“Our politicians never really did look ahead in this county for when coal wouldn’t be king,” Sheriff West said. “Therefore, we’ve fallen flat on our face.”

Returning for Neighbors

Not everyone with an education and prospects has moved away. McDowell County has a small professional class of people fighting long odds to better a place they love. Florisha McGuire, who grew up in War, which calls itself West Virginia’s southernmost city, returned to become principal of Southside K-8 School.

For Ms. McGuire, 34, the turning point in the town’s recent history was the year she left for college, 1997, when many of the 17-year-olds who stayed behind graduated from beer and marijuana to prescription pill abuse.

Many of the parents of the children in her school today are her former classmates. In some, emaciated bodies and sunken eyes show the ravages of addiction. “I had a boy in here the other day I went to high school with,” she said. “He had lost weight. Teeth missing. You can look at them and go, ‘He’s going to be the next to die.’ ”

Ms. McGuire, who grew up in poverty — her father did not work and died of lung cancer at 49; her mother had married at 16 — was the first in her family to attend college. On her first morning at Concord University in Athens, W.Va., about 50 miles from War, her roommate called her to breakfast. Ms. McGuire replied that she didn’t have the money. She hadn’t realized her scholarship included meals in a dining hall.

“I was as backward as these kids are,” she said in the office of her school, one of few modern buildings in town. “We’re isolated. Part of our culture here is we tend to stick with our own.” In her leaving for college, she said, “you’d think I’d committed a crime.”

As the mother of a 3-year-old girl, she frets that the closest ballet lesson or soccer team is nearly two hours away, over the state line in Bluefield, Va. But she is committed to living and working here. “As God calls preachers to preach, he calls teachers to certain jobs,” she said. “I really believe it is my mission to do this and give these kids a chance.”

Ms. McGuire described War as almost biblically divided between forces of dark and light: between the working blue- and white-collar residents who anchor churches, schools and the city government, and the “pill head” community. As she drove down the main street, past municipal offices with the Ten Commandments painted in front, she pointed out the signs of a once-thriving town sunk into hopelessness. The abandoned American Legion hall. A pharmacy with gates to prevent break-ins. The decrepit War Hotel, its filthy awning calling it “Miner’s City,” where the sheriff’s department has made drug arrests.

When coal was king, there were two movie theaters and a high school, now closed. “Everybody worked,” Ms. McGuire said.

She turned up Shaft Hollow, where many people live in poorly built houses once owned by a coal company, their roofs sagging and the porches without railings. At the foot of Shop Hollow, a homemade sign advertised Hillbilly Fried Chicken. Another pointed the way to the True Light Church of God in Jesus Name. “This is one of the most country places, but I love these people,” Ms. McGuire said. She said it was a bastion of Pentecostal faith, where families are strict and their children well behaved.

She and others who seek to lift McDowell County have attracted some outside allies. Reconnecting McDowell, led by the American Federation of Teachers union, is working to turn schools into community centers offering health care, adult literacy classes and other services. Its leaders hope to convert an abandoned furniture store in Welch to apartments in order to attract teachers.

“Someone from Indiana or Pennsylvania, they’re not going to come to McDowell County and live in a house trailer on top of a mountain,” said Bob Brown, a union official.

Another group, the West Virginia Healthy Kids and Families Coalition, is working to create a home visitation service to teach new parents the skills of child-rearing.

Sabrina Shrader, the former neighbor of Marie Bolden in Twin Branch, has spoken on behalf of the group to the State Legislature and appeared before a United States Senate committee last year. Ms. Shrader, who spent part of her youth in a battered women’s shelter with her mother, earned a college degree in social work.

“It’s important we care about places like this,” she said. “There are kids and families who want to succeed. They want life to be better, but they don’t know how.”

A version of this article appears in print on April 21, 2014,

on page A1 of the New York edition with the headline:

50 Years Later, Hardship Hits Back.

    50 Years Into the War on Poverty, Hardship Hits Back,
    NYT, 20.4.2014,
    http://www.nytimes.com/2014/04/21/us/
    50-years-into-the-war-on-poverty-hardship-hits-back.html

Low-Wage Workers

Are Finding Poverty

Harder to Escape

MARCH 16, 2014
The New York Times
By STEVEN GREENHOUSE

CHATTANOOGA, Tenn. — At 7 in the morning, they are already lined up — poultry plant workers, housekeepers, discount store clerks — to ask for help paying their heating bills or feeding their families.

And once Metropolitan Ministries opens at 8 a.m., these workers fill the charity’s 40 chairs, with a bawling infant adding to the commotion. From pockets and handbags they pull out utility bills or rent statements and hand them over to caseworkers, who often write checks — $80, $110, $150 — to patch over gaps in meeting this month’s expenses or filling the gas tank to get to work.

Just off her 10 p.m. to 6 a.m. shift, Erika McCurdy needed help last month with her electricity and heating bill, which jumped to $280 in January from the usual $120 — a result of one of the coldest winters in memory. A nurse’s aide at an assisted living facility, Ms. McCurdy said there were many weeks when she couldn’t make ends meet raising her 19-year-old son and 7-year-old daughter.

“There’s just no way, making $9 an hour as a single parent with two children, that I can live without assistance,” said Ms. McCurdy, 40, a strong-voiced, solidly built Chattanooga native.

She was so financially stretched, she said, that she and her daughter often sneaked into her son’s high school football games free during halftime because she couldn’t afford the $6 tickets. (She proudly noted that her son, Charles, had made the All State football team.) As for her daughter Jer’Maya, who mimics Beyoncé’s every move on her mother’s iPhone, Ms. McCurdy said, “She’d love to take ballet and piano lessons, but there’s no way I can afford that.”

Having worked as a nurse’s aide for 15 years, Ms. McCurdy has been among the nearly 25 million workers in the United States who make less than $10.10 an hour — the amount to which President Obama supports increasing the minimum wage. Of those workers, 3.5 million make the $7.25 federal minimum wage or less.

And like many of them, Ms. McCurdy hasn’t been able to rely on steady full-time hours — she has often been assigned just 20 hours a week. Even if she worked full time year-round, her $9 hourly wage would put her below the poverty threshold of $19,530 for a family of three.

Climbing above the poverty line has become more daunting in recent years, as the composition of the nation’s low-wage work force has been transformed by the Great Recession, shifting demographics and other factors. More than half of those who make $9 or less an hour are 25 or older, while the proportion who are teenagers has declined to just 17 percent from 28 percent in 2000, after adjusting for inflation, according to Janelle Jones and John Schmitt of the Center for Economic Policy Research.

Today’s low-wage workers are also more educated, with 41 percent having at least some college, up from 29 percent in 2000. “Minimum-wage and low-wage workers are older and more educated than 10 or 20 years ago, yet they’re making wages below where they were 10 or 20 years ago after inflation,” said Mr. Schmitt, senior economist at the research center. “If you look back several decades, workers near the minimum wage were more likely to be teenagers — that’s the stereotype people had. It’s definitely not accurate anymore.”
Continue reading the main story

In Chattanooga, the prevalence of low-wage jobs has contributed to the high poverty rate: 27 percent of the city’s residents live below the poverty line, compared with 15 percent nationwide. Women head about two-thirds of the city’s poor households, and 42 percent of its children are poor, nearly double the rate statewide.

“The face of poverty in this community is women, especially women of color,” said Valerie L. Radu, a professor of social work at the University of Tennessee, Chattanooga.

This city was not always a magnet for low-wage jobs. For much of the last century, the city, which hugs the Tennessee River, was a manufacturing hub with dozens of apparel factories, textile mills and metal foundries.

During the last quarter of the 20th century, almost all the factories and foundries were shuttered, and with them disappeared thousands of manufacturing jobs that had once lifted workers, even ones without high school degrees, into the middle class or to the cusp of it. In their place have come thousands of service-sector jobs: at the aquarium and Imax theater built to lure tourists and at hotels, nursing homes, big-box stores, brew pubs, fast-food restaurants, beauty salons and hospitals.

Discount stores dot the landscape, including a Family Dollar downtown near the upscale Bluewater Grille, reflecting how much American cities have experienced a hollowing-out of the middle class.

“Chattanooga has a twofold problem: the low level of educational attainment and the traditional jobs that these people move into have largely disappeared,” said Matthew N. Murray, an economist at the University of Tennessee. Just 23 percent of Tennessee adults have a bachelor’s degree.

JeraLee Kincaid, 23, is an $8.50-an-hour cashier who works at the checkout booth at a parking garage next to the Marriott Courtyard hotel downtown. A solid student in high school, Ms. Kincaid, who lives with her mother, planned to study computer programming in college, but instead her family decided that she needed to help pay the medical bills of a 5-year-old niece who has leukemia.

“She can’t eat, talk or walk by herself,” said Ms. Kincaid. She says she feels stuck, but also grateful that her boss is trying to help find her a scholarship to attend college.

When Volkswagen opened a $1 billion assembly plant in 2011, 80,000 people applied for 2,000 jobs paying an average of $19.50 an hour. Many low-wage workers, like Ms. McCurdy — a high school dropout who later obtained her high school equivalency diploma — would have loved to work there, but they faced difficulty mastering the math tests given for jobs that involve advanced machinery.

“We understand that more individuals have to get some kind of higher education degree or certificate to have a chance in this world,” said Chattanooga’s mayor, Andy Berke. “We don’t want the South to be a place where businesses go to find low-wage, low-education jobs. That’s a long-term problem that midsized cities in the South face.”

Here as well as elsewhere, a college degree cannot guarantee a good job.

Landon Howard graduated from the University of Tennessee campus here four years ago with a bachelor’s degree in social work, but has been unable to find a job in that field. Instead he is a prep cook at the trendy Tupelo Honey Cafe. Often scheduled for just 15 to 20 hours a week at $9.50 an hour, he usually takes home less than $200 a week.

“I’ve had to move back in with my parents,” Mr. Howard said. His most urgent concern is his lack of dental insurance. “One of my teeth is cracked,” he said. “There’s a big gaping hole. I don’t know if I’m going to lose it.”

Ms. McCurdy, as a parent in a modest income bracket, would not usually be eligible for the state’s Medicaid program, although her children would, but she was accepted because of a heart condition requiring costly medications.

Her family has had to make many sacrifices since she was laid off in 2012 from her job as a full-time nurse’s assistant in the emergency room of Memorial Hospital.

Her fall to $9 an hour at the assisted living facility from $13.75 at the hospital forced her to give up a 2,000-square-foot home in Harrison, a local suburb, “which is beautiful, and you have better schools,” she said.

“It was a good life,” she added. “You didn’t have to worry about violence or anyone breaking in.”

After being laid off, “I realized I couldn’t afford to stay in a house where the rent was $625 a month,” she said. So she found a $400-a-month, 1,100-square foot house in Brainerd, known for its gangs and violence. “I stay in at night,” she said. “I put bars on the windows.”

The new house has two modest bedrooms, a largely unfurnished living room, a bathroom and a small shotgun kitchen “where I got to move the table when my son gets up from dinner,” she said. “Imagine being in a two-bedroom place with a 6-2, 280-pound boy and a little girl. Me and my little girl share a room.”

They also share a bed, but Jer’Maya keeps her dolls, books and clothes in Charles’s room, among his footballs and athletic gear. Ms. McCurdy receives $400 a month in food stamps. Without it, she said, “we wouldn’t be eating.”

Still, Ms. McCurdy worries about her children’s future.

“I have a son that’s graduating in May,” she said. “He’s looking at college. My heart is pounding 99 miles per hour. If he goes on full scholarship, I’ll still need to support him — how to pay his cellphone bill, how to pay for transportation and food during vacations.”

Her February utility bill just arrived and it stunned her: $320. She may again turn to Metropolitan Ministries for help, although she says she hopes the $3,000 or so she expects to receive from the earned-income tax credit will help her pay that bill — and also buy a new living room couch.

Rebecca Whelchel says she has seen big changes in the clientele since she became the executive director of Metropolitan Ministries eight years ago.

“It used to be that folks came in with a single issue — it was like, ‘I have to buy a new tire because my tire blew out,’ or, ‘I’m short on my electrical bill,’ ” Ms. Whelchel said. “Now they come in with a rubber band around a bunch of bills and problems. Everything is wrong. Everything is tangled with everything else.”

At age 34, Nick Mason earns $9 an hour as an assistant manager for a Domino’s, overseeing a crew of six. “I don’t think $9 is fair — I’ve been working in the pizza business for 19 years, since I was 15,” he said.

He attended the University of Tennessee, Chattanooga, studying to become a registered nurse, but he dropped out as a sophomore when his marriage fell apart. He returned to work full time, and he and his children moved in with his parents in the suburb of Hixson.

“I just wish we could have our home, but I can’t afford to,” said Mr. Mason, father of 7-year-old Halle and 5-year-old Eli. “That’s what the kids keep asking for.”

“We’ve had to sacrifice a lot of things,” he continued. “I’d love nothing more than to give them what they deserve. As a single father, it’s impossible. I put my kids in karate about a year ago. They loved it, but I got to the point where it was a choice between paying for a cellphone or karate, and as a manager, I need a cellphone for people to keep in touch with me.”

Mr. Mason has heard the criticisms: Stop complaining about your pay; just go back to school and that way you’ll find a better-paying job.

“I would love to go back to school,” he said. “It’s easy for people to say that because they haven’t been in my shoes. I’m already busy every minute of the day. I already don’t get to see my kids enough. I doubt I’ll be able to afford school, and I don’t know where I would find the time.”

His big hope is to be promoted to run a Domino’s, which might mean earning $15 an hour.

Ms. McCurdy, who applied for two dozen jobs this winter, delivered good news with a big smile. She was offered a job as a full-time nurse’s aide on the transition medical floor at Erlanger Health System, a hospital.

“They’re paying me $10.64,” she said, an improvement over the $9 an hour she had been earning. “That gives me a little room to breathe.”

A version of this article appears in print on March 17, 2014,

on page B1 of the New York edition with the headline:

The Walls Close In.

    Low-Wage Workers Are Finding Poverty Harder to Escape,
    NYT, 16.3.2014,
    http://www.nytimes.com/2014/03/17/business/economy/
    low-wage-workers-finding-its-easier-to-fall-into-poverty-and-harder-to-get-out.html

Richard Boone,

Johnson Aide on Poverty,

Dies at 86

MARCH 7, 2014
The New York Times
By ADAM CLYMER

Richard W. Boone, who played a central role in President Lyndon B. Johnson’s war on poverty in the 1960s and led private organizations pursuing political and social change, died on Feb. 26 at his home in Santa Barbara, Calif. He was 86.

His son Wade said the cause was complications of non-Hodgkin’s lymphoma and Parkinson’s disease.

Mr. Boone went to Washington in 1962 to work at the Justice Department on juvenile delinquency, an issue he had dealt with as a police captain in Cook County, Ill. He was close to Attorney General Robert F. Kennedy and worked with him when, as a senator from New York, Kennedy became deeply involved in antipoverty efforts.

“He was one of four or five people who had the senator’s ear, always,” Frank Mankiewicz, press secretary for Kennedy as senator, said in a recent interview.

Mr. Boone went from the Justice Department to the White House staff, and from there to the Office of Economic Opportunity, headed by R. Sargent Shriver, brother-in-law to Robert and President John F. Kennedy.

As an important aide in Johnson’s antipoverty program, Mr. Boone was most closely involved with Head Start and Upward Bound, educational initiatives for preschoolers and high school students, respectively, and Foster Grandparents, a mentoring program for children with exceptional needs. He was also integral in nationwide efforts to establish community health centers and legal services for the poor and in promoting the administration’s goal of “maximum feasible participation” by the poor in efforts to lift their own circumstances.

Mr. Boone spent most of his career in the private philanthropic sphere. He directed the Citizens Crusade Against Poverty, an umbrella group founded by the United Automobile Workers to work alongside government efforts but also to scrutinize them. A major effort by the group was a 1968 report, “Hunger USA,” which found that the Agriculture Department was failing in its efforts to combat hunger among 29 million poor Americans.

As director of the Field Foundation from 1977 to 1989, Mr. Boone used grants to establish nonprofit groups to help refugees who had escaped Vietnam by boat during the war there, to promote voting by minorities and young people and to campaign against the buildup of nuclear weapons.

Two organizations he helped create and guide remain active and influential in Washington: the Communications Consortium Media Center, which has aided liberal groups in communications strategies since 1988, and the Center on Budget and Policy Priorities, a liberal research institute that examines the impact of federal spending and taxation.

Mr. Boone created the budget center when he became dismayed at President Ronald Reagan’s success in cutting spending on programs for the poor, said Robert Greenstein, its director since its founding in 1981.

Besides his son Wade, Mr. Boone is survived by his wife of 62 years, Chloris Robinson Boone; three other sons, Steven, Brent and Jed; a daughter, Laurel Boone Nelson; and six grandchildren.

Mr. Boone was born in Louisville, Ky., on March 29, 1927, the son of Cassius Aurelius Boone, a doctor, and Leah Wolf Boone. Before graduating from high school, he entered the University of Chicago at 16. After Navy service in the Pacific, he returned and earned a bachelor’s degree in 1948 and a master’s in 1949. When a professor of his was brought in as a reform police chief in Cook County, he recruited Mr. Boone and made him a captain.

Wade Boone recalled his father telling him that he first became acquainted with poverty by going with his own father by horse and carriage to make house calls in Appalachia. The charge, during the Depression, was 25 cents a visit.

A version of this article appears in print on March 8, 2014,

on page D6 of the New York edition with the headline:

Richard Boone, 86, Johnson Aide on Poverty.

    Richard Boone, Johnson Aide on Poverty, Dies at 86, NYT, 7.3.2014,
    http://www.nytimes.com/2014/03/08/us/politics/
    richard-boone-johnson-aide-on-poverty-dies-at-86.html

New York Is Removing Over 400 Children

From 2 Homeless Shelters

FEB. 21, 2014
The New York Times
By ANDREA ELLIOTT
and REBECCA R. RUIZ

In the face of New York’s mounting homeless crisis, Mayor Bill de Blasio will announce on Friday that his administration is removing hundreds of children from two city-owned homeless shelters that inspectors have repeatedly cited for deplorable conditions over the last decade, officials said.

The city has begun transferring over 400 children and their families out of the Auburn Family Residence in Fort Greene, Brooklyn, and from the Catherine Street shelter in Lower Manhattan, while vowing to improve services for the swelling population of 22,000 homeless children, Mr. de Blasio and other officials said in interviews this week.

The administration is trying to find either subsidized permanent housing or suitable temporary shelter for the families and will be converting the Auburn and Catherine Street facilities into adult family shelters, the officials said.

State and city inspectors have cited Auburn for over 400 violations — many of them repeated — for a range of hazards, including vermin, mold, lead exposure, an inoperable fire safety system, insufficient child care and the presence of sexual predators, among them, a caseworker.

“We just weren’t going to allow this to happen on our watch,” the mayor said.

The conditions at Auburn, which were detailed in a recent series in The New York Times, prompted the City Council to schedule hearings next week on family shelters. Records and interviews show that similar lapses have dogged Catherine Street, which, like Auburn, is an aging residence with communal bathrooms that children share with strangers. Families live in rooms without kitchens or running water, preventing them from cooking their own meals or washing baby bottles.

Since 2006, the state agency responsible for overseeing homeless shelters has routinely ordered the city to remove all infants and toddlers from Catherine Street, citing at least 150 violations in that time.

That agency, the Office of Temporary and Disability Assistance, could have sanctioned Auburn and Catherine Street by withholding state funding, but chose not to because that “would have meant defunding services that help tens of thousands of New Yorkers in need at a time when New York City had the highest number of homeless residents in its history,” the office’s commissioner, Kristin M. Proud, said in an email.

In the fall, a resident at Catherine Street took five children and two caseworkers hostage, barricading them in a room on the second floor, according to police records. In August 2012, a group of teenage boys took “over the building,” threatening children in bathrooms and assaulting others on the street, according to state records.

“This is no place for kids,” said Dawn Hazel, 38, a single mother studying to be a nurse who has lived at Catherine Street with her five children for just over a year.

Ms. Hazel said her youngest son, now 6, was cornered in the men’s bathroom last year by a group of residents who exposed themselves to him. A security guard was present during the encounter but did not intervene, said Ms. Hazel, who filed a complaint at the shelter.

While security has more than doubled at Auburn in recent weeks, with security guards stationed outside every bathroom, Catherine Street’s transition will take longer, officials said. The city’s Department of Homeless Services will first move families out of Auburn. Forty-two families have already left, mostly to other shelters, and another 64 will move by late June to allow for minimal disruption of school, officials said.

As Auburn’s families depart, security guards from that shelter will be transferred to Catherine Street, where 211 children currently reside, a spokeswoman for the department said. Since January, a dozen families have been placed in other shelters or in permanent housing, and the rest will be moved by the fall, officials said.

The transition plan for both shelters will cost the city more than $13 million, between allocations for enhanced security and upgrades to both facilities, which will feature closed-circuit security cameras, renovated bathrooms and refurbished rooms.

In a somewhat surreal twist, the city is exploring a plan to convert part of Auburn’s ground floor — the site of a cafeteria notorious for its mice and rancid food — into a “culinary arts” training program for adult residents. In the meantime, the city has added six more microwaves to the cafeteria, where people used to wait in lines to heat food that was sometimes served cold.

Both Auburn and Catherine Street were converted into family shelters in 1985 and, in the intervening decades, have remained a thorn in the side of homeless advocates.

“Until today, no mayor was willing to say no children should be treated this way, and that’s a historic breakthrough,” said Steven Banks, the attorney in chief at the Legal Aid Society, which has battled the city in court over shelter conditions.

Yet only a small fraction of the city’s homeless children live at Auburn and Catherine Street. Its temporary housing system includes 151 family facilities of varying quality, and it remains to be seen whether the administration will address complaints about conditions at other shelters.

Advocates for the homeless have pressed Mr. de Blasio to reinstate several policies that ended under Mayor Michael R. Bloomberg. From 1990 until 2005, the city placed more than 53,000 homeless families in permanent housing by giving them priority referrals to federal subsidy programs, according to an analysis of city data by Patrick Markee of the Coalition for the Homeless.

The Bloomberg administration canceled that policy and in its place created a short-term rent subsidy program that ended in 2011 when the state withdrew its portion of the funding. By the time Mr. Bloomberg left office at the end of last year, the homeless population had peaked at more than 52,000 — the highest number on record since the Great Depression.

That tally reflects only the shelter population, which fluctuates daily and does not include families that live doubled up with friends or relatives. According to data compiled by the State Education Department, more than 80,000 school-age children in the city were identified as homeless during the last academic year.

“There are major American cities that have the same population as we have people in shelter,” Mr. de Blasio said. “We have to look this in the face. This is literally an unacceptable dynamic, and we have to reverse it.”

In interviews, Mr. de Blasio, his deputy mayor for health and human services, Lilliam Barrios-Paoli, and the newly appointed homeless services commissioner, Gilbert Taylor, laid out the broad outlines of a still-evolving plan to address homelessness.

They will focus on prevention efforts, and said the administration was committed to renewing a version of the former rent subsidy program, which will require money from the state. A spokesman for Gov. Andrew M. Cuomo said the proposal was under discussion.

The de Blasio administration is also exploring a plan to enhance anti-eviction legal services for families, and an “aftercare” support program intended to prevent newly housed families from becoming homeless again.

The city is less likely to depend on federal housing programs as a solution because of the dwindling supply, Mr. de Blasio said. “It will be a tool we use as needed, but I think the central thrust has to be getting at the root causes,” he said. “Greater supply of affordable housing. Pushing up wages and benefits. More preventative efforts.”

The subject of the series in The Times, Dasani Coates, 12, spent three years at Auburn, sharing one room with her parents and seven siblings before the family was transferred to a shelter in Harlem, where they have remained since October. The Department of Homeless Services is trying to place the family in one of the city’s few supportive housing programs, which provide affordable apartments with on-site services for vulnerable families.

“It takes all of this for something to happen?” Dasani’s mother, Chanel, said in response to the announced changes at Auburn, and the city’s recent effort to house her family. “Why was it so hard to do this three years ago?”

A version of this article appears in print on February 21, 2014, on page A1 of the New York edition with the headline: 400 Children to Be Removed From 2 Shelters.

    New York Is Removing Over 400 Children From 2 Homeless Shelters,
    NYT, 21.2.2014,
    http://www.nytimes.com/2014/02/21/nyregion/
    new-york-is-removing-over-400-children-from-2-homeless-shelters.html

The Post Office Banks on the Poor

FEB. 7, 2014
The New York Times
By MEHRSA BARADARAN

ATHENS, Ga. — PEOPLE like to complain about banks popping up like Starbucks on every corner these days. But in poor neighborhoods, the phenomenon is quite the opposite: Over the past couple of decades, the banks have pulled out.

Approximately 88 million people in the United States, or 28 percent of the population, have no bank account at all, or do have a bank account, but primarily rely on check-cashing storefronts, payday lenders, title lenders, or even pawnshops to meet their financial needs. And these lenders charge much more for their services than traditional banks. The average annual income for an “unbanked” family is $25,500, and about 10 percent of that income, or $2,412, goes to fees and interest for gaining access to credit or other financial services.

But a possible solution has appeared, in the unlikely guise of the United States Postal Service. The unwieldy institution, which has essentially been self-funded since 1971, and has maxed out its $15 billion line of credit from the federal government, is in financial straits itself. But what it does have is infrastructure, with a post office in most ZIP codes, and a relationship with residents in every kind of neighborhood, from richest to poorest.

Last week, the office of the U.S.P.S. inspector general released a white paper noting the “huge market” represented by the population that is underserved by traditional banks, and proposing that the post office get into the business of providing financial services to “those whose needs are not being met.” (I wrote a paper years ago suggesting just such an idea.) Postal banking has a powerful advocate in Senator Elizabeth Warren, Democrat of Massachusetts, who has publicly supported the plan.

The U.S.P.S. — which already handles money orders for customers — envisions offering reloadable prepaid debit cards, mobile transactions, domestic and international money transfers, a Bitcoin exchange, and most significantly, small loans. It could offer credit at lower rates than fringe lenders do by taking advantage of economies of scale.

The post office has branches in many low-income neighborhoods that have long been deserted by commercial banks. And people at every level of society have a certain familiarity and comfort in the post office that they do not have in more formal banking institutions — a problem that, as a 2011 study by the Federal Deposit Insurance Corporation demonstrated, can keep the poor from using even the banks that are willing to offer them services.

Many will oppose the idea of a governmental agency providing financial services. Camden R. Fine, chief executive of the Independent Community Bankers of America, has already called the post office proposal “the worst idea since the Ford Edsel.” But the federal government already provides interest-free “financial services” to the largest banks (not to mention the recent bailout funds). And this is done under an implicit social contract: The state supports and insures the banking system, and in return, banks are to provide the general population with access to credit, loans and savings. But in reality, too many are left out.

It wasn’t always this way. In 1910, President William Howard Taft established the government-backed postal savings system for recent immigrants and the poor. It lasted until 1967. The government also supported and insured credit unions and savings-and-loans specifically created to provide credit to low-income earners.

But by the 1990s, there were essentially two forms of banking: regulated and insured mainstream banks to serve the needs of the wealthy and middle class, and a Wild West of unregulated payday lenders and check-cashing joints that answer the needs of the poor — at a price.

People need credit to increase their financial prospects — that’s the theory behind government backing of student loans and mortgages. The Latin root of the word “credit” is credere — to believe. But belief is something that mainstream lenders lack when it comes to assessing the creditworthiness of the poor. And yet establishing credit not only allows individual families and communities to grow wealth, but also allows our economy to do so. Everyone benefits.

There is, of course, a certain irony in the post office, cash-strapped and maxed out on credit, looking to elbow in on the business of check-cashing and payday-loan storefronts. And while the U.S.P.S. white paper stresses that its own offerings, rates and fees would be “more affordable,” a note of alarm is raised when it highlights the potential bonanza that providing financial services to the financially underserved could yield, stating that the result could be “major new revenue for the Postal Service” estimated at $8.9 billion a year. It’s a plan that could indeed save the post office, which last year recorded a $1 billion operating loss.

In this potential transaction between an institution and a population that are both in need, it would be wise to look back a century ago, at the last time a similar experiment was conducted. In 1913, the chief post office inspector, Carter Keene, declared that the postal savings system was not meant to yield a profit: “Its aim is infinitely higher and more important. Its mission is to encourage thrift and economy among all classes of citizens.” Any benefit to the post office’s bottom line should not come at the expense of those who can least afford it.

Mehrsa Baradaran is an assistant professor of law

at the University of Georgia, specializing in banking regulation.

A version of this op-ed appears in print on February 8, 2014,

on page A19 of the New York edition with the headline:

The Post Office Banks on the Poor.

    The Post Office Banks on the Poor, NYT, 7.2.2014,
    http://www.nytimes.com/2014/02/08/opinion/the-post-office-banks-on-the-poor.html

Enemies of the Poor

JAN. 12, 2014
The New York Times
The Opinion Pages|Op-Ed Columnist

Suddenly it’s O.K., even mandatory, for politicians with national ambitions to talk about helping the poor. This is easy for Democrats, who can go back to being the party of F.D.R. and L.B.J. It’s much more difficult for Republicans, who are having a hard time shaking their reputation for reverse Robin-Hoodism, for being the party that takes from the poor and gives to the rich.

And the reason that reputation is so hard to shake is that it’s justified. It’s not much of an exaggeration to say that right now Republicans are doing all they can to hurt the poor, and they would have inflicted vast additional harm if they had won the 2012 election. Moreover, G.O.P. harshness toward the less fortunate isn’t just a matter of spite (although that’s part of it); it’s deeply rooted in the party’s ideology, which is why recent speeches by leading Republicans declaring that they do too care about the poor have been almost completely devoid of policy specifics.

Let’s start with the recent Republican track record.

The most important current policy development in America is the rollout of the Affordable Care Act, a k a Obamacare. Most Republican-controlled states are, however, refusing to implement a key part of the act, the expansion of Medicaid, thereby denying health coverage to almost five million low-income Americans. And the amazing thing is that they’re going to great lengths to block aid to the poor even though letting the aid through would cost almost nothing; nearly all the costs of Medicaid expansion would be paid by Washington.

Meanwhile, those Republican-controlled states are slashing unemployment benefits, education financing and more. As I said, it’s not much of an exaggeration to say that the G.O.P. is hurting the poor as much as it can.

What would Republicans have done if they had won the White House in 2012? Much more of the same. Bear in mind that every budget the G.O.P. has offered since it took over the House in 2010 involves savage cuts in Medicaid, food stamps and other antipoverty programs.

Still, can’t Republicans change their approach? The answer, I’m sorry to say, is almost surely no.

First of all, they’re deeply committed to the view that efforts to aid the poor are actually perpetuating poverty, by reducing incentives to work. And to be fair, this view isn’t completely wrong.

True, it’s total nonsense when applied to unemployment insurance. The notion that unemployment is high because we’re “paying people not to work” is a fallacy (no matter how desperate you make the unemployed, their desperation does nothing to create more jobs) wrapped in a falsehood (very few people are choosing to remain unemployed and keep collecting benefit checks).

But our patchwork, uncoordinated system of antipoverty programs does have the effect of penalizing efforts by lower-income households to improve their position: the more they earn, the fewer benefits they can collect. In effect, these households face very high marginal tax rates. A large fraction, in some cases 80 cents or more, of each additional dollar they earn is clawed back by the government.

The question is what we could do to reduce these high effective tax rates. We could simply slash benefits; this would reduce the disincentive to work, but only by intensifying the misery of the poor. And the poor would become less productive as well as more miserable; it’s hard to take advantage of a low marginal tax rate when you’re suffering from poor nutrition and inadequate health care.

Alternatively, we could reduce the rate at which benefits phase out. In fact, one of the unheralded virtues of Obamacare is that it does just that. That is, it doesn’t just improve the lot of the poor; it improves their incentives, because the subsidies families receive for health care fade out gradually with higher income, instead of simply disappearing for anyone too affluent to receive Medicaid. But improving incentives this way means spending more, not less, on the safety net, and taxes on the affluent have to rise to pay for that spending. And it’s hard to imagine any leading Republican being willing to go down that road — or surviving the inevitable primary challenge if he did.

The point is that a party committed to small government and low taxes on the rich is, more or less necessarily, a party committed to hurting, not helping, the poor.

Will this ever change? Well, Republicans weren’t always like this. In fact, all of our major antipoverty programs — Medicaid, food stamps, the earned-income tax credit — used to have bipartisan support. And maybe someday moderation will return to the G.O.P.

For now, however, Republicans are in a deep sense enemies of America’s poor. And that will remain true no matter how hard the likes of Paul Ryan and Marco Rubio try to convince us otherwise.

    A version of this op-ed appears in print on January 13, 2014,
    on page A21 of the New York edition with the headline: Enemies Of The Poor.

    Enemies of the Poor, NYT, 12.1.2014,
    http://www.nytimes.com/2014/01/13/opinion/krugman-enemies-of-the-poor.html

In the Long War on Poverty,

Small Victories That Matter

January 8, 2014
11:00 am
The  New York Times
By DAVID BORNSTEIN

It was 50 years ago that President Lyndon B. Johnson started the “war on poverty,” railing against the “lack of jobs, bad housing [and] poor schools” that perpetuated an array of social crises, struggle and suffering amid a sea of plenty. Given the state of poverty today, it’s tempting to believe that the effort was a failure, and that perhaps we may never prevail against these ills. But in many ways, we have become far more thoughtful and systematic in our efforts to address social problems. It’s often hard to see these improvements. I spent time over the holidays checking up on organizations we’ve covered in Fixes over the past three years (far more relaxing than watching episodes of “Homeland”). I was struck by the steady progress most of them had made. And a few patterns jumped out. Here are three ways we may be getting smarter:

1. Getting real about what works and what does not. One of the most important trends among effective organizations is the rigor with which they’re examining their own impact (and this includes the willingness to acknowledge failure). Unlike businesses, social organizations don’t go bankrupt if they fail to produce results; they can plod along for years wasting time and money.

This is a heartening change. So what’s driving it? Not just budget pressures, but the ability to access and process information at lower cost, the emergence of competing solution models and the recognition that many social programs have been disappointments. The push for more and better evidence of impact is vital if we are to learn, as a society, how to fix things that aren’t working and allocate resources to greatest effect. I found numerous examples of organizations doing this well. Here are two:

Playworks, which I wrote about twice in 2011, works to foster safe and inclusive play opportunities in public schools in more than 20 states (it shows students and teachers how to make recess fun and healthy). In today’s test-crazed culture, where every instructional minute is sacred, Playworks could easily be seen as a low priority. Why should a principal focus on recess when many kids are struggling to read?

When researchers from Mathematica Policy Research and Stanford University examined the program (pdf), they found something that many educators overlook: children’s emotional and physical well being is intimately connected with their cognitive development. When kids have a good time playing with other kids at recess, it has a positive impact on the rest of their school day. Teachers in schools with Playworks reported 43 percent less bullying. They found that kids felt safer. And they reported having to spend a third less time helping kids transition into learning routines after recess. Equally important for Playworks, the study revealed where the implementation of its program was strong, where it was weak, and how it could be improved.

Another organization that has put a lot of thought into its impact evaluation is Blue Engine, which works to increase college readiness through a team-teaching model in high school classrooms. One common method of measuring impact is to compare performance among students receiving an intervention to students from comparable schools. In this case, it was more complicated. Blue Engine requires an unusually high investment from a school so the presence of the program can be taken as a sign that the school has distinctive leadership.

Instead, the organization worked with GlassFrog, an evaluation firm to devise an algorithm (pdf) to estimate how students would have performed on New York State Regent exams without its help. They found that that the equation predicted with better than 80 percent accuracy which students would attain “college ready” levels for algebra and geometry (it was slightly less accurate for English). Not only did the analysis reveal that the program increased the number of students scoring at “college ready” levels on the Regents exams by 61 percent, but as with Playworks, it showed where the model was faring best and where it was faring worst. That’s essential feedback for improvement.

2. Paying for success (and prevention). One reason organizations are doing more to examine their impact is that foundations and governments are increasingly demanding it, and in some cases making payments contingent on performance. My colleague Tina Rosenberg reported in 2012 on the first “social impact bond” in England. Since then, with the support of organizations like the Rockefeller Foundation, Social Finance and Third Sector Capital Partners, these bonds – financial instruments in which investors are repaid based on the success of the social programs that they fund – have gained traction in a variety of locations across the United States.

In December, New York State launched a $13.5 million social impact bond, financed by private and institutional investors, to pay for training and employment services for 2,000 previously incarcerated individuals. The deal is that investors get repaid, and earn returns, only if the program achieves specified reductions in recidivism or gains in employment (which would produce large savings for the state). In the coming months, Massachusetts is expected to launch a pay-for-success project aimed at helping youths who are aging out of the juvenile justice system.

President Obama requested $300 million in the 2014 Budget for an Incentive Fund to help state and local governments implement pay for success projects. And this summer, the White House reiterated its push for rigorous evidence to drive government innovation in a memo to the heads of all departments and agencies (pdf).

What’s most noteworthy about this approach is that, if it works, it creates incentives to finance prevention – the smartest and usually the cheapest way to address problems, but also the hardest thing to get governments to pay for. (Program costs are incurred immediately, but savings often accrue on someone else’s watch.)

One limitation is that the successes that are easiest to connect to savings are those that address problems that are already advanced, and therefore difficult to solve. A program aimed at ex-offenders is considered highly successful if it cuts the recidivism rate from, say, 70 to 60 percent. If society intervenes earlier – say by preventing or buffering “toxic stress” in early childhood — the gains for society could be considerably greater. But the pay back period would be longer and the savings much harder to estimate.

It’s yet to be seen how well social-impact bonds will work and how much attention they will attract beyond social-purpose investors. This year marks their coming out in the United States.

There are, of course, many barriers involved in getting governments to fund things based on rational considerations. Politics cannot be divorced from favoritism anymore than bureaucracies can be released from rules — so there will always be pressures and restrictions that give preference to lackluster performers over innovators. Moreover, many social organizations lack the resources to produce evidence that would help them attract growth funding, a classic Catch-22.

One idea being advanced by the Coalition for Evidence-Based Policy is to demonstrate how to design low-cost randomized controlled trials using data that is readily available. It’s often assumed that these studies, considered the gold standard in research, must be expensive. However, the coalition has gathered a range of examples where people have constructed them on a shoestring (pdf). Recently, it launched a competition to finance and showcase this approach. The winners and finalists will participate in a workshop co-hosted by the White House Office of Science and Technology Policy.

3. Getting change into the water supply: The social sector has been described as a cottage industry — with lots of small nonprofit organizations, but relatively few that achieve major scale. It’s impossible to grow big without large sources of capital, like those most commonly available to companies. But growing big isn’t the only way to have major influence. Here are some of the ways that groups are trying to ramp up their impact more quickly:

Last September, Rare, an organization that pioneered an effective and replicable methodology for organizing “Pride Campaigns” to galvanize community conservation efforts, announced that it was merging with the nation’s largest conservation organization: the Nature Conservancy. This is an important step – and one that remains exceedingly uncommon in the nonprofit world, where personality often trumps pragmatism. To be sure, mergers are hard to make work. But the idea here makes good sense. Rare will be able to inject its approach across a wider platform, while the Nature Conservancy will benefit by absorbing the know-how of a smaller group that has developed a social technology that complements its current work.

In another important partnership announced in October, Youth Villages, one of the nation’s leading organizations providing assistance to youths and families involved in the foster care system, will work alongside the state of Tennessee to provide transitional living assistance for every 18-year-old who ages out of the state’s foster care system and needs this kind of help (the first time a state has provided such assistance for all youths). Research indicates that a young disconnected person who leaves foster care at 18 is at high risk for homelessness, early parenting, unemployment and criminality. However, Youth Villages reports successful outcomes with more than 80 percent of youth it helps. (It is currently undergoing a longitudinal impact study.)

Some other examples:

The Myelin Repair Foundation formed partnerships with Biogen, Gencia and Bionure, drug development companies, to license laboratory models and collaborate on the development of therapeutic compounds for myelin repair, with the hope of advancing a cure for multiple sclerosis.
The Interfaith Youth Core, which cultivates interfaith leaders on college campuses, is bringing together representatives from 40 universities to advance the development of a new academic field: interfaith studies.
First Book now provides discounted or free books to children in need through 90,000 classrooms and nonprofit programs, double its reach from the same period last year.
Mosaic, which began crowd-sourcing solar energy installation last January, became the first company to use this model to help finance installations on United States military housing.
The Rapid Referral approach, which makes treatment a condition of release for low-level offenders with substance abuse problems and produces a significant drop in recidivism, is under consideration by Vermont’s legislature and human services agency for statewide adoption.
Jim Thompson, founder of the Positive Coaching Alliance, gave an extraordinary TEDx talk highlighting the crucial difference between professional and youth sports.
Jill Vialet, founder of Playworks, somehow found time to author “Recess Rules,” a book for children and youths about a group of friends who rescue recess in their school. I’ve been reading it to my 10-year-old son, and it’s been making us both laugh out loud.

Happy New Year!

    In the Long War on Poverty, Small Victories That Matter, NYT, 8.1.2014,
    http://opinionator.blogs.nytimes.com/2014/01/08/
    in-the-long-war-on-poverty-small-victories-that-matter/

Progress in the War on Poverty

JAN. 8, 2014
The New York Times
The Opinion Pages|Op-Ed Columnist
Nicholas Kristof


America’s war on poverty turned 50 years old this week, and plenty of people have concluded that, as President Reagan put it: “We fought a war on poverty, and poverty won.”

That perception shapes the right’s suspicion of food stamps, minimum-wage raises and extensions of unemployment benefits. A reader named Frank posted on my Facebook page: “All the government aid/handouts in the world will not make people better parents. This is why the ideas from the left, although always made with the best of intentions, never work. ... All of this aid is wasted.”

Yet a careful look at the evidence suggests that such a view is flat wrong. In fact, the first lesson of the war on poverty is that we can make progress against poverty, but that it’s an uphill slog.
Related Coverage

President Johnson touring impoverished areas in 1964.
Washington Memo: 50 Years Later, War on Poverty Is a Mixed BagJAN. 4, 2014

The most accurate measures, using Census Bureau figures that take account of benefits, suggest that poverty rates have fallen by more than one-third since 1968. There’s a consensus that without the war on poverty, other forces (such as mass incarceration, a rise in single mothers and the decline in trade unions) would have lifted poverty much higher.

A Columbia University study suggests that without government benefits, the poverty rate would have soared to 31 percent in 2012. Indeed, an average of 27 million people were lifted annually out of poverty by social programs between 1968 and 2012, according to the White House Council of Economic Advisers.

The best example of how government antipoverty programs can succeed involves the elderly. In 1960, about 35 percent of older Americans were poor. In 2012, 9 percent were. That’s because senior citizens vote, so politicians listened to them and buttressed programs like Social Security and Medicare.

In contrast, children are voiceless, so they are the age group most likely to be poor today. That’s a practical and moral failure.

I don’t want anybody to be poor, but, if I have to choose, I’d say it’s more of a priority to help kids than seniors. In part, that’s because when kids are deprived of opportunities, the consequences can include a lifetime of educational failure, crime and underemployment.

Research from neuroscience underscores why early interventions are so important. Early brain development turns out to have lifelong consequences, and research from human and animal studies alike suggests that a high-stress early childhood in poverty changes the physical brain in subtle ways that impair educational performance and life outcomes.

A careful review of antipoverty programs in a new book, “Legacies of the War on Poverty,” shows that many of them have a clear impact — albeit sometimes not as great an impact as advocates hoped.

For starters, one of the most basic social programs that works — indeed pays for itself many times over — is family-planning assistance for at-risk teenage girls. This has actually been one of America’s most successful social programs in recent years. The teenage birthrate has fallen by half over roughly the last 20 years.

Another hugely successful array of programs involved parent coaching to get pregnant women to drink and smoke less and to encourage at-risk moms to talk to their children more. Programs like Nurse-Family Partnership, Healthy Families America, Child First, Save the Children and Thirty Million Words Project all have had great success in helping parents do a better job with their kids.

Early education likewise has strong evidence of impact. Critics note that in Head Start, for example, gains in I.Q. seem to fade within a few years. That’s true and disappointing. But in the last five years, robust studies from scholars like David Deming have shown that graduates of Head Start also have improved life outcomes: higher high school graduation and college attendance rates, and less likely to be out of school and out of a job.

Another area of success: Programs that encourage jobs, especially for the most at-risk groups. The earned-income tax credit is a huge benefit to the working poor and to society.

Likewise, a program called Career Academies has had excellent results training at-risk teenagers in specialized careers and giving them practical work experience. Even eight years later, those young people randomly assigned to Career Academies are earning significantly more than those in control groups.

As that example suggests, we increasingly have first-rate research — randomized controlled trials, testing antipoverty programs as rigorously as if they were pharmaceuticals — that give us solid evidence of what works or doesn’t.

So let’s drop the bombast and look at the evidence.

Critics are right that antipoverty work is difficult and that dependency can be a problem. But the premise of so much of today’s opposition to food stamps and other benefits — that government assistance inevitably fails — is just wrong. And child poverty is as unconscionable in a rich nation today as it was half a century ago.

    Progress in the War on Poverty, NYT, 8.1.2014,
    http://www.nytimes.com/2014/01/09/opinion/
    kristof-progress-in-the-war-on-poverty.html

50 Years Later,

War on Poverty Is a Mixed Bag

January 4, 2014
The New York Times
By ANNIE LOWREY

WASHINGTON — To many Americans, the war on poverty declared 50 years ago by President Lyndon B. Johnson has largely failed. The poverty rate has fallen only to 15 percent from 19 percent in two generations, and 46 million Americans live in households where the government considers their income scarcely adequate.

But looked at a different way, the federal government has succeeded in preventing the poverty rate from climbing far higher. There is broad consensus that the social welfare programs created since the New Deal have hugely improved living conditions for low-income Americans. At the same time, in recent decades, most of the gains from the private economy have gone to those at the top of the income ladder.

Half a century after Mr. Johnson’s now-famed State of the Union address, the debate over the government’s role in creating opportunity and ending deprivation has flared anew, with inequality as acute as it was in the Roaring Twenties and the ranks of the poor and near-poor at record highs. Programs like unemployment insurance and food stamps are keeping millions of families afloat. Republicans have sought to cut both programs, an illustration of the intense disagreement between the two political parties over the best solutions for bringing down the poverty rate as quickly as possible, or eliminating it.

For poverty to decrease, “the low-wage labor market needs to improve,” James P. Ziliak of the University of Kentucky said. “We need strong economic growth with gains widely distributed. If the private labor market won’t step up to the plate, we’re going to have to strengthen programs to help these people get by and survive.”

In Washington, President Obama has called inequality the “defining challenge of our time.” To that end, he intends to urge states to expand their Medicaid programs to poor, childless adults, and is pushing for an increase in the minimum wage and funding for early-childhood programs.

But conservatives, like Representative Paul D. Ryan of Wisconsin, have looked at the poverty statistics more skeptically, contending that the government has misspent its safety-net money and needs to focus less on support and more on economic and job opportunities.

“The nation should face up to two facts: poverty rates are too high, especially among children, and spending money on government means-tested programs is at best a partial solution,” Ron Haskins of the Brookings Institution wrote in an assessment of the shortfalls on the war on poverty. Washington already spends enough on antipoverty programs to lift all Americans out of poverty, he said. “To mount an effective war against poverty,” he added, “we need changes in the personal decisions of more young Americans.”

Still, a broad range of researchers interviewed by The New York Times stressed the improvement in the lives of low-income Americans since Mr. Johnson started his crusade. Infant mortality has dropped, college completion rates have soared, millions of women have entered the work force, malnutrition has all but disappeared. After all, when Mr. Johnson announced his campaign, parts of Appalachia lacked electricity and indoor plumbing.

Many economists argue that the official poverty rate grossly understates the impact of government programs. The headline poverty rate counts only cash income, not the value of in-kind benefits like food stamps. A fuller accounting suggests the poverty rate has dropped to 16 percent today, from 26 percent in the late 1960s, economists say.

But high rates of poverty — measured by both the official government yardstick and the alternatives that many economists prefer — have remained a remarkably persistent feature of American society. About four in 10 black children live in poverty; for Hispanic children, that figure is about three in 10. According to one recent study, as of mid-2011, in any given month, 1.7 million households were living on cash income of less than $2 a person a day, with the prevalence of the kind of deep poverty commonly associated with developing nations increasing since the mid-1990s.

Both economic and sociological trends help explain why so many children and adults remain poor, even putting the effects of the recession aside. More parents are raising a child alone, with more infants born out of wedlock. High incarceration rates, especially among black men, keep many families apart. About 30 percent of single mothers live in poverty.

In some cases, government programs have helped fewer families because of program changes and budget cuts, researchers said. For instance, the 1996 Clinton-era welfare overhaul drastically cut the cash assistance available to needy families, often ones headed by single mothers.

“As of 1996, we expected single mothers to go to work,” Professor Ziliak said. “But if they’re shelling out most of their weekly pay in the form of child care, they can’t make sense of doing it.”

The more important driver of the still-high poverty rate, researchers said, is the poor state of the labor market for low-wage workers and spiraling inequality. Over the last 30 years, growth has generally failed to translate into income gains for workers — even as the American labor force has become better educated and more skilled. About 40 percent of low-wage workers have attended or completed college, and 80 percent have completed high school.

Economists remain sharply divided on the reasons, with technological change, globalization, the decline of labor unions and the falling value of the minimum wage often cited as major factors. But with real incomes for a vast number of middle-class and low-wage workers in decline, safety-net programs have become more instrumental in keeping families’ heads above water.

The earned-income tax credit, for instance, has increased employment among single mothers and kept six million Americans above the poverty line in 2011. Food stamps, formally known as Supplemental Nutrition Assistance Program benefits, kept four million Americans out of poverty in 2011.

Above all, the government has proved most successful in aiding the elderly through the New Deal-era Social Security program and the creation of Medicare in the 1960s. The poverty rate among older Americans fell to just 9 percent in 2012 from 35 percent in 1959.

But for working-age households, both conservatives and liberals agree that government transfer programs alone cannot eliminate poverty. The answer, the White House has said, is in trying to improve households’ earnings before tax and transfer programs take effect.

“Going forward, the biggest potential gains that could be made on poverty would be in raising market incomes,” said Jason Furman, the chairman of Mr. Obama’s Council of Economic Advisers. “In the short run, that means things like the minimum wage, and in the long run, things like early education.”

If Congress approved a proposal to raise the federal minimum wage to $10.10 an hour from its current level of $7.25, it would reduce the poverty rate of working-age Americans by 1.7 percentage points, lifting about five million people out of poverty, according to research by Arindrajit Dube of the University of Massachusetts, Amherst.

But in the meantime, the greatest hope for poorer Americans would be a stronger economic recovery that brought the unemployment rate down from its current level of 7 percent and drew more people into the work force. The poverty rate for full-time workers is just 3 percent. For those not working, it is 33 percent.

    50 Years Later, War on Poverty Is a Mixed Bag, NYT, 4.1.2014,
    http://www.nytimes.com/2014/01/05/business/
    50-years-later-war-on-poverty-is-a-mixed-bag.html