Five Things We Can Do to Reduce Poverty

This week there's been discussion about rising trends in poverty, the fragility of the safety net, the possibilities and limits of social enterprise, and obstacles to reducing poverty. Despite the challenges ahead, I think it's important to recognize there is a lot we can do to reduce poverty and create solutions that will help families weather tough economic times in the coming decade.
More after the jump . . .
1) Give $25 to a Local Charity. It sounds modest at first, but if every person in your neighborhood gave just $25 to a local charity or nonprofit service provider they hadn't supported before - we'd inject billions of private giving into programs helping the poor. The Obama campaign has demonstrated how this kind of grassroots giving can generate large pools of resources in short order. Don't know where to give? Contact your local community foundation or United Way, and ask which nonprofits are helping working poor families in communities with the most pressing need.
2) Expand the Earned Income Tax Credit (EITC). The EITC is the largest cash assistance program for working poor families today - providing nearly $5 in assistance for every $1 we provide through traditional welfare programs. One of the EITC's key strengths is that it "makes work pay" by providing wage supplements to millions of low-income workers that help to lift many of them out of poverty. Not only could the amount of the credit be increased to provide more income to working poor families, particularly to low-income childless workers, but eligibility could be expanded to include a broader range of working poor households, and the phase out could be flattened to allow more working poor families to remain eligible as their earnings increase (click here to see the Brookings Institution's work on the topic). The federal stimulus package enacted some expansions in the EITC for larger families and married couples, but more can be done.
3) Cash for Clunkers II. Now that the middle class has got its $3 billion in fuel-efficient auto upgrade subsidies, how about we do something for working poor families who can't access most areas of job growth easily by public transit and who can't afford a car? Studies show that cars are key to increased work earnings among the poor - although it wouldn't be an easy sell, it could reap huge payoffs.
4) Building on the Success of New Hope. The New Hope Project implemented in Milwaukee during the mid-to-late 1990s offered working poor adults a bundle of services through neighborhood-based agencies: earnings supplements, subsidized child care, and health insurance. To be eligible, clients had to work 30 hours per week, but had access to temporary community-service jobs and caseworker referrals for social services that would support job search activity. Not only did New Hope program participants experience better work outcomes and higher earnings, but the children of New Hope participants also did better in school. A program like New Hope indicates how communities can bring together a wide array of services and assistance to improve work outcomes among low-income families.
5) The Potential of Promise Neighborhoods. A centerpiece of President Obama's antipoverty strategy and modeled after the successful Harlem Children's Zone (HCZ) in New York City, the Promise Neighborhoods initiative would channel education and social service program resources in targeted neighborhoods to provide coordinated, comprehensive help for low-income children and their families. I toured a few HCZ schools earlier in the spring and was extremely impressed with the children, staff, services, and facilities. But, this set of programs and schools was built very carefully through sustained leadership and generous private support over many years. Those interested should read both Steve Smith and Elizabeth Kneebone's posts about the possibilities of such grassroots innovations to reduce poverty. The partnerships needed and results anticipated can't be expected to happen overnight. Part of me also worries that federal efforts to support scale up of initiatives like HCZ might transform them into 21st Century versions of the Great Society's largely ineffective Model Cities program - too many targeted areas, too little money, too much regulation, too much politics. Nevertheless, the idea of Promise Neighborhoods is one of great promise for reducing poverty, educating children, and ensuring greater well-being among working poor families.
And, hey, it's Friday - so here's another idea I've been thinking about:
6) Think Local Food Pantries. In my visits to dozens of communities and conversations with hundreds of service providers, I'm convinced that food pantries are the best barometers of need in our communities. But more than that, they present opportunities to triage need. Food pantries often are the first place families go when in need and pantries are in a position to help these families before things get much worse. Many pantries today offer a variety of services and assistance beyond food - helping them to do more would be a great investment in the safety net.
It bears repeating that any successful antipoverty strategy will require public and private funding, national and local leadership, government agencies and nonprofit social enterprise. We need all hands on deck and all tools in our toolboxes if we are to make a dent in poverty over the next decade.
Thanks to TPM for providing space for us to discuss issues of poverty and the safety net this week.




















This book was a great read but I disagree with extending the EITC and other work support type of programs. Seems to me that if anything these types of programs (EITC and Child Care subsidies especially) have done as much or more to keep real wages low for lower income jobs as has the disintegration of unions.
For every 10% increase in the generosity of the EITC there is a correlating 4% decline in wages in low-wage industries. So who is getting the subsidy? The employer or the employee? (See http://papers.ssrn.com/sol3/papers.cfm?abstract_id=473445) When employees receive the EITC, Child Support and other subsidies and without unions to make the case, there is little pressure on employers to up wages--they don't need to. Employees use the EITC to make up for wage shortfalls. The EITC is such a bait and switch kind of program. Why is it we are spending billions of TAX dollars to prop up low wage industries? Lots of other research (that has been suppressed for the most part) shows that increases in minimum wage do not lead to massive job losses or that jobs lost are quickly recovered. With the EITC--there is less pressure to increase minimum wage.
August 7, 2009 12:29 PM | Reply | Permalink
Re #3. There's another solution there. Car insurance rates now differ hardly at all based on mileage driven. Even though crashes and costs are very closely correlated with miles. Shifting to rates based on miles would cut down a lot on crashes and costs. A good analysis for California concluded this would save the average driver about $250 a year, largely because there would be so many fewer deaths to pay off for. And it would create total savings of TENS of BILLIONS of $ per year just in California. And it would make it much easier for lower income people to afford insurance. Now low-mileage drivers subsidize the high-mileage ones. And low--mileage drivers are generally less affluent. Some groups are trying to get California to do this (partly just to follow the current law, which isn't being done). http://www.brookings.edu/papers/2008/07_payd_bordoffnoel.aspx
August 7, 2009 1:05 PM | Reply | Permalink
This list is so miserable that I cannot believe I am reading it. Does Ronald Reagan really need channeling?
Here are five things we can really do to help reduce poverty:
1. Make unionizing easier, for starters by passing an undiluted Employee Free Choice Act. Did you notice Obama dropped the ball on that? Did you notice TPM is not picking the ball either? Unionized workers can impose higher wages, hence lower poverty.
2. Give a bail out to states with as much money as was pumped into the banking industry. OK. maybe 8 trillion is too much. How about 1 trillion? States pay most of the services for the poor, and states are right now in service cutting mood because they have no funds.
3. Pass a federal living wages law, adjustable to the local cost of living.
4. Impose a significant tax on employee turnover.
5. End the drug war.
6. OK, I promised five. But this one is a winner. Legalize the hunting of Washington lobbyists. The surest way to win the Second Amendment folks to the progressive cause.
August 8, 2009 11:04 AM | Reply | Permalink