An Anti-Poverty Policy That Works for Working Families

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Cross-posted on Brookings Metro’s blog, The Avenue

By Elizabeth Kneebone and Jane Williams

In his State of the Union address, President Obama remarked that few steps are “more effective at reducing inequality and helping families pull themselves up through hard work than the Earned Income Tax Credit.” The latest Census Bureau figures on the anti-poverty effects of the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) confirm their substantial impact on the well-being of families and communities across the country.

According to the Census Bureau’s Supplemental Poverty Measure (SPM)—a more nuanced measure of poverty than provided by the official definition—the poverty rate would have been 3 percentage points higher in 2012 without the EITC and the refundable portion of the CTC. For children, the impact of these credits was even greater, effectively lowering the child poverty rate by 6.7 percentage points.

The poverty alleviation effects of these refundable credits are shared across the country, benefiting every state and the District of Columbia. The map below illustrates the average number of people kept out of poverty by the combined impacts of the federal EITC and CTC using the most recent data available. (Due to sample size issues, the map presents estimates of the average annual impact of these credits based on three years of Current Population Survey data, from 2010 to 2012.)

Less populous states like Vermont and Alaska each saw more than 10,000 residents lifted out of poverty by these credits (13,000 and 16,000, respectively). In 31 states, the number of residents lifted out of poverty by the EITC and refundable CTC exceeded 100,000, reaching as high as 1.3 million in California.

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The anti-poverty impact of the EITC alone ranged from 9,000 residents in Washington, D.C. to 831,000 in Texas, where more than half of those residents were children. (See this table for detailed state data.)  In addition, for the many states that have their own version of the EITC, the combined anti-poverty impact of the federal and state credits would be even greater than what is captured by the SPM, which currently only accounts for the federal provision.

Part of what makes the EITC effective as a poverty alleviation tool is its responsiveness to changes in the economic cycle (bolstered in recent years by targeted expansions) and to the changing geography of poverty in the United States. Because this benefit is administered through the tax code, the distribution of EITC recipients has tracked closely with shifts in the location of the low-income population over time. As the low-income population rapidly suburbanized in recent years, so, too, did the geography of EITC recipients, providing an important benefit to working families in struggling suburban communities that are otherwise ill-equipped to address growing need.

However, the EITC could work better for some workers, both as a poverty alleviation tool and as a work incentive. Of the more than 26 million taxpayers who claimed the EITC in Tax Year 2012, 6.1 million were childless workers or noncustodial parents. Under current law, only workers between the ages of 25 and 64 can claim the so-called childless worker credit, and both the anti-poverty impact and work incentive aspects of this credit are dampened by its comparatively small size ($487 maximum in Tax Year 2013, compared to $6,044 for families with three or more qualifying children) and the fact that these workers phase out of eligibility much sooner (at $14,340 for single filers and $19,680 for married filers, compared to $46,227 for unmarried filers or $51,567 for married filers with three or more kids).

Accordingly, in his State of the Union address, President Obama also called for strengthening the EITC for workers without qualifying children (as have policymakers on both sides of the aisle) to make it more effective at incentivizing work and making work pay. As proposals evolve and are debated, we will release estimates of the impacts of potential expansions to the credit in the coming weeks, and how they would play out across different states and metropolitan areas.

Homepage photo/John Morgan

Smart Regional Planning Can Help Struggling Suburbs

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Smart-Growth-HomesliderSomerville, outside of Boston

By Sarah Jackson

Poverty today has become a regional challenge. It affects a wide range of places, which have varying and uneven capacity and infrastructure to help low-income residents cope and to connect them with economic opportunity.  These changes have forward-thinking planners and community groups around the country asking: Now that we understand how places are changing over time, how can we can effectively plan for those changes? What strategies make sense to ensure all residents can share in future prosperity?

The Denver area may have some of the answers. The region has been struggling with one of the most rapid shifts in the location of jobs to the suburbs in the country. By 2010 only about one in five jobs in the region was located within three miles of downtown. And as Elizabeth Kneebone and Melinda Pollack note in a recent op-ed, even when suburban residents can use transit, “they can only reach one-third of the region’s low- and middle-skill jobs on average in a 90-minute commute.”

To address this, the region is in the midst of a transit expansion project to build new commuter and light rail and improve bus services across eight counties. But most impressive are the ideas developers have come up with to ensure all residents of the region can benefit from this investment.

The new Mile High Transit-Oriented Development Fund, for example, is leveraging public and private dollars to increase access to affordable housing, jobs, and services around transit sites. The Urban Land Conservancy (ULC), Enterprise Community Partners, and the City and County of Denver partnered with public and private funders to create the fund. The fund aims to create and preserve at least 1,000 affordable homes along current and future high-frequency bus and rail corridors. The plan is to take the model region-wide in 2014.

“Locating affordable housing in transit corridors allows households to reduce expenses, while increasing access to employment, educational opportunities and services,” organizers write on ULC’s website.

Recognizing the intersection of housing, transportation, and jobs, the U.S. Departments of Transportation and Housing and Urban Development have put together a new location affordability portal that aims to help residents make better decisions about how housing and transportation costs affect the affordability of a given area.

In Boston developers are also working to connect neighborhoods and promote principles of smart growth, like coordinated planning around affordable housing, transportation, and economic development decisions, which, they say, also promote equity.

Speaking at a recent conference there, Larissa Brown, director of community planning at the local firm Goody Clancy, laid out the smart growth design principles that planners designing for today’s suburbs should incorporate:

  • Design for people first, then cars.
  • Promote connections between towns, rather than isolation from adjacent areas.
  • Balance open spaces with high-density development.
  • Orient buildings to the public realm and to the connecting streets.

Planners like Brown advocate developing a variety of housing types and promoting mixed-use development where feasible, allowing housing to coexist with retail, work places, and recreation; enabling people to live closer to their jobs or transit; and making it easier for struggling residents to access needed services.

Planners say zoning reform—improving the way communities allocate land, zone, and permit—is also a key piece of the puzzle. Communities that allow higher density neighborhoods and more affordable housing can ensure poor residents are not priced out of developing neighborhoods and communities entirely as they change.

As Elizabeth and Alan argue in Confronting Suburban Poverty in America, communities need to work together to plan regionally. As Alan noted with Natalie Holmes last month, developing “quarterbacks,” or lead organizations that operate across multiple communities and programs to coordinate resources and market expertise is another smart model for change.

The Massachusetts Smart Growth Alliance’s Great Neighborhoods program is a good example of a quarterback. The program has partnered with five communities in the Boston area to better support affordable housing development, preserving open space, and building alternative transportation infrastructure that encourages walking and biking. They’ve worked to help local residents, community leaders, and municipal and state officials achieve their goals more quickly by providing resources and technical assistance.

The Great Neighborhoods program has helped cities and towns collaborate across issue areas and agencies to work at a regional scale, creating hundreds of affordable housing units and miles of new parks while engaging thousands of community members. As we respond to changing demographics, that’s a future plan more suburban communities across the country should get behind.

Photo/Darcy

Confronting Suburban Poverty in Park Forest, Illinois

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We are pleased to share with you a recent review of Confronting Suburban Poverty in America by Mayor John Ostenburg of Park Forest, IL, a suburb in South Cook County facing rising poverty. In it, Mayor Ostenburg connects the challenges presented in the book to the experiences his community is facing:

Thirty years ago, few would have envisioned the day in Park Forest when one of its churches would operate a food pantry that feeds approximately 350 local families per week. But that’s what St. Irenaeus Church does today.

Likewise, few would have thought it necessary for two local churches to provide homeless shelter twice a week from October through April, but today both St. Irenaeus and Holy Family Church do just that through participation in the PADS program.

And who, thirty years ago, would have believed that it one day would be necessary for Habitat for Humanity to renovate Park Forest homes that had gone into foreclosure and disrepair, and subsequently make those homes available to families in need of housing, giving them the opportunity to use “sweat equity” as a part of their down-payment? But that’s happening right now.

The reality is, poverty has come to the suburbs.

That’s the basic message of a book by Brookings Institution researchers Elizabeth Kneebone and Alan Berube. Confronting Suburban Poverty in America is the result of their research in major municipal regions across the nation. It presents the startling conclusion that “today more Americans live below the poverty line in the suburbs than in the nation’s big cities.”

At the outset of their text, Kneebone and Berube draw an illustration that could be a picture of early Park Forest.

“In many ways, suburbs have been central to the particular brand of the American dream that developed rapidly after World War II. Moving to suburbia signaled a step up—a house with a yard, a car to drive to work, good schools, and safe streets.”

Wasn’t that what William H. Whyte was writing about in the chapters of The Organization Man that focused on Park Forest?

But today, in many ways, Park Forest is illustrative of a different type of American suburb, the one Kneebone and Berube are talking about when they write the following.

“The economic tumult of the 2000s not only helped propel the size of America’s poor population to record levels but also contributed to its broadening geographic reach. Rising poverty touched all kinds of communities around the country, moving well beyond the declining and at-risk suburbs.”

The Brooking researchers not only document how, and to what extent, poverty has increased in suburban America, but also point out that the major programs intended to address issues of poverty now are fifty years old, having been born of the “Great Society” legislation signed into law by President Lyndon Johnson. Furthermore, they also explain that the great majority of those programs remain concentrated in the inner city, far removed from where an increasing need for them exists today.

But all is not doom and gloom. The Brookings folks point to a number of activities that have occurred in communities across the U.S. as local leaders seek to find ways out of the poverty malaise. The key to the success of these efforts, they say, is collaboration. Two of the primary examples they reference are found right here in Chicago’s south suburbs.

“To the south of Chicago, stretching into suburban Cook and Will counties, lies a series of suburban municipalities collectively referred to as the Chicago Southland, including the likes of Blue Island, Dolton, Harvey, Lansing, Park Forest, and South Holland,” they write. “As manufacturing and steel jobs began to disappear in the 1970s, many of these communities experienced income declines and poverty increases more typical of the city’s South Side than of its suburbs.”

But, they continued, under the auspices of the South Suburban Mayors & Managers Association (SSMMA), two entities have emerged that are seeking solutions to the loss of jobs, the need for workers to be re‐trained, and the challenge of deteriorating housing conditions. One is the Chicago Southland Economic Development Corporation (CSCDC) and the other is the Chicago Southland Housing & Community Development Collaborative (CSHCDC).

“The [Southland] suburbs joined forces around issues such as municipal management and planning, bond issuance and purchasing, brownfield remediation, public safety, infrastructure, and transportation,” Kneebone and Berube write. “As the foreclosure crisis began to strike, they turned again to this model to access the first wave of Neighborhood Stabilization Program (NSP) funding—emergency assistance for state and local governments aimed at stabilizing home values in neighborhoods hardest hit by the foreclosure crisis.”

I’ve had the opportunity to serve on two panel discussions regarding the work of the Brookings researchers—with Kneebone in a program at the Federal Reserve Bank in Chicago, and with Berube in a session at the National League of Cities Congress of Cities in Seattle—and I have found both of them to be realistic about the economic decline that has hit so many American suburbs, but also optimistic about the opportunities we have to put things right. This book details their thinking. It’s a good read for anyone who wants to see America’s suburbs thrive once again.

Mayor John Ostenburg

Food Stamps Respond to the Changing Geography of American Poverty

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Cross-posted on Brookings Metro’s blog, The Avenue

By Jane Williams and Elizabeth Kneebone

At the end of January, the House of Representatives passed a new $1 trillion five-year Farm Bill, by 251 votes to 166. The bill, which is now on its way to the Senate where it is expected to pass, cuts $8.6 billion from the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) over the next 10 years—significantly less than House Republicans had previously proposed, but more than Democrats had initially agreed to.  The main provision of the bill changes aspects of the SNAP benefit calculation that would affect benefits for roughly 850,000 households, who would see an average decline in monthly benefits of $90 according to the Congressional Budget Office.  However, benefit levels for more than 96 percent of the nation’s 48 million SNAP recipients would not be affected under this compromise.

That’s good news, as SNAP recipients already saw their benefits cut in November following the expiration of the 2009 Recovery Act expansion to the program.  As recent news coverage has highlighted, the families and individuals affected by those cuts are already some of the country’s most vulnerable.  An overwhelmingly large percentage (87 percent) of SNAP recipients live in households with children, seniors, or people with disabilities.  Upwards of 21 million children in the United States—more than one in four nationally—live in households receiving monthly food support through SNAP.

This past summer, we pointed out that SNAP recipients are increasingly likely to reside in suburban areas.  Just as poverty has shifted decidedly toward suburbs over the last several years, so has the geography of households receiving food assistance.  According to our analysis of the latest American Community Survey data, the number of suburban households receiving SNAP benefits grew by 116 percent from the start of the Great Recession in 2007 to 2012, compared to a 79 percent growth rate in the country’s largest cities.  By 2012, 55 percent of SNAP households in the country’s largest metropolitan areas were located in the suburbs, up from 51 percent in 2007.

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The responsiveness of this program is part of what makes it effective at alleviating poverty for residents across the country.  The recent release of the Census Bureau’s Supplemental Poverty Measure (SPM) shows that, each year between 2009 and 2012, the SNAP program lifted an average of 4.8 million people above the poverty line, including 2.1 million children. Every state benefited from SNAP’s poverty alleviation effects—from Texas, where nearly 470,000 individuals were lifted out of poverty per year by the program, to the District of Columbia, where the corresponding figure was 14,000.

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There are many steps that local leaders can take to more effectively address today’s geography of poverty, as outlined in our recent book Confronting Suburban Poverty in America.  However, these efforts on their own—absent a functioning federal safety net—would be insufficient to address the scope and scale of today’s need.  Effective federal programs like SNAP provide an essential foundation that helps working families meet their basic needs, regardless of where they live.  As poverty rates remain stubbornly high years after the official end of the Great Recession, that foundation remains critical to the economic stability of millions of struggling families across the country.

Finding Health Care in the Suburbs When You’re Poor

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LakewoodGarrPhotoLakewood, a suburb of Cleveland, OH

By Barbara Ray

“There is a new group of people who don’t know where to go for help. They are newly poor and don’t know what to do.”

That quote, in Scott Allard and Benjamin Roth’s 2010 report on the social service challenges posed by suburban poverty, still rings true today, as millions of Americans  continue to struggle to regain lost ground after the recession. Many of them are newly poor and find themselves invisible in the suburbs.

Take for example, Christine Shearheart, a Cleveland area resident who was laid off in June 2010. She found herself turning to North Coast Health Ministry (NCHM), a free health clinic in suburban Lakewood serving low-income families and individuals.

“I knew I didn’t have health care and I knew I couldn’t afford it living on unemployment,” she said in a video on NCHM’s website. “There’s so many people in my position that aren’t old enough to be on Medicare but are without any health care whatsoever, and there’s a gap that needs to be filled.”

Lee Elmore, executive director of NCHM, remarked that “even with Medicaid expansion, we expect there to be over 70,000 uninsured individuals in Cuyahoga County in 2014. We are seeing more people who are uninsured and without a job for the first time in their lives. They don’t have any experience with the social service safety net and need help finding resources.” They are also deeply embarrassed, he wrote.

NCHM is a lifeline for these families, but it is one of only a handful of social service providers located in Cleveland’s suburbs. The growing number of low-income residents outside of Cleveland—who now account for 56 percent of the metro area’s poor population—must often travel downtown for medical care and other essential services. Yet, as Elmore noted, “as public transportation has become more limited in some portions of the Cleveland metro area, getting to these other providers of care can be quite challenging for many who reside outside of the central city.”

NCHM is also struggling with another issue: capacity. Not being a federally-subsidized clinic, it’s funded largely by foundations. But as other agencies that previously relied on government funding find that source drying up, they too are turning to local foundations. “The competition for funding from our longtime foundation partners has never been greater,” Elmore said. Limited funding means they can staff only one full-time physician and nurse practitioner, even as demand rises.

By investing in the expansion of Consolidated Health Centers, the implementation of the Affordable Care Act (ACA) presents an opportunity to address these service gaps, not just by increasing health care coverage of low-income residents, but also by helping to grow health care capacity in underserved communities. These new dollars represent an important infusion of funds into struggling places. But the question remains: to what extent will these capacity building efforts target hard-hit suburbs like Lakewood? (So far for Cleveland’s suburbs it hasn’t. The last round of funding for new access points invested in the city of Cleveland, but not in the suburbs. The latest round of funds has not yet been awarded.)

Without waiting for Washington, communities in suburban Chicago are finding ways to improve access to health care through a novel partnership. For years, the DuPage Community Clinic was the only free health clinic in the 337-square-mile suburban DuPage County. In 2011, it joined with Access DuPage to expand its reach. As a collaboration of hospitals, physicians, local governments, human services agencies, and community groups, its network includes more than 100 private physicians’ offices and four federally qualified health clinics. It enrolls about 14,000 low-income DuPage residents annually, according to a recent report.

That approach seems to be having an impact, as a recent evaluation finds. One of the authors, Melissa Simon, M.D., told the Northwestern University news team:

The dramatic demographic change that suburban counties are experiencing exacerbates the lack of a health care safety net.…traditionally located in urban centers. Creative solutions are required to expand access and improve medical care for high risk, medically underserved populations. Such creativity pivots on successful partnerships between community-based organizations, public health institutions and academic medical centers.

More of this creative thinking is clearly needed to make sure the safety net is stretching to meet the health needs of an increasingly suburban underserved population.

Photo/Chris Garr

Wanted: Suburban Quarterbacks

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By Alan Berube and Natalie Holmes

During our travels around the country, we’re often confronted with the question, “Is suburban poverty better or worse than urban poverty?” A good one-word answer is: “Depends.”

A better question to ask might be, “How is suburban poverty different from urban poverty?” To that, a good one-word answer is: “Capacity.”

Most suburbs simply haven’t built the infrastructure that cities have over the past few decades to tackle the issues facing low-income families and communities. At the same time, existing safety net programs in suburbs are highly siloed and fragmented, frustrating effective delivery. By bringing high-capacity organizations to scale and encouraging collaboration between smaller service providers where a larger regional anchor group may not exist, we could greatly enhance the reach and effectiveness of suburban anti-poverty efforts.

Hence, our call in Confronting Suburban Poverty in America for “quarterbacks” that can operate across multiple communities and programs to bring resources and market expertise to bear on suburban poverty. That’s a concept we borrowed from the 2012 book Investing in What Works for America’s Communities, a joint project of the Low Income Investment Fund (LIIF) and the Federal Reserve Bank of San Francisco. In that volume, David Erickson, Ian Galloway, and Naomi Cytron envisioned quarterbacks as high-capacity, high-performing local organizations whose job was to “identify and build on…areas of leadership and strength, as well as to build capacity in the gaps.”

It was great to see, then, that in early December, Citi Foundation and LIIF announced the inaugural recipients of Partners in Progress grants. Each of the 13 organizations selected will be awarded a one-year $250,000 grant to support its work as a “Community Quarterback.” According to the announcement, grantees will work to “develop or expand networks that connect efforts to improve places—for example, housing, transportation, and community safety—to opportunities for people—such as jobs, childhood development, educational opportunities, health care, and other services.” Those grants will support each organization to work in a targeted community where it will help knit together these various strategies. For instance, Frazier Revitalization in South Dallas, Texas, will use the grant to coordinate the activities of a diverse group of stakeholders involved in transforming the Hatcher Station Village neighborhood through housing, health care, business development, and community support services.

Many of the organizations selected by Citi and LIIF explicitly demonstrate the qualities we found so important for success in confronting suburban poverty. Scale helps organizations serve their clients with efficiency that may not be not possible for smaller organizations, delivering better outcomes with the same, or even fewer, inputs. (These are the groups that, as Urban Institute President Sarah Wartell puts it, “figure out how to get $1.20 of value from $0.80.”) Because of their size and diversity of services they provide, scaled organizations can access a wider array of funding, which in turn may confer stability. They may also be able to invest in better organizational infrastructure, and to attract talented employees with higher salaries. By backing high-capacity organizations including BRIDGE, CCLF, CASA, and LINC Housing, Citi and LIIF are stretching their dollars for greater impact.

Collaboration among smaller service providers and/or geographically diffuse groups is a way to emulate scale in the absence of a single, scaled service provider. Collaboration can help to overcome the fragmentation and proliferation of systems, sectors, jurisdictions, and agencies—and break down policy and program silos. Recognizing the potential returns to collaboration, Partners in Progress selected organizations to receive funding that are explicitly collaborators in their communities.

These approaches are crucial for building a stronger safety net and greater access to opportunity in suburban areas, where the majority of America’s poor now live, and where poverty is growing most quickly. This is not to say that the same strategies are not also well-suited to address urban poverty. But the quarterback model is arguably needed even more in suburbia, to help strategically close the capacity gaps facing so many of those communities.

However, just two of the 13 Partners in Progress grant recipients—CASA de Maryland, in Langley Park, Maryland; and Neighborhood Housing Services of South Florida, in unincorporated Miami-Dade County—received support for work outside of an inner-city setting.

(In a similar vein, on January 9, the first five communities to be awarded the Obama Administration’s new Promise Zone designation—which provides those areas with enhanced technical assistance and preferences in accessing a bevy of federal place-based anti-poverty investments—included no suburbs.)

It may well be that the intensive, place-based strategies encouraged by the Partners in Progress program are not well-suited to more spread-out suburban populations. Or the funding to sustain such efforts beyond a planning phase may not exist in many suburbs. Or existing suburban quarterbacks (or collaboratives that could fill the same role) may lack the visibility to attract philanthropic investment. The end result, unfortunately, is that poor suburbs that could benefit from the presence of strong quarterbacks may lose out from the services they can help provide, and the investment that such organizations can attract.

Nevertheless, here’s hoping that the first round of the Partners in Progress project proves a tremendous success, and gives the effort a chance to expand further into the growing number of suburbs that so greatly need strong quarterbacks and the capacity they provide.

Homepage Photo/Jim Larrison

The GOP and the Next War on Poverty

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ryanBy Sarah Jackson and Alan Berube

On the 50th anniversary of President Johnson’s War on Poverty, leading Republicans have been taking to the speaking circuit calling for new solutions.

“I would give us a failing grade,” Rep. Paul Ryan (R-Wis.), chairman of the House Budget Committee, told NBC News at an event last week. “It has failed. We should’ve done better than this. We can do better than this.”

Speaking at Brookings this week at a summit on social mobility, Ryan said federal antipoverty programs take a “haphazard, Whack-a-Mole approach … because the federal government created different programs to solve different problems at different times.” He continued, “There is little to no coordination among them.”

Ryan, who’s been traveling to low-income neighborhoods across the country for the past year to talk to local leaders, called for a more streamlined approach that allows for leadership from community members and the poor themselves. “Washington does not have all the answers,” Ryan told the crowd at Brookings. “Only the people in the community can solve the problems facing their community.”

On his travels, Ryan may have seen that the landscape of poverty has changed a great deal since President Johnson was in office. For one thing, it has moved increasingly into the suburbs outside of cities like Milwaukee and Madison, not far from Ryan’s Wisconsin hometown of Janesville. More poor people now call the suburbs home than cities.

Yet federal programs designed to fight poverty two generations ago have not kept pace. Many suburbs have yet to build the civic infrastructure that cities have to help low-income families. Poverty in the suburbs often spreads across a larger geographic area than in cities, covering multiple jurisdictions that aren’t accustomed to working together. Federal antipoverty funding doesn’t do much to help spread necessary infrastructure, and presents obstacles to collaboration among providers and local governments.

Ryan’s remarks focused primarily on how people-based programs—like Medicaid, food stamps, and child care subsidies—could be blended to enhance coordination and remove work disincentives associated with program phase-outs. But that logic applies at least equally to place-based programs, such as those for affordable housing development, community health care, and low-income schools. Instead of giving small amounts of money to many fragmented on-the-ground actors, we can stretch limited federal investment further by encouraging greater collaboration and integrated problem solving at the state and metropolitan levels.

Ryan warned against policymakers who “sit in our think tanks in Washington and say, ‘Oh we’ve got the answer. It’s this program. It’s money here and money there.’” That being said, he might be pleased to read some of the case studies on our website and in Confronting Suburban Poverty in America. “Let’s talk to the people who are actually fighting poverty successfully,” Ryan told Brian Williams, “and see what we can do to support people there.”

We’ve talked to local leaders around the country, and it’s clear that we should invest more in organizations that are able to confront both urban and suburban poverty at scale. Greater Houston’s Neighborhood Centers is blending more than 30 federal government funding streams to serve clients at more than 60 sites across the region. IFF (formerly Illinois Facilities Fund) is providing crucial research and lending services to regions across the Midwest to help develop needed services like affordable and supportive housing in their communities. Those are bottom-up models worth spreading.

They are also one step ahead of Senator Marco Rubio (R-Fla.) who, in a speech last week, called for turning federal antipoverty funding over to the states in the form of a “Flex Fund”—block grants that would presumably combine all manner of people- and place-based antipoverty programs.

That’s a bridge too far. Federal programs like food stamps, Medicaid, and the EITC are effective (something that those who deem the War on Poverty a “failure” conveniently ignore) precisely because they work harder when poverty rises, something block grants don’t do. But some incremental steps in Rubio’s direction would undoubtedly help. Our proposed Metropolitan Opportunity Challenge would repurpose a fraction of existing place-based federal antipoverty funding to enable more regional solutions to poverty. The challenge would award resources to states though a competitive process, encouraging state and local governments to organize programs and delivery systems in creative ways that focus on real outcomes for people and places.

“It’s wrong for Washington to tell Tallahassee what programs are right for the people of Florida,” Rubio said. “But it’s particularly wrong for it to say that what’s right for Tallahassee is the same thing that’s right for Topeka and Sacramento and Detroit and Manhattan and every other town, city, and state in the country.”

The rise of suburban poverty adds relevance and urgency to Rubio’s and Ryan’s calls for greater local autonomy in the next War on Poverty. Far short of dismantling the federal safety net altogether, though, there are smart, bipartisan moves we can make right now that build on local successes in addressing the new landscape of poverty.

Photo/Brookings 

Suburbs on $7.25 an Hour

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By Sarah Jackson and Elizabeth Kneebone

Fifty years after President Johnson called for an expanded minimum wage in his State of the Union speech that launched the War on Poverty, the nation is once again debating the merits of a minimum wage hike.

This is timely, if not overdue, as today’s federal minimum wage of $7.25 an hour is effectively $2.15 lower than it was in 1964, after adjusting for inflation. (Many states today do have minimum wages above the federal level.)

More than that, however, the profile of minimum wage workers has shifted dramatically in the last few decades. Rather than teens working after school or summer jobs, according to the Economic Policy Institute, the typical worker likely to be affected by a raise in the minimum wage today is a woman in her 30s working full-time, with a family to support.

And like most Americans, minimum wage workers are suburbanites.WalmartCropThey include parents like Shawndrakae Mack, a single mom of two teenagers who works at the McDonald’s on Edisto Island, a suburban beach community near Charleston, South Carolina, and earns $7.60 per hour. Mack told the Charleston Post and Courier that she relies on food stamps and Medicaid to supplement her income and has trouble affording the athletic equipment her kids need for school.

Or they are workers like Semaj Ransom, 39, who was hired in February at Jack in the Box in the Bay Area suburb of Hayward, California, for a full-time position at $8.50 an hour. But, he says, he rarely gets a full schedule. Ransom told the San Jose Mercury News his hours fluctuate drastically week-to-week, “so you can’t even save.”

Like Mack and Ransom, roughly one in four workers living in the suburbs works in a low-wage occupation (i.e., an occupation where at least 25 percent of workers make less than $10 an hour).  Many are employed in retail, restaurant, and other low-wage service jobs. In fact, according to our colleague Jane Williams’ analysis of American Community Survey data, suburbs are home to two-thirds of all workers employed in such jobs in the nation’s largest metro areas.

Given that suburbs are where the bulk of low-wage work and workers are found, Alan Berube recently observed that “it stands to reason that measures to boost their wages, like minimum wage and living wage campaigns, could be important tools for addressing the economic hardships facing suburban workers and communities.”

Some argue that raising the minimum wage beyond $10 an hour will be a job killer. Others worry that a higher minimum wage could push up prices or create “border wars” with neighboring locales that keep wages low to attract businesses.

But as the Washington Post recently reported, new research from Arindrajit Dube at the University of Massachusetts-Amherst concludes that increasing the minimum wage would reduce poverty, without detectable impacts on employment.

Workers in suburban SeaTac in Washington State, where voters approved a raise in the minimum wage to $15 an hour, are certainly pleased.  Many families say this will enable them to put healthier food on the table, afford car repairs, or to save for an emergency fund. (A recent court ruling, however, said that SeaTac voters do not have the authority to raise wages for SeaTac airport workers, who operate under the auspices of the local port authority.)

But as Alan pointed out, piecemeal efforts like SeaTac’s are not a long-term solution. Creative responses and jurisdictional collaboration are necessary to combat these new challenges and address suburban poverty at scale.  That is also true for the minimum wage.

Washington, D.C., is a case in point.  Local leaders there created a regional pact to all raise the minimum wage.  The city council voted to increase the city’s minimum wage in stages to $11.50, and the adjoining Maryland suburban counties of Montgomery and Prince George also voted to raise their minimum wages to $11.50.

Suburbs should be allies for larger policy efforts to raise minimum wages at the national and state levels. Five decades on from President Johnson’s speech, President Obama is likely to call for a federal minimum wage increase in his State of the Union address later this month. For the many suburban families who are working hard and struggling to survive on meager wages, those increases couldn’t come soon enough.

Photo/Ben Schumin

Does the Suburbanization of Poverty Mean the War on Poverty Failed?

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Also cross-posted on The Avenue

By Elizabeth Kneebone and Alan Berube

LBJStateofUnion

On the 50th anniversary of President Johnson’s State of the Union speech announcing a “War on Poverty,” pundits and analysts are in full swing, judging the war to have been a qualified success, an outright failure, or something in between. The current official measure—15 percent of the population, or 46 million people, living below the federal poverty line—suggests, at best, a mixed result over the past five decades.

Alongside this stubbornly high rate, the geography of poverty has changed dramatically in America. In his 1964 address, Johnson spoke about the need to pursue poverty “in city slums and small towns, in sharecropper shacks or in migrant worker camps, on Indian Reservations…in the boom towns and in the depressed areas.” But today, the suburbs are home to more than one-third of the nation’s poor (up from less than one-quarter in 1970), and 3 million more poor individuals live in suburbs than in cities. Given these statistics, some might be tempted to conclude that the War on Poverty has failed.

However, this would paint our nation’s anti-poverty efforts with far too broad a brush. After all, the War on Poverty laid the foundation for what, today, remain key pillars in the nation’s anti-poverty arsenal—from Medicaid and Medicare to food stamps. New research shows how these safety net programs have alleviated poverty for millions of people, especially in recent years as economic recession and growing low-wage jobs have left many families struggling to make ends meet. Those policies, and others adopted in their wake (e.g., the Earned Income Tax Credit), help society meet the challenges of poverty wherever they occur—in suburbs, cities, small towns, and rural areas.

Beyond these initiatives, however, the War on Poverty also recognized that place matters in shaping individuals’ access to opportunity. It ushered in a number of initiatives that sought to grapple with poverty in distressed communities. Some, like Title I, worked to improve economic conditions in those places. Others, like Community Action Agencies, Head Start, and Community Health Centers, focused on delivering safety net and work support services in high-need areas. Still others, like the Fair Housing Act, sought to open up residential opportunities for low-income and minority residents in better-off areas.

In Confronting Suburban Poverty in America, we estimated that, five decades on from Johnson’s call to action, the federal government runs 81 place-based anti-poverty programs spread across 10 different agencies, investing $82 billion annually as of 2012. By and large, these programs were built to address the landscape of distress described in Johnson’s speech, targeting entrenched urban and rural poverty. Many have proven inflexible and slow to adapt to suburban needs. The infrastructure, access points, and local expertise and political will on which the success of these programs relies simply do not exist in many suburbs today. “Neighborhood economic development” doesn’t work very well in areas that don’t have any economic developers—or actual neighborhoods, for that matter.

There are many lessons to be learned from the successes and failures of these place-based policies since the War on Poverty began. Among the clearest is that we can’t rely on 50-year-old architecture to succeed in addressing the broader reach and scale of today’s need, particularly in a resource-constrained environment. Moreover, the suburbanization of poverty reflects the suburbanization of the American economy writ large, and a structural shift that has failed to produce sufficient numbers of good-paying jobs that lift workers and families out of poverty. The next War on Poverty must arm regional institutions that work across urban and suburban lines to grow more and better jobs.

Without waiting for Washington, local and regional leaders across the country are modeling innovative strategies and finding more scaled, collaborative, and strategically funded ways to address the challenges of poverty region-wide. By building on early successes in metro areas like Chicago and Seattle, local leaders can lift up the strategies that work—not only in terms of creating better access to education, services, and jobs for low-income residents and communities in the short run, but in creating better economic opportunities within struggling communities (whether urban or suburban) in the long run.

But these leaders shouldn’t go it alone. The federal government must also modernize its place-based approach, providing the support and incentives to help confront poverty at the metropolitan, regional scale of the economy. Failing to update policy and practice risks recreating in suburbs the challenges of concentrated disadvantage that continue to plague many cities and rural communities.

The 50th anniversary of the War on Poverty is not just a time to reflect on what has, or has not, been accomplished in the last five decades. It is also an opportunity to look forward and plan for where we want to be 50 years from now. President Johnson, to his credit, foresaw this need. Four months after his State of the Union Address in 1964, he delivered commencement remarks at the University of Michigan. There, he described the challenge of the next half century as the building of a Great Society, one that “is not a safe harbor, a resting place, a final objective, a finished work. It is a challenge constantly renewed.”

Photo/LBJ Library photo by Cecil Stoughton