Fighting stubborn poverty numbers

Self Help Credit Union in North Carolina was founded 30 years ago to address the growing wealth gap, but economic inequality has gotten worse since then, says founder and CEO Martin Eakes. (Image is a still from the video below.)

The Mary Reynolds Babcock Foundation funds organizations in the South working to move people and places out of poverty. The foundation has launched a "Southern Voices" oral history project to capture the stories of Southern leaders working for social and economic justice. The latest installment features stories about organizations in the South working to address stagnant wages and poverty. For more stories from the project, click here. (Disclosure: The Mary Reynolds Babcock Foundation is a funder of the Institute for Southern Studies.)

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Despite improving employment numbers, the U.S. Census Bureau announced Wednesday the poverty rate in 2014 remained virtually unchanged from 2013 — its fourth consecutive year of statistical stagnation. At 14.8 percent, 46.7 million Americans lived in poverty last year (defined as $24,230 or less for a family of four). There has also been negligible change in income for three years in a row, and wages still haven't caught up to pre-recession numbers. Last year's median household income was $53,657, about $3,700 lower than in 2007, adjusted for inflation.

The static income and poverty numbers are especially disappointing given the dramatic increase in the number of working Americans. Last year, about 2.8 million more people worked full-time than in 2013. This paradox underscores the need not just for jobs, but for better wages. Economists at the Center on Budget and Policy Priorities say the poverty and wage stagnation reflects, in part, limits in the labor market's recovery as well as the marked rise in income inequality over the past decade and a half. The growing wealth gap was one of the primary reasons for the establishment of Self Help Credit Union in North Carolina. "The issue of economic inequality has actually gotten worse in the 30 years that we've been working," said Founder and CEO Martin Eakes. "There's this battle of ideology that has polarized and paralyzed the state and the country, where we can't really come to a consensus that a certain amount of economic inequality is so corrosive that it actually destroys the foundation of the society, which is exactly what we're seeing."

The Census data also highlight the importance of safety net programs designed to help low-income families. For the first time this year, the Bureau released its Supplemental Poverty Measure alongside the official poverty report. The SPM takes into account many of the government programs not included in the current official poverty measure. It found the Supplemental Nutrition Assistance Program lifted 4.7 million people out of poverty last year. The Earned Income Tax Credit and Child Tax Credit lifted roughly 10 million people out of poverty — most of them children — while Supplemental Security Income for very low-income elderly and disabled people kept 3.8 million out of poverty. These figures come amid mounting evidence that children living in poverty experience greater learning and health problems, adverse effects on brain structure and risk of adult poverty than their peers. Income support and health insurance programs significantly mitigate these deficits. EITC expansions and Child Tax Credits, for example, have been associated with gains in middle school reading and math test scores, high school completion and college entry. Another study found young children given access to food stamps (now SNAP) showed strong improvements many years later, including an 18-percentage-point increase in high school completion.

Anti-poverty advocates know children's wellbeing is an issue that brings people to the table. "There's a statewide campaign that is being organized that is really looking at how does poverty and the safety and quality of life of children serve as a thread that runs through everything?" said Stephanie Tyree, Director of Community Engagement and Policy for the West Virginia Community Development Hub. "The Hub is a major partner in that campaign, even though we don't really work on children's health issues normally, but we think that you can't have community development if you can't have a place where children can grow up happy, healthy and safe, and you can't have community development if you're not addressing poverty."

CBPP offers concrete solutions to these seemingly intractable challenges. President Robert Greenstein writes, "These findings, along with today's disappointing poverty data, suggest that policymakers should seek common ground on measures that can make public policies still more effective in reducing poverty. Examples include strengthening the inadequate EITC for low-income childless workers; … enabling more low-income households with housing subsidies to live in lower-poverty neighborhoods; instituting criminal justice reforms to reduce incarceration without jeopardizing public safety; expanding access to pre-school and child care; and enacting a long-overdue increase in the federal minimum wage. Today's data also underscore the importance of health reform's historic coverage expansions — and of spreading its Medicaid expansion to all states."

Medicaid expansion is one of the core issues Jeremiah Group has focused on in Louisiana. "Our governor said no, which left approximately 300,000 people uninsured, so we worked very closely to get the stories of those people out on the forefront," said lead organizer Jackie Jones. "We met with both Republicans and Democrats to tell the story and to lay out why it was important that we have Medicaid expansion, and that work is still going on."

Advocates argue any policy changes must come from communities, not politicians. "We really philosophically believe strongly that the people who are affected by policy have the right and the ability to be engaged in developing that policy," said Arkansas Public Policy Panel Executive Director Bill Kopsky. "It's, from a social justice perspective, more inclusive, builds their leadership, but it also just results in better policy."