Safety Net

How We Measure Poverty: Catching up with Mollie Orshansky

Poverty—it’s a term we readily use, but don’t really understand very well, unless we’ve experienced it. It’s not enough to have just been down on your luck for a little while; you really understand poverty when you reach the point where you aren’t sure whether or how you will escape it.

We think we know what poverty is, but when pushed, it really isn’t easy to define. Poverty seems to be about not having enough, about deprivation. But sometimes it’s not easy to know how much is enough.

As it is, our measurement of poverty vastly understates the problem, allowing us to continue onward without effectively addressing it.

Poverty can be considered, and measured, as absolute—based on an agreed upon minimum level of resources that no one should be allowed to sink below, usually connected to a minimum level of basic needs. Or it can be considered as relative—based on some “standards of the community.” It can also be measured as “subjective”—based on levels of resources that individuals believe and report that they need in order to be healthy, satisfied, or happy.

In the US we use a “quasi-absolute” measure of poverty. It is historically based on an estimate of the cost of a minimally nutritious diet. So it is connected to a floor, or minimum level of resources that no one should be allowed to sink below, but a floor that supposedly supports a healthy life. This “official” poverty measurement emerged in the early 1960s based on the work and insights of Mollie Orshansky.

Working for the Social Security Administration , Orshansky was tasked with developing a response to a Congress member’s question about how much it costs a retired couple to live. Orshansky examined USDA data and found that in 1955 the average household of three or more people in the US spent about one-third of its annual income on food, which implied that it spent two-thirds on everything else it needed. So, if you knew how much a healthy diet cost, you could multiply that amount by 3 to arrive at the amount needed to meet basic needs, or the poverty threshold.

And it worked very well. Since she knew the cost of the USDA’s economy food plan (now known as the “Thrifty Food Plan”)—which was supposed to be the lowest cost, minimally nutritious diet—Orshansky multiplied its cost by 3, and she had the basic poverty threshold. Simple but elegant, and quite accurate in the 1960s.  It’s still the basis of the official poverty thresholds today.

But there is a problem with this approach: if the average proportion of income spent on food changes, then the multiplier would need to change, and so would the poverty threshold. And the proportion of income spent on food has indeed changed, as housing and health care costs have absorbed an ever-growing percentage of our annual incomes. In 2012, for example, the average share of expenditures spent on food for all consumer units was just 12.8%—far below the 33% in Orshansky’s day. Using her elegant logic, we would therefore need to multiply the cost of the minimally nutritious diet by 7.8—instead of 3—to accurately arrive at the basic 2012 poverty thresholds.

Using 2012 costs, if you multiply the cost of the Thrifty Food Plan for a family of four people by 3, you get $22,604—very close to the Census Bureau’s poverty threshold of $23,283 for a family of four. But if you instead multiply the cost of the Thrifty Food Plan by 7.8, the poverty threshold would be $58,771 per year for that same family.

While that may seem high, it is actually very close to the “Economic Self-Sufficiency Standard” that Diana Pearce estimated was $59,027 for a family of four in Albany County, NY in 2010. And it is a little more than the economic self-sufficiency income level of $54,636 for that same family in Allegheny County, PA in 2012. So Mollie Orshansky’s logic still seems to work reasonably well, it just hasn’t been adjusted to reflect the higher costs of basic necessities for contemporary families.

It is clear that if we accurately applied Mollie Orshansky’s approach to measuring poverty, much higher thresholds would result, and many more households and people would be categorized as living in poverty. In 2012, the median income level for all US households was $51,017.  If $58,771 (7.8 times the Thrifty Food Plan for a family of four in 2012) were the basic poverty threshold, more than half the households in the US would be classified as being in poverty. And that would probably be accurate in terms of the number of families that are unable to afford basic necessities.

Changing how we measure poverty would force a change in the narrative we tell ourselves as a nation.  When something affects half of the nation’s households, it becomes the problem of many more leaders, at all levels of government and society, forcing a recognition that poverty really was never about “them”, it is truly about “us”.  As it is, our measurement of poverty vastly understates the problem, allowing us to continue onward without effectively addressing it.

I frequently hear the argument that we can’t afford to reduce or eliminate poverty, and without doubt it would not be an inexpensive undertaking. But the unstated question this implies is “how much are we willing to pay not to eliminate poverty?” In 2007, four of the best poverty researchers in the country estimated that child poverty alone costs the US in excess of $500 billion per year. This estimate only includes costs arising from foregone earnings, crime, and health care, and is surely an underestimate of the actual total costs of poverty.

So the question we seem to be facing these days is this: “Do we value poverty more than not having poverty?” Are we as a country willing to pay more to have poverty than we are to eliminate poverty? It is an open question, but the answer is emerging rapidly.



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Safety Net

Fighting Poverty with Early Education and a Focus on Health

Early childhood education is now at the forefront of the nation’s social policy agenda.  The groundswell of support presents a real opportunity to ensure that low-income children get the most out of education throughout their school years, in part by making sure that undiagnosed health issues aren’t interfering with school performance.

If we make sure that every child entering pre-kindergarten has been properly screened for significant health conditions, we can treat and manage some of the conditions – like asthma and vision problems – that, unrecognized or under-treated, can jeopardize a child’s likelihood of succeeding in school.

There may be a broad assumption that every child gets a complete medical assessment as a requirement for school entry – but this is far from reality.  The fact is that millions of children are educationally at-risk because of a host of medical challenges that are easily treated.

If standardized health screening and follow-up are mandated in any new universal pre-k legislation, educators and health providers – in partnership – can dramatically improve the education and health trajectories of students.

President Obama has placed expansion of pre-K programs at the center of his social policy agenda in successive State of the Union addresses – and his focus on this issue is already making a difference.  The budget deal reached by Congress in December ensures that Early Head Start and Head Start will receive a $1 billion increase on top of a restoration of sequestration cuts. Funding was also added for competitive grants to states to help them expand pre-K programs. Thirty states have now chosen to expand access to universal pre-k through state run programs.

In November 2013, Senator Tom Harkin, Chairman of the Senate Committee on Health, Education, Labor and Pensions introduced the Strong Start for America’s Children bill. A marginally bipartisan companion bill has also been introduced on the House side. With billions in new funding to states, Strong Start proposes the expansion of comprehensive, high-quality pre-K programs that include health screenings and referrals for vision, oral and mental health conditions. These provisions stand solidly on the preponderance of research which demonstrates a correlation between persistent health-related barriers to education and poor performance in the classroom.

Still, the provisions to identify important health conditions among young children entering school don’t go far enough.  We also need to make sure that children are not educationally impaired by other conditions like chronic anemia, hearing deficiencies, behavioral problems and so on. And beyond identifying these health barriers, it is essential to provide guidance and resources to do follow-up and management of identified medical challenges.

Federal, state and local governments have an opportunity to pass early education laws that mandate a focus on health care, as well as access to education.  Maybe Congress will put aside partisan and political grandstanding and pass a popular bill that funds universal, comprehensive pre-K for all children as well as screening for and management of health-related barriers to learning—it would be a major step forward in definitively addressing chronic poverty.



Safety Net

Concentrated Poverty and The Case for Promise Zones

In his post, “The Ghetto Is Public Policy,” Ta-Nehisi Coates, national correspondent at The Atlantic states, “The wealth gap is not a mistake. It is the logical outcome of policy and democratic will.” For decades, federal leaders invested in the stability of affluent, predominantly white communities, while giving localities the autonomy to neglect and exclude low-income communities and communities of color. Such practices included redlining, beginning in the 1930s, where banks were allowed to exclude African American communities from receiving home loans. Or following World War II, when many metropolitan regions saw highways rammed through many low-income, mostly African American communities, displacing thousands of residents and small businesses and ripping apart the fabric of long established neighborhoods. And then there was the federal government’s “Urban Renewal” effort of the 1950s and 1960s, which gave local governments and private developers free rein to develop downtowns and displace residents with no clear policy for relocation.  At best, residents were moved to public housing located in already segregated, poor neighborhoods with few resources.

Today, concentrated poverty persists, with many communities facing inferior housing, poor health outcomes, failing schools, inadequate public infrastructure, and few employment opportunities. A growing body of research shows that being raised in such high-poverty communities undermines the long-term life chances of children. For example, poverty has been shown to genetically age children, and living in communities exposed to violence impairs cognitive ability. Even when income is held constant, families living in areas of concentrated poverty are more likely to struggle to meet basic needs than their counterparts living in more affluent areas.

However, it is important to note that low-income people are not the only residents of high-poverty neighborhoods. According to research by Professor Patrick Sharkey of New York University, the average African American family making $100,000 a year lives in a more disadvantaged neighborhood than the average white family making $30,000 a year, revealing how past social policies continue to affect neighborhood choice. Sharkey explains that the same, mostly African American families have lived in the most disadvantaged neighborhoods over long periods of time and over multiple generations, limiting access to better opportunities. “Neighborhood poverty experienced a generation ago doesn’t disappear. It doesn’t become inconsequential. It lingers on to affect the next generation,” he explained.

The enduring effects of concentrated poverty require long-term, comprehensive strategies that will be experienced across generations.

It is clear that the federal government has a role to play in undoing the effects of past policies that contributed to these outcomes. Further, as research shows that income inequality and social mobility place a downward drag on national prosperity, the federal government has a vested interest in ensuring that all communities connect people with the opportunities critical to helping them succeed.

Federal and local efforts must move away from short-term investments, such as relocating a fraction of families to more prosperous communities, towards transforming communities in order to alter their trajectories. “When I’m asking for durable urban policy, I’m not asking for a unique commitment to low-income, nonwhite communities. I’m proposing that we extend the commitment and the massive investments that have been made in affluent, predominantly white communities and extend them to…communities across the country,” Sharkey explained.

This is why place-based strategies, such as the Promise Zones initiative, are so important. Such strategies involve policies and practices that take into account how a community—both the built environment and the social and economic opportunities available—impacts its residents. The intersection of place with poverty comes with unique challenges that require place-based strategies to complement our national investments to cut poverty and create greater economic opportunity.

The Promise Zones initiative is designed to revitalize high-poverty communities through comprehensive, evidence-based strategies and help local leaders navigate federal funding. Promise Zones designees receive priority access to federal resources to support job creation, increase economic security, expand educational opportunities, increase access to quality, affordable housing, and improve public safety. Equally important, the initiative pulls together lessons from the administration’s previous efforts to improve struggling communities and is serving as an opportunity to rethink how the federal government can be a more effective partner to communities facing barriers to upward mobility.

The enduring effects of concentrated poverty require long-term, comprehensive strategies that will be experienced across generations. The Promise Zones initiative has the potential to serve this role and finally extend the benefits of stable communities to all people.



Safety Net

We Have Blown a Huge Hole in the Safety Net

You can count on your fingers, and maybe a toe or two, the number of otherwise progressive public officials and policy experts inside the Beltway who want to talk about the gaping hole in our safety net for mothers and children.  Up to and including President Obama, the mainstream Democratic position on cash assistance for families with children is that we reformed welfare in 1996 and that the ensuing policy regime is a roaring success.

This is just plain wrong.

Lest I be immediately dismissed in what I am about to say (and the usual suspects will do so anyway), let me be clear that the main way to end poverty is jobs that result in a livable income, and the education necessary to get and keep those jobs.  The totality of strategies to reduce poverty also includes healthy communities and necessary services—including health and mental health services—child care, legal services, and more.  A discussion of welfare is not the same as a discussion of how to end poverty.

Whatever the facts were about the success of TANF in the flush times of the late 1990s...the recession exposed the utter bankruptcy of TANF as a public policy.

But one part of an antipoverty strategy is indeed a safety net.  And this is where people who should know better (or actually do) are averting their eyes.

Short history:  The old welfare system—Aid to Families with Dependent Children, or AFDC, which existed from 1935-1996—needed to be reformed.  It did not work hard enough at helping people get jobs and become self-sufficient.  There were 14.3 million people receiving it when President Clinton was elected and that’s too many.

In 1996, Temporary Assistance for Needy Families (TANF) was enacted.  Just then, and quite unforeseen, the economy heated up and jobs became plentiful.   The welfare rolls plummeted and the number of never-employed single mothers obtaining jobs increased substantially.  But even then, because states had no legal obligation to grant benefits, about 2 out of 5 people who left welfare did not obtain jobs, and large numbers were turned away at the front door.

Beginning in 2001, the impressive numbers of single mothers at work began to go down, and now is nearly back to where it was before the 1996 law was passed.  But that didn’t mean that the TANF rolls went back up, because states did not extend benefits to those who were losing their jobs.  By the time the recession started, the TANF rolls were at 3.9 million.

TANF was absolutely useless as an antirecessionary tool.  Food stamps went up from reaching 26.3 million people to 48 million people, because there is a legal right to receive them.  TANF went from helping 3.9 million people to 4.4.million—and even reached fewer people during the recession in some states—because there is no legal right to assistance.

Here’s the bottom line: TANF is basically defunct in more than half the states and the percentage of children in poor families receiving cash assistance nationally has dropped from 68 percent to 27 percent.  In more than half the states, fewer than 20 percent of children living in poor families are receiving TANF.  Wyoming is the poster state.  About 600 people—4 percent of children living in poor families—receive cash aid in Wyoming.   Before 1996, with all of the faults in AFDC, the safety net at the bottom consisted of AFDC and food stamps combined.  The median income from welfare and food stamps combined was only half the poverty line, but there was a legal right to both.  No longer.

So, now 6 million people have incomes composed only of food stamps.  Stunning?  Who knew?  These are government figures and they have appeared on the front page of the New York Times.  A lot of people are averting their eyes.  Whatever the facts were about the success of TANF in the flush times of the late 1990s—and I think they weren’t so fact-based even then—the recession exposed the utter bankruptcy of TANF as a public policy.

This is enormously frustrating.  The minute the government gives someone a nickel we hear a chorus of aversion to handouts, a cacophony of complaints that these are people who do not want to work, a concert of disapproval of the character of anyone who would accept cash help (and now the disapproval extends to anyone receiving food stamps).

Of course we want to have a minimum number of people receiving cash assistance.  Of course we want to help mothers receiving TANF find work—and that help has to include child care assistance and health care coverage.  And we not only want to do those things well, which is not the case now, but we also need a safety net that is responsive to the individual problems and needs of the families it serves.  A properly designed cash assistance program for families with children would take into account the availability of work as well as the fact that recipients vary in their capacity to work.

It’s past time to acknowledge that we have blown a huge hole in our national safety net for the very most needy among us.  Shame on us.



Safety Net

Does Head Start Work? Wrong Question

It’s a tired debate born of selective reading and contrarian sound bites: Does Head Start work?

The research shows that it clearly does.  Decades of studies, including the most recent Head Start Impact Study, have found that at the end of Head Start, prior to kindergarten, the program shows wide-ranging positive effects on children and families from language and pre-reading abilities to parenting skills.  And even though Head Start dates back to 1965, the latest research has proven its creators right about many basic principles.

Since its inception, Head Start’s core has been a comprehensive approach to high-quality early education and a focus on the whole child—recognizing the importance of social, emotional, physical and cognitive development. Head Start children receive medical and developmental screenings and subsequent treatment for identified concerns. They receive regular medical and dental care. And their families receive parenting education, health education and support services connecting them to education and jobs. Current research tells us that this full array of services is what early education programs should offer to have a positive effect on vulnerable children.

Whether Head Start works isn’t close to the right question. Instead, we should ask why only a fraction of eligible children are being served.

But it’s not just the comprehensive approach that makes Head Start a leader.  Head Start’s rigorous quality standards and monitoring processes, commitment to serving children with disabilities, and leadership in serving children from diverse backgrounds all make it a model of a high-quality program and a foundational component of our early learning system.

Head Start’s history of evaluation, innovation, and self-improvement is just as extraordinary. It has been the subject of intensive research for five decades and much of what has been learned has been incorporated into the program through quality improvement.

Head Start has evolved over time in various ways to meet families’ needs for full-day or year-round programs or to respond to local community needs with innovative models. Program standards, monitoring, and professional development have all been revised based on research and evaluation. Most notably, the 2007 Congressional reauthorization of Head Start increased the focus on school readiness for children and established higher educational requirements for teachers. New assessment procedures require a review of teacher-child interactions, a critical component of any early education experience.

Drawing on this history, researchers have taken a careful look at what about Head Start works and what can be improved based on the findings of the recent national impact study and the broader Head Start research.

So why is there any debate at all regarding the effectiveness of Head Start?

The answer is simple—the impact study has been selectively mined for talking points.  The study found that right after leaving Head Start, children did better than their peers. It also found cognitive gains disappeared during the early elementary years. There are many possible reasons, including uneven quality in Head Start programs, uneven quality in elementary schools that poor children enter after Head Start, and the need for higher-intensity interventions than the 9-month Head Start program tested in the study. There is also much more to learn about how to sustain immediate gains for poor children over time.

Importantly, the study results do not necessarily mean that children won’t benefit later from Head Start. A robust body of research finds that while children in Head Start and other high-quality early education programs may lose immediate gains, they still experience improved outcomes later in life.  This is important:  the large payoffs to early education that researchers have found for high-quality programs in the form of increased education, employment, and earnings can happen even when there is no immediate evidence that children are doing better in school. Here too, we have more to learn.

As we deepen our understanding of the complexities of high-quality early education and its impacts, Head Start should continue its legacy of continuous quality improvement to respond to the needs of poor children. As with any program intended to advance outcomes for our children, we should learn and adapt as new research expands our knowledge base. But labeling the intervention a failure based on one study is neither sensible nor advantageous to preparing poor children for school, a goal that benefits everyone in the country.

But the biggest problem with the simplistic talking points framing the Head Start debate isn’t a selective reading of the research.  It is the distraction from what matters most:  the persistence of child poverty, which affects a quarter of our youngest children. The immediate impacts of Head Start are clear. We shouldn’t ignore or reject decades of reputable research.  Whether Head Start works isn’t close to the right question.  Instead, we should ask why only a fraction of eligible children are being served. Why, when we know what works, can we not make a significant investment to put a generation of young children in poverty on a better and brighter path?

It is our public will that we must question.