This interview with the D.C. Fiscal Policy Institute (DCFPI) kicks off a series of interviews with D.C. service providers, advocates, and low-income people for TalkPoverty’s In Our Backyard project. DCFPI does critical work educating policymakers and the public about the policies we need to reduce poverty in the nation’s capital.
In Our Backyard aims to highlight efforts to dramatically reduce poverty and inequality in our city. If you are interested in writing for the project, please email us at firstname.lastname@example.org.
TalkPoverty: What were the reasons and the need for the creation of the D.C. Fiscal Policy Institute [DCFPI]?
Ed Lazere: We were created in part because the city passed a pretty steep and regressive tax cut on the idea that we needed to cut our top income tax rate because otherwise people would flee the city which is not really supported by the research at all. There wasn’t a DCFPI to respond to that argument.
We see ourselves as using a combination of research and putting the numbers out there for the advocacy community, hopefully communicated in a strategic way, and then partnering with other organizations to try to shape the city’s budget to be more focused on the needs of low-income residents; and to do research that highlights the challenges that low-income residents face, like affordable housing or poverty, and to address working conditions, like the minimum wage or paid sick leave.
TalkPoverty: Can you describe poverty in the nation’s capital for people who know nothing about it?
Jenny Reed: The poverty rate in D.C. is a little over 18%. There were about 109,000 residents living below the poverty line in 2012. Our poverty rate has continued to be high even during strong periods of economic growth in the city. We have about 1 in 4 kids living in poverty, but in the eastern and southern parts [of the city], child poverty rates are much higher. In some neighborhoods it’s 50%.
Lazere: The poverty rate consists almost entirely of people of color… African American and Latino. Income inequality is quite dramatic in the District. If you divide the population, ranking them top to bottom, the bottom earners were even with most large U.S. cities, but at the top, the average income is the highest in the country. As a result the gap between the top and the bottom is one of the highest in the country. If you’re living in a community with substantial inequality, a lot of things may be more expensive, like housing, because it’s all one market. The high-income people are shopping in the same market as you are. They’re going out to restaurants or theater and you don’t. There’s a psychological effect of being at the bottom of a rung of a very unequal society.
Reed: We have found that a large share of people in families in poverty work. For a lot of people the problem is getting access to full time year-round work, and full time year-round work that actually pays a decent wage. D.C. recently increased its minimum wage. It will be $11.50 by 2016. The first phase of the increase went into effect July 1 up to $9.50. We think that will help…. We did a simulation that showed if you could get everyone into a $15 an-hour job and access to full time year-round work you could move about 80% of the people [out of] poverty in D.C.
Lazere: The minimum wage was passed the same day as something almost as equally monumental [that] got almost no attention, which was an expansion of our paid sick leave requirement. D.C. is fairly unique among jurisdictions in requiring every employer to provide some amount of paid leave for illness or domestic violence. [That] legislation passed in 2008, but you weren’t eligible until you’d been on the job for almost year. For most low-wage workers, they’re in an industry where the turnover is often 100% within a year, so it was likely that many, many people never got to the point where they started accruing [leave].
The bill that passed last fall made sure all workers were covered. They start accruing leave from the first day on the job, and there are no exclusions for tipped restaurant workers as there had been before. That was big. It’s pretty dramatic and people we know, particularly single parents who have the highest poverty rate, often face challenges if a child is sick. Do I stay home with them and risk losing my job because I don’t have paid sick leave? Now for at least some number of people they won’t have to make that difficult choice.
TalkPoverty: What is the unemployment rate in D.C.?
Lazere: For people with [just a high school degree], it’s about 20 percent. We’re talking about an unemployment rate that’s twice what the national unemployment [rate] peaked at during the great recession—in the middle of a city where construction cranes are everywhere, people are building ugly popup housing, [and] restaurants are opening left and right.
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TalkPoverty: So what do you make of that? One guy who wrote for us in Maryland lost 6 people in two years to gun violence, this young guy. He found a job in community development and he takes people to job fairs and describes the devastation of 50 people going and getting nothing. He said just what you said: we see all of these shovel-ready projects starting and none of the jobs going to low-income people who are ready to work. What do you make of that?
Reed: Workforce development is probably one of the most important things we can do, but it’s really hard to do well. There are a couple ways the city really needs to do a better job. One is the Workforce Investment Council which they’ve recently beefed up. [It’s comprised of] business leaders, developers, labor, and government officials that are all supposed to get together and say, “This is where D.C. should be investing its workforce development dollars.” They have an executive director, but they really are just getting started.
Then there’s the workforce intermediary which DCFPI and D.C. Appleseed and Employment Justice Center advocated for. It’s sort of a matchmaker. They’re supposed to be the liaison between say the developer for the convention center hotel that was recently built and the Department of Employment Services to say, “I’ve got all of these people who have these skills. You need these people with these skills. Let’s put them together.” But I don’t think that the Workforce Intermediary has really been able do anything. They’re still kind of figuring themselves out.
Lazere: You hear from a lot of D.C. residents: “I got training for a job and then there wasn’t a job at the end.” They get understandably discouraged and not very optimistic about participating in other training after that.
TalkPoverty: You hear a lot of that with TANF training programs too…
Lazere: It’s a similar thing. They used to go through the same ropes of, “Let’s get your resume ready, let’s help you get some business clothes and teach you how to do an interview.” And a lot of people didn’t show up because they were like, “I’ve done this already. What I really need is just for you to connect me to a decent paying job.”
The District made an effort to revamp its “one size fits all” TANF employment program, largely because we highlighted the problems. The current program is not perfect but still is far more customized than the old program. DCFPI is in the midst of assessing how well the new TANF employment program is working.
Reed: I think that there’s concern about some of the major D.C. programs like our transitional employment program or our one-stop centers [that] haven’t really shown great outcomes. They might be giving people something to do, but it’s not connecting them to a job and that’s a big problem.
Lazere: I just learned recently that while the city monitors for the federal programs whether someone got a job and how long they kept it and ways they got it, they don’t really do that for the locally funded programs. How can you have and modify and shape an effective program if you’re not looking at how well you’re doing?
TalkPoverty: How do you think the city can balance having people come into areas that were previously less developed with providing affordable housing for low-income people?
Reed: Where I think D.C. could do a better job is being more proactive about preservation. We absolutely need to build more affordable housing, but we also need to make sure we’re holding on to what we have. We’re not helping people stay in the neighborhoods as they develop around them. We could be more proactive about tying affordable housing preservation strategies to major economic development projects. Just like you do [an] environmental analysis, or traffic analysis, you could do an affordable housing analysis and say, “What’s at risk here? Is there project-based Section 8 housing that we think owners might want to opt-out of? Are there low-income buildings with tenants that we think the owner might try to sell? Can the district purchase it? Can the tenants purchase it? What can we do to keep the neighborhood affordable?”
You won’t be able to keep every unit, but it’s actually a lot cheaper for the city to preserve units or build new affordable housing prior to development then to try and do it after development has started.
Lazere: The way that governments do their budgets it tends to be fairly incremental. We spent $100 million [on affordable housing] this year, so we’ll spend $102 million next year and then $103 million. That’s just not really going to work. With prices rising so fast, we’re losing ground every year. Once you’ve lost a neighborhood, you’ve lost this tremendous opportunity to preserve affordable housing for a long period of time.
We spend about $2 billion as a city on education, [and] we spend $500 million on our police department… So why is it that in a city where the number one challenge for residents is affordable housing, we spend three times on public safety when crime is going down than what we spend on housing? And the number of homeless families jumped 23% or 25% this year.
TalkPoverty: 25% THIS YEAR? When the economy’s supposed to be getting better…that goes to your recovery report. Recovery for who?
Reed: That was a huge issue this past winter. There was a really significant rise in the number of homeless families and the D.C. shelter system was incredibly overwhelmed. We put families in recreation centers for one night only and they had to reapply for shelter every day. If it wasn’t below 32 [degrees] it was tough luck. You had to be out. A pro-bono law firm brought a class action against the city. They’ve won two injunctions against the district.
TalkPoverty: Against that policy?
Reed: Both of the judges ruled in favor of the plaintiff, finding that the recreation centers violated the law. By law families are supposed to be placed in rooms or apartment-style shelters and what they did was set up partitions like what you see when you’re giving blood. It was really horrible the way they set them up. Families couldn’t get in until after 9 and they had to leave by 7 in the morning. They couldn’t use the showers even though the showers were there. There was no food. The lights were kept on all night, there was no privacy. The judges found not only was it a violation of the law but it was causing irreparable harm to the children.
Lazere: There’s a new national model that started largely with the Recovery Act of getting people out of shelter quickly through rapid rehousing because shelter is not a good place for anybody to live.
I think the issue with rapid rehousing in D.C. is with housing so expensive, most families who become homeless are very young and have very limited job experience. When you [try to] put them into an apartment that’s $1,000 a month even that’s hard to find right? Then to tell them a year from now you’re on your own [because rent is no longer covered after one year]—on a… job that pays $10.00 an hour. A lot of families are very nervous about going into rapid rehousing because when they’re in shelter it may be crappy but at least they get to stay.
Lazere: Part of the solution is to get someone out of shelter quickly. You hope that rapid rehousing will give them the stability they need to get their life back together. But there still needs to be something at the end [when the rent subsidy runs out] for that significant number of people who may have a job that may be more stable, but still not enough to [pay for] their home on their own.
Reed: Maybe we should give people longer than a year to get settled and get to the point where they can afford the rent. We should make sure people aren’t paying too much of their income towards rent. Program rules allow maybe 45% [of a person’s income toward rent], which is way too high. I understand maybe 30% isn’t achievable, but 35% maybe max. More than that and we’re getting into a likelihood that they’re going to end up back in shelter.
There’s a lot on the homeless services front that we could be doing. We kind of backed away from our permanent supportive housing investments for the chronically homeless. It combines long-term affordable housing with intensive services. Chronically homeless are folks with severe mental health or chronic health issues and they really need intensive supports to maintain their housing. It’s shown to save a ton of money because there’s less reliance on costly emergency services.
D.C. was progressing pretty well and just kind of stopped investing in the program. In the upcoming budget, we will start making fairly good investments again. For example, the mayor put in money so we’ll end chronic homelessness among veterans in 2015 which is part of a federal campaign as well. We can end chronic homelessness in D.C. There’s about 2,300 families and individuals. It’s not an unachievable number. There’s a plan. We just need to fully invest in it to get it done.