Culture

Life Amidst Poverty

I have lived in poverty both as a child and as an adult, and I can say with full confidence that it is a life-crushing force. I hated it. “Poverty” is also one of the most misunderstood labels that gets slapped onto individuals without their approval—cast upon them simultaneously by both unseen and more visible forces of society.

Poverty is a word loaded with preconceived notions, common misperceptions, and seemingly innocuous assumptions. What the word does not do is delve below its surface meaning, into the reality of poverty—a world that no one wants to live in.

Poverty is exhausting. Poverty is despair and desperation-inducing. Poverty is soul, dream and hope crushing. Poverty is like being enclosed in a prison cell with no doors or windows. It feels claustrophobic, as if there is no way out. Only the most resilient do not give up. Still, there is no guarantee that life will get better—and those in poverty know this all too well. They either become hardened or submit to fate. You don’t live life, you don’t thrive—you survive. You wonder if you are predestined, like a caste in another country, to live out a life destitute of fulfillment—whether financial, professional or just having a better life.

These are the very thoughts that consumed me in times of poverty. And yet, I never stopped believing that there must be a way out. The “how” and the “why” of my situation—resounding questions that were never sated—eventually fell by the wayside as I pushed towards hope. The very thing that brought despair and darkness motivated me to dig out of that prison, to fight with everything within me, to find that light that must exist outside of the walls.

Resources and access to them are the most influential factors in the “making it or breaking it”

In America, there is this prevalent belief that if someone just pulls herself up by her bootstraps, she can succeed. And yet, as I have learned, it is entirely possible to work your ass off and still struggle. Whether I had boots or not, whether I was barefoot, in heels, what I really learned is that resources and access to them—a network of support, and awareness of available choices—are the most influential factors in the “making it or breaking it” of life in the US. So much of this became clear to me only later—when I had the opportunity to see outside of the tiny, claustrophobic room that I had been in for years.

Living in poverty need not be a death sentence. I decided when I was 5 years old that I wanted to secure a bachelor’s degree before I was married (which I did). Throughout my childhood, I had a voracious appetite for knowledge: I was constantly hungry to learn more. In high school, I decided that upon graduation I would leave the state and my family to start a new life for myself, even though it was extremely hard and I worked three jobs at one point. In college, I knew that I wanted to live and work overseas, to expand my perspective and learn more about the world. And when life challenges blindsided me as an adult (now with two degrees under my belt), I continued to learn what my options were, what resources were available to me, and to fight hard to provide the best opportunities that I can for my own children, so that they may never see themselves as “living in poverty” or not having a shot at a better life.

Enduring poverty is not the end of hope or life. The key things needed to break down the walls that imprison those within poverty are: outside influences, support networks such as friends or family, awareness of other opportunities, and access to resources.

With this combination, a new life is possible.

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Safety Net

Restoring Hope to Baltimore Requires Making College Affordable

“I’ve always wanted to go to college. I’ve wanted to be an orthodontist since I was seven,” said 16-year-old Kayla, not realizing that because she grew up in West Baltimore the odds of her dreams coming true were very slim.

There’s a long shadow cast over Baltimore’s children. Like young people across America, they know that the ability to get a good-paying job depends on college. As teens, many of them finish high school, fill out college applications, and complete financial aid forms.  But then they find out the truth: college is unaffordable.

There is a lot of talk about elite universities offering “no loans” promises and sending letters to low-income families across the country urging their children to apply.  But that effort is relevant to a tiny few. Most people who attend college go to institutions that are far from free.

Despite massive public investment in financial aid, students from families like Kayla’s who earn less than $20,000 a year are now required to pay at least $8,000 for a year of community college and more than $12,000 a year at a public university. That “net price” is what researchers like me have found to be the real bill that students and their families face after all grants (including the federal Pell and state and institutional grants) are subtracted from the sticker price of attending college. This price has gone up substantially over time, particularly since the Great Recession.  It’s climbed as real family income for most has fallen. Worse, it may well be under-stated.

College education is central to the American Dream. But the ladder people must climb to get there has eroded, and a critical rung fell off.  After a semester or two, even the most talented students from the bottom half of the income distribution find that the price of college is more than they can afford.  They have enough money to register for classes, but they cannot pay the bills long enough to graduate.  

The young people of Baltimore know this.  Researchers tracked a set of the city’s children beginning in 1982, when the kids were in 1st grade.  A decade and a half later, almost two-thirds enrolled in college. But by age 28, just 17 percent had earned an associates or bachelor’s degree, with another 13 percent earning a certificate.  Nearly half who grew up poor, ended up poor, especially if they were black.

The ladder people must climb to get to the American Dream has eroded, and a critical rung fell off.

It wasn’t for lack of trying. Researchers like Stefanie DeLuca, who met Kayla while doing research on young people from Baltimore’s highest poverty neighborhoods, confirm that a strong work ethic is omnipresent there. But enrolling in college exacerbates their poverty: working two or three jobs while also taking on federal and private loans takes a heavy toll. Growing numbers of undergraduates find themselves living without sufficient food or adequate housing even as they try and focus on school.

When college is unaffordable, hope is lost.  Without degrees, young people are returning to the streets with debt, disillusioned and fearful for their futures.

Today colleges and state governments set most college prices. They are failing at this job. The opportunity to get a college education is distributed in highly inequitable ways.  Rather than promoting mobility, the broken college financing system is ensuring that economic and racial inequality gets passed down – and worsened – from one generation to the next.  Americans deserve better.

Last year, Republican Governor Bill Haslam began to restore hope in Tennessee by offering tuition-free community college.  The predecessor to the Tennessee Promise, Knox Achieves, is proving effective at helping young people who would have otherwise never experienced even a 13th year of education earn college credits.  Helping those students complete a 14th year, and attain a credential, may require more investment, along the lines of America’s College Promise proposed by President Barack Obama.

The initiatives of Haslam and Obama were preceded by wisdom and a smart initiative in New York. In 1969, large numbers of African Americans and Puerto Ricans demanded that the City University of New York become a place that they could enter to pursue better lives.  University administrators responded by instituting an open admissions policy to complement a very low price.  An evaluation conducted over the next 30 years revealed that while the new policy did not wipe out disadvantages due to race or class (or high school academic record), it more than doubled the proportion of black women who would attain degrees. That finding is consistent with more recent studies that raise sharp questions about the contention that “college isn’t for everyone.”

National leaders need to provide hope to young adults in Baltimore and cities like it.  Federal policy must change. Simply providing financial aid isn’t getting the job done, as it requires too little from those who establish college costs.  Instead, we need a national conversation about what it means to provide a high-quality 13th and 14th year of public education to everyone, and then we need to pay for it. New taxes are an option – but we can also simply stop spending where investments aren’t pay off. Ending subsidies to for-profit universities is a good place to start.

There is much to do to provide hope, dignity, and a chance at a better life to America’s poor urban youth. Part of the solution must include making college affordable.

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Safety Net

To Combat For-Profit Schools, Provide Free Community College

Although it is widely documented that for-profit colleges routinely prey on low-income students, these schools have proven adept at beating back regulations that would curb their abuses. To decrease the attractiveness of for-profit schools, and their power to exploit students with low incomes, progressives should rally around President Obama’s proposal to provide free community college.

Over the last few years, for-profit colleges have come under fire from the Senate HELP committee, several federal agencies, and 37 state attorneys, with good reason. The for-profit education business model provides no incentive for schools to produce successful, educated college graduates. As a result, over half of the students who attend these schools fail to obtain a degree and struggle with mounting student loan debt. Those students fortunate enough to graduate have a hard time securing employment, as employers increasingly turn away candidates with degrees from for-profit schools.

For-profit colleges use a variety of unethical and sometimes illegal practices to persuade students to attend their schools. Some schools get leads on potential students through fake job postings on websites like craigslist or monster.com. Recent reports show a few top for-profit colleges utilize fake online health insurance and food stamp applications to collect information on potential students. Individuals who fall victim to phishing schemes like these are subsequently harassed with calls from for-profit schools until they speak with admissions representatives. Students report being called up to twenty times in a single morning, or as late as 11 p.m. When students finally succumb to the pressure and speak with a representative, they are subjected to recruitment tactics that are far more abusive.

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 An example of training materials for recruiters at a for-profit college

Admissions representatives at several large for-profit schools say management promotes a variety of exploitative practices to secure enrollment. These tactics include asking callers—many of whom are low-income or people of color—to imagine what they will buy when they make six-figures, or how their family will feel when they no longer rely on a minimum wage job. Many representatives go as far as telling callers how worthless they are with just a high school diploma. Many students who were actively recruited in this manner were unable to afford—or clearly incapable of completing—the program. Some students even struggled with a range of disabilities such as brain damage and learning disorders. In one particularly high profile case, a Corporal for the U.S. Marines was enrolled at a large for-profit college, but was so severely impaired by a traumatic brain injury that he could not remember what classes he was taking.

Students who enroll as a result of this kind of manipulation often sign themselves into financial ruin. However, as long as the students attend classes, the school turns a profit. The entire business model of for-profit schools relies on cheating victims out of their dollars and dreams, which ultimately increases their reliance on safety net programs.

In contrast, community college provides crucial alternatives for those most frequently victimized by for-profit schools—people with low-incomes and people of color. Students with low-incomes are disproportionately affected by social factors (financial instability, health issues, transportation issues) that discourage investing financial resources in brick-and-mortar schools, in deference to online education. For-profit schools take advantage of this instability, promising increased upward mobility coupled with the flexibility of online schooling. As a result, low-income students enroll in for-profit schools at nearly four times the rate of other students.

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 An example of student “profiles” targeted by recruiters at a for-profit college

By providing low-income students with the opportunity to attend community college at no cost, President Obama’s plan virtually eliminates the consumer base of these profit-seeking colleges, ending their large-scale fraud. Under President Obama’s plan, students receive full tuition funding if they are enrolled at least half-time at community college and are earning above a 2.5 GPA. The proposal is also beneficial because it permits students to receive Pell grants while they are at community college; this policy would help families afford living expenses while the primary caretaker focuses on school.

Obama’s initiative encourages low-income, at-risk students to consider local community colleges before for-profit schools, thereby increasing their potential economic mobility and financial wellbeing. Current estimates suggest that as many as 9 million students would benefit from the initiative.

While Obama’s proposal is not a blank check, it provides much more flexibility for students with low-incomes. More importantly, the plan could prevent millions of our country’s most disadvantaged people from enrolling in schools that prove far better at exploiting students than educating them.

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Labor

New York City Limits the Use of Credit Checks in Hiring

One of the recurring—and troubling—themes of TalkPoverty posts has been the overwhelming number of misguided policies that kick people while they’re down: from asset limits that tell poor people not to save, to employers’ use of criminal records that make it hard for people to find a job even decades after an infraction.

In a rare moment of good news, New York City has decided to remove one of these barriers by limiting the use of credit checks for employment screening. Last month, the City Council voted overwhelmingly to pass the strongest measure in the country on this issue, joining ten states. This measure, which Mayor DeBlasio is expected to sign on Wednesday, is a major step forward to rein in a practice that does little for employers while filtering out good employees who run into financial trouble.

Nearly half of employers check credit histories for at least some positions, according to the Society for Human Resource Management. This means that before receiving a job offer, the employer has the ability to comb through your financial history to see if you’ve paid your bills on time, and can choose not to offer you a job if you haven’t. Of course, if you’re having trouble paying your bills—because of a job loss, an illness, an irregular work schedule, or other risks that working families face—being turned down for a job isn’t going to make it easier to pay your bills or improve your credit. And so the cycle continues.

If you’re having trouble paying your bills, being turned down for a job isn’t going to make it easier to pay your bills or improve your credit.

Meanwhile, credit reporting itself has its limitations. Roughly one in five credit reports contains errors, according to an analysis by the Federal Trade Commission. And the information in credit reports only reflects part of a family’s financial situation—the part that tends to reflect better on upper-income folks. Mortgage payments count toward a positive credit history—very significantly—but on-time rent payments don’t. And when low-income families pay their regular bills on time—such as rent and utilities—this positive information generally doesn’t go on credit reports, even though negative information such as late payments, nonpayments, and collections ultimately does get reported. So even when families are trying hard to pay bills on time, these bills don’t count in the same way credit cards and loan payments do.

That’s slowly starting to change. There are efforts underway to improve credit reporting to more accurately reflect credit risk and help more deserving borrowers get affordable loans, including a recent pilot where thousands of low-income families living in affordable housing were able to have their rental payments applied to their credit reports and scores. But in the meantime, families are needlessly hurt by a system that misuses financial information to make hiring decisions that hurt those who are already struggling.

To be sure, New York City’s law does have some exceptions for jobs in government, law enforcement, certain finance and tech jobs, and jobs where the employee is in charge of major financial decisions. For these jobs, one can argue that the fears of theft cited when credit screening tools are pitched to companies are more legitimate. (When I worked at the Treasury Department, for example, a credit check was required.) But the City’s new law goes well beyond other states where, for example, handling a certain amount of cash could be considered an exception. And it comes close to two bills introduced in the last Congress: one bill by Senator Elizabeth Warren (D-MA) limiting credit checks to jobs requiring a security clearance, and a bill by Rep. Steve Cohen (D-TN) with added exemptions for some government and banking jobs.

The federal government has been catching on as well. Last fall, the US Department of Labor issued new guidance warning employers that the use of credit reports may be discriminatory. Policies designed to screen for people working in high-level positions shouldn’t apply to most jobs, never mind that even Bernie Madoff probably had a stellar credit history for most of his career.

We should follow New York’s example to keep credit reports where they belong—in the financial marketplace—and not as another barrier to hold people back from jobs and financial security because of past decisions or financial distress.

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Safety Net

Temporary Assistance Doesn’t Help Impoverished Married Parents

Marital poverty is a serious, widespread, but mostly unacknowledged problem in the United States. Just over 9.3 million people in married-parent families live below our extremely low official poverty line. Another 6 million people live between the official poverty threshold and 130 percent of the poverty line, which is the income limit for the Supplemental Nutrition Assistance Program (SNAP) and only about $26,000 for a married couple with one child.

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Despite these staggering numbers, there is widespread denial of the reality of marital poverty. Senator Rand Paul (R-KY) has gone so far to claim that being “married with kids versus unmarried with kids is the difference between living in poverty and not.” It appears he is unaware there are more married parents living in poverty in his state than never married parents living in poverty.

We know from a vast body of research that poverty and related financial stressors are risk factors for marital conflict, domestic violence, and divorce. And notable recent research by Laura Tach and Kathryn Edin found that economic factors are a more important predictor of dissolution for married parents than for cohabiting ones.

The Temporary Assistance (TANF) program should be playing a central role in helping married families overcome the kinds of economic hardship and other factors that contribute to the high divorce rate among working class families. Under the Temporary Assistance program, states receive funds to provide means-tested, re-employment assistance and other services to struggling unemployed and underemployed parents with low incomes. One of the four purposes of Temporary Assistance is to “encourage the maintenance of two-parent families.”

Despite this mandate, Temporary Assistance is failing struggling, married families. The extent of TANF’s failure is shown in the chart below. Between 2000 and 2012, the number of married parents living in poverty increased 39 percent, but the already extremely low number of married parents being helped by TANF plummeted by 54 percent. In the majority of states today, fewer than 1000 married parents receive Temporary Assistance. In Louisiana, for example, over 50,000 married parents live in poverty, but only about 50 of them receive Temporary Assistance.

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Where Temporary Assistance has failed, other better-designed programs have stepped up. In 2014, the Supplemental Nutrition Assistance Program (SNAP) helped 5.2 million low-income children who lived with both of their married parents, and another 1.2 million children who lived with both of their unmarried parents. Unlike Temporary Assistance, SNAP actually responded to the increase in married-parent unemployment and hardship during the Great Recession. Similarly, early evidence suggests that the Affordable Care Act—including Medicaid expansion and the Premium Tax Credit—has increased health insurance coverage among working-class married families.

How can we fix Temporary Assistance so that it doesn’t effectively exclude millions of struggling, married parents from getting the temporary financial help – as well as employment and other services – that could make the difference between staying together and splitting up?

The first and arguably most important step is to acknowledge the extent of the problem of marital poverty and hardship in the United States, and the destructive impact it has on family life.

Then we need to look at models for reforming Temporary Assistance. Most notably, the original version of the Minnesota Family Investment Program (MFIP) that was evaluated in the mid-1990s reduced divorce among participating disadvantaged, two-parent families. The reductions in divorce were particularly large—70 percent—among black married couples. In addition, both MFIP and Milwaukee’s New Hope Project increased rates of marriage among disadvantaged single mothers.

These progressive demonstration projects ensured that low-income married- and cohabiting-couple families had an adequate income to support themselves while searching for work or addressing issues that limited their work capacity, including through transitional jobs, re-employment, and other services. Unlike the current Temporary Assistance program, these programs did not utilize unreasonably restrictive participation rates or harshly punitive measures that are mostly aimed at reducing the number of people who receive help; instead, these programs emphasized helping parents obtain and maintain stable employment, while meeting their basic needs.

Unfortunately, the current financial structure of Temporary Assistance and the federal law that governs it makes operating rigorously tested programs like the original MFIP or New Hope all but impossible for states. Fixing this should be at the top of the list of reforms that would help struggling, two-parent families. At the very least, the federal government should establish a national Temporary Assistance demonstration project for married and unmarried two-parent families based on the original MFIP program and New Hope. Of course, some policymakers would prefer to just talk about family values, but even in today’s polarized political environment it should be possible to move forward on a concrete initiative like this one that actually values working-class families by helping them stay together.

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