Economic Security Archives - Talk Poverty https://talkpoverty.org/tag/economic-security/ Real People. Real Stories. Real Solutions. Tue, 06 Mar 2018 20:26:34 +0000 en-US hourly 1 https://cdn.talkpoverty.org/content/uploads/2016/02/29205224/tp-logo.png Economic Security Archives - Talk Poverty https://talkpoverty.org/tag/economic-security/ 32 32 What Candidates Should Say about Poverty and Opportunity at Ryan’s Forum https://talkpoverty.org/2016/01/07/candidates-should-say-poverty-opportunity-ryan-forum/ Thu, 07 Jan 2016 21:14:42 +0000 http://talkpoverty.org/?p=10704 This Saturday, a number of Republican presidential candidates will converge in South Carolina to debate and discuss “fighting poverty and expanding opportunity in America.” We hope that they discuss the issue and its solutions based on what a balanced view of research tells us.

Here are eight things they should say at this forum.

1. Inequality is closely related to poverty and opportunity

Poverty and inequality are separate but related challenges. Poverty typically refers to a floor—set in some relation to prevailing living standards—for economic resources or material deprivation, below which nobody should fall. Inequality refers to the distribution of economic resources throughout the population, and raising floors—and lowering ceilings—would of course reduce it. To understand the connection between poverty and inequality, consider that the growing concentration of economic resources among the more affluent during the past half-century contributed four times more to poverty than changes in family structure and racial composition in the American population.

2. Both poverty and inequality create economic disadvantage and limit our economy

By creating economic disadvantage, both poverty and inequality limit the life chances of a large share of our population. Research has confirmed that childhood poverty hinders school achievement, harms health, increases interaction with the criminal justice system, and worsens labor market outcomes in adulthood. More recently, we’ve learned that stress from poverty affects brain development and a range of cognitive and non-cognitive skills, and that even growing up in a high-poverty neighborhood significantly lowers one’s chances for upward mobility. Such high costs of poverty and inequality have real, economic consequences for all of us. Costs associated with persistent childhood poverty alone amount to almost 4 percent of our GDP—hundreds of billions of dollars—every year.

3. Social and economic policy can create poverty and reduce opportunity, but not in the ways many conservatives claim

Persistent poverty and extreme inequality can be attributed in large part to the choices we make to shape our economy and opportunity structure. Had economic growth continued to produce shared prosperity as it had from 1959 to 1973, poverty would have come close to elimination decades ago. Poverty and inequality impact minorities and women disproportionately, fueled by structural disparities in criminal justice, pay, and education. For example, researchers estimate that had we not chosen our devastating path of mass incarceration, poverty rates would be 10 to 20 percent lower overall, with larger improvements for communities of color.

In contrast, conservatives push overblown claims about public programs creating work disincentives. The evidence suggests that the amount of earnings discouraged is negligible if any, and many programs like the EITC encourage work.

4. Good jobs are the best way to reduce poverty and expand opportunity

We can’t address poverty and opportunity without first acknowledging the detrimental effects of low minimum wages, deteriorating job quality, and limited worker protections. Current labor practices allow employers to simultaneously demand much and provide little in the way of support and flexibility. Unions and labor standards can help prevent workers from being shortchanged. Policymakers should take seriously calls to raise the national minimum wage, require fair scheduling for workers, fight employee-contractor misclassification and wage theft, and enact the Paycheck Fairness Act to address the gender wage gap.

Reaching full employment—both by investing in physical infrastructure (including transportation, water, and affordable housing) and by increasing employment opportunities through subsidized jobs—is one of the most effective strategies we can pursue. Jobs programs also help the children of workers and strengthen families.

5. Public benefits are enormously effective, but do far less than they could

Even people working full-time often cannot work or earn enough to meet basic needs—making the safety net essential. In 2013, work supports and antipoverty programs like Social Security, food assistance, and Medicaid lifted 40 million people out of poverty. Still, with a growing share of families living in $2.00-a-day poverty, and gaping holes in the safety net, more needs to be done to strengthen our antipoverty programs. When factoring in public benefits and tax credits, other wealthy countries do far more than the U.S. to reduce poverty and inequality.

Research has shown that we have at least partial—often cost-effective—strategies for addressing economic disadvantage. It is likely, however, that conservatives will ignore empirical evidence and turn instead to Ryan’s Opportunity Grant which—by consolidating safety net programs into block grants given to the states—poses substantial risk of actually expanding poverty rather than cutting it.

6. We must empower disadvantaged people in our political system

Significantly reducing poverty and inequality requires an explicit focus on empowering disadvantaged groups and eliminating discrimination based on race, gender, sexual orientation, and more. Democracy must also become more representative, as political science research confirms what many of us have feared: in policy disagreements between the most well-off and everyone else, the wealthy consistently win. We must strengthen and protect the Voting Rights Act, level the playing field for political contributions, and limit the influence of corporate lobbyists. We must also prevent further disenfranchisement of especially vulnerable groups by enacting comprehensive immigration reform, restoring and increasing access to legal aid, and reversing over-incarceration and over-criminalization. If people have a voice in our political and judicial systems, they will have a real chance in our economic system.

7. When work-family balance is supported, good things happen for families

Providing paid family and medical leave, home visitation, affordable child care, and comprehensive family-planning services—as well as increasing incomes for disadvantaged families through a child allowance—will promote equity and security by ensuring that all women and families are able to maintain steady work and much-needed income while having more control over their lives.

Opportunities for education and training should be accessible and affordable for all at every stage of life. Universal early learning and quality education help lay the groundwork for success in adulthood. Increasing funding for public schools serving poor children significantly reduces intergenerational poverty. All individuals deserve the chance to get ahead through higher education without debt, and when there must be debt, income-based repayment should be an option.

8. Race and gender are intertwined with poverty, inequality, and opportunity

In 2013, racial and ethnic minorities had a poverty rate that was 13 percentage points higher than that of non-Hispanic whites. Women are still 32 percent more likely to be poor than men; for women of color, the economic disparities are even worse. In 2013, white families had on average six times the wealth of Hispanic families and seven times that of African American families. Income and wealth gaps mean these families have significantly fewer resources to invest in themselves, their children, and their communities. For example, African American families have to wait an average of eight years longer than white families to purchase a home.

In case you don’t hear it at the upcoming forum in South Carolina, remember that addressing poverty and inequality can simultaneously expand economic security and opportunity while growing the economy. And with America’s economic rivals making impressive investments in children and families, American competitiveness depends in part on helping the most disadvantaged among us reach their full potential.

Editor’s Note: This post has been updated from its original version.

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Is the American Dream Shifting? https://talkpoverty.org/2015/03/17/american-dream-shifting/ Tue, 17 Mar 2015 13:00:38 +0000 http://talkpoverty.org/?p=6558 Continued]]> For much of the past decade, The Pew Charitable Trusts has been studying the health and status of the American Dream, defined as the ability of families to move up the economic ladder over a lifetime and across generations. Economic mobility has long played a central role in our national discourse, and improving the ability of all Americans to move up the ladder has been one of the rare issues with the potential to unite the political parties.

As recently as 2009, nearly 4 in 10 Americans felt that it was common for someone to start poor, work hard, and become rich. But by 2014, only 23 percent of Americans said that hard work alone is enough to achieve success, and an overwhelming 92 percent said they value financial stability over economic mobility, an increase of 7 percentage points since 2011. These results indicate that American attitudes appear to be shifting: The American Dream is becoming less about mobility and more about keeping one’s head above water.

In late February, Pew released findings from a nationally representative survey that collected data from more than 7,000 American households on family balance sheets as well as families’ perceptions of their own financial security. This research combined quantitative and qualitative information to begin to explain the changing definition of the American Dream. The survey revealed that although Americans are starting to feel more optimistic about the economy and their own finances, most still worry about money.

Fifty-six percent rated their financial situations favorably, but the same proportion (57 percent) said they are unprepared for a financial emergency, and only half reported feeling financially secure. Many people’s descriptions of their financial lives suggest that they have reason to worry: More than half (55 percent) said that they either break even or spend more than they make and that their income or expenses fluctuate each month, making it difficult to plan and save. A full one-third reported having nothing in savings, which causes a great deal of anxiety.

The American Dream is becoming less about mobility and more about keeping one’s head above water.

In addition, many Americans experience economic shocks that strain family finances and often derail savings plans and aspirations. These unexpected expenses, combined with frequently unpredictable income, even eat away at the budgets and savings of families at the upper end of the income ladder: One in 10 of those with income of $100,000 or more has no savings, and 1 in 5 reports income volatility.

As policymakers look for ways to bolster families’ economic security in the post-recession economy, they must consider Americans’ changing perceptions as well as their financial realities. For example, specific components of savings plans, such as opt-out versus opt-in choices for 401(k)s, can dramatically increase retirement savings.

But decision-makers must also take into account that policies can present conflicting messages about—and even hinder—asset accumulation. For example, although many low-income families understand the importance of saving, a host of states include asset limits in the eligibility requirements for cash and food assistance programs, which can deter potential participants from enrolling or keep enrollees from building savings. These unintended consequences can, in turn, further compromise families’ financial security and feed the growing sense among many Americans that economic mobility is no longer readily available in the United States.

As they prepare platforms for the 2016 election, many policymakers have begun to outline proposals intended to increase Americans’ opportunities to move up the ladder. But before going too far down the mobility path, they should consider families’ priorities, attitudes, and financial realities. People can’t be economically mobile if they aren’t first financially secure.

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