Paycheck to paycheck

by Rod Williams, Feb. 3, 2019 - As soon as the government shut down occured, the media started running stories about how devastating the shutdown would be on government workers who are living "paycheck to paycheck."  My initial reaction was that this was so much hype to tilt public opinion against the president. After all, government workers get paid pretty darn well compared to the private sector or compared to state or local government employees doing comparable jobs.  Surely, I reasoned, they could miss a paycheck without it being a disaster.

Upon reflection however, I realized the shut down would be devastating for many who live paycheck to paycheck.  And, many do. However, living paycheck to paycheck is simply irresponsible and a reflective of stupidity. I do not think federal government employees are more irresponsible and stupid than the average person, however.  That is probably typical of many people.

I spend my career working with poor people and much of what I did was teach poor people how to become homeowners.  That most often involved teaching them how to change their habits and values. It involved teaching them to set priorities and learn delayed gratification and exercise personal discipline. I did not teach this class as one who did not know what they were talking about.  I have experienced poverty.  It was not fun but I know what it is like. I survived it without ever having my electricity cut off or without being evicted or filing bankruptcy. I managed my poverty until things improved. I could talk to poor people and knew what I was talking about

About 2006 we started seeing a new class of clientele at our agency; not poor people wanting to become homeowners but middle class people wanting to avoid losing their home.  We did some good. We helped many people get financial assistance to save their home and helped many clients get modifications or repayment plans that allowed them to keep their home.  As the housing crisis grew, my work shifted entirely to mortgage default counseling.  I am now mostly retired and don't need to work but still work part-time and see about two clients a week.  It keeps my mind sharp and it is rewarding to help someone through a crisis.

My experience working with middle class people who are about to lose their home and poor people who wanted to achieve the dream of home ownership taught me something.  The poor and the middle class are not much different; the middle class just have more money.  I know my sample may be skewered because of the middle class I saw, I only saw those who were facing a crisis.  However, giving the report of how missing one paycheck impacted federal workers, I think my observation is quite accurate.

It is sad that missing one paycheck could cause someone to be unable to pay their house payment or buy groceries.  It is sad that one lives paycheck to paycheck.  However, there is simply no excuse for living that way.  As a housing counselor I saw people lose their home because as soon as they got laid off and missed their first paycheck, they missed a house payment.  Many people who lost their home could have avoided losing their home had they had some saving.

I know people will object and say, "I don't make enough money to save."  That is simply not true. Savings is simply a matter of prioritizing. It is a question of management and exercising a little discipline and establishing some priorities. I tell clients that savings is "paying yourself first."  In examining a client's income and expense report, after I ask them in detail how much they spend on this or that, I then review their credit card statements and bank statement. Often people don't know how much money they make and they don't know how they spend it. Often they spend it foolishly.

I was working with one client who was facing foreclosure. After developing her budget sheet, I then reviewed her bank statement and saw a fee for something like $115 to a place with the name of something like "Dragon's Lair."  I asked her what that expenditure was for and she said it was for a tattoo. She went on to explain that with all she was going though she needed to do something for herself. "I felt I deserved it, " she said.  That is not an uncommon attitude. People spend money on something because they "deserve it."

I was working with one couple who had missed a house payment but had gone out and traded cars and had a large car payment of almost $500. When I asked the client why they had taken on this new debt the wife told me that she was pregnant and they already had one child and, "we had to have an SUV."  People feel entitled to things weather they can afford them or not.

I see many people who have no accumulated saving for retirement. In an article by David Moon that appeared in the Tennessean today, he says only 52% of Americans have any type of retirement savings.  In my position as a housing counselor, I have seen people who had an employer contribution retirement plan where the employer would match what the employee contributed and yet the employee did not participate.  There is a lot of free money that people are just turning down. If the employer matches the employee's contribution that is a 100% return! Putting it into such an account also makes the money not subject to taxes which makes the effective return 125% or something, and then if you assumes the money is invested and grows at 10% that makes the return 135%.  These employees by refusing to save $100 are saying, "no thank you, keep your $135."  They are leaving money lying on the table and refusing to pick it up.

I have seen people who spend enough daily on Starbucks coffee to have a week's paycheck in the bank in a few months. There are many people who could build a nice nest egg if they would exercise six months' discipline.

As a conservative, I have always believed in maximum freedom for the individual. When it comes to poor people this has caused me to advocate for food stamps as oppose to food commodities and housing vouchers as opposed to public housing and to entertain ideas such as a guaranteed minimum income to replace the bundle of current welfare programs.  I have thought that Social Security should be replaced with a retirement fund owned by the individual.  This rest on a foundation of believe in individual autonomy and personal freedom.  I hate to say I may have been wrong about a lot of things, but I am coming to the conclusion that most people are too stupid to be free.  If given choices they will make wrong choices. Unfortunately, many people need to be treated like children and need someone to take care of them.

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Mayor’s Economic Inclusion Advisory Committee Releases Recommendations.

Nashville Financial Empowerment Center and US Community Credit Union Will Partner on New Loan Option

Metro Nashville Press release, October 27, 2017 - Mayor Megan Barry’s Economic Inclusion Advisory Committee today unveiled its report containing recommendations to build a more financially inclusive city by increasing financial literacy, empowerment and capability. Mayor Barry was joined at the announcement by committee co-chairs Eddie George, managing partner of Edward George Wealth Management Group, and Dr. Shawn Joseph, director of Metro Nashville Public Schools, as well as Paul Johnson, President and CEO of US Community Credit Union, which announced an innovative new small-dollar loan for working Nashvillians who can’t qualify for traditional loans.

Since Mayor Barry launched the committee in September 2016, its members have worked in subcommittees to produce a report with short-, medium- and long-term actions. Mayor Barry charged the committee with developing a “Nashville Vision” that provides a comprehensive approach to empowering low-income and moderate-income Nashvillians toward financial inclusion.

“Nashville has been experiencing terrific economic growth, but that prosperity has not been shared by all. I asked this committee to come up with ways to improve the financial well-being of all Nashvillians. The recommendations in this report will help guide those efforts,” Mayor Barry said. “I’ve instructed my staff to move these ideas to action and complete implementation plans for each of them.”

Each subcommittee created a set of actionable strategies to (1) increase financial literacy, (2) empower residents in their financial decision-making and (3) increase access to financial capability. Their recommendations fall under three target areas for improvement:

• Financial Literacy: Every student graduating from Metro Nashville Public Schools should be financially literate and understand basic financial concepts.
• Financial Empowerment: Nashville needs to expand, grow and professionalize financial empowerment tools to empower its residents.
• Financial Capability: The city needs to increase access to the financial mainstream, meaning safe and affordable financial services, for all Nashvillians, regardless of cultural, societal or legal barriers.

In its report, the committee recommended opportunities for Metro and its educational, non-profit, financial, and legal institutions to prioritize financial inclusion to improve residents’ quality of life. Some key recommendations include:

• Clearly defining a consistent personal finance curriculum across the school system;
• Developing criteria and a process for re-credentialing of MNPS personal finance teachers;
• Forming a private-public partnership that reduces barriers to access workforce or post-secondary attainment; 
• Finding new innovations that support access to small-dollar loan alternatives;
• Commissioning an impact analysis of proposed and existing court fines, fees and taxes and the collateral consequences affecting financial security and capability;
• Deploying pretrial pilot projects that substantially reduce incarceration rates, the associated costs and failures to appear;
• Protecting consumers against unfair and deceptive business practices by developing a consumer protection program

Discussions have already begun between the Mayor’s Office and several criminal justice agencies about how to implement financial justice strategies, including the use of text-message reminder systems to help ensure that additional debts are not created by a missed court date.

“Personal finance is an important component of a young person’s education,” said Dr. Joseph. “We need the right information at the right time for students to understand this importance, and our teachers need to be equipped with the right tools. Our team will be working with our local Federal Reserve to develop an enhanced training and re-credential process so our teachers are prepared.”
“In principle, personal finance is simple: maintain an active budget, spend less than you make, and save for emergencies and large purchases,” said Eddie George. “However, the process for how to do these things has become increasingly complex. We recommend expanding the capacity of our financial empowerment counseling services to meet these needs.”

“Community Development Financial Institutions across the country are working to improve the economic opportunity of low-income communities, and we are incredibly excited to continue this mission in partnership with the Nashville Financial Empowerment Center,” said Paul Johnson, President and CEO of US Community Credit Union. “We are proud to partner with the Nashville FEC to pair a quality loan product with the financial counseling needed to repair credit and gain financial acumen.”

The Opportunity Loan is designed to help consumers pay off expensive debt and will provide qualifying clients with a loan option up to $4,000. The interest rate and the amount someone can borrow will be based on income, credit score, and ability to repay. Consistent payment will be positively reported to credit reporting agencies.
Full Economic Inclusion Advisory Committee Report

My Comment: I commend Mayor Barry for this endeavor. There are several good initiates outlined in the report. For those interested in this issue, I encourage you to read the report at the link above.

For most of my career I have worked with low-income people in some capacity. For about the last 25 years I worked with a non-profit organization as a housing counselor and for many of those years I served as the director of the housing counseling programs.  I have designed programs, written grants and tracked results, counseled clients and taught classes.  I worked with both low-income people who were trying to obtain home ownership and with clients who were facing foreclosure.

One of our programs that was quite successful was "Homebuyers Club."  In this programs we worked long-term with people who were very poor, teaching them financial skills, encouraging them to save money, repair their credit and build good credit, and we helped them get grants and loans to buy a house.  For people who come from generational poverty and have spend their life in public housing, who have lived in an environment where most people were on some sort of welfare and where there were few intact two-parent households, there are tremendous obstacles to getting out of poverty.  As you teach these people how to improve their financial standing and give them skills, you must also help them change their behavior and their way of thinking. That is not easy.

The Homebuyers Clubs were a combination of financial literacy classes and something that resembled an AA meeting. It was as much about encouraging and motivating people as it was about giving them information. In the years I managed the program we had approximately 900 families achieved home ownership.  Most of these were the hard core poor, many of them residents of public housing when they came to us. For those families who succeeded, we changed their life and the lives of future generations.  I feel good about that. For those who did not achieve homeownership, they still may have benefited. I hope so.  Unfortunately, for every success we had probably 100 people who did not achieve success. Some would only come for one meeting or one one-on-one session and when they realized they were not just signing up for something that would just be handed to them, they did not come back. Others tried really hard but the obstacles were just too great and after months of trying they gave up.

I have a lot of thoughts about what needs to be done to lift people out of poverty and what causes people to become part of a class of the permanent poor that have little hope of ever improving their lives.  There are no simple answers but there are things that can help.  The problem of poverty is complex. While there are the hard core poor, there are also people who just do dumb stuff because they don't know better. These people can benefit most from financial literacy. I have seem people who were not the hardcore generational poor but who fail to get out of poverty or who fall into poverty, simply due to poor money management skills or making other poor decisions. I strongly endorse financial literacy being taught in the schools. Knowing some basic life skills like understanding interest rates and how to balance a check book are very important.  Financial skills is probably more beneficial than advanced calculus. While this endeavor of the mayor's will not solve the problem of poverty, it will help.  It is the right thing to do.

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Things are getting better, yet the public thinks the opposite about crime and poverty.

Sometimes what everyone assumes is true is simply not true.  We are accustomed to so much bad
news, people simply are not receptive to good news.  Two areas in which what most people believe is simply wrong is what they think they know about crime and poverty.  Although there are occasional upticks and fluctuations in crime rates, crime has been on a downward trend  in America since about 1990. There was an upswing in crime in the 60's, peaked in 1980, declined and climbed back up and peaked again in 1990 and has been on a steady downward trend and is now at about the same rate as 1968.

There is also great news about poverty. While poverty rates in America are no better than in 1968, world wide poverty has been on a steady decline since 1980 and has fallen by half in the last two decades. Following welfare reform there was a decline in American poverty, but failure to follow the course has resulted in no appreciable poverty decline. World wide however, there has been a major reduction in poverty. The fall of communism brought the blessing of capitalism to many of the world's poor and even Communist China abandoned socialism as an economic system. Socialism has lost its luster in most of the world. Also, some philanthropy and aid, especially that aimed at fighting decease, has shown results. For most of human history until the 1960s, a majority of adults were illiterate; now, 85 percent of adults worldwide are literate. World wide, inequality is on the decline primarily because of gains by the poor in places like China and India. For more on the decline in poverty see this article, The best News You Don’t Know.

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The link between marriage and poverty in Nashville acknowledged in NashvilleNext.

I have finally gotten around to reading NashvilleNext.  I found this gem in the Economic and Workforce Development section. Often the role of marriage as a factor in poverty is ignored. I am pleased to see it acknowledged in this report. This is from page 21 at this link. 

Unfortunately this acknowledgement does not lead to a recommendation of goals, policies or actions.  A policy prescription from this acknowledgement should be that Nashville will attempt to instill a respect for marriage and work to discourage young women from becoming pregnant. 

There is only so much government can and should do to promote social policies, however the same leadership Mayor Barry has shown to combating youth violence could be devoted to curtailing illegitimate births. United Way could make reducing illegitimate births one of their goals for which they award grant funding. Religious leaders, civic and charitable organizations, and schools could join in a united campaign to combat pregnancy among young girls. Surely, as much attention should be paid to reducing illegitimate births as there is to combating bullying, not texting and driving, wearing seat belts, and not littering.  

The term "single mother" is used everywhere as an inclusive term for divorced mothers, widowed mothers and never married mothers who gave birth out of wedlock.  I wish some researcher would dig deeper. I suspect that there is less poverty and societal ill effects from divorced mother and widowed mothers than from never married mothers. We should discontinue use of the term "single mothers" as an inclusive term that includes divorce, widowed, and women who had a child born out of wedlock. 

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Stupid poor people line up to play the powerball lottery.

People who think they can get rich without working, other stupid people, and people who like a

long-shot and just enjoy participating in a game of chance with an incredibly large jackpot lined up last night to buy lottery tickets in Nashville and at convenience stores across America. If no one matches all the numbers on  tonight drawing, the next drawing is expected to soar to $1.3 billion.

The chance of winning in tonight's drawing were 1 in 292.2 million. You chance of being struck by lighting in any given year is 1 in 1,107,143. So your chance of being struck by lighting is 290 times greater than your chance of winning the lottery. The annual risk of being killed in a plane crash for the average American is about 1 in 11 million.

I have no moral opposition to gambling although I have never gambled much myself. I don't even know how to play poker.  While a young man in the service I played slot machines in the airman's club from time to time.  I went to Vegas once to a League of Cities convention and gambled a little but just did not enjoy it that much. I just don't see the attraction.  I have bet on horses or dogs maybe a total of 20 times and did enjoy that. I  have bought only two lottery tickets in my life. If I enjoyed gambling, I would do it and not feel guilty. As a leisure activity I do not see it any worse than any other leisure activity such as going out drinking and listening to music or going  to a sports event or to a movie or a concert.

What bothers me about the lottery is that most people who play the lottery are poor people who should be paying their utility bills on time rather than buying lottery tickets or should be buying food for their family. I am not for being overly protective of stupid people. People should be free to be stupid. I don't want to ban payday lenders, as an example. I think payday lenders are kind of slimy, but for people who have a crisis or never learned money management, the exorbitant interest rate charged by payday lenders is cheaper than having your electricity cut off. It is cheaper than bouncing a check. I still think that for the most part however, payday lenders are preying on weak and stupid people. I could not be in the payday loan business and feel like an honorable person.

When payday lenders prey on stupid people, it is not me doing it.  They are not doing it in my name. However, the lottery is the government preying on stupid people. While I am not for using the power of government to protect stupid people from being preyed upon necessarily, I don't want the government to be the one preying on stupid people. The State lottery is done in the name of "we the people." I think it is shameful and we should repeal the State lottery. I also think it should be illegal for anyone on food stamps or any other public assistance to purchase a lottery ticket. If you are so poor you need a handout, you should not be permitted to gamble with that money.

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Obamacare is failing and a tax penalty will not make it work.

Obamacare is failing. The sooner it fails and we can start serious discussions about market oriented health care reform the better.

Starting in 2016, every American must be enrolled in an Obamacare ACA-compliant health insurance plan or face a tax penalty of $695 per adult or 2.5% of their income, whichever is higher. That is not going to work to change behavior among most low-income people. Among people who are middle-class or socially  and culturally middle-class it may, but it is not going to force many low income people to buy health insurance.

Most of my working career, I have worked with low income people. Many have expensive cell phone and cable TV and routinely buy lottery tickets, but have no savings.  They do not even have auto insurance and that is the law.  They pay 540% interest rates or higher at a payday lender company in order to keep their electricity from being cut off and then do the same thing again the following month.

For people with this mindset, even if they enroll in health care, will not pay the monthly premium.  They would rather spend the $96 a month that their insurance premium cost them, or whatever it is, on a Titans starter jacket or chrome wheels for their muscle car or more bling or attend a concert rather than pay a health insurance premium.

The tax penalty is not going to change their behavior.  They simply do not understand how income tax works. They think when they get a big income tax refund that Santa Clause just came a little late or that they hit the jackpot. When I explain to them that if they get a tax refund they have been robbed and it is a bad thing, they look at me as if I am crazy. I tell them that when they get a tax refund, the government took too much of their money each week and then gave it back to them, but didn't pay them interest.  They don't grasp the concept.  In fact, many purposely claim fewer dependents than they actually have to on their w-4 because they know that claiming fewer dependents means a bigger refund at the end of the year. They are not going to pay a health insurance premium in order to avoid a tax penalty. There is a gap between grasping cause and effect.

People who spend every dollar they make and do not value savings or grasp the concept of budgeting or delayed gratification will not be able to pay the deductible or the co-pay under Obamacare.  They will still go without routine health care and will still go to the emergency room in an emergency.

The fear of bankruptcy is not a motivating factor that will persuade many low-income people to get health insurance. Multiple bankruptcy is just the way the world works for many low-income people. They don't even buy cars the way middle class people do.  They go to a "buy-here, pay-here" auto dealer and when the transmission starts slipping they stop making the payments and let it get repossessed. I have had them say with pride, "The transmission started slipping and I just told them, they could come and get it."  A auto repo or a bankruptcy is not a terrible thing to happen in the minds of many low-income people. Health insurance will not be a high priority with people with this mind set.

I am not sure what the solution is. If people do not value health insurance, why should it be forced on them? I know many middle class people who had preexisting conditions and could not get affordable insurance prior to Obamacare value what is offered, but for many others they do not. If emergency care is reduced or community clinics are closed or if hospitals close as a result of Obamacare, many of the low-income who have low-income values and who rely on these services will be worse off.  We may need a minimal safety net for the low-income with low-income values and market solutions everyone else.

Many Say High Deductibles Make Their Health Law Insurance All but Useless

By ROBERT PEAR, The New York Times, WASHINGTON — Obama administration officials, urging people to sign up for health insurance under the Affordable Care Act, have trumpeted the low premiums available on the law’s new marketplaces.

But for many consumers, the sticker shock is coming not on the front end, when they purchase the plans, but on the back end when they get sick: sky-high deductibles that are leaving some newly insured feeling nearly as vulnerable as they were before they had coverage.

“The deductible, $3,000 a year, makes it impossible to actually go to the doctor,” said David R. Reines, 60, of Jefferson Township, N.J., a former hardware salesman with chronic knee pain. “We have insurance, but can’t afford to use it.” (link)

 

UnitedHealth warns it may exit Obamacare plans 

USA Today - The nation's largest health insurer warned Thursday that it may pull out of the Obamacare exchanges after 2016 – forcing more than a half million  people to find other coverage – after low enrollment and high usage cost the company millions of dollars.

The possible move by UnitedHealth Group raises new questions about the viability of President Obama's signature health law and follows the departure of more than half of the non-profit insurance cooperatives this year. If UnitedHealth drops out, consumers would lose one of the lowest-cost plans available in much of the country, and some wonder how smaller insurers could fill the void. (link)

 Ratings of U.S. Healthcare Quality No Better After ACA

Gallup, WASHINGTON, D.C. -- Fifty-three percent of Americans rate the quality of healthcare in the U.S. as "excellent" or "good." This is similar to what Gallup has found since 2013, but is down from the more positive ratings of 2008 to 2012.

From 2005 to 2007, a slim majority of Americans rated the quality of healthcare in the U.S. as excellent or good. But this percentage increased slightly in 2008 after President Barack Obama was elected, reaching a high of 62% in November 2010 and again in 2012 just after he was elected to his second term. Those higher ratings could reflect optimism about Obama's promises to reform healthcare and the passage of the Affordable Care Act. However, since November 2013, shortly after the ACA insurance exchanges first opened, no more than 54% of Americans have rated the quality of healthcare in the U.S. as excellent or good.

Americans rate U.S. healthcare coverage far less positively than they do healthcare quality. The percentage of Americans rating U.S. healthcare coverage as excellent or good increased from 26% in 2008 to 38% in 2009. Since then, the percentage who view healthcare coverage in the U.S. positively has varied slightly from year to year, but remains higher than before Obama took office.

Fewer Than One in Four Satisfied With U.S. Healthcare Costs
Americans' satisfaction with the total cost of healthcare in the U.S. remains low, with 21% saying they are satisfied. Twenty-eight percent were satisfied in 2001, but satisfaction fell after that, rising again only in 2009, to 26%. This increase too may reflect optimism about the possibilities of Obama's healthcare reform. However, satisfaction has since slipped.

Bottom Line
Although Americans were more positive about the cost, quality and coverage of U.S. healthcare in the early years of the Obama's first term, that optimism has faded to some degree. Americans' ratings of healthcare coverage are not high, but remain higher than they were in George W. Bush's second term. This may have something to do with the ACA, especially as the U.S. uninsured percentage has dropped since the ACA exchanges opened. The ACA may not have had such obviously positive effects on cost and quality, which Americans generally regard as no better than before Obama took office.
At the same time, Americans continue to rate their personal healthcare positively overall, although again without much improvement since the recent healthcare reform took effect.

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Obamacare Could Face Large Numbers of Dropouts

Obamacare Could Face Large Numbers of Dropouts

More than half the people who enrolled in Obamacare last year don’t plan to sign up again—and that’s bad news for the president’s  health care law.  A new Bankrate survey reveals that 53 percent of current ...The Fiscal Times

My Comment: I could have told you that. With deductibles as high as $6500 the low income will do what they have done for a long time and use the emergency room as their primary source of  health care. I have worked with poor people most of my life. With no assets to loose, they do not need to be protected from catastrophic expense.  If they run up hospital and doctor bills in the thousands and their wages are eventually garnished they will simply file bankruptcy. Unlike people with assets, a bankruptcy is not as devastating to people with no assets. Also, I never did think the low income would forgo the purchase of a sports starter jacket or cable TV to pay an insurance premium.  The desire for immediate gratification and lack of discipline and poor decision making is part of the reason they are poor to begin with. 

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Mayor Karl Dean says November 13th is Child Hungar Day

Mayor Karl Dean has just released a public service announcement promoting November 13 as Child Hunger Day. It has the requisite soft mood music in the background as Dean says there are 4,000 children suffering from hunger here in middle Tennessee. He ask us to take the 365 challenge and for just $1 a day you can change the life of a child suffering from hunger. You can view the PSA at this link. 

Didn't we just have a whole month devoted to hunger?  The month of September was Hunger Action Month so why is November 13th Child Hunger Day?  Is not a whole month enough?  It is not that I am a heartless bastard who wants kids to go hungry.  I just don't believe hunger is that big of a deal in America. I do not believe there are 4000 kids "suffering" from hunger in middle Tennessee. Ask your self, do you believe it?

I believe that if there is any real hungry kids in America it is because of bad parents who sell the food stamps and spend the money on crack or booze or gambling instead of milk and groceries. To solve that problem, we must be willing to take kids away from bad parents which I would be willing to do.  Giving the incidents of poor, neglectful, and abusive parenting and the failure of the foster care system, I think maybe it is time to bring back public orphanages and be willing to take kids away from parents who will not care for them. If they are in an orphanage, we know they will be fed.

Below is my commentary commemorating Hunger Action Month. The same commentary applies to Child Hunger Day.

This is Hunger Action Month and we are told that one in six Tennesseans "struggle with hunger."  I don't believe it! I have never believed the hype about hunger. I remember a few years ago there was a ad, with sad music in the background, for some organization fighting hunger that went something like this: "It could be the person you work next to, it could be that person you ride the bus with every morning but x number of x number of people go to bed hungry every night." I didn't believe it then and do not believe it now. I thought, if they go to bed hungry it is probably because they are on a diet.

Most of my working career, I have worked one way or the other with poor people and people in crisis.  I don't know that I have ever witnesses real hunger. At one time the place where I work was an outlet for Nashville's Table and Second Harvest Food Bank.  The food people got from that place supplemented their budget and helped them, but I don't think many of the clients were hungry and maybe it was because of these agencies they were not hungry, but those agencies were there. Even among the homeless there is an abundance of free meals in Nashville. This is link to a list of 113 food pantries in Nashville.

What do people really mean by "hunger?"  Well notice that the campaign does not say they are starving or have nothing to eat or do not know where their next meal is coming from; it says they "struggle" with hunger.  I think "struggles with  hunger" is synonymous with "food insecurity" and that means "without consistent access to enough nutritious food to live a healthy life." Here is how an article in Forbes called, 29 Uncomfortable Myths About Soaring Poverty In America described it:

21. Today, approximately 17 million children in the United States are facing food insecurity. In other words, that means that “one in four children in the country is living without consistent access to enough nutritious food to live a healthy life.”

Food insecurity is one of those odd numbers again. It’s whether the household has ever skipped a meal in the year, or had a less than adequately nutritious one, or even had to drop the quality of their menu, as a result of not having the money to buy food. So having to have pasta with ketchup for lunch and dinner because Pops blew the food budget on a bottle of whiskey counts here. We can indeed call this poverty if we want to but it’s obviously not an extreme form of it.

We have 47 million Americans on food stamps (now called SNAP) and our local school system decided to give free breakfast and lunch to every child in school and end the necessity to qualify for free or reduced lunch. We are very generous to the poor in America.  We are so generous that people become trapped in poverty and it is too expensive to stop being poor.  If one is eligible for Aid to Dependent children, medicaid, public housing, earned income tax credit, food stamps and a free telephone and gets the free stuff such as clothes and schools supplies and Christmas gifts from non-profit agencies, it takes a lot of money to equal that same level of income one has living in poverty.  If one tries to enter the workforce and fails, then they must requalify for those benefits and there may be a long waiting list for some of them.  It is easier to stay poor.

Why do we sensationalize hunger? I have some theories:
(1) The non-profits and government bureaucrats want to keep their job. If the problem does not appear a severe crisis then people may not give and tax payers may be more demanding that government spending be cut.
(2) There is a political payoff to perpetuating a myth that times are really bad and only the government can help hurting people and that the wealth needs to be redistributed.  Democrats are looked upon as the party that cares about poor people so by spreading a perception that there is widespread hunger in America it helps Democrats stay in office.
(3) It is simply advertising and advertisers exaggerate and lie. These agencies helping the poor will get more money to help the poor if the situation appears dire. They have advertising agencies create a fund raising campaign. And,
(4) it makes good copy and TV.  The liberal media shares the world view of other liberal but also a story about hunger in the richest country in the world makes a good story. 

I am not opposed to programs to help families in poverty.  I do think food stamps is out of control and there is a lot of waste and corruption in the program and the food stamp program needs to be cut, but I am not opposed to programs that help the poor. I occasionally give to the Nashville Rescue Mission or buy a homeless newspaper or contribute to Second Harvest or  Meals-on-Wheels.  These are good programs. I hate to see food go to waste and I think Nashville's Table and Second Harvest are good programs.  I admire the work done by all the churches who help the poor supplement there food budget. However, it is dishonest and unnecessary to create an impression that there is widespread hunger in America.

The Myth of Starving Americans 

According to the Census Bureau, 96% of parents classified as poor said their children were never hungry.

Wall Street Journal, Jan. 2012 - We take it as a given that hunger stalks America. We hear it in the news, we see a myriad of government and private organizations set up to feed the hungry. And we are often reminded of the greatest of all ironies—in the richest nation on earth, there are still those without enough to eat. But are these media portrayals of hunger in America accurate? 

A hungry child is the ultimate third rail in the entitlement debate. Few candidates—Democrat, Republican or independent—would even question conventional wisdom on this particular issue because that would make them look indifferent to hungry children and that, of course, is political death.

The U.S. government spends close to $1 trillion a year providing cash, food, housing, medical care and services to poor and near-poor people. (read more)

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Nashville Students Prove That Poverty Doesn’t Dictate Academic Outcomes

by TCSC staff,| September 23, 201-  In far too many corners of Nashville, a student’s zip code factors heavily into their chances of getting into and graduating from a 2 or 4 year college.

The data is clear on low-income students.  According to Pew Center research[i], low-income students lag far behind their more affluent peers by significant margins. And this is just enrolling in college. Far fewer low-income students actually finish with a degree. Over the last decade, however, we have seen the emergence of “beat the odds schools”- high poverty schools that are getting incredible academic results from their students.

In pursuit of ever-stronger public schools, some cities and states have begun formally identifying “beat the odds schools” to focus attention on what these schools are doing differently and to facilitate the sharing of these practices across schools.  The Tennessee Charter School Center proposes a “Beat the Odds” measure for Tennessee- schools that have more than 75% Economically Disadvantaged and had more than 50% of their students score Proficient or Advanced on the 2013-14 TCAP achievement exam.

Metropolitan Nashville Public Schools (MNPS) is a district of 84,000 students with a diverse student body and spread out over a large geography. Almost three quarters of the student population is Economically Disadvantaged; nearly 60,000 students qualify for free or reduced lunch. Not surprisingly, Metro Nashville Public Schools has a number of good public schools, both traditional and charter, that are “beating the odds,” serving a high poverty student population and ensuring high levels of academic achievement.  We’re proud to recognize those schools and their results from the 2013-14 year here.

TCAP Math, Grades 3-8

Type	School	% Econ Disadvantaged	% P/A
Charter	Nashville Prep	78.10%	82.70%
Charter	KIPP Academy Nashville	91.30%	77.90%
Charter	Liberty Collegiate	86.00%	76.00%
Charter	STEM Prep Academy	84.30%	74.00%
Charter	New Vision Academy	82.00%	62.80%
Charter	KIPP College Prep	84.40%	62.20%
District	Old Center Elementary	85.80%	57.50%
Charter	Knowledge Academy	82.40%	54.20%
District	Chadwell Elementary	93.20%	54.00%
District	Donelson MS	76.00%	53.30%
Charter	Cameron College Prep	96.40%	52.00%
District	Cole Elementary	90.90%	50.90%
Charter	Intrepid College Prep	81.00%	50.60%
District	Cameron MS	91.90%	50.00%

TCAP RLA, Grades 3-8

Type	School	% Econ Disadvantaged	% P/A
Charter	Liberty Collegiate	86.00%	65.70%
Charter	Intrepid College Prep	81.00%	62.60%
Charter	Nashville Prep	78.10%	60.40%
Charter	STEM Prep Academy	84.30%	59.10%
Charter	KIPP Academy Nashville	91.30%	56.60%
District	Old Center Elementary	85.80%	52.80%
Charter	New Vision Academy	82.00%	50.60%
Charter	Knowledge Academy	82.40%	50.50%

TCAP Science, Grades 3-8

Type	School	% Econ Disadvantaged	% P/A
Charter	Liberty Collegiate	86.00%	90.70%
Charter	STEM Prep Academy	84.30%	89.40%
Charter	Nashville Prep	78.10%	87.50%
Charter	LEAD Prep Southeast	87.30%	83.60%
Charter	KIPP Academy Nashville	91.30%	78.20%
Charter	New Vision Academy	82.00%	76.70%
Charter	Knowledge Academy	82.40%	75.00%
District	Old Center Elementary	85.80%	71.70%
Charter	KIPP College Prep	84.40%	66.70%
Charter	Intrepid College Prep	81.00%	62.60%
District	Rosebank Elementary	87.60%	62.30%
Charter	Cameron College Prep	96.40%	53.30%
District	Charlotte Park Elementary	86.10%	51.10%
District	Chadwell Elementary	93.20%	50.80%

TCAP Algebra 1 EOC

Type	School	% Econ Disadvantaged	% P/A
Charter	LEAD Academy High School	89.00%	80.40%
District	Antioch High School	75.00%	58.80%
District	Maplewood	87.60%	53.90%
District	Glencliff	82.50%	52.80%

TCAP English 2 EOC

Type	School	% Econ Disadvantaged	% P/A
Charter	LEAD Academy High School	89.00%	74.00%
District	Antioch High School	75.00%	55.20%

TCAP Biology 1 EOC

Type	School	% Econ Disadvantaged	% P/A
Charter	LEAD Academy High School	89.00%	83.30%

We need to study these schools more, their practices and habits, and the specific things they are doing to ensure success among high poverty populations. Collaboration must be a top priority in order to explore these schools and their success. It is important for charter schools and traditional schools alike to look at the best practices that can be shared across classrooms, schools and the district. We propose a working group, comprised of educators and leaders from both charter and traditional schools, tasked with producing a report on those practices that could be replicated in other schools. This work should begin as soon as possible, because these students cannot afford to wait.

[i] http://www.pewresearch.org/fact-tank/2014/01/15/college-enrollment-among-low-income-students-still-trails-richer-groups/

Reposted from the Inside Charters website. Rod 

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About "Hunger Action Month": Just how bad is hungar in America?

This is Hunger Action Month and we are told that one in six Tennesseans "struggle with hunger."  I don't believe it! I have never believed the hype about hunger. I remember a few years ago there was a ad, with sad music in the background, for some organization fighting hunger that went something like this: "It could be the person you work next to, it could be that person you ride the bus with every morning but x number of x number of people go to bed hungry every night." I didn't believe it then and do not believe it now. I thought, if they go to bed hungry it is probably because they are on a diet.

Most of my working career, I have worked one way or the other with poor people and people in crisis.  I don't know that I have ever witnesses real hunger. At one time the place where I work was an outlet for Nashville's Table and Second Harvest Food Bank.  The food people got from that place supplemented their budget and helped them, but I don't think many of the clients were hungry and maybe it was because of these agencies they were not hungry, but those agencies were there. Even among the homeless there is an abundance of free meals in Nashville. This is link to a list of 113 food pantries in Nashville.

What do people really mean by "hunger?"  Well notice that the campaign does not say they are starving or have nothing to eat or do not know where their next meal is coming from; it says they "struggle" with hunger.  I think "struggles with  hunger" is synonymous with "food insecurity" and that means "without consistent access to enough nutritious food to live a healthy life." Here is how an article in Forbes called, 29 Uncomfortable Myths About Soaring Poverty In America described it:

21. Today, approximately 17 million children in the United States are facing food insecurity. In other words, that means that “one in four children in the country is living without consistent access to enough nutritious food to live a healthy life.”

Food insecurity is one of those odd numbers again. It’s whether the household has ever skipped a meal in the year, or had a less than adequately nutritious one, or even had to drop the quality of their menu, as a result of not having the money to buy food. So having to have pasta with ketchup for lunch and dinner because Pops blew the food budget on a bottle of whiskey counts here. We can indeed call this poverty if we want to but it’s obviously not an extreme form of it.

We have 47 million Americans on food stamps (now called SNAP) and our local school system decided to give free breakfast and lunch to every child in school and end the necessity to qualify for free or reduced lunch. We are very generous to the poor in America.  We are so generous that people become trapped in poverty and it is too expensive to stop being poor.  If one is eligible for Aid to Dependent children, medicaid, public housing, earned income tax credit, food stamps and a free telephone and gets the free stuff such as clothes and schools supplies and Christmas gifts from non-profit agencies, it takes a lot of money to equal that same level of income one has living in poverty.  If one tries to enter the workforce and fails, then they must requalify for those benefits and there may be a long waiting list for some of them.  It is easier to stay poor.

Why do we sensationalize hunger? I have some theories. (1) The non-profits and government bureaucrats want to keep their job. If the problem does not appear a severe crisis then people may not give and tax payers may be more demanding that government spending be cut. (2) There is a political payoff to perpetuating a myth that times are really bad and only the government can help hurting people and that the wealth needs to be redistributed.  Democrats are looked upon as the party that cares about poor people so by spreading a perception that there is widespread hunger in America it helps Democrats stay in office. (4) It is simply advertising and advertisers exaggerate and lie. These agencies helping the poor will get more money to help the poor if the situation appears dire. They have advertising agencies create a fund raising campaign. And, (4) it makes good copy and TV.  The liberal media shares the world view of other liberal but also a story about hunger in the richest country in the world makes a good story. 

I am not opposed to programs to help families in poverty.  I do think food stamps is out of control and there is a lot of waste and corruption in the program and the food stamp program needs to be cut, but I am not opposed to programs that help the poor. I occasionally give to the Nashville Rescue Mission or buy a homeless newspaper or contribute to Second Harvest or  Meals-on-Wheels.  These are good programs. I hate to see food go to waste and I think Nashville's Table and Second Harvest are good programs.  I admire the work done by all the churches who help the poor supplement there food budget. However, it is dishonest and unnecessary to create an impression that there is widespread hunger in America.

The Myth of Starving Americans 

According to the Census Bureau, 96% of parents classified as poor said their children were never hungry.

Wall Street Journal, Jan. 2012 - We take it as a given that hunger stalks America. We hear it in the news, we see a myriad of government and private organizations set up to feed the hungry. And we are often reminded of the greatest of all ironies—in the richest nation on earth, there are still those without enough to eat. But are these media portrayals of hunger in America accurate? 

A hungry child is the ultimate third rail in the entitlement debate. Few candidates—Democrat, Republican or independent—would even question conventional wisdom on this particular issue because that would make them look indifferent to hungry children and that, of course, is political death.

The U.S. government spends close to $1 trillion a year providing cash, food, housing, medical care and services to poor and near-poor people. (read more)

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ObamaCare Enrollment Is Shrinking, Top Insurers Say

By JED GRAHAM, INVESTOR'S BUSINESS DAILY, August 11, 2014 - Aetna's (NYSE:AET) ObamaCare exchange statistics should clear up any doubt as to why the Obama Administration has been tight-lipped about enrollment since celebrating 8 million sign-ups in mid-April.

Reality, evidence suggests, could require quite a come-down from those lofty claims. The nation's third-largest health insurer had 720,000 people sign up for exchange coverage as of May 20, a spokesman confirmed to IBD. At the end of June, it had fewer than 600,000 paying customers. Aetna expects that to fall to "just over 500,000" by the end of the year. (link)

My Comment: I am not surprised.

In my job, I work in the non-profit sector serving primarily low income people. Part of what I do is budget counseling. The other day I had a client who had lost her job, who was enrolled in an Obamacare insurance plan that was $400 a month with a a $5000 deductible.  For a low income or no-income person that might as well be no insurance at all. A $5000 deductible may be a good plan for a middle class person who has assets that could be at risk and who was denied coverage due to a pre-existing condition, but for a low-income person with no wealth at risk or for the previously middle class person who has not accumulated assets and has lost his job, he would be much better off using the emergency room and free clinics.

I have worked with low-income people for most of my life. Many do not even have auto insurance although they have a car and they drive and although the law requires it. Many smoke cigarettes and play the lottery and have cable TV rather than pay their utilities. Many live day to day and take what pleasures they can and worry about tomorrow, tomorrow. Sports starter jackets, a good cell phone, bling, and a nice tattoo are more important than health insurance. Most of the low-income I have served are simply not going to pay a monthly insurance premium.

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Are the working poor any better off under Obamacare? Will they pay their premium?

How many people  have actually gotten health care coverage under Obamacare?  It is hard to say.  The Administration said 8 million enrolled but we don't know how many of those paid their premium. Also the Administration has not released numbers in over two months, so they must be embarrassing or they would be crowing. This article makes an informed calculation that the number is less than 4 million: Obamacare Exchanges Are ‘Disappointing’ With Fewer Than 4 Million Newly Insured. The Government Hoped for 26 Million.

No doubt some people who needed health insurance are now covered under Obamacare. Those probably most benefiting are the middle-class people  with pre-existing conditions. There have no doubt been winners and losers under the program.

One thing I have not seen discussed anywhere is that those who previously did not have health insurance did not, not have health care. Among the working poor, having insurance may not make them any better off.  I have worked with low-income people in one way or the other most of my adult life.  In my experience, few low income people go without health care. If they earn too much for Teencare, there is a safety net. They often are served at a United Community Health Service facility for their primary care such as the Vanderbilt Clinic at Vine Hill. These programs have a sliding fee program making care affordable. Here is what the Vine Hill clinic says about their program:

Vine Hill Clinic offers a full range of primary care services, including chronic disease management, pediatrics, social work services, and preventative services such as annual physicals, well child exams and immunizations. Our clinic also offers basic dental services to our patients such as cleanings, fillings and extractions. Our Medical Staff who specialize in pediatric and adult care are here to serve you. Patients are encouraged to schedule an appointment. "Walk-in" and Open Access appointments are available each day. Open Access appointments are similar to “walk-in” appointments, except Open Access appointments are available for scheduling starting at 8:00 am for that day. This way you can come in at your appointment time and it will prevent you from having to wait very long to be seen. Medicare, Medicaid (TennCare) and most private insurance is accepted. Discounts are available for those without health/dental insurance who meet income guidelines. Patients can also obtain low cost or free prescriptions and most lab tests provided on site are discounted or free.

There is also a program called "Bridges to Care" that is much better than Obamacare. I have encountered several people using this program. I know someone who has had heart problems and various other health issues and has had all of her health care cost paid for under this program.

Also, the emergency room is a source of care for people with no insurance. Part of the logic of Obamacare is that reliance on the emergency room by the uninsured is driving up health care cost.  No doubt that is true.  But I predict that we will see little decline in emergency room use unless some disincentives are put in place to discourage emergency room use. Those who now rely on the emergency room for non-emergency care could use a health clinic now, instead of the emergency room. I was around when TennCare was an expansive health care program, not just Medicaid like it is now.  Under the old TennCare, the working poor still relied on the emergency room.  Part of the reason is that the working poor often work jobs where it is difficult to take off work for a doctors appointment and the emergency room is open 24 hours a day. Part of it may simply be habit.

There are no doubt many admirable hard working responsible working poor people.  But there is also a way of thinking that accompanies poverty in our welfare state. Middle class people or the working poor with middle class values would be mortified if they could not make their car payment and a car was repossessed. It is not uncommon to hear something like this from a poor person: "I bought that car, and I hadn't had it six months until the transmission started slipping, so I just stopped making the payments and said, 'you can come get it.'" They say this with pride.  They do not view a repossession of a car as a failure.

Not all, and I don't know the percentage, but I know it is a common attitude among the poor that they do not think about debt the same way middle class people do.  They do not worry about $50,000 of medical bills. They have no assets and get by day by day.  They are not going to go without cable TV to pay a hospital bill.

I don't doubt that many of the people now covered by Obamacare will make sure they maintain their insurance premiums and will be grateful to have health insurance.  When it come to the working poor, I am not so sure. Even it they made that first insurance premium payment, if they must choose between a new Titans starter jacket and making that second insurance payment, many of them will choose the new Titans jacket.

The income tax penalty is not going to make a lot of difference either. They just do not think that far ahead. They have never learned delayed gratification. Also, many of them either legitimately don't pay taxes or have learned how to cheat on their taxes so they don't pay taxes.  As the penalty increases, no doubt the working poor with middle class values and the middle class will be motivated to comply and avoid the penalty, but not the working poor with lower class values.

Instead of just comparing the number of people who now have insurance who before did not have insurance, I think a better measure of the success of Obamacare is how many people now have health care or much better health care than they did before Obamacare. I bet it is not many.  A less comprehensive approach to changing the health care delivery system, could have helped those few.

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What prevents poor children from becoming middle class adults?

From Family Action Council of Tennessee:

What is the greatest obstacle in the U.S. to upward intergenerational social mobility, that is, what's the primary factor preventing poor children from moving up the economic ladder as adults?  Is it income inequality?  The quality of their schools?  Racial and economic segregation? Much to the dismay of liberals, the answer is ... none of the above.  It is family structure. Children living with married moms and dads have the greatest chance of moving up the economic ladder, according to a new study by researchers at Harvard and University of California at Berkeley.

The study of more than 40 million children and their parents found that "the fraction of children living in single-parent households is the strongest correlate of upward income mobility among all the variables we explored...."  While liberals believe the answer is throwing more money at supposedly underfunded government programs, we believe the solution is public policies and societal support for encouraging and strengthening marriages that provide children with both a mother and a father.  As we recently observed, 40% or more of births since 2008 in the U.S. have been by unmarried women, and the percentage of all babies born who are born to unmarried women has more than doubled since 1980.

My Comment: This truth is almost universality ignored by popular culture and the mainstream press. There can be big conferences and lengthy reports addressing the issue of poverty that never mention the fact that the primary factor contributing to poverty is unmarried women giving birth to children. We need to change the economic incentives that encourage single women to have children and we need policy changes that support families.  However, we need a cultural shift. Instead of single motherhood being something that is to be celebrated and single mothers being treated as noble heroes, they should be pitied and having a child out of wedlock should be condemned and be a shameful event. Public condemnation can influence behavior. Women are not having children out of wedlock because they don't know what causes pregnancy. Women are not having children out of wedlock because they don't have access to birth control. They do it primarily because it is the norm and not condemned. When something is socially condemned you will have less of it.

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Marriage: Tennessee’s Number 1 Weapon Against Child Poverty

From Heritage Foundation: 

A dramatic rise in unwed births and the accompanying decline in marriage are the most important cause of child poverty in the state. As Chart 1 shows, in 2009, 43.5 percent of single-parent families with children in Tennessee were poor. In the same year, only 8.1 percent of married couples with children in the state were poor. Single-parent families were more than five times more likely to be poor than were married families.

The overwhelming majority of poor families with children in Tennessee are not married. (Overall, more than a third of all families with children at all income levels in the state are not married.) But a staggering 73 percent of all poor families with children in the state are unmarried. By contrast, married couples comprise only around one-quarter of poor families with children in the state. (See Chart 2.)


The higher poverty rate among single-mother families is caused by two factors: (1) the lower income caused by the absence of the father from the home, and (2) the lower average education levels among single mothers.

Marriage, Education, and Poverty

Births outside marriage in Tennessee occur predominantly among less-educated women. In Tennessee, 70.3 percent of births among women who are high school dropouts are out of wedlock. Among women who are college graduates, only 7.2 percent of births are out of wedlock. Ironically, the women most likely to have children without being married are those who have the least ability to support children on their own.

Tennessee is splitting into two separate castes. In the top half of the population, children are raised by married couples with a college education. In the bottom economic third of the population, children are raised by single mothers with a high school degree or less.

Policymakers clearly recognize that education reduces poverty, but they are largely unaware that marriage is an equally strong anti-poverty weapon. In Tennessee, married couples with children are 75 percent less likely to be poor than non-married families with the same level of education. In fact, a married family headed by a high school dropout in Tennessee is actually less likely to be poor than a non-married family headed by an individual with a few years of college.

 

Marriage, Poverty, and Race

Marriage substantially reduces the probability of poverty within all racial groups. For example, in Tennessee, non-married black families are nearly six times more likely to be poor than married black families. Non-married Hispanic families are three times more likely to be poor than married Hispanic families, while non-married white families are nearly six times more likely to be poor than married white families.

 

Marital Collapse: Not the Same as Teen Pregnancy

Unwed childbearing is often erroneously confused with teen pregnancy. In reality, only 8.6 percent of non-marital births in Tennessee occur to girls under age 18. Most non-marital births occur to young adult women in their early 20s. Lack of access to birth control is not a significant cause of non-marital births.

The Importance of Fathers

The positive effects of married fathers are not limited to income alone. Children raised by married parents have substantially better life outcomes compared to similar children raised in single-parent homes. When compared to children in intact married homes, children raised by single parents are more likely to have emotional and behavioral problems; be physically abused; smoke, drink, and use drugs; be aggressive; engage in violent, delinquent, and criminal behavior; have poor school performance; be expelled from school; and drop out of high school.[1] Many of these negative outcomes are associated with the higher poverty rates of single mothers. In many cases, however, the improvements in child well-being that are associated with marriage persist even after adjusting for differences in family income. This indicates that the father brings more to his home than just a paycheck.

Faulty Policies

Ignoring the positive impact of marriage on children leads to faulty government policies. Today,
billions are properly spent on the education of low-income youth. Billions more are spent each year on means-tested welfare aid for single mothers. But at present, Tennessee does little or nothing to discourage unwed births and nothing to encourage and strengthen healthy marriages.

Tragically, the critical facts about the importance of marriage in combating poverty are never communicated to youths at risk for future non-marital births. Similarly, the state welfare system ignores and disdains the institution of marriage: In fact, most welfare programs actively penalize low-income couples who do marry. Tennessee will continue to have high levels of child poverty, inequality, and welfare dependence as long as this governmental indifference and hostility to marriage persists.

Ironically, research shows that most unwed parents look favorably on the institution of marriage.[2] New policies should be developed that build on these attitudes. Government should provide factual information to at-risk youth about the value of marriage. It should also connect low-income couples with community resources that will help them relearn the skills needed to develop and sustain healthy marriages before bringing children into the world. Finally, the state welfare system should be reformed to encourage rather than discourage marriage.

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War on Poverty was lost. Promoting work and restoring marriage is a winning plan for eradicating poverty

Reposted from The Foundry, by Jennifer Marshall, January 8, 2014

When President Johnson launched the War on Poverty on Jan. 8, 1964, he pledged “not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it.” Sadly, the half-century legacy of Johnson’s Great Society has not lived up to that noble goal.

The War on Poverty has not done justice to the poor. Our responsibility to our neighbors in need demands more: a redirection of public policy and a commitment from each of us to do what we can in our own communities.

Despite spending nearly $20 trillion since the War on Poverty began, the poverty rate remains nearly as high today as it was in the mid-1960s. Today, government spends nearly $1 trillion annually on 80 federal means-tested programs providing cash, food, housing, medical care and targeted social services for poor and low-income Americans. Clearly, policymakers can’t hide behind reams of programs and billions in spending and declare they’ve done their duty to the poor. Good intentions aren’t enough.

We need to change the character of public assistance. That means redirecting incentives in federal welfare programs. “Sometimes those incentives encourage dependence, even for generations,” said Robert L. Woodson, Sr., founder and president of the Center for Neighborhood Enterprise, testifying before the Senate Budget Committee last year. Woodson sees firsthand the effects of these programs as he works with community leaders across the country to empower those in need to overcome adversity.

On the other hand, the right kind of incentives can “help people gain personal responsibility and
pursue their dreams,” observes Woodson. Transforming incentives to promote personal responsibility has a dramatic effect: After the 1996 welfare reform began to require recipients to work or prepare for work, welfare rolls fell by more than half, and poverty rates among single mothers and black children fell to historic lows. But that reform redirected the incentives of only one program among more than 80 federal welfare programs.

As Woodson concludes:

So if we want to help those in need, we need to ask: Is the approach we are taking to relieve poverty by what we call the safety net actually helping or is it injuring with the helping hand?

In addition to promoting work, any serious effort on behalf of those in need must get serious about restoring marriage, America’s most important inoculation against child poverty. Children born and raised outside of marriage are more than five times more likely to experience poverty than their peers raised in intact families.

When the War on Poverty began, 8 percent of all children in America were born outside marriage. Since the mid-’60s, unwed childbearing has skyrocketed to more than 40 percent of all births, and from 25 percent to about 73 percent among black children.

Rebuilding a culture of marriage calls for policy reform to reduce marriage penalties in welfare programs. It also requires the kind of relational restoration that must happen on a personal level, through the work of churches and community initiatives like First Things First in Chattanooga, TN, that build relational skills. These and other efforts to overcome poverty should engage us personally in the effort to help restore lives, families, and communities.

Promoting work and restoring marriage “would be a better battle plan for eradicating poverty in America than spending more money on failed programs,” writes Heritage Senior Research Fellow Robert Rector in today’s Wall Street Journal, “And it would help accomplish LBJ’s objective to ‘replace their despair with opportunity.’”

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