Grande FinaléGrande Finalé

Today’s Reading:Schiller Ch. 17-Directions and

Prospects

Today’s Reading:Schiller Ch. 17-Directions and

Prospects

Additional SourcesAdditional Sources

Center for Budget and Public Policy,“What does the Safety Net Accomplish?” http://www.cbpp.org/pubs/accomplishments.htm

Aloc Sherman, “Public Benefits: Easing Poverty and Ensuring Medical Coverage,” Center for Budget and Policy Priorities, http://www.cbpp.org/7-19-05acc.htm

Center for Budget and Public Policy,“What does the Safety Net Accomplish?” http://www.cbpp.org/pubs/accomplishments.htm

Aloc Sherman, “Public Benefits: Easing Poverty and Ensuring Medical Coverage,” Center for Budget and Policy Priorities, http://www.cbpp.org/7-19-05acc.htm

Purposes of the Safety Net Purposes of the Safety Net To prevent families and individuals from falling into poverty (or becoming poorer), and losing health insurance coverage as a result of: Job loss (not quitting)

Illness Death of a worker Disability Divorce

To prevent families and individuals from falling into poverty (or becoming poorer), and losing health insurance coverage as a result of: Job loss (not quitting)

Illness Death of a worker Disability Divorce

Name the unique programs associated with each event?

What programs cover all events?

What events would you like to add to the list?

Name the unique programs associated with each event?

What programs cover all events?

What events would you like to add to the list?

Purposes of the Safety NetPurposes of the Safety Net

To assist families and individuals in poverty in meeting their basic needs and and climbing out of poverty

To assist families and individuals in poverty in meeting their basic needs and and climbing out of poverty

Name the unique programs associated with each basic need?

Name the unique programs associated with each basic need?

Accomplishments of the Safety NetAccomplishments of the Safety Net

Cuts the number of poor Americans in half! Reduces the number of poor Americans by 27 million 14 million elderly people nearly 5 million children

Reduces the severity of poverty for those who remain poor by increasing their average disposable income from 29 to 57 percent of the poverty line

Cuts the number of poor Americans in half! Reduces the number of poor Americans by 27 million 14 million elderly people nearly 5 million children

Reduces the severity of poverty for those who remain poor by increasing their average disposable income from 29 to 57 percent of the poverty line

Medical ProgramsMedical Programs

Provides medical coverage for more than 55 million low-income people over the course of a year

Medicaid 70 percent of expenditures go to the elderly and disabled

Reduces infant mortality and child deaths Increase the likelihood that low-income women receive preventive screenings for cancer

Increased availability of medication the chronically ill

Provides medical coverage for more than 55 million low-income people over the course of a year

Medicaid 70 percent of expenditures go to the elderly and disabled

Reduces infant mortality and child deaths Increase the likelihood that low-income women receive preventive screenings for cancer

Increased availability of medication the chronically ill

Food and Nutrition ProgramsFood and Nutrition Programs

Food Stamps, WIC, and school meals programs have made severe hunger rare!Reduces low-weight birthsEach $1 or WIC reduces future expenditures by $3.50

Reduces child anemia

Food Stamps, WIC, and school meals programs have made severe hunger rare!Reduces low-weight birthsEach $1 or WIC reduces future expenditures by $3.50

Reduces child anemia

Accomplishments of the Safety Net, cont.

Accomplishments of the Safety Net, cont.

EITC has raised the proportion of single mothers who work

Lifted almost 3 million children out of poverty

EITC has raised the proportion of single mothers who work

Lifted almost 3 million children out of poverty

SSI has made it possible for millions of elderly and mentally ill persons to live independently

SSI has made it possible for millions of elderly and mentally ill persons to live independently

Program EffectivenessProgram Effectiveness

How do we measure the anti-poverty effectiveness of safety-net programs? CBPP’s definition of being lifted out of poverty:A family’s disposable income would be below the poverty line if income from a benefit source were not counted

Which category of programs have the greatest overall antipoverty effectiveness? Social insurance or means-tested programs, including tax credits?

Cash-transfer or in-kind benefits?

How do we measure the anti-poverty effectiveness of safety-net programs? CBPP’s definition of being lifted out of poverty:A family’s disposable income would be below the poverty line if income from a benefit source were not counted

Which category of programs have the greatest overall antipoverty effectiveness? Social insurance or means-tested programs, including tax credits?

Cash-transfer or in-kind benefits?

Which subgroups of the poor population are helped most by

the safety net?

Which subgroups of the poor population are helped most by

the safety net?

The Winners:ElderlyFamilies with children

Qualification: Protections have weakened for poorest familiesFewer receive cash assistanceMore experience extreme poverty

The Losers:Childless, non-elderly adultsImmigrants

The Winners:ElderlyFamilies with children

Qualification: Protections have weakened for poorest familiesFewer receive cash assistanceMore experience extreme poverty

The Losers:Childless, non-elderly adultsImmigrants

The Importance of Programs Varies Across Groups

The Importance of Programs Varies Across Groups

Which programs are most effective for each of the winners?Elderly?

Social Security, SSI, Food Stamps, Medicare, Medicaid

Families with Children?EITC, Child Care Subsidies, Medicaid and SCHIP, TANF

Which programs are most effective for each of the winners?Elderly?

Social Security, SSI, Food Stamps, Medicare, Medicaid

Families with Children?EITC, Child Care Subsidies, Medicaid and SCHIP, TANF

Who is left behind?Who is left behind?

Procedure:Identify those persons and families whose disposable income is less than the appropriate poverty line.

Source: U.S. Census Bureau, Current Population Report, P60-232, The Effect of Taxes and Transfers on Income and Poverty in the United States: 2005, available at http://www.census.gov/prod/2007pubs/p60-232.pdf

Procedure:Identify those persons and families whose disposable income is less than the appropriate poverty line.

Source: U.S. Census Bureau, Current Population Report, P60-232, The Effect of Taxes and Transfers on Income and Poverty in the United States: 2005, available at http://www.census.gov/prod/2007pubs/p60-232.pdf

Definition of Disposable Income

Definition of Disposable Income

All cash income+ imputed net realized capital gains+ imputed rental income+ value of food stamps, subsidized housing, school meal programs

- federal payroll taxes- federal and state income taxes- property taxes for home owners= disposable income

All cash income+ imputed net realized capital gains+ imputed rental income+ value of food stamps, subsidized housing, school meal programs

- federal payroll taxes- federal and state income taxes- property taxes for home owners= disposable income

Who is Left Behind?Persons in Poverty, 2005

Who is Left Behind?Persons in Poverty, 2005

Children (less than 18 yr)Households headed by femalesUnrelated individualsBlacks and HispanicsHigh School dropouts

Children (less than 18 yr)Households headed by femalesUnrelated individualsBlacks and HispanicsHigh School dropouts

Who is Left Behind?Persons in Poverty, 2005

Who

Number

(millions)

Poverty Rate

(%)

Black children 3.8 34.5

Hispanic Kids

(any race)4.1 28.3

Black elderly

65 years +0.1 22.3

Unrelated Individuals

10.4 21.1

Who is Left Behind?Families in Poverty, 2005

Characteristic of Family Head

Number

(millions)

Poverty Rate

(%)

Female head, no workers

1.7 68.7

Black Single Female

3.3 38.8

Hispanic Single Female

2.0 39.6

Families of 7+ persons

0.3 25.4

Who is lacking Health Insurance?

Who is lacking Health Insurance?

By NumberPeople living in families, Whites, persons age 25 to 64, Citizens, Southerners, Persons with incomes less than $50,000, and persons who did work during the year

By Uninsured RatePersons living in unrelated subfamilies, Hispanics, persons 18 to 24 yrs, Non-citizens, Southerners, persons with less than $25,000, persons who worked only part-time or not at all.

By NumberPeople living in families, Whites, persons age 25 to 64, Citizens, Southerners, Persons with incomes less than $50,000, and persons who did work during the year

By Uninsured RatePersons living in unrelated subfamilies, Hispanics, persons 18 to 24 yrs, Non-citizens, Southerners, persons with less than $25,000, persons who worked only part-time or not at all.

What can we do to help those left behind?

Schiller’s Recommendations

What can we do to help those left behind?

Schiller’s Recommendations

Seek full employment -- Expand the number and decent jobs and their availability by:selecting that mix of public actions that maximizes impact on the unemployed and poor, while minimizing dislocations, such as inflation, elsewhere; and

incorporating clear supply-side incentives for employment and training of the poor Families of 7+ persons 0.3

25.4especially the EITC).

Seek full employment -- Expand the number and decent jobs and their availability by:selecting that mix of public actions that maximizes impact on the unemployed and poor, while minimizing dislocations, such as inflation, elsewhere; and

incorporating clear supply-side incentives for employment and training of the poor Families of 7+ persons 0.3

25.4especially the EITC).

Schiller’s Recommendations, cont.

Schiller’s Recommendations, cont.

Equalize educational opportunities by adding additional resources, not reallocating existing educational resources.

Expose to real-world job situations those with low skills as soon as possible.

Assume responsibility for those who are temporarily or permanently unable to participate in the labor market, providing adequate income support.

Equalize educational opportunities by adding additional resources, not reallocating existing educational resources.

Expose to real-world job situations those with low skills as soon as possible.

Assume responsibility for those who are temporarily or permanently unable to participate in the labor market, providing adequate income support.

Schiller’s Recommendations, cont.

Schiller’s Recommendations, cont.

Enforce equal opportunity laws and compensate for the heritage of previous discrimination by providing compensatory education and training, and preferential opportunities.

Educate the public to the realities of poverty and discrimination and reflect these realities in public policy.

Enforce equal opportunity laws and compensate for the heritage of previous discrimination by providing compensatory education and training, and preferential opportunities.

Educate the public to the realities of poverty and discrimination and reflect these realities in public policy.

Schiller’s Recommendations, cont.

Schiller’s Recommendations, cont.

Do you that Schiller’s prescription would lead to significant reductions in poverty? If not, why not?

What else might we do?

Do you that Schiller’s prescription would lead to significant reductions in poverty? If not, why not?

What else might we do?

Programs Aimed at Low-Income Men

Programs Aimed at Low-Income Men

Guiding Principles (from Mead)Combine help and hassleHonor men with potential while also challenging them

Enhance demands but convey respectBe supportive and directive

Source: Lawrence M. Mead, “Raising Work Levels--Especially among Men, Unpublished manuscript.

Guiding Principles (from Mead)Combine help and hassleHonor men with potential while also challenging them

Enhance demands but convey respectBe supportive and directive

Source: Lawrence M. Mead, “Raising Work Levels--Especially among Men, Unpublished manuscript.

Programs Aimed at Low-Income Men, cont.

Programs Aimed at Low-Income Men, cont.

EITCRaise benefits but attach an hours threshold to the benefits

Jobs-PlusRent increases were reduced for men in public housing projects if they earned more (few such men)

EITCRaise benefits but attach an hours threshold to the benefits

Jobs-PlusRent increases were reduced for men in public housing projects if they earned more (few such men)

Programs Aimed at Low-Income Men, cont.

Programs Aimed at Low-Income Men, cont.

Job CorpsPlaced disadvantaged youth in a prep-school setting, away from home, under close supervision

National Guard Youth Challenge Corps5 months on military base followed by mentoring by Guard members

Center for Employment TrainingEmployers commit to hiring participants once they are trained

Job CorpsPlaced disadvantaged youth in a prep-school setting, away from home, under close supervision

National Guard Youth Challenge Corps5 months on military base followed by mentoring by Guard members

Center for Employment TrainingEmployers commit to hiring participants once they are trained

Programs Aimed at Low-Income Men

Programs Aimed at Low-Income Men

Parents’ Fair ShareLow-income fathers who paid their child support were offered reduced support orders and employment and other services. Violators were jailed

Center for Employment OpportunitiesParolees receive several day of job instruction and are assigned to local work sites for up to 75 days

Job developers help find regular jobs

Parents’ Fair ShareLow-income fathers who paid their child support were offered reduced support orders and employment and other services. Violators were jailed

Center for Employment OpportunitiesParolees receive several day of job instruction and are assigned to local work sites for up to 75 days

Job developers help find regular jobs