The Sand Trap of Poverty State Policies That Cause California to Have the Highest Poverty Rate in the Country

EOPS/CARE Conference March 3, 2015 Mike Herald, WCLP

The Sad Truth

• Childhood poverty means that a child is: – less likely to finish high school -- more likely to be poor -- less likely to be working as a young adult • The longer that children are poor during the early years, the worse are adult outcomes • The younger the child, the worse are adult outcomes.

We’re Number ONE!

• • • California has the highest poverty rate of any state in the country. 23.6 percent under the SPM.

One in four children in California are growing up in poverty.

More than 1 million blind, aged and disabled Californians now live below the poverty line.

These Problems Don’t Happen By Accident

• • • Poverty is a choice.

Poverty is often based on a stereotype that gets reflected in policy decisions.

Poverty is often caused by “solutions” that create more problems than they correct.

Poverty is a Choice Who Said This?

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“I say we’re not going to adopt a socialist system with Leninism and all the rest of it. So, where are we going? France and Germany, they’re all in retreat. This is a challenging point. The modern economy is based on individuals, with most of the money moving towards the top. That’s the system. And we try to mitigate that. But I would say the country is moving more to the right.

But is the Governor Correct?

• • • • • Governor seems to suggest there is a limit to what can be done to reverse inequality.

A recent report by the Office of Economic Co-Operation and Development (OECD) from December 2014 reports that “reducing income inequality would boost economic growth.” Well known radicals like the IMF, Standard and Poor’s and Morgan Stanley concur with the OECD.

In fact if the United States had taken steps to reduce income inequality in 1990, the gross domestic product would have increased by seven percentage points. A key way to reduce inequality is increasing income of the bottom forty percent. In another words more investment by government not less.

OECD, Trends in Income Inequality and its Impact on Economic Growth, Bud Fedrico Cingano, http://www.oecd-ilibrary.org/social-issues migration-health/trends-in-income-inequality-and-its-impact-on-economic-growth_5jxrjncwx19v6j-en

Stereotype as Policy

• • • • In the 1980’s and 1990’s some blamed society’s ills on “welfare queens.” To rid ourselves of the scourge we decided to ban welfare for children born to welfare families to discourage more births.

Outcome 1 – young women kept having kids.

Outcome 2 – A couple of million kids grew up in deep poverty with a host of negative outcomes.

Solutions Become Problems

• • • • • In the 1980’s the state was having trouble collecting minor traffic fines.

Solution? – Suspend driver’s licenses if people don’t pay.

Whoops – Now we have more than 4 million persons with a suspended license and $8 billion in uncollected traffic fines. That worked well.

Suspensions cost people jobs and then they can’t pay. But because they don’t have a license they can’t get a job and then the fines go up. End result is we trap families in perpetual poverty.

But All is Not Lost

• • • • • There is more interest in reducing poverty than any time in recent memory.

In recent years we have increased CalWORKs grant by 10% but they are still at 42% of FPL.

We repealed laws banning CalWORKs and CalFresh to persons with drug convictions.

We repealed the double truancy rule.

We “banned the box” on Government job applications.

More Reasons for Hope

• • • • EOPS students w/o children are now eligible for CalFresh.

We created a new “Rapid Re-Housing” program for CalWORKs families at-risk of homelessness.

We reduced burdensome wage garnishments by banning them for medical debt and raising the income level before wages are garnished.

The CalWORKs program is now permanent at the community colleges.

But There is a Lot Left to be Done

• • • • 2 million children live in deep poverty A full time minimum wage worker in a family of four earns below the poverty level.

120,000 children are denied CalWORKs because they were in a family on welfare.

CalWORKs “reforms” resulting in more sanctions and fewer adults going to community college.

What’s on the Agenda for 2015?

• • • • • Repeal the Maximum Family Grant - SB 23

(Mitchell)

Increase the Minimum Wage to $13 - SB 3

(Leno)

Increase CalWORKs grants above deep poverty Increase SSI grants above the poverty level.

Eliminate use of license suspensions and waive unpaid traffic fines so people can get out of poverty. SB 405 (Hertzberg)