scottwallard.com

As I prepare a piece about the 2010 poverty numbers released this week – I revisited this piece I wrote two years ago at Talking Points Memo:

“During the recessions that occurred between 1980 and 1982, the national poverty rate increased by 2 full percentage points – more than 5 million persons entered poverty during that time. Poverty continued to increase after the 1982 recession officially ended, rising above 15% of the population in 1983. It wasn’t until 1998 that poverty rates returned to their pre-1980 levels. After a few years of robust economic opportunity in the late 1990s, poverty rates rose again during the jobless recovery following the 2001 recession. From 2001 to 2007, more than 4 million Americans fell into poverty because they were unable to find good paying jobs.

Today, we find ourselves in a position comparable to the early 1980s. What are the prospects for reducing poverty after we emerge from the current recession into recovery?

Although we assume poverty reduction is a policy goal for the Obama Administration and the Democratic Party, there are many reasons to be concerned about rising poverty levels and about the likelihood they will remain high.

One obstacle is political will. The focus today is on jump-starting the economy, ending two wars, shoring up financial markets, and pushing through health care reform. Success on these issues will be critical to future growth and development of our society, but even attempting to address these challenges comes with a heavy political price for Obama. As LBJ found during Vietnam, efforts to create a stronger safety net for working poor families is very difficult without political capital and popularity. Yet, if poverty reduction gets pushed to the next term, it will have to compete for space on the agenda with reducing record budget deficits and crumbling entitlements for retirees.

We should be honest though, reducing poverty is not exactly a top priority for the Left at this point. And, the broader public is unlikely to be concerned about poverty once unemployment rates begin to subside, housing markets appear stable, and investment portfolios regain most of what was lost since 2007.

A second obstacle to reducing poverty, however, is the very nature of the economy itself. When recovery comes, it again may be a jobless recovery where a wide swath of low- and formerly-middle income adults has difficulty finding good paying jobs even though GDP and the stock market are trending upward. We should expect it will be several years before the unemployment rates among individuals without college degrees return to pre-2008 levels. Even when jobs are found, many workers may find their job does not pay enough to lift their family out of poverty.

The weakened state of the nonprofit community also makes it difficult to fight poverty and help low-income families achieve greater economic well-being. Even though there have been few cuts to federal programs so far, the recession has hit every revenue source for nonprofit service organizations. State and local government budgets are cutting back, and the largest cuts to government funding for social services and antipoverty programs may be yet to come. In addition, private philanthropy is down and expected to remain down for the foreseeable future. Public and private funding cuts lead to what I refer to in my book as a “subtraction ripple effect.” Funding cuts don’t just translate into fewer clients getting help in the short-term. Instead, these cuts destabilize the operations of the nonprofit sector on which our safety net is founded and depends. Cuts today mean there will be fewer and fewer places to turn to for help next year when poverty rates are still on the rise.

Given the severity of the recession and the slow road ahead, poverty reduction needs to be more prominent on the policy agenda. If the country is to emerge fully from this downturn, we need to ensure that assistance is available to help the unemployed and underemployed deal with their economic troubles, find work, and increase their earnings so they may contribute to the recovery.”

Recently, I co-authored a report with Benjamin Roth for the Brookings Institution Metropolitan Policy Program that examined the strains confronting suburban safety nets amidst evidence of rapidly rising rates of poverty in suburban communities.

One of the most surprising findings from this work is that suburban safety nets lag behind in offering nonprofit social service programs of assistance that can help low-income populations find work and provide for their families. Yet, such programs – whether providing employment assistance, emergency food, or help finding housing – are essential sources of support in today’s safety net receiving roughly $100 billion annually. The figure below shows most suburban communities examined in our study with no or only very modest-sized social service nonprofit organizations.

There are several reasons why suburban communities lag behind in strength of safety nets. First, poverty is a relatively recent phenomenon in suburban America and has become more prominent in the wake of the recession in 2001. Unlike their urban counterparts, public agencies and nonprofit organizations in suburban areas lack the capacity and resources to address poverty issues. Second, many of the perceived virtues of suburban living make it extremely difficult to deliver safety net assistance. Low-density residential communities, small government, and a reliance on automobile transportation make it difficult for service providers to secure adequate program funding, achieve economies of scale, and find accessible places to locate programs.

What can be done? We are a compassionate country in many respects and we give generously to charity. In the short-term, our compassion should lead us to stronger channel a larger share of our philanthropic giving to charities that work with low-income populations in our local communities. Currently, about $.10 of every dollar given to charity goes to a social service nonprofit and most of that dime goes to organizations in cities. It is also important that we look past misleading stereotypes of who is poor, recognizing that many people seeking help today never thought they would face lengthy periods of time without work and are trying to get back to work as soon as they can.

In the long-term, there should be greater investment in suburban safety net programs. Part of the investment will require finding regional models for service delivery that increase access and reduce inefficiencies associated with administering programs across many different suburban counties and municipalities. Greater investment also requires we translate support for nonprofit organizations into public support for programs that will help families living below the poverty line. Particularly important are programs that provide emergency food and shelter to stabilize families, deliver services that help families cope with the stress of prolonged unemployment, and education and training for the skilled jobs of tomorrow. Without investment in a safety net that supports jobseekers until they are able to find stable work and achieve greater self-sufficiency, none of our communities will be able to fully enter into economic recovery in the coming years.

Diana Lind, at Next American City, put together a nice 15 minute excerpt from a discussion that Elizabeth Kneebone and I had about our recent reports for the Brookings Institution Metropolitan Policy Program.

The Suburban Poor: An Interview with Elizabeth Kneebone and Scott Allard
Next American City
By Diana Lind

During the housing boom, low-income families were drawn to the suburbs by construction and service jobs, as well as the opportunity to have their own homes. Then the recession hit, and recent data show that of the massive increase in the number of American poor in 2009, two-thirds occurred in suburban areas. In this episode of the Metro Matters podcast, Next American City Editor-at-Large Diana Lind speaks with Elizabeth Kneebone, a senior research associate at the Brookings Institution, whose ongoing work assesses the scale and nature of suburban poverty. Joining them is Scott Allard, a professor at the University of Chicago School of Social Service Administration, whose book Out of Reach: Place, Poverty and the New American Welfare State looks at how where people live affects the social services available to them, and argues that our current safety-net system is inadequate. Together, these experts discuss equitable access to services, a current lag in private resources and the ongoing perception problem that poverty is strictly an urban issue.

Click here to read “Strained Suburbs:The Social Service Challenges of Rising Suburban Poverty” my latest Brookings Institution Metropolitan Policy Program report on trends in suburban poverty and their implications for suburban safety nets.

Early in March, I presented findings from my book Out of Reach at the Opportunity Dividend Summit in Detroit sponsored by CEOs for Cities.  You can find the slideshow here or by clicking below:

The current issue of the University of Chicago magazine features a story, “On the line,” that discusses the impact of the recession on the residents and nonprofit agencies of Chicago.  Drawing on themes and findings from my book, Out of Reach, Lydialyle Gibson provides vivid examples of how community-based organizations in Chicago and the people they serve are coping amidst rising unemployment and depleted program resources.

Even though the stock market has been on the rise recently and optimism is emerging that the economy may start rebounding in coming months, millions of Americans are still having trouble finding work and providing for their families. News and research highlight the many challenges working poor families and communities face today. Food Pantries are facing unprecedented need for help.  More than 30 million Americans today receive help from the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps). Homelessness is on the rise. Nonprofits that help low-income families are in trouble. The foundations that typically serve as the safety net for nonprofits are struggling. As a result of mounting needs and inadequate assistance to meet those needs, people are turning to family for help.

Even though the outlook for markets may be brightening, the outlook for workers – particularly those at the lower end of the income ladder – may not be so bright. How could a recession end without improvement in the labor market? The end of recessionary periods do not correlate with immediate increases in employment opportunities because the starting and stopping points of recessions are defined by trends in GDP, not by changes in unemployment rates. Recessions are deemed to have ended when sustained GDP growth is observed.  This growth can occur due to a range of factors – like increases in productivity – without increasing overall employment rates.  Thus, unemployment can increase or remain high early on during an economic recovery.

The previous recession that lasted from March 2001 to November 2001 exemplifies this seeming contradiction. According to Bureau of Labor Statistics data, the seasonally adjusted unemployment rate among adults 25 and older without a high school degree rose from 6.8% in March 2001 to 8.0% in November 2001. Yet, the unemployment rate among this group peaked in 2003 and did not fall below 8.0% until 2005. Similarly, the unemployment rate for adults 25 and older with a high school degree increased during the recession of 2001 to 5.0% and remained at or above that level until late 2004.

In March 2009, the unemployment rate was 13.3% for adults without a high school degree and 9.0% for those with a high school degree. Even if GDP and the Dow rise in the latter half of 2009, we should expect jobseekers at the bottom of the income distribution to continue to struggle to find work.  Safety net programs, food pantries, and social service providers should be expected to see historically high levels of demand well into 2010 and 2011, maybe even beyond. In short, rosy stock market news and initial signs of turn-around may distract the news media, but they should not divert our attention from the very real investments we need to continue to make in education, training, work supports, and aid to low-skill jobseekers unable to find employment.

A recent report for the Brookings Institution’s Metropolitan Policy Program by Elizabeth Kneebone examines recent trends in job sprawl across metropolitan areas.  Despite the resurgence of urban living during the 1990s, there were relatively few job gains in downtown or central city areas between 1998 and 2006. Instead, most of the job growth appears to have occurred in suburbs far away from downtown areas.

Over the course of the 1990s, downtowns in major metro areas throughout the country experienced a sort of renaissance. The population living in downtowns grew by 10 percent over that decade, after 20 years of decline. While that upswing has continued to a certain extent in this decade, the “rebirth” of downtowns appears to have remained a residential rather than a jobs-based phenomenon. From 1998 to 2006, the top 98 metro areas experienced a 10 percent increase in the number of jobs within 35 miles of downtown. However, the urban core [within 3 miles of downtown central business district (CBD)] saw an increase of less than one percent, compared to job growth of 9 percent in the middle ring [3 to 10 miles from CBD] and more than 17 percent growth in the outer ring [10 to 35 miles from CBD]. As a result, the geographic distribution of employment steadily decentralized in the top 98 metro areas over this time period.

While these data do not reflect changes in the distribution of employment since the recent recession began, these data are consistent with evidence that poverty rates in central cities have not diminished in the years following the recession of late 2001. Moreover, they suggest that we should expect poverty and jobless rates to increase during and remain higher after we recover as a nation from the current recession.