An Agenda for Reducing Poverty and Improving Opportunity
In 2015, 13.5 percent of the population and one out of every five children was living in a poor family. Not only are too many children poor now but their chances of moving up the ladder are limited. Almost two-fifths of them will remain poor as adults.
There are three major barriers to greater mobility from the bottom. The first is lack of education. The second is lack of work. And the third is family instability. In our work at Brookings, we have found that if an individual does just three things – graduates from high school, works full-time, and delays childbearing until they are in a committed and stable relationship, the poverty rate in the U.S. would fall to around 2 percent.
The question, then, is how do we help people overcome these three barriers?
First, we need to invest in low-income children beginning in the earliest years and extending at least through high school. These investments could include a home visiting program such as the Nurse Family Partnership, a high-quality pre-k experience (such as Boston’s Pre-K program), a reading program in elementary school such as Success for All, and a comprehensive high school reform, such as Talent Development or Small School of Choice in New York City.
We have shown, using a data-rich life cycle model (the Social Genome Model), that these or similar evidence-based programs, if taken to scale, could close a very large proportion of the opportunity gap between lower and higher income children. While we can always learn more, we cannot let an entire generation flounder while we do more research.
Even after accounting for the fact that our modelling is imperfect and that taking programs to scale while maintaining their effectiveness is challenging, our research suggests that we could close at least half the opportunity gap (the proportion who achieve a middle-class income by middle age) between lower and higher income kids if we acted on what we know. The benefits of any one program are modest, but the cumulative impact of intervening in every life stage are more impressive. In fact, given the expected increase in these children’s future income as a result of these interventions, our rough estimates suggest the programs would actually save taxpayers money.
Next, we have to focus on jobs. Tight labor markets are essential. We finally saw increases in employment and earnings, especially in the bottom ranks, between 2014 and 2015. There should be more progress in 2016 and 2017, assuming the Federal Reserve or a new Congress doesn’t cut off the recovery prematurely. We saw similar improvements in employment and earnings for those at the bottom in the late 1990s when the unemployment rate fell to around 4 percent. If jobs are the best antipoverty program, tight labor markets are the best jobs program.
To be sure, some people are not going to find work even in a full employment economy because they lack the skills and other attributes that employers are looking for. I believe we should offer these individuals a subsidized positon in either the public or private sector, while referring those who are not job-ready to training and support services. Because this is potentially the most expensive and risky item included in this agenda, it should be tried on a demonstration basis in a few communities to see if it can be made to work. (Some but not all past efforts have been disappointing.) But we should also limit the amount of assistance these jobless individuals receive if they fail to show up for the job or the services offered. This is a tough love approach. It says we will provide you with help, but you must be willing to take a low-wage job in return.
Child care needs to be available to those who need it. Making the child care tax credit refundable and capping it for the wealthy would help as would greater subsidies through the child care and development block grant. We should also make work pay better by raising the minimum wage and funding a more generous Earned Income or Child Tax Credit. It is possible to pay for the latter, in part, by raising the minimum wage since a higher wage reduces dependence on government assistance. Even a modest increase to $10.10 would save around $9 billion a year.
Third, we should encourage and empower teens and young adults to delay childbearing until they are in a committed relationship, and until both of them really want to have a child. Of course, we must take care of the families we already have, many of whom are struggling single parents. But currently 60 percent of births to women under the age of 30 are unplanned and our goal should be to reduce this number significantly.
The way to do this is to make the most effective forms of birth control available at no cost along with good counselling and education. In combination with the opportunity-improving measures mentioned above, this would help to reduce the proportion of children being born to young adults who say they are not yet ready to take on the difficult task of raising the next generation and who end up disrupting their own education, careers, and chances of forming stable relationships by unintentionally becoming parents too soon. Early, unplanned childbearing not only derails the lives of teens and young adults but also reduces the life chances of their children. Colorado and St Louis have led the way here and have shown that this approach not only dramatically reduces unplanned pregnancies, abortions, and births, but saves money in the process.
I believe this agenda is built on evidence, balances individual with social responsibility, and has the ability to reduce poverty and improve mobility with a modest upfront investment that should provide strong dividends in the future.
Isabel Sawhill is a Senior Fellow at the Brookings Institution. This article is based on her longer paper with the same title, co-authored with Edward Rodrigue.
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