The Evolving Fight Against Concentrated Poverty

Since the early 1960s and the civil rights movement, when urban concentrated poverty began to enter public consciousness, policymakers and neighborhood activists have pursued place-based anti-poverty work in distinct ways. Back then it proved difficult to address the multiplicity of issues that exist when so many people with low incomes all live in the same zip code. Today, it remains a difficult task—maybe even more so—given the disappearance of good manufacturing jobs, increased concentration of wealth, and political gridlock. Our country remains stubbornly segregated, and especially given how intertwined race and poverty are, it remains vitally important to focus on place.

Fortunately, we’ve had some new thinking on this front during the last eight years and I am guardedly optimistic that we are moving towards solutions.

I am guardedly optimistic that we are moving towards solutions.

Building on the work of social entrepreneur Geoffrey Canada, President Obama succeeded in funding the Promise Neighborhoods program centered on children in schools and, by extension, on their families. The initiative aims to improve educational and development outcomes for students living in urban and rural communities by providing cradle-to-career educational programs and family supports. Beyond the importance of the initiative itself is the fact that it opened the door to new approaches to fighting poverty. If a neighborhood revitalization initiative could be anchored in schools instead of the traditional focus on housing and community development, other hubs could serve the same purpose—including community health centers, or early childhood or mental health facilities, or a variety of family services locations.

This past year I visited four places to look at some of the cutting-edge work focused on poverty and place. The diversity of their theories of change is impressive, and all of them should be on our collective radar as we move into a new presidency.

Minneapolis, Northside Achievement Zone

I started in Minneapolis where I grew up. The city is perplexing. While it has a very low overall unemployment rate of 3.1 percent, the African-American poverty rate hovers over 44 percent and the African-American unemployment rate is about 14 percent (compared to 8.8 percent nationwide).

I visited the Northside Achievement Zone (NAZ), a Promise Neighborhood composed of a 13-by-18 block segment of North Minneapolis that is 84 percent African-American, with poverty above 50 percent, unemployment concomitantly high, and extensive violence.

NAZ was founded in 2011 with a mission to improve educational outcomes for children, including through parental involvement and a commitment to good housing, employment, and community safety. The heart of NAZ’s modus operandi is “connectors” and “navigators.” Connectors visit families in their homes and then connect them with the help they need. The connector brings the issue that a NAZ family is struggling with to a navigator who is a specialist in the relevant area—whether it’s related to education, parenting, child care, housing, or some other challenge.

NAZ works with partners of all kinds – including neighborhood-based organizations, businesses, education groups, and philanthropic organizations. In all, it has 43 ongoing partners and dozens more that it partners with when there is a specific need. It’s too early to draw any conclusions beyond the fact that NAZ’s work is promising, but if there is a second generation of Promise Neighborhoods—and I hope there is—we should keep an eye on NAZ and the work of connectors and navigators.

Chicago, Logan Square Neighborhood Association

The next stop for me was the Logan Square Neighborhood Association (LSNA) in Chicago, in business since 1962. Originally, the LSNA served mostly Polish Americans, but today it primarily serves Latino families. The LSNA engages its people in legislative advocacy and does a lot of community building as well. Its long list of activities includes: affordable housing and foreclosure prevention, education programs for children and adults, investing in green development, and addressing immigration issues, among others. There is no one place to find money for all of that work, so the LSNA stitches together its budget from dozens of sources—government at all levels, philanthropic, corporate, and individual.

I visited LSNA because of its parent mentor program, which operates in nine local public schools and directly impacts more than 3,800 students. LSNA recruits parents (usually immigrants) of children in kindergarten to come to school as semi-volunteers—they receive a small stipend at the end of each semester. The parents are nurtured into mentor roles, including by obtaining a GED. Finally, they graduate to employment—at LSNA, the school where they volunteered, or elsewhere—or they further their education. The women involved in the program successfully lobbied the state legislature for an appropriation. That’s good stuff. Put it on the agenda for national attention.

Los Angeles, Youth Policy Institute

The third stop was the Youth Policy Institute (YPI) in Los Angeles. This one is special for me because its CEO, Dixon Slingerland, worked for Robert Kennedy’s dear friend (and mine), David Hackett. Among other things, Hackett founded YPI and helped establish what we now know as AmeriCorps Vista. When he retired in 1996, Hackett passed the mantle to Slingerland. He died about 5 years ago, and I know he would be very proud of the work YPI is doing today.

You have to catch your breath at the size of what Slingerland and his colleagues have built. YPI’s budget has grown to $57 million. It has 1,600 staff serving more than 100,000 youth and adults at 125 program sites. YPI is the lead agency for a Promise Neighborhood, a Byrne Criminal Justice grantee (to reduce neighborhood crime and increase safety), and a lead partner for a Promise Zone. It operates five schools of its own and partners with 90 more, 83 public computer centers, and runs afterschool programs at 78 schools.

YPI is an example of what the nonprofit sector can do by marshaling public and private funding to help children and families at scale. I visited two of YPI’s non-school sites and talked to many staff members and even more consumers of the products. They serve children ranging from early Head Start, to older students in after school and gang prevention programs. They also offer teen pregnancy prevention, job readiness, and job placement services. YPI works with families on parenting skills, financial planning, and computer literacy. They help day laborers and teach community agriculture. Nonetheless, Dixon is very clear that for all the help YPI extends to individual children, youth, and families, the strategic point is to change things on a large scale as well. I think the lesson here is that YPI and similar organizations must have public and private investment for what they do, and that their ultimate goal is to move the needle on poverty.

New Haven, MOMS Partnership

Finally, I visited New Haven and the New Haven Mental Health Outreach for Mothers (MOMS) Partnership, an innovative collaboration of city agencies and institutions that was spearheaded by Megan Smith, a faculty member of the Yale School of Medicine. This is a relatively young endeavor but it has already received national attention and funding from the university, foundations, the state of Connecticut, and the federal government.

The exciting thing about the MOMS Partnership is its focus on mental health. The entry point to get women involved is by addressing the extra stress that comes with living in poverty and near poverty. With decentralized locations in the community, Smith’s staff—who are themselves mostly residents in low-income neighborhoods—do outreach to their neighbors and offer an 8-week stress management course to address chronic and toxic stress. Participants also have the opportunity to take skill-building and job readiness classes. The MOMS Partnership is currently branching out, and is especially expanding its effort to help participants find employment or job training.

These four diverse initiatives are representative of innovation that is occurring throughout the country. Attacking the many issues that confront people who live in low-income neighborhoods is a longtime challenge. It is vital that we support these and other efforts so we achieve a scale large enough to make a measureable difference in the fight against poverty in America.

One of the most effective ways to combat poverty among current and future generations is to maintain a full employment economy. The point should be straightforward: when the labor market is strong, or “tight,” it offers increased employment opportunities for those at the bottom. Disadvantaged workers are not only more likely to find employment in a tight labor market, they are also in a better position to secure higher wages as employers are forced to compete for labor. This can allow millions of workers the opportunity to raise themselves and their families out of poverty.

We got a chance to see this story in practice in the boom of the late 1990s, when the unemployment rate fell to its lowest levels in almost three decades, settling at a year-round average of four percent in 2000, the peak year of the boom. In this period, wages rose rapidly at all points along the income distribution, with workers at the bottom of the ladder actually achieving the largest gains.

The same principle would apply today, with the gains of a tight labor market going disproportionately to the most disadvantaged. The unemployment rate for African-Americans is typically two to two-and-a-half times that of whites. This means if we can lower the unemployment rate for whites by one percentage point, it is likely that the unemployment rate for African-Americans will fall by two percentage points. For African-American teens, the ratio hovers near six to one, meaning that a one percentage point drop in the white unemployment rate is likely to be associated with a six percentage point drop in the unemployment rate for African-American teens.

But even if we accept that full employment is especially important for the most disadvantaged groups, there is still the question of how we get there. At present, the biggest obstacle to higher levels of employment is inadequate demand for goods and services in the economy. If there were more demand, we would see more people employed.

The first place to turn to for policies that boost demand and employment is the Federal Reserve Board. While the Fed did take extraordinary measures in an attempt to boost the economy during the downturn, its current policy of raising interest rates goes 180 degrees in the opposite direction. Higher interest rates make it more expensive to buy a car or house. They also discourage companies from increasing investment in equipment, software, and buildings, and deter state and local governments from investing in infrastructure. Higher interest rates also prevent people from refinancing mortgages, which would save them money on their monthly payments.

The reason the Fed raises interest rates is to slow the economy and prevent inflation. While there are indeed times when inflation could be a problem, our economy isn’t currently suffering from excessive inflation—nor is it in danger of doing so any time soon. In this context, any Fed rate hikes will needlessly slow the economy and prevent people from getting jobs. And while the small rate hike in December likely did not have much negative effect on the economy, any further rate hikes almost certainly would seriously impede growth. It is therefore important that the Fed exercise caution with any future rate hikes and only take this step if there is a real threat of inflation.

But they can only work hard if jobs are available, and they can only lift themselves up if their wages are just.

But even if the Fed can be persuaded not to restrain growth, we will still likely need more demand in the economy to return to full employment. The most obvious way to generate demand is with more government spending, ideally through public investment. This approach has the great advantage of creating more jobs today and making ourselves richer in the future. For example, spending to promote clean energy—whether in the form of research or subsidies for the use of solar and wind power—will lessen the damage that we do to the environment, leaving less harm for future generations to deal with. Spending on physical infrastructure and mass transit will speed transportation times and reduce gas use. Money for education will give us a better trained and more productive work force.

We can also pursue full employment by reducing our trade deficit, which is running at an annual rate of more than $500 billion, or a bit less than three percent of GDP. This is money that is creating demand in other countries, while more balanced trade would create greater demand in the United States. Ordinarily the mechanism for reducing the trade deficit is a lower value for the dollar. That reduces the price of U.S. exports for people living abroad while raising the price of imported goods for people living in the United States. The result is that we export more and import less, bringing the trade deficit closer to balance and creating jobs.

However, lowering the value of the dollar is probably not a plausible strategy in the current world economy. With most of our major trading partners experiencing weaker growth than the United States or even recessions, we cannot expect them to absorb a hit to their trade balance. But we should keep a lower valued dollar on the to-do list for better economic times since the trade deficit is a key obstacle to maintaining full employment.

Finally, we can move towards full employment by reducing the supply of labor, specifically by lowering the average number of hours that people work. It used to be the case that workers took a portion of the benefits of productivity growth in the form of more leisure. While that has not been true in the United States to any great extent over the last four decades, workers in other wealthy countries have continued to see reductions in the length of the average work year and/or workweek.

Indeed, across Europe, four to six weeks of paid vacation annually is standard. Workers have paid sick days as well. By reducing the number of hours per worker, there is increased demand for more workers. This story explains how Germany managed to lower its unemployment rate in between 2008 and 2009 even though it experienced a more severe recession than did the United States. By promoting policies that spread work among more workers, the government can hope to create a tighter labor market, which will also give workers the bargaining power they need to obtain higher wages.

Although full employment is not the complete solution to poverty, reaching it would go a long way. It should also be an area of bipartisan agreement. After all, conservatives are supposed to like the idea of people working hard to lift themselves up. But they can only work hard if jobs are available, and they can only lift themselves up if their wages are just.

Over the past seven years, our economy has come back from the brink of catastrophe. The unemployment rate is now below 5.0 percent, 14 million new jobs have been created, and health insurance is now affordable for millions of Americans. By nearly every measure, our nation is doing better today than it was right before the Great Recession. But for more than 46 million Americans, poverty is a harsh daily reality, and the triumphs of our economic recovery have meant little. That’s why we must continue to wage the battle against hunger, homelessness, and joblessness in our communities.

Because we are deeply committed to ensuring everyone has the opportunity to achieve the American Dream, we launched the Democratic Whip Task Force on Poverty, Income Inequality, and Opportunity in 2013. Since then, our Task Force has introduced and advocated for policies that provide pathways out of poverty for the most vulnerable, and we have worked to demonstrate our commitment to helping those struggling to make ends meet and get ahead. Last November, we sent Speaker Paul Ryan a letter inviting him to join us in enacting bipartisan policies that combat poverty in America, hoping to find common ground with someone who just last month launched his own Republican task force on poverty.

While it is encouraging that Speaker Ryan discusses the need to address poverty in America, he must back up his rhetoric with action. Unfortunately, even since his election as Speaker, House leadership has continued to block even basic measures that could benefit millions of struggling Americans, such as raising the minimum wage, and they continue to tell families across the country: “You’re on your own.”

Today, the House Budget Committee is marking up the Majority’s budget proposal for Fiscal Year 2017 that continues to promote draconian budget policies that set back the cause of eliminating poverty. From cutting Medicaid to repealing the patient protections of the Affordable Care Act, from ending the Medicare guarantee to slashing funding for programs that encourage job growth, the Majority’s budget disinvests in our nation and shifts the burden of deficit reduction onto the shoulders of the poorest and most vulnerable.

Despite making these extreme spending cuts, the most conservative members of the House still believe the proposed budget does not go far enough. Speaker Ryan should not be tempted to move even further to the right in an effort to get the extreme wing of his party to agree to a budget. Any attempt to do so would result in even more dangerous policies that would harm those living in poverty. We strongly urge Speaker Ryan instead to work across the aisle to adopt a budget resolution that adheres to last year’s bipartisan budget agreement and invests in economic opportunity for all Americans.

The Majority’s budget shifts the burden of deficit reduction onto the shoulders of the poorest and most vulnerable.

The budget released by the President in February—which House leaders irresponsibly dismissed out of hand—laid out a number of proposals that would do just that, such as a mobility counseling program to help families move to safer neighborhoods with better schools and more job opportunities; a permanent program to ensure that children who rely on free or subsidized school lunches are fed and healthy; and an expansion of Pell Grants. We will continue to fight back against disinvestments that hurt working families and the very poor, and we will push for measures like the ones the President has proposed that create opportunities for families to escape poverty.

In addition, there are a number of areas where Democrats and Republicans could work together to achieve bipartisan progress. For example, Congress could adopt the Half in Ten Act (H.R. 258), which we co-sponsored, to establish a national strategy to halve poverty over the next decade. We also believe we can work together to expand the Earned Income Tax Credit (EITC) to childless adults, a policy Speaker Ryan advocated for when he chaired both the Budget and the Ways and Means committees.

In the weeks ahead, the Speaker has an opportunity to do more than make promises or launch a new task force—he can partner with the Democratic Whip Task Force to act. For the sake of the more than 46 million Americans struggling to get by, we will be ready to meet with the Speaker and his team to find common ground and help lift families out of poverty and into the middle class.

A lot of folks in Washington like to talk about the economic recovery as though our work is finished. To listen to some politicians in their nice suits and fancy offices—working families are doing just fine. But while the country may have climbed out of the depths of the recession, too many hard-working families are still struggling. That’s because the gains from economic growth have gone largely to the wealthiest Americans, while low and middle-income workers have seen little to no income growth over the past two decades.

Earlier this month, the Senate Banking Committee, on which I serve as Ranking Member, held a hearing on the economic recovery, and I was proud to see ordinary Americans outnumbering lobbyists in the audience. Instead of expensive tailored suits, they wore T-shirts with a simple but powerful message: “Whose Recovery?”

That’s a question we must keep asking ourselves.

If we are serious about helping working families and reducing the persistent poverty holding too many Americans back, we need to get serious about expanding and strengthening one of the most effective poverty-fighting tools we have: the Earned Income Tax Credit (EITC).

27 million households earned an average refund of $2,400.

The EITC was created with broad bipartisan support in 1975, and it has been expanded by every president since. It encourages people to work by putting thousands of dollars back into the pockets of low-wage and moderate-wage workers. Last year, 27 million American households—950,000 households in my home state of Ohio alone—claimed the EITC and earned an average refund of $2,400. That means millions of families getting a check in the mail this spring—a check making their hard work pay so they can make a down payment on a new car, put a deposit on an apartment, pay off medical debt, or save for a rainy day.

Each year, the EITC protects more children from poverty than any other government program. What’s more, research shows that it is an investment that pays long-term dividends, improving children’s health, educational attainment, and even earnings in adulthood.

One of our most important accomplishments last year was the bipartisan tax package that permanently expanded the EITC, providing certainty for the millions of families who rely on the credit and are counting on it again this year. But there is one glaring hole in the program that we still need to fix.

Under current law, workers without children barely earn any EITC. And childless workers under age 25 don’t qualify for the credit at all.

We are talking about people working full-time, 40 hours a week, all year round. But at minimum wage or even $9 per hour, they earn less than $20,000 a year. And without a significant EITC, these workers can actually be taxed deeper into poverty.

That is shameful. It goes against our core values as a nation, and it has to end.

These people work hard and play by the rules. They contribute by paying Social Security and other payroll taxes. How will they save for the future and plan for their families if they constantly struggle to get by, paycheck to paycheck—all the while being taxed deeper into poverty?

In the final budget of his presidency, President Obama has proposed expanding the EITC by reducing the eligibility age from 25 to 21 and nearly doubling the maximum value of the credit.

This is a step in the right direction, but it does not go far enough.

The Working Families Tax Relief Act, which I introduced last year, would nearly triple the maximum value of the EITC to ensure that no one is taxed into poverty. Just expanding the childless EITC as that legislation would do, would lift more than half a million people out of poverty and reduce poverty for an additional 10 million Americans.

We must also combine the tax credit with an increase in the minimum wage, to make sure a hard day’s work is rewarded with an honest day’s pay.

Expanding the EITC will mean more people attending college and getting GEDs. It will mean more Americans working at higher salaries. And it will enable millions of people to earn their way out of debt or to begin saving a nest egg, potentially for the first time in their lives.

And that means stronger communities, and more stable families.

If we are serious about creating an economic recovery for all Americans—not just those who work on Wall Street or in Washington—we need to let working people keep more of their hard-earned money. Then when we are asked the question, “Whose recovery?” we will be closer to answering: “All hardworking Americans.”

A few months before I met Vivian Warner,* she got the call she had been waiting so long for that she’d forgotten to hope for it. It was Baltimore Housing, the agency that oversees subsidized housing in the city. After four years on the waitlist, Vivian would receive a housing voucher, and could finally move off of her sister’s couch into her own home. A few weeks later, Vivian boarded a bus with the other lucky winners and drove around the city to visit eligible homes. At the last stop, the bus pulled up in front of a low-rise apartment complex. It was not quite what Vivian had imagined, but there was a two-bedroom available, and Vivian would pay just $55 a month out of pocket from her part-time income. She signed the lease that afternoon.

The housing voucher Vivian waited years to receive is part of the federal government’s most recent attempt to house the poor. Since the 1930s, it has employed housing assistance as a key tool in its war on urban blight and poverty. But these attempts have often failed those whom they were meant to protect, at times recreating the very inequality they intended to undo.

These attempts have often failed those whom they were meant to protect.

Post-war, the Federal Housing Administration underwrote home loans for millions of white Americans, while banks systematically denied them to black families, a process called redlining. Even in federally funded public housing, the poor had no respite from the marginalizing forces of inequality. In the 1950s and ‘60s, high-rise public housing was erected in neighborhoods that already suffered from segregation, underinvestment, and decline. And when the Fair Housing Act of 1968 outlawed housing discrimination by “race or national origin,” local housing authorities in cities like Chicago, Baltimore, and Dallas continued to keep two separate housing lists: one for whites, and one for blacks.

Vivian is part of a generation of poor urban dwellers who left the concentrated poverty of high-rise public housing towers, which by the 1990s were crumbling from neglect. Across the country the buildings were torn down, and along with them an entire system for housing the poor was dismantled. In the place of public housing, the federal government needed a new solution, one that would remedy the concentrated poverty and segregation it had helped to create.

This solution expanded an existing program relying on the private market to house the poor: housing vouchers. These vouchers make up the difference between what a needy household can afford and the cost of a unit in the private market. They are meant to allow families to rent in any affordable neighborhood, offering men and women like Vivian their very first chance to choose where to live. Today, of the five million households across the country receiving some form of federal housing assistance, over half now live in privately owned properties, many through the Housing Choice Voucher program, previously called Section 8.

The program has undeniably positive effects. Vivian was able to regain custody of her twin boys thanks to her new home. For Tony Young, a 55-year-old man with HIV, receiving a voucher meant relief from the cold, hard bed under the bridge where he slept when there was no room at the homeless shelter. Joann Jones, a young mother of two, was able to buy fresh fruits and vegetables for her seven-year-old at the local store while he attended a high-performing public school nearby. The basic economic relief that vouchers provide cannot be understated. And they also give families something more: flexibility in times of crisis to respond to the demands of their jobs, their children’s needs, even the whims of landlords. By letting recipients choose where to live, vouchers confer dignity and affirm a sense of belonging potentially free from the stigma of “public” housing. Most importantly, they may help people to realize their dreams of a place to call home.

By untethering federal housing aid from the disadvantaged neighborhoods to which it was once attached, vouchers offer millions of poor Americans the opportunity to move to a new neighborhood where streets are safe, schools have resources to teach their children, and jobs are bountiful. But not everyone does. Vivian, for example, might have used her voucher in a number of safer, more affluent neighborhoods. But time and resources to find an ideal home are limited. And America’s long history of discriminatory housing practices have shaped the residential landscape in ways that cannot be undone by simply offering families a “choice.” Though voucher holders have moved to areas that are less poor than the ones available in the heyday of public housing, many are re-concentrating in poor neighborhoods.

This re-concentration matters for a reason that social scientists like William Julius Wilson have long known to be a social fact, but finally have the hard numbers to prove: where you live matters. It matters for your quality of life, for how much money you make in your lifetime, and for your children. Raj Chetty’s new work shows that a child growing up in a city like Baltimore will make 14 percent less over his lifetime than one in a typical American county, even after accounting for individual factors like income and education.

Vouchers fail to take account of an important lesson: A roof is not enough.

If where you live is so crucial, then we ought to pay attention to the role housing policy plays in where families end up. In a landmark case this past July, the Supreme Court ruled that housing discrimination need not be intentional to have harmful effects of segregation. This is the first time the legal concept of “disparate impact”—the idea that a policy may disproportionately affect certain groups even absent injurious intent—was applied to federal housing policy. The decision substantiates an important change in the way discrimination persists in contemporary America: we are moving away from the overt racism of Jim Crow, toward one maintained by enduring institutions that inadvertently perpetuate longstanding inequalities—a “racism without racists.” This shift is crucial to understanding how and why racial inequality continues to plague our nation.

Housing vouchers offer a chance to remedy this disparity, but are not yet equipped to fully do so. Not all voucher holders succeed in finding a place to live, and those who do are often unable to find homes in neighborhoods that have jobs and good schools. And although vouchers are a potential tool to dismantle concentrated poverty and segregation, it turns outs that black voucher holders live in neighborhoods that are poorer and far more segregated than those of white voucher holders, revealing the program’s shockingly disparate impact on white and black families. If black voucher holders face obstacles that prevent them from using their vouchers in the same neighborhoods as whites, then something needs to be done.

In their current form, vouchers fail to take account of an important lesson: A roof is not enough. Where you live matters. Vouchers shouldn’t merely keep people off the streets; they should help families move to neighborhoods with more opportunities. What can we do then to make the voucher program work better to reduce inequality? There are a number of policy fixes to reduce barriers that prevent families from using their voucher in low-poverty, integrated neighborhoods. For example, we could do a better job providing mobility counseling and transportation to help families explore new neighborhoods. There are also solutions related to landlords, like passing national legislation that makes it illegal to discriminate against someone who pays their rent with a voucher, and other policies that would encourage landlords in low-poverty areas to accept housing vouchers.

It is not enough to simply move the poor out of poverty-stricken neighborhoods.

Even with these fixes to modify the disparate impact vouchers often have, it is not enough to simply move the poor out of poverty-stricken neighborhoods. It is imperative that we address the root causes of poverty and inequality by implementing change at the level of the neighborhood itself, improving the environments around poor families by investing in schools, institutions, and the economy. But this systemic transformation cannot take place overnight, and it will face stark political opposition. It remains to be seen how the political climate of the next presidency will unfold to potentially make good on the Fair Housing Act’s recently renewed half-a-century old promise to “affirmatively further fair housing.”

While we wait for political change, we can act to undo the disparate impact this program has on minority families, who don’t fully reap its rewards. Housing vouchers could be a powerful instrument to remedy the indelible dangers of living in a poor environment, for families of all backgrounds.

*Name has been changed to protect confidentiality

The Evolving Fight Against Concentrated Poverty

How to Fight Poverty Through Full Employment

What the House Republican Budget Says About Conservative Anti-Poverty Rhetoric

Honor Work: Expand the Earned Income Tax Credit

Segregation in the Era of Housing ‘Choice’

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