The Poverty Industry: How Foster Care Agencies Exploit Children In Their Care

A Charles Dickens novel has come to life. Foster care agencies are partnering with companies to search for poor children who are disabled or have dead parents—in order to take their money for state revenue.

Consider the story of a foster child named Alex:

Alex was taken into foster care at age twelve after his mother’s death. Over a six-year period, he was moved at least twenty times between temporary placements and group homes. Soon after losing his mother, Alex learned his older brother might be able to care for him, but then his brother died. There were also hopes that Alex could go to live with his father, but then his father died as well.

Unknown to Alex, he was eligible to receive Social Security survivor benefits after his father died. These funds could have provided an invaluable benefit to Alex, supplying an emotional connection to his deceased father and financial resources to help with his difficult transition out of foster care.

But without telling Alex, the Maryland foster care agency applied for the survivor benefits on his behalf and to become his representative payee. Then, although obligated to only use the benefits for the child’s best interests, the agency took every payment from Alex. The agency didn’t tell Alex it was applying for the funds, and didn’t tell him when the agency took the money for itself. Alex struggled during his years in foster care, left foster care penniless, and continued to struggle on his own.

Unfortunately, Alex’s story is not unique. Across the country, agencies and their contractors target children who might be determined disabled or whose parents have died, apply for federal disability (SSI) and survivor (OASDI) benefits on their behalf, and then apply to gain control over the children’s money. Often, the children never see the money and receive no benefit. Many states also confiscate Veteran’s Assistance benefits from children whose parents died in the military. The Nebraska foster care agency even drafted a regulation so it can claim a foster child’s burial space.

By taking their resources, foster care agencies are forcing vulnerable children to pay for their own care—when the agencies and states are already legally obligated to do so. Further, if a parent or relative serves as representative payee and uses a child’s disability or survivor benefits to help with expenses for a child’s care, the child is better off because more funds are available to help in the household where the child lives. But when foster care agencies take resources from children, the children receive no benefit; their money is used to provide neither them nor their foster care home more assistance. The agencies simply ignore their fiduciary obligations and route the funds to government coffers—while the contractors also take a cut.  All of this is usually done without informing the children or their advocates.

In contract documents obtained from public records requests, foster children are treated as “units” on revenue maximization conveyor belts (or, in the case of the Maryland foster care agency, a “revenue generating mechanism.”) They are “scored and triaged,” plugged into “data mining” and “algorithms,” and subjected to “dissection” to increase the “penetration rate” of children whose resources can be taken.

Foster care agencies have reached a point where they have prioritized their own fiscal self-interests over the interests of children in their care.

Why are foster care agencies doing this to the very children they’re supposed to serve? The agencies are underfunded. States have continued to cut funding necessary for child welfare services, including assistance to help families stay intact so that foster care is not needed. In a desperate search for revenue, foster care agencies have reached a point where they have prioritized their own fiscal self-interests over the interests of children in their care.

Cash-strapped agencies would argue that this is all for the greater good, because increased agency funds will lead to improved agency services. But the rationale fails. The notion that child welfare agencies should fund themselves by taking resources from children they exist to serve is counterintuitive, at best. Further, foster care agencies are not even better off after they confiscate children’s resources: the funds are either routed directly to general state coffers, or the state reduces funding for the agency based upon how much money is obtained from the children.

Given the intense difficulties that foster children already face—especially as they age out of care—policymakers need to address this issue. The recently enacted ABLE Act, which allows disabled children to conserve their SSI benefits, is a helpful step in the right direction—but it will only help foster children if agencies stop taking their funds. And pending legislation from Congressman Danny Davis (IL) would do just that—it would protect foster children’s resources so the children can best help themselves.

Unfortunately, this is not an isolated practice. In The Poverty Industry: The Exploitation of America’s Most Vulnerable Citizens, I expose how states and their human service agencies team up with private companies to profit from the vulnerable. In addition to taking foster children’s assets, the poverty industry uses illusory budget shell games to siphon away billions in Medicaid funds intended for children and low-income adults. Child support payments for foster children and families on public assistance are converted into government revenue. Nursing homes and juvenile detention centers sedate residents to reduce costs, and pharmaceutical companies encourage the drugging through illegal marketing practices. States use nursing homes to take the facilities’ federal aid while the elderly languish in poor care. Counties and court systems hire companies to mine the poor for funds in modern day debtor’s prisons. And the poverty industry keeps expanding.

We may disagree about the best way to help vulnerable populations. But we all should be able to agree that when aid funds are generated with specific intent to help those in need, those funds should be used as intended.



Maine’s Governor Just Threatened to End the State’s Food Stamp Program. Here’s Why That’s Illegal.

Maine Governor Paul LePage is no stranger to food stamp cuts. The Republican executive kicked more than 6,000 people off of food assistance last fall, after he reinstated stringent time limits for the program. And in December, the U.S. Department of Agriculture threatened Maine with fines for its failure to adequately process food stamp applications.

But now LePage has taken his attacks on the program a step further. This month, he wrote the Obama Administration threatening to stop participating in the food stamp program if the Administration didn’t add restrictions on how recipients use their benefits. Specifically, LePage wants to “prohibit the purchase of candy and sugar-sweetened beverages with food stamp benefits in Maine.” If not, the Governor wrote, “I will be pursuing options to implement reform unilaterally or cease Maine’s administration of the food stamp program altogether. You maintain such a broken program that I do not want my name attached to it.”

In other words, LePage would effectively end food assistance in Maine.

His claims are shaky at best. A comprehensive survey by the Department of Agriculture found that food stamp recipients’ diets largely mirror those of other Americans. In fact, consumption of candy, ice cream, and cookies is lower among food stamp recipients than it is among higher-income Americans.

It’s still unclear whether LePage can actually do this. Legally, states administer food assistance, and the federal government funds the program. According to Robyn Merrill, Executive Director of Maine Equal Justice Partners, “There’s no precedent in a state actually pulling out and refusing to administer the program.” On top of that, state law requires Maine to administer a statewide food assistance program that follows federal regulations.

But if Governor LePage were to follow through with his threat, it would have a devastating impact on his constituents. Nearly 1 out of every 7 residents in the state—190,000 people—rely on food stamps. SNAP also has important economic benefits—in 2015 alone, the program provided almost $280 million in federal dollars to the state, which were distributed among more than 1,500 state retailers. And as a program that is counter-cyclical—meaning it provides greater benefits during economic downturns and fewer during economic expansions—SNAP plays an important role in stimulating the economy during a recession.

The effort also demonstrates the risk of giving state executives like LePage more authority over antipoverty programs. Republican leaders such as House Speaker Paul Ryan have proposed giving states more “flexibility” on food stamps, housing assistance, and child care. But in practice, empowering state leaders has resulted in conservatives enacting a number of counterproductive and punitive policies, including banning low-income people from using cash benefits at public pools or movie theaters and drug testing program recipients.

LePage’s threat to end food stamps is just the latest chapter in this effort.




Young Adults Are More Likely Than Ever to Live at Home—Unless They Grew Up in Foster Care

The transition to adulthood today is increasingly trying for young Americans in low-income families, but no group is more vulnerable than foster youth. As it is, wages are low, education is expensive, and the labor market remains very difficult to break into for low-income young adults. These are among the factors that have made parents an important safety net.

For the first time since 1880, it is now more likely for young adults ages 18-34 to live with parents than with a partner or on their own.  On average, parents also provide young adults with about $2,200 annually in material assistance—such as food, educational expenses, or direct cash assistance—throughout the transition to adulthood.

The cost of aging out is devastating to these youth and to our society.

But for the tens of thousands of young people exiting or aging out of the foster care system each year, most often when they turn 18, parental support is not an option. Without parents as a safety net, these young people face a vast array of extreme disadvantages. They are more likely than the average youth to drop out of high school, be unemployed, and rely on public assistance. Many of these young adults find themselves in prison, homeless, or as parents earlier or less prepared than they would have liked. Any one of these outcomes can result in immediate and long-term hardship. For example, adults without a high school degree have an unemployment rate of 8 percent, compared to 5.4 percent for those who have one. Interaction with the criminal justice system can make it difficult to obtain employment, housing, education and training, and more. And homelessness causes and exacerbates health problems, ranging from communicable diseases to behavioral health problems.

Overall, the cost of aging out is devastating to these youth and to our society.

Since 2000, more than 340,000 young people have aged out of foster care without permanent family connections. Taxpayers and communities pay nearly $300,000 in social costs over the lifetime of the average young person who ages out of foster care. Even conservative estimates find that the overall social costs of these young people to the United States hover around $8 billion every year. Yet policymakers have real opportunities available to help some of our nation’s most vulnerable youth and save public dollars.

In an effort to address some of these challenges, Congress enacted the Fostering Connections to Success and Increasing Adoptions Act of 2008. This law permits states to receive federal support for young adults who remain in foster care through age 21, while they are working or pursuing education and training. In short, the legislation allows young people to remain connected to their foster families as they transition to adulthood.

So far, the results of the Fostering Connections Act have been encouraging. It is associated with an increased likelihood that these young people will complete at least one year of college, which can result in higher earnings. Other studies suggest that extending foster care to age 21 is related to a reduction in the number of foster youth who become homeless. Another study revealed that remaining in extended care is associated with less reliance on public assistance and a lowered likelihood of being arrested.

Disappointingly, fewer than half of states have chosen to take up the federal option to extend foster care to age 18 under this legislation. Considering the effects of aging out and the proven benefits of this additional support, this is a commonsense choice that all states should take. It not only will give some young people a better shot—it will also likely save on social costs that instead can be invested in housing, education, training, or other initiatives that support youth aging out.

The cost of the status quo is too high and the potential benefits for extending support to older foster youth are too promising for states to justify their continued inaction.



How Our Country Fails Black Women and Girls

I hold a professorship named for one of the most extraordinary Americans to live in the twentieth century. Born in 1928, Maya Angelou experienced childhood poverty and dislocation. She was raped by an adult man when she only seven years old. The brutality and unresolved trauma resulting from that early sexual violence stole her voice and shaped her young adulthood. Eventually she became an unwed teen mother. More than three generations after Maya’s childhood, poverty, familial disruption, sexual violence, interrupted education, and teen pregnancy remain key barriers facing black girls in America’s cities, towns, and rural communities.

Maya Angelou’s story does not end with her struggles; it only begins there. She was guided out of silence by the loving hand of an educator. Her teacher did not practice zero tolerance or call a school resource officer to slam young Maya to the ground. She saw the brokenness of a girl child who needed to be drawn gently back into the world. She helped Maya regain her voice through a love of literature and poetry. As a girl Maya was burdened with poverty and brokenness, but she also encountered meaningful opportunities to learn, grow, and discover her talents while experiencing the care of her community. Maya transformed these opportunities into a life of singular accomplishment and remarkable contributions.

Maya became a fierce advocate for voting rights and human rights, working first with Dr. Martin Luther King Jr. and Malcolm X and later with both Coretta Scott King and Dr. Betty Shabazz.  Recognizing the importance of race and gender health disparities, Dr. Angelou gave her name to the Maya Angelou Center for Health Equity at the Wake Forest University School of Medicine. In Washington, D.C., she enthusiastically contributed her name to the Maya Angelou Public Charter School offering second chances to young people emerging from juvenile incarceration. Maya Angelou’s path was not always pretty or polite, but it always affirmed that Black Girls Rock and Black Women Matter.

Indeed, Maya Angelou’s story embodies the barriers and pathways for black women and girls we have gathered to discuss today. I believe she would be pleased by this unprecedented gathering of scholars, activists, artists, journalists, citizens, and lawmakers committed to eliminating injustices black women face. I believe she would commend each of the co-chairs for the visionary leadership to develop the first Congressional Caucus for Black Women and Girls. And I believe she would ask of the larger legislative body, “What took so long?”

Vulnerability to Violence

What took so long? After all, it is not safe to be a black girl in America.

It is not safe to be a black girl in America.

Black communities understand how unjust violence perpetrated against black boys is connected to our collective movements for racial justice and social change.  We know how the horrific murder of Emmett Till galvanized the courage of black Americans in the battle against Jim Crow. Because we know these stories we draw on them again and again. When Oscar Grant or Trayvon Martin or Eric Garner or Tamir Rice were taken too soon, we understand their deaths in historical context of racial vulnerability. We can see the need to make change―to keep our brothers.

We less frequently discuss historical violence against black girls and don’t adequately connect these stories to movements for social justice. As a result we think our daughters are safer than our sons. We forget Elizabeth Eckford walking a racist gauntlet toward Central High School in 1957; or tiny Ruby Bridges requiring federal marshals to attend elementary school in 1960, New Orleans; or four little girls murdered in their Sunday school in Birmingham, Alabama, in 1963.  Girlhood has never been a shield against the brutality of white supremacy. We cannot forget the vulnerabilities of black girls. Yes, we must keep our brothers, but what about our daughters? We must also say their names: Rekia Boyd, Renisha McBride, Mya Hall, Natasha McKenna, Sandra Bland.

We are even more reluctant to acknowledge the violence black girls and women suffer at the hands of black men. According to the Black Women’s Blueprint, approximately 60 percent of black girls will experience sexual assault before they are 18. A leading cause of death for black women 15 to 34 is homicide by an intimate partner. Debilitating injury resulting from intimate partner violence is a health crisis for black women. Yet African American women are less likely to report rape and sexual assault than their white counterparts. When they do seek protection, black women face unique challenges in family and criminal court because many judges perceive African American women as less vulnerable, more hostile, more sexualized, and less worthy of official forms of protection.

Unequal Opportunity

What took so long? After all, black women have less economic opportunity.

Black women work more than all other women, but reap fewer economic rewards. According to a December 2015 report by the National Partnership for Women and Families, a state by state analysis shows black women’s wages range from 48 to 69 cents for every dollar paid to white men.  One in four black women live in poverty, a rate more than double white women’s poverty.

Perhaps even more shocking than black women’s poverty is black women’s wealth. According to a 2010 study by Mariko Chang, the median wealth for a single white man age 18 to 64 was $41,410.  But the median wealth for a single black woman in the same age range was $5. Five dollars is the cushion between these adult black women and an illness, an unexpected expense, a family member who needs help. Five dollars.

Education is not necessarily the answer. Neither the wage gap nor the wealth gap is resolved by educational attainment. Black women with a college degree earn more than black women with only a high school diploma, but the pay gap relative to their white male counterparts is wider. As a 2015 report by the Black Women’s Roundtable states, “It would take nearly two Black women college graduates to earn what the average White male college graduate earns by himself ($55,804 vs. $100, 620).” Finishing college does not ensure long-term wealth accumulation for black women. Lower wages, higher student loan debt, and significant expectations for redistribution within family networks means studying and working hard are insufficient remedies for the systemic economic inequities black women face.

Criminal Injustice

What took so long? After all, the criminal justice system is unfair to black women.

According to The Sentencing Project, the number of women in American prisons is increasing at nearly double the rate of men. These women are disproportionately black women according to statistics from the Department of Justice. The rate of incarceration is almost twice as high for black versus white women, 113 per 100,000 compared 51 per 100,000. Given that nearly 60 percent of these women are mothers who were caring for minor children before their sentencing, the jailing of black women has a devastating effect on black children and communities.

Now consider this: Decades of research show the overwhelming majority of incarcerated women are survivors of domestic abuse, sexual violence, childhood trauma, poverty, and broken foster care systems. When black women are guilty of being victims our response is to lock them away; strip them of parental rights; permanently damage their ability to seek educations, secure housing, start businesses, and choose their elected representatives. And it begins when they are girls. Black girls are suspended, criminalized, pushed out of school and into a juvenile system where they receive disproportionally harsh sentences often in the wake of severe emotional and sexual trauma. Imagine if eight-year-old Maya Angelou had been sent to a correctional facility instead of to the head of the class.

Health Disparities

What took so long? After all, black women’s health is suffering.

Black women have higher rates of hypertension and diabetes. Black women are far more likely to suffer from fibroids and undergo hysterectomies. While HIV-AIDS infections have declined throughout the United States, black women account for 66 percent of new cases of HIV among women. And there is this shocking disparity―black women are less likely than white women to get breast cancer, but more likely to die from the disease. In 2010, the CDC reported breast cancer is the leading cause of cancer death for black women 45 to 64 years old, a death rate 60 percent higher than for white women.

Babies born to black women remain twice as likely to die before their first birthday as those born to white women.

Perhaps nothing so powerfully illustrates how the bodies of black women carry the burdens of racial injustice as the persistent racial infant mortality gap. Babies born to black women remain twice as likely to die before their first birthday as those born to white women. The gap is not closed by access to health insurance, prenatal care, or education. Black mothers with advanced degrees suffer higher infant morality than white mothers who have not finished high school. The most promising research in this area suggests that black infant mortality may be an intergenerational result of historical experiences of racial inequality. It may be that black women literally carry the legacy of American racism and sexism in our bodies, making both our infants and ourselves ill.

Here I want to pause to note that despite important commonalities, all African American women do not share the same ideas, beliefs, and burdens. Age, region, queer identity, and skin color shape black women’s lived experiences. Black trans women are uniquely vulnerable to public and state violence. Black women living with disabilities face barriers we frequently overlook. Black girls in foster care or struggling with episodic homelessness will have very different challenges than those with more stability. But these variations between and among us do not invalidate the importance of thinking about black women and girls as a group.

I have offered up a lot of statistics. These are data you will hear more about, with more context, from other witnesses throughout the day. Together these data tell us that the intersections of race and gender strongly determine life opportunities for black girls and women. Therefore it is important to think about black girls and women as a meaningful analytic category and to target justice-oriented, community-centered, and culturally literate research and public policy toward addressing the challenges faced by black women and girls. The women you will hear from today represent organizations that have been doing this work for years, often without recognition or adequate support.

Even as we map these profound injustices, don’t get it twisted. Black women are more than the sum of their relative disadvantages―they are active agents who craft meaning out of their circumstances and do so in complicated and diverse ways. The exceptional generative capacity of black girls and women in circumstances of deep inequality is so profoundly incomprehensible to so many they have little choice but to understand it as black girl magic.

How else to understand that black women had the highest voter turnout of any category of voters in both 2008 and 2012, twice choosing an American president while no one asked a single black woman to moderate a presidential debate? How else can we understand that in 2014 black women candidates running statewide in Ohio and Georgia accumulated more than one million votes even though their state parties largely ignored their races? How else to understand that when black women picked up four Congressional seats in 2014, one of those seats was to the first black woman elected to congress from New Jersey, Representative Bonnie Watson-Coleman? And her first order of business was to come here to Capitol Hill and help form this first congressional caucus for black women and girls.

Many call it black girl magic because it seems we can do what no one else can or will do. We seem to bear burdens heavier, run races faster, and absorb brutality more stinging than ought to be possible given how few resources are at our disposal. The legacy of black women’s lives and labors show an unprecedented capacity to survive in hostile conditions. This is not magic. It is grinding work that exacts deep costs from black girls and women. Yes, black women have long made lemonade from the lemons life handed them. The problem is somebody usually sat down and drank it after she made it. That is not justice.

I want to leave you with one final imperative. On July 9, 2014, Tianna-Gaines Turner, an African American mother from Philadelphia, became the only person living in poverty to testify before Representative Paul Ryan’s House Budget Committee on poverty―the only person living in poverty to address the lawmakers creating policy about poverty. Her statement was powerful and clear. She concluded by admonishing the committee with these words:

My neighbors and I know what’s going on in our own communities, more than anyone else. We know our own hardships better than anyone. We have the energy, the grit, the creativity, and the strongest interest in overcoming our struggles. We’re fighting already for our families and our neighbors. We need to be taken more seriously by our state and federal governments.

Nothing about us, without us. Congress should not make any decisions about programs meant to help families living in poverty without people who know poverty firsthand at the decision-making table…. It’s time to call in the experts.

As the work of this historic caucus moves forward, let us follow this rule set by Tianna-Gaines Turner—nothing about us, without us. Black girls must be at the table. Black women must be at the table. Not just the college professors, celebrities, business leaders, and elected officials, but our cousins, our sisters, our grandmas, the girls who didn’t make it out, the ones we locked away, the voices that have been silenced. Let us be the ones who find today’s Maya Angelou while she is yet mute, who remind her she has something to say, and then let us listen while she tells us her story.

This post originally appeared on Elle.com, and was delivered before the Congressional Caucus for Black Women and Girls in April.


First Person

I Needed Unemployment Insurance in Two Different States. It Was Radically Different.

The first time I lost my job, the owner of the small design agency where I worked sat in a chair across from me in his spandex shorts and spiked bicycle shoes.  He proceeded to lay off my soon-to-be husband Dylan and me, and then click-clacked his way back to his desk. Six years later, that image of him is the only thing I can laugh at about that day.

As our boss walked away, panic shot through my body. It was 2009. The recession had now smacked us right in the face.

When Dylan and I tried to get the two months of back pay that we were owed, the North Carolina Department of Labor flatly told us there was no recourse, and suggested we apply for unemployment benefits (UI). The process was daunting.  It required a lengthy registration and application, a long lead time before we’d receive any benefits, and a “weekly certification” to prove we were seeking new employment. Eventually, our first unemployment checks came in. Mine totaled around $150 per week, Dylan’s around $85 per week.

Our daily job searches and revised resumes were fruitless. We delayed paying bills, cashed in coin jars, and sold off the few luxury items we had, like film cameras and well-played, treasured records. But it wasn’t enough to keep us in our apartment.

We made the difficult decision to move into the basement of my future mother-in-law’s home in New Hampshire. Our unemployment benefits, though meager, were key to getting us a moving truck so we could have a roof to live under and hold onto the things we hadn’t sold.

Fourteen months later, I was laid off again—right after I had returned from our honeymoon. Dylan, too, had lost his job in New Hampshire shortly before we were married.  Instead of newlywed bliss, we faced stress and fatigue as we crunched numbers to make ends meet.

Luckily, the process for claiming unemployment was much easier and faster in New Hampshire. And since our recent jobs had paid us slightly higher wages, and New Hampshire policies were far more generous, our checks came in at $450 between the two of us—almost double what we received in North Carolina.

But the bills continued to pile up on the kitchen counter. There were stacks of legal pads on the nightstand. We postdated and subtracted to survive—a process made more difficult on an empty stomach, which was too often the case for us. We eventually applied for SNAP, the Supplemental Nutrition Assistance Program.  After we got through its long application process the program gave us a second huge sigh of relief. We could eat. Therefore we could think. Crunch some more numbers.

Six years later, my husband and I still live paycheck to paycheck. But the specter of poverty sits right on my shoulder. It’s there. Always.

Because I have faced the reality of living on a shoestring, I know how critical programs like unemployment insurance and SNAP are. Without them, the story of our small family would be radically different. We would not have gone on to start our own business, begun to build up our savings (albeit slowly), or, with trepidation, started to dream again.

But public assistance has become even harder to secure in states like North Carolina. Since we left, the state legislature has passed harmful cuts to the UI program. Now residents are eligible for just 13 weeks of UI—half the duration permitted in most other states. In our case, this harsh time limit wouldn’t have given us any chance of finding suitable jobs and applying for them, let alone completing the process of interviewing and securing a start date.  In contrast, the state of New Hampshire offers modest insurance benefits that gave us the boost we needed to get back on our feet.

I know too many people who work hard and get knocked down. It’s time for an unemployment insurance system that lifts people back up—no matter where they live.