[Poverty at Issue]
A Newsletter for Individuals Concerned About Poverty in Missouri


Spring 1997

In this issue:

Research on Poverty

Welfare Mothers Speak Out

Family Programs that Work

Sustainable Communities


After months of intense debate, Missouri's legislature ended this year's session without passing a new welfare law. In the coming session, during an election year, it looks likely that another welfare bill will be introduced and the debate will begin again. In the meantime, Missouri's Department of Social Services is responsible for implementing welfare reforms mandated by federal legislation passed last fall. It seems clear that community-level decisions and programs will have a growing impact on Missourians living below the poverty line.

This Poverty At Issue offers some basic facts about "the poor," a diverse and dynamic group. Poverty is associated with a number of factors, many of which are not under the control of those most affected. Some of those factors are discussed as well as implications for program planning.

This Poverty At Issue also summarizes findings of a recent qualitative research study of welfare recipients in Maine. Researchers identified a number of themes that arose from a lengthy survey of 929 respondents living on welfare. Finally, there is a brief summary of characteristics that make family programs successful, based on a review of existing research literature as well as a frame work for thinking about community capital formation.

I hope you find the information helpful.

Brenda Procter
Consumer and Family Economics Specialist




Implications for Programming
Research on Poverty

The public generally agrees that government has some obligation to provide support for those who are unable to meet basic needs. Yet, until recently, poverty rates have been rising steadily. In 1995, 36.4 million Americans lived in poverty. Currently, one of every five US children is poor. There also is great concern that the former welfare system fostered long-term dependency on government subsidies.

Research has documented long-lasting negative effects of poverty on children's health, educational progress, and social adjustment. We know poverty is harmful and creates tremendous future costs to society. Poor children are more likely to fall behind in academic achievement, require expensive medical treatment, or become delinquent. There is considerable controversy about the best approach to help those in poverty.

Policy makers must balance meeting the needs of those in poverty with their concern that they will foster welfare dependency among able-body adults. Welfare reform reflects a desire to change the current system of transfer payments based on income requirements to a welfare system that is work-based. Providing employment training and job search assistance has been shown to increase income and decrease reliance on welfare in small demonstration projects, but also is initially more expensive than simply providing monthly transfer payments.

This research summary provides information about the poor, causes of poverty, and barriers to escaping poverty.

Who are the poor?

The poor are a diverse group. Less than half of the poor receive AFDC, and the largest source of income for families with poor children is employment. A significant proportion of the poor (17.8%) work full-time, year-round. Almost two-thirds of those in poverty are white and 38% are children. Rates of poverty are slightly higher in rural counties than in metropolitan areas. The elderly make up about a tenth of all persons in poverty.

In recent years, the declining value of wages for unskilled men and low wages for women have made young families especially vulnerable. Forty percent of children in families headed by an adult less than 30 are poor.

The depth of poverty has increased as well. The number of persons with incomes below 50% of the official federal poverty level-the poorest of the poor-has steadily risen over the last two decades.

There is much movement in and out of poverty, with one-half of those who are poor in any one year not poor in the following year. Poor elderly or disabled persons are more likely to remain poor for extended periods.

The rural poor are likely to remain in poverty longer than the urban poor, especially rural female-headed households. The working poor are most likely to leave poverty relatively quickly.

The length of time spent on welfare also varies among the poor who seek assistance. Thirty percent are the working poor and short-term welfare recipients whose circumstances will improve within a few years. Another forty percent may remain on welfare for up to eight years. They have low earning capacity due to low education level, and/or their gender or race, and may have a sense of hopelessness that diminishes work motivation. In addition, their responsibility for young children may limit their employment options or reduce their net gain from employment due to child care costs.

The remaining thirty percent are the truly "welfare dependent." They may have additional barriers to becoming independent of welfare-physical or mental illness of themselves or a dependent, illiteracy, chemical dependence or disabilities.

What Keeps Families in Poverty?

Many of the factors that keep people poor are barriers to earning. Medium-term recipients face long spells of poverty due to low earning capacity and/or lack of higher wage job opportunities. Some experience self-esteem and motivation problems.

Unemployment, involuntary part-time employment, and low wages are the primary causes of poverty for the working poor. Families with no workers, married couple families with one earner, and families with only a part-time worker have much higher poverty rates than all families with children.

Low skill or education levels and functional illiteracy are both causes of and barriers to escaping poverty. Only 6.3% of high school graduates are poor, compared to 15.7% of high school dropouts. One in four poor workers is functionally illiterate, and two in five lack a high school diploma.

Both women and minorities face lower wages and fewer job opportunities due to discrimination and are more likely to be poor. The strong effect of education on earnings is evident for both males and females, with females earning less than males at every level of education. Females need some college to earn as much as a male high school dropout. Blacks and Hispanics earn considerably less than whites although the gap is larger for males than for females.

In addition to these disparities among those who work full-time, year-round, one study found the most important factors related to lower women's wages were having less education, being employed less than full-time, year-round, having a non-union job, and fewer years of work experience.

As mentioned, long-term welfare recipients may have behavioral problems such as chemical dependence or mental illness that impair their ability to secure or maintain employment. Others may be unable to work due to medical problems, disabilities, or old age.

Family Structure

Family structure also plays a role in causing poverty. Having more children and/or fewer earners in a family can cause poverty, especially if the primary earner is unskilled. Seventy-six percent of working families with one earner are poor, while only 24 percent of working families with two or more earners are poor.

Poverty rates are higher in large families. Of families with five or more children, 53.3% are poor compared to 25.5% of families with three children, and 12.6% of families with one child. However, poor families are only slightly larger than non-poor families on average.

Most poor families have one or two children (63.5%), 21.8% have three children, and 14.7% of poor families have more than three children.The growing numbers of single-parent families are much more likely to be poor because 1) they have fewer earners to contribute to family income, 2 ) fewer adults provide unpaid child care within the family, and 3) most single parents are women (and therefore earn lower wages than men).

Low rates of child support from non-custodial parents, usually the higher wage-earning father, further disadvantage these single-parent families. The proportion of single-parent families has risen steadily among all families, and since these families are more likely to be poor, a growing proportion of poor families are female-headed. About half of all poor families in 1994 were single-parent, female-headed families, with three-fourths of poor African American families being female-headed.

Changes in Available Jobs and Welfare Benefits

Gradual changes in the structure of the overall economy also have influenced the number of families in poverty. A decline in the number of high-paying manufacturing jobs, and a rise in the number of part-time and temporary jobs in service industries have increased poverty. Workers more often face low wage levels and the lack of unemployment insurance or other benefits. There has been a steady decline in the real value of wages for men and women, especially young and unskilled workers, in the 1980s, as well as a failure of the value of the minimum wage to keep pace with inflation.

From 1973 to 1991, the average real hourly wage for male high school graduates fell 20.6% while the average real hourly wage for female high school graduates fell 6.4%. The real value of wages fell more for young workers than for older workers, putting young families at a greater disadvantage.

Married couple families compensated for these trends by increasing labor force involvement of wives, but single- earner families have suffered large decreases in real income.

In addition to employment and family structure, declines in the real value of government transfer payments in the 1980s meant fewer families were lifted above poverty thresholds by public assistance. The percentage of government spending on poverty programs has remained fairly steady at about 1% of the gross domestic product. However, the number of persons in official poverty increased from 11.7% in 1979 to 14.5% in 1992. In addition, poverty programs do not reach all families. Most programs reach 40 to 60% of poor households, with housing programs reaching fewer than one-fifth of poor households.

Other Barriers to Employment

Lack of transportation and child care, particularly for women, are additional factors contributing to an inability to escape poverty. Unreliable transportation, especially in rural areas, acts as a barrier to keeping employment for both men and women. Cost and availability of child care also limit employment and mothers' ability to gain work experience. Most male poverty is caused by low wages. Most female poverty is caused by barriers to employment including being a single parent, having children, the number of children, concerns about the quality of day care, being a high school dropout, and illness.

Lack of child care has been repeatedly cited as a barrier to employment for mothers on AFDC and in JOBS programs. In one simulation of the effects of subsidizing child care, single welfare mothers' labor force participation was estimated to rise from the current 12% to 38% with fully subsidized child care.

Child care is not a problem restricted to welfare mothers; working poor mothers are also constrained by the cost and availability of child care. Among poor and low-income families in 1991, only about a third paid for child care, with most obtaining free care from relatives and by having parents work alternating shifts. For those who did pay, child care costs were 33% of income for working poor families compared to 13% for non-poor families earning less than $25,000, and 6% for families with incomes above $25,000.

How Can Program Planners Make a Difference?

Programming for low-income families can result in significant benefits. Through educational programming or community coalition building, teachers and facilitators can contribute to improved earning capacity, and reduce or eliminate barriers to employment, thereby improving families' quality of life.

Important first steps are to assess existing community attitudes toward the poor and seek input from those in the community who are living in poverty. When necessary, community leaders can educate themselves about the causes of poverty and the diversity of those in poverty. In Missouri, the county Extension office can assist with gathering county-level demographic data to aid in profiling the characteristics of those in poverty.

Programmers can consider the following questions:

The well-documented diversity of causes for poverty suggests the need for a variety of program efforts. Welfare reform provides additional programming needs at the community level. Families may need information on changes in government programs. Local community leaders may need education about poverty and the realities of those who experience it, and about how federal or state policy changes affect the community. A variety of stakeholders and citizens can provide leadership as communities create local responses to lessen poverty, mitigate against its negative effects, and deter future costs of poverty.

Adapted from Poverty & Welfare Reform: A Resource Guide for Communities and Educators, by Karen F. Folk, Ph.D., University of Wisconsin Cooperative Extension Service.


And This Is What They Speak About
"Welfare Mothers" Speak Out

Recipients of AFDC are rarely asked what they think about welfare reform. As part of a multifaceted research effort designed to move the welfare debate in the State of Maine beyond myths and stereotypes, a coalition of activists, service providers and academics did a random survey of AFDC recipients, to which 929 families responded. In addition to ten pages of multiple choice and short-answer questions, respondents were given three open-ended questions:

Researchers report that six conceptual themes emerged in the large volume of qualitative data contained in the responses:

Adapted from "Welfare Mothers Speak: One State's Effort to Bring Recipient Voices to the Welfare Debate." Butler, Sandra Sue, and Mary Katherine Nevin. Co-published simultaneously in Journal of Poverty (The Haworth Press, Inc.) Vol. 1, No. 2, 1997, pp. 25-61; and: Income Security and Public Assistance for Women and Children (ed: Keith M. Kilty, Virginia E. Richardson, and Elizabeth A. Segal) The Haworth Press, Inc., 1997, pp. 25-61.


1997 Poverty Guidelines
48 Contiguous States and the District of Columbia


Family Size Annual Income
1 $7,890
2 10,610
3 13,220
4 16,050
5 18,770
6 21,490
7 24,210
8 26,930
For family units with more than eight members... ...add $2,720 for each additional member.




What Do They Have in Common?
Family Programs that Work

According to the National Network for Family Resiliency, there are no rules for developing resiliency, no prescriptions that guarantee success of programs addressing the needs of at-risk children, youth, and families. Research does highlight, however, some common elements in effective programs.

Community Based

Community-based programs recognize that children are part of a family and community. Programs that encourage neighborhood and school involvement help communities respond to the needs of individuals and families.

Comprehensive

Programs that provide continuous, intense interaction with competent, caring adults and peers are more effective than programs designed solely for crisis situations. Effective programs focus on services that address the educational, health, social, and emotional needs of individuals, parents, and children.

Empowering

Programs that provide nurturing connections with others help individuals and families learn about community resources and link them to the world of work. Successful programs involve clients in shaping their own interventions.

Complex

Programs must focus on causes; addressing immediate symptoms is not enough. Early intervention and crisis prevention should be emphasized. Addressing barriers to change empowers individuals and families to become part of the decision-making process.

Culturally Relevant

Programs that respect individual and cultural differences build strengths in the clients they serve. Addressing barriers and accommodating different learning styles helps build a broad resource base for problem solving.

Collaborative

Programs need to involve multiple agencies, organizations, and citizens to be effective. Coordination with existing services helps integrate programs into communities.

Respectful

Interactions between programs and clients that focus on equality and respect, solidify relationships and provide opportunities for one-on-one interaction. Voluntary programs that are accessible and easy to use encourage participation. Using mentors to share their experiences helps clients address their own goals.

Intergenerational

Programs that value resiliency use an encouragement model that takes an intergenerational approach to build on family strengths. Programs that provide parent education can help families acquire basic skills and promote informal support among peers.

Accountable

Programs need regular assessment to make services more responsive to families and to justify financial investment.

Adapted from Family Resiliency: Building Strengths to Meet Life's Challenges, National Network for Family Resiliency, Children, Youth and Families Network, CSREES-USDA, July 1995.


A Capital Idea
Sustainable Communities

A community is the interactions among individuals for mutual support. Both communities of interest and communities of place are important. Communities have resources available to them collectively, which they can either consume, hold in reserve or invest. When resources are invested to create new resources, they become capital. Communities can mobilize five areas of capital to sustain themselves.

Community Financial Capital

Financial capital consists of money or instruments of credit for investment and speculation. Examples are stock, bonds, mutual funds, and mortgages. Financial capital can be public or private. Individuals generate financial capital through salary and wages, earnings on investments, or loans. Governments generate financial capital through fees, taxes and borrowing. Financial capital is the most mobile of all forms of capital which can be invested in a community. The principles of fear and greed govern financial markets-neither is conducive to community sustainability.

Manufactured Capital

Manufactured capital is composed of a community's physical infrastructure-such as machinery, homes, office buildings, schools, roads, sewers, factories and water systems. Either the private or public sector turns financial capital into manufactured capital. While some manufactured capital is immobile-like sewers and roads-other is relatively mobile. As many rural residents are discovering, factories and machines can be dismantled and moved easily.

Human Capital

Human capital makes financial and manufactured capital more efficient. For example, machinery works better and longer when a skilled individual runs it than when an unskilled individual runs it.

Environmental Capital

Environmental capital consists of air quality, water quality and quantity, soil quality and quantity, biodiversity (plants and animals), and landscape. The natural beauty of an area can be environmental capital if it is linked with other kinds of capital. Communities can encourage people to come to a place either temporarily, as with tourists, or permanently.

Social Capital

Social capital in a community is defined as collective norms and networks of reciprocity and mutual trust that contribute to working together for mutual benefit. Social capital on a community level depends on strengthening communities of interest and communities of place. Sometimes there are structural reasons, rather than reasons of individual motivation, that are biased against the formation of social capital. For example, the way that manufactured capital is enhanced can either help or hurt social capital development.

Overemphasizing the value of a single form of capital can reduce the levels of other forms of capital. For example, focusing on increasing short term financial and manufactured capital without regard to pollutants that may be generated can reduce the value of human capital through negative effects on health, on environmental capital through destruction of soil and water quality, and on social capital through bypassing local networks and replacing them with impersonal bureaucratic structures with top-down mandates. Privileging any form of capital over another results in medium-term decline in community well-being, despite any short-term gains.

Adapted from Rural Development News, Vol. 21, No. 1, March 1997.



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Jeanne Bintzer, HES Extension Site Administrator
bintzerj@missouri.edu

Brenda Procter, Consumer and Family Economics Specialist, Content Provider
procterb@missouri.edu