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Originally published Sunday, August 17, 2008 at 12:00 AM

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Syndicated columnist

States are getting serious about families "on the edge"

In a rare burst of positive news for America's hard-put poor families, 15 states have set up bipartisan commissions to see how to narrow...

Syndicated Columnist

In a rare burst of positive news for America's hard-put poor families, 15 states have set up bipartisan commissions to see how to narrow the yawning income gaps that leave so many Americans in destitution.

The advent of the commissions and serious studies — ordered up in states from Maine to Washington, Alabama to Colorado — is good news. It's true, legislatures have struggled with welfare and Medicaid issues for years. But not gladly.

In the meantime, the nationwide poverty rate has stalled around 11 percent or 12 percent for years — and that's for a family of four with income under the federally set line, now $21,200 a year. (Try living on that — a reasonable minimum for food, shelter and clothing needs would be closer to $30,000.)

Poverty places a huge drag on the economic output and productivity of states and communities. Poor health, substandard housing, mental stress, employment crises, teenage pregnancy, low literacy and the added likelihood of arrest and imprisonment all appear to be part of a misery package that hits poor populations far more heavily than the rest of us.

The results for children are especially alarming. A recent study shows that those who spend their first five years in poverty will (compared to a middle-class child) face daunting odds — first lagging school performance and then, as adults, less income, poorer health and higher psychological stress. Girls growing up poor are five times more likely to be a teen parent; boys are more than twice as likely, after reaching adulthood, to be arrested.

Small wonder that by some estimates, childhood poverty is draining a massive $500 billion a year out of the U.S. economy. State and local governments can hardly not care: They're then saddled with vastly increased welfare, health, social services, criminal-justice costs — plus incredible amounts of lost income.

So what's to be done? What should the 15 state commissions (and how about the other 35) recommend?

First and most obvious, get more money into the pockets of the poor. Even with full-time, minimum-wage employment, many of our poor subsist "on the edge." Often, rent costs more than half their income. A single illness, an unexpected car repair or rent increase can throw them into full-scale crisis.

Tax relief for the poor is crucial. Nearly half the 42 states that levy income taxes have thresholds set below the federal poverty level. Sales taxes take a much bigger and more painful bite out of poor people's budgets. Alabama even has a sales tax on food. Any significant taxes hitting the poor are a bad idea — arguably counterproductive for states' long-term budgets.

Instead, states should supplement the federal earned-income tax credit for low-income working families with a parallel state credit. Twenty-two states are doing that — but hello, other 28 states: Why not you?

Next, curb the exploitive debt cycle for poor families by cracking down on such abusive practices as payday lending, predatory mortgages and excessive fees for cashing paychecks. North Carolina and Illinois are among the few states so far willing to buck the loan-sharking lobbies to enact reforms. And banks (which have often fled low-income neighborhoods) can help by returning with special local outlets that offer check-cashing, money orders and savings accounts.

There's no shortage of other steps the new state commissions on poverty reduction can recommend — from financial literacy counseling to better schools to expanded work-force training, increased housing subsidies to local health clinics.

But there's a critical measure missing from most of the state commission agendas — reforming the state criminal-justice policies that have turned the United States into the world's biggest incarcerator. A child's life can be torn apart by a parent, especially a mother, going to prison. Some children even land in foster care, making parental incarceration, some reformers assert, a "death sentence" for families.

But even as 400,000 parents a year get released from prison or jail sentences, laws and customs make it terribly hard for them to re-create normal family life. Many employers shun ex-convicts. Without income, finding stable housing can be terribly difficult. Cumulatively, the consequences of having a criminal record can be devastating and continue for years, with children among the most-wounded victims.

Incarceration is so salient in America today that the state commissions should put it high on their agendas — starting with a recommendation that we stop imprisoning nonviolent offenders and think afresh, relying on community service, effective drug treatment and remedial education.

We can do better by our poor families and the children growing up in them. The state commissions are a good start. But eventually it will take vision, and political courage, by governors and legislators to make real change happen.

Neal Peirce's column appears regularly on editorial pages of The Times. His e-mail address is nrp@citistates.com

2008, Washington Post Writers Group

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