More to fuel the minimum wage debate

An Associated Press article published on Fox News website on July 19, 2014 titled “Job growth picks up in states that raised minimum wage” brought some interesting data to consider when debating increases in the minimum wage. I’ve included excerpts below, but you can read the whole article at http://www.foxnews.com/politics/2014/07/19/job-growth-picks-up-in-states-that-raised-minimum-wage/.

advertisementMaybe a higher minimum wage isn't so bad for job growth after all.

“The 13 U.S. states that raised their minimum wages at the beginning of this year are adding jobs at a faster pace than those that did not, providing some counter-intuitive fuel to the debate over what impact a higher minimum has on hiring trends.

Many business groups argue that raising the minimum wage discourages job growth by increasing the cost of hiring. A Congressional Budget Office report earlier this year lent some support for that view. It found that a minimum wage of $10.10 an hour, as President Obama supports, could cost 500,000 jobs nationwide.

But the state-by-state hiring data, released Friday by the Labor Department, provides ammunition to those who disagree. Economists who support a higher minimum say the figures are encouraging, though they acknowledge they don't establish a cause and effect. There are many possible reasons hiring might accelerate in a particular state.

"It raises serious questions about the claims that a raise in the minimum wage is a jobs disaster," said John Schmitt, a senior economist at the liberal Center for Economic and Policy Research. The job data "isn't definitive," he added, but is "probably a reasonable first cut at what's going on."

…

Some economists argue that six months of data isn't enough to draw conclusions.

"It's too early to tell," said Stan Veuger, a scholar at the American Enterprise Institute. "These states are very different along all kinds of dimensions."

For example, the number of jobs in North Dakota — which didn't raise the minimum wage and has prospered because of a boom in oil and gas drilling — rose 2.8 percent since the start of this year, the most of any state.

But job growth in the aging industrial state of Ohio was just 0.7 percent after its minimum rose to $7.95 from $7.85. The federal minimum wage is $7.25.

Veuger, one of the 500 economists who signed a letter in March opposed to an increase in the federal minimum, said the higher wages should over time cause employers to hire fewer workers. They may also replace them with new technologies.

The Congressional Budget Office cited those factors in its February report. But in addition to job losses, the CBO also said a higher minimum could boost paychecks for another 16.5 million workers.

Sylvia Allegretto, an economist at the University of California, Berkeley, said that research comparing counties in states that raised their minimums with neighboring counties in states that did not has found no negative impact on employment.

Restaurants and other low-wage employers may have other ways of offsetting the cost of higher wages, aside from cutting back on hiring, she said. Higher pay can reduce staff turnover and save on hiring and training costs.

Programs Matter: Walking against the Wind

By Interim Case Manager Frenchie Pulluaim, MSW

Walking against the wind must be how some of our families feel as they struggle to recognize the negative behaviors that are hindering them. Most of our families want to create positive change in their lives, but when it requires money it is virtually impossible. 

For example, many of our families have arrest records for driving unregistered vehicles, traffic tickets, expired identification , or child support arrears.  These may seem easy to fix, but imagine trying to do so while earning $7.30 hour with 3 children and living expenses.  Another example is the lasting impact of years-old minor drug charges—some as minor as possession of a single marijuana cigarette—that resulted in a felony. Although the charges occurred when the person, now in  his 50’s, was much younger, this one mistake can affect the family for the rest of their lives.

We all make mistakes every now and then, but having resiliency, support, and access to resources make it easier for these families to walk against the wind.  It is then that they can imagine and work toward a life of stability for themselves and their families.

Poverty Matters: Dare to Dignify

By Jeremy Lillig, CSJA, Managing Director, Bright Futures Fund

In my work with Community LINC and serving as the Managing Director for another nonprofit, I’m oftentimes reading essays and theories, both historical and current, on the issue of poverty.  Sometimes they cause me to stop and reflect.

Such was the case recently when reading one of my favorites on the topic, the late legend Dorothy Day.

While reading one of her essays she states, “We need to always be thinking about poverty, for if we are not among its victims its reality fades from us.  We must talk about poverty, because people insulated by their own comfort lose sight of it.“

This premise of this quote may seem obvious but when I stopped to reflect upon it I was reminded that we really don’t like to talk about it.  We do distance ourselves from it.  At times it’s almost as if we say “If I don’t know about it, it’s not really a problem.”

 

So what do we do?  How can we too be victims of poverty?  In the question so lies the problem.  We have lost our sense of community.  In a world in which we only see news that we want to on our smart phones and which community is defined by social media we have become more insulated than ever. Our opportunities to understand or even to listen to the struggles of our fellow person become difficult or nonexistent.  Perceptions are defined by anecdotal rants on Facebook and Twitter helping to define new stereotypes and generalizations to the plight of all.  How often have we in Kansas City heard someone complain about Jerry on the Plaza asking for a “down payment on a cheeseburger?”

Obviously I don’t have to answer to eradicate poverty from our society otherwise I would have done so long ago.  I do however have a few suggestions as to how we might help ourselves to help others.  The “little ways” can be extremely powerful and effective. 

1.  Treat people as people.  Don’t refer to people in poverty by slurs such as “bums,” “gangies,” or even refer to someone as “that homeless person.”  If you encounter someone find out their name,  or at least smile at them, make eye contact.

2.  Help to preserve dignity.  Answer someone who is panhandling.  If you can’t or prefer not to give them money say “I’m sorry I can’t help you today.”  Don’t ignore them as if they don’t exist. 

3.  Go and volunteer once a month.  Help out at Community LINC, St. James Place soup kitchen, etc.  Serve, talk with people, etc.  You’ll be amazed at how much you connect with people.  You’ll be thankful that you did.

These three suggestions are not revolutionary but they do require a revolution of our hearts in order to see them happen.  It takes effort but our lives will be all the more rich because of it.

In closing I leave you with the words from the inspiration for this post, Dorothy Day: 

“Suffering, sadness, repentance, love, we all have known these. They are easier to bear when one remembers their universality.  Life can be a lonely experience.  We don’t know what is going on in the depths of the heart and soul of another.  We scarcely know ourselves.”

There isn't enough affordable housing

By CEO/Executive Director Laura Gray

I read a lot of studies that tell us there isn’t enough affordable rental housing in the U.S. One such report from The Joint Center for Housing Studies at Harvard - The State of the Nation’s Housing – was released last Thursday.

The report states that in 2012 nearly 41 million households paid more than 30% of their income for housing. Nearly half of all renters are considered housing burdened, meaning they pay more than 50% of their income for housing. Four out of five people who made less than $15,000 per year (roughly equal to full time work at minimum wage) paid more than 30% of their income for housing and two thirds paid more than 50%.

Logic tells us that a family spending more than 50% of their income on housing have less to spend on food and healthcare. The report confirms it.

What really caught my eye was a blog posting on the Urban Institute’s MetroTrends blog back on November 18, 2013. Erika Poethig posted that “The federal resources subsidizing homeownership far exceed those dedicated to subsidizing rental housing for America’s lowest income citizens. All the subsidies for homeownership – the mortgage interest deduction, the deduction for property taxes, and the housing value that is not taxable – add up to about $300 billion annually. Compare this to the $37.4 billion the US Department of Housing and Urban Development spends on rental housing assistance. Throw in the tax subsidies for developers of affordable housing, which is about $8 billion a year, and there is still room for improvement.”

Don’t get me wrong. I take all of the deductions associated with owning a home. But, something feels wrong about so little assistance going to help ensure that children in extremely low income families have a home.

Poverty and the minimum wage

By CEO/Executive Director Laura Gray

I’m always torn when I get something urging me to contact my Senator and Congressman to do something like raise the minimum wage. You might think that it’s an automatic “yes” for someone who works in an organization that serves the homeless. Obviously, my heart is pulled to a mission that helps people who are among the poorest of the poor.

But, the pull of my heart is balanced by my head. I have an undergraduate degree in Economics and an MBA in Finance. I realize that raising the minimum wage will raise costs for a lot of businesses. That increase will be passed on to us as consumers, some of whom are the very people whose increased minimum wage will have to absorb the rising prices.

But, I also realize that right now a single mother with two kids working 40 hours per week will still be below the poverty level. She’ll qualify for other forms of government subsidies, so in a way businesses that don’t pay minimum wage are increasing the cost of subsidies taxpayers have to support.

There are a lot of other arguments on both the head and heart sides of the issue. Unfortunately, the answer isn’t easy despite all of the passionate opinions on both sides.

Does poverty discriminate or do we?

Fifty years ago this week Dr. Martin Luther King gave his most famous speech - the “I have a dream” speech. Most people remember it for the stirring vision of freedom and equality for every American.

Wynton Marsalis points out, “How many of us today know that it was called the March on Washington for Jobs and Freedom? I sure didn't. And it is now clear that poor and working class citizens need to be an integral part of our economic system. This necessity transcends race. Race is a matter of physiology; discrimination is a matter of culture, and culture shapes public perception, which influences political action.”

When I read the comments on the Fox News website about the 50^th anniversary of the speech, the first several I saw were about how many blacks are criminals or on welfare. To at least some of the public, crime, poverty and race all blur together.

Representative Lynn Woolsey, Democrat of California, noted at a 2010 Congressional briefing, that views of the cultural roots of poverty “play important roles in shaping how lawmakers choose to address poverty issues.”

There is no question that poverty still disproportionately impacts non-whites in America. In 2010, 27% of blacks and Hispanics were below the poverty level versus 9% of whites and 12% of Asians.

As long as lawmakers share the perception by some of the public that poverty shows a character flaw, political action won’t be of much use in the fight to end poverty.

We’ll just have to keep trying to change those perceptions and striving to live up to Dr. King’s vision of freedom and equality. 

The only thing we know for certain is what already happened

2011 was a complex year for Community LINC. Thanks to our donors, we were able to provide a home for homeless families and services that equip them for independence. We were able to make some needed building repairs. We began to comprehend the building repairs that are still needed (the bad news), assessed our program performance (the good news) and developed a strategic plan to guide us through 2014.

But, the U.S. poverty rate was the highest since 1993 and our waiting list averaged more than 70 families each month. Homeless families did not share in the economic recovery. The Federal Reserve Bank of Kansas City’s 4^th quarter 2011 Low and Moderate Income Survey (LMI) confirms that “the financial status of the LMI community continues to deteriorate.” Jobs that pay well are still few and far between and our residents often lack the skills to compete effectively for those jobs. Affordable housing is still in short supply, with the wait time for subsidized housing in Kansas City increasing to five years.

Despite all of the barriers, about 70% of our families left for permanent homes in 2011. The 38 families who exited saved an astounding average of $1,500 apiece. Moreover, the cumulative increase in taxable earnings of the families who have left since 2007 exceeded $600,000 and the decrease in public assistance was almost $200,000.

Our families are successful because we screen for people both willing and able to make a life change and then equip them for independence and self-sufficiency. Our new mission statement says it all - “to end homelessness, impact poverty, and remove the barriers to self-sufficiency for the families we serve.”

Each year, I’m inspired by everyone I encounter through Community LINC - the families who have committed to a life change, the staff who have made this mission their lives, the volunteers who give their time for people they never met, and the donors willing to give strangers a proverbial “hand up.” In 2012 we will pilot two new programs to extend our services to more families and serve that extensive waiting list. I hope that you will choose to be a part of this meaningful mission.

You've Got a Friend

Having a friend, or more formally, a support system, is something that differentiates poor mothers who don’t slide into homelessness from those who do.

The fifth policy brief from the Institute for Children, Poverty & Homelessness (ICPH) on the characteristics of fragile families who become homeless makes a number of points. But, the key role of family and friends is the one that struck me the most.

If a poor mother has support from family and friends, she will be able to work more, she will earn more, and she will rely less on welfare than those with weaker bonds.

So, why would that be the case?

The safety net of family and friends relieves some of the financial strains of poverty – they help with groceries, diapers, clothing, and rent. Family and friends who can help out in an emergency with child care or transportation make it possible for a poor mom to get to work and can mean the difference between keeping and losing a job.

The picture for poor mothers who have weak or erratic support is bleak. They struggle to get a foothold in the labor market and end up homeless more often than their counterparts with strong support.

It’s hard to prove or disprove, but we’ve always felt that one of the reasons our program is so successful in transitioning families out of homelessness, is that we give them a readymade community of support. The families live together on a single campus. The adults attend life skills classes and mental wellness groups together. The children play and study together in their classes. They meet other people at the same place in their lives and making the same life changes. They watch out for each other’s kids. They give each other rides.

First they have new neighbors and then they have new friends. And, now we know how important those friendships can be.

Chicken or the Egg - When it Comes to Homelessness

We know from the National Center on Family Homelessness that mothers experiencing homelessness struggle with mental health issues.

• They have three times the rate of PTSD (posttraumatic stress disorder) (36%) and twice the rate of drug and alcohol dependence (41%).
  
• About 50% of mothers have experienced a major depressive episode since becoming homeless.
  

We recently saw the reverse, where depression in a mother living near poverty level contributed to her family becoming homeless.

Paulette and her 3 children entered our transitional housing on October 15, 2009. Paulette’s 4 year old daughter passed away in January 2009 after having an asthma attack. Paulette was depressed and unable to return to work at the same daycare center her daughter had attended prior to passing. Paulette had no savings and very little support from her children’s father. Paulette lost her job and was unable to pay rent which meant she had to move in with her father in his one bedroom apartment with her other two children. Her goals are to obtain employment and work towards eliminating some old debt. Paulette stated Community LINC will be the start she needs to get her life back on track. Her main focus is housing and her mental health.

Her family coach calls depression "the invisible sickness." She sees it in fathers who spiral into depression when they aren’t able to provide for their families. We see it in most mothers.

But, we also see people overcome the impact of depression.

Caroline, a single mother of a little girl, came to Community LINC after a long stint of substance abuse, homelessness, and chaos including depression. While in our program, she maintained her hard won sobriety, became gainfully employed, retired a significant amount of debt and began work toward an undergraduate degree. She more than doubled her wages and no longer relies on public assistance from food stamps. Today, Caroline and her daughter live in a quaint three-bedroom home.

Our mental health therapist works with all of our adults on all of their issues. She counts herself successful when she only hears from a graduate family occasionally after they leave the program. If she hears from them constantly, she feels they haven’t achieved the independence that is our goal.

Happily, she doesn’t hear from Caroline very often. But, this week, Caroline came by to take her out to the construction site for her Habitat for Humanity home. In her lifetime, she’ll have gone from homeless to homeownership.

- Laura Gray

The Value of Relationships

According to Dr. Ruby Payne, noted author of "A Framework for Understanding Poverty," there are certain hidden rules among the classes. Where the middle class value things as possessions and the wealthy one-of-kind objects, legacies and pedigrees, the impoverished value people/relationships.

Recently, a current resident asked permission to bring a significant other into the program, explaining that he would be a tremendous support and that his inclusion would be beneficial for the success of the family. After very careful consideration, he was taken through the process and enrolled in the program. What has resulted is a family that was simply going through the motions has become a family focused on ending the cycle of poverty in their lives. To this end, the significant other is nearing completion of his aviation training--in which he is the top performer in his class--and the family is developing their plan to transition to permanent housing.

Though we may not readily see the value in the relationships that our families choose to maintain, we have to sometimes be willing to take the chance that they know best.

- Jeannine Short, Director of Programs

A Point in Time

Each year Community LINC takes part in a “point in time survey” of the homeless in Kansas City. It’s a count of homeless individuals and families both in shelters and on the streets.

The preliminary estimate was that on one day (January 27 this year) there were at least 2,655 people, including 715 children, homeless in Kansas City. In past years, before the economic downturn, about 15,000 people became homeless over the course of the year. There are an unknown number who are not counted in the survey. These are the homeless who couch surf with families and friends or stay in a weekly motel.

It makes me realize that our goal is for homelessness to be just a point in time for the families in our transitional housing program.

Right now, half of our families were raised by grandparents or other relatives. Like foster kids who age out of the foster care system, these young parents have no one left to fall back on. They didn’t have families or friends to give them a place to stay when they became homeless.

We can see the impact of the downturn in the economy in a lot of ways. Today, there are 64 families on the waiting list for an apartment. A surprising 30% of our families are two parent families. In a typical year, less than 10% of the families have two parents. We are also seeing more families from situational poverty rather than generational poverty.

We will help most of our families ensure that they don’t become homeless at any other point in time. We will provide about 36,000 bed nights this year. The average family will stay for 7 months. What they learn while they are here will ensure that, for at least our two year follow-up period, more than 8 out of 10 will not become homeless again.

-Laura Gray