Purpose of the Poverty and Inequality Blog (2009-2011)


The purpose of this blog is to highlight trends, resources and opinions on what’s happening regarding poverty and inequality and what should be done to address them. The focus is largely, though not exclusively, on the U.S, particularly on Los Angeles and California. See my introductory post for more background on my motivations for creating this blog.

A blog should not be a one-way affair, so I welcome critiques, suggestions, and opinions via comments on the blog or even guest posts.

Why focus on poverty and inequality?

Addressing the core issues of poverty and inequality has been central to almost all of my professional career and volunteer activities. I carry a deep-seated belief (thanks to my family, friends, mentors and other important influences) that all people have equal value and should have the same opportunities to live fulfilled lives. To my thinking, there are two major reasons for this belief in myself and many others, one moral and spiritual, the other economic and political.

They are morally and spiritually repugnant

Probably just about all people but the most heartless among us agree that we have a moral responsibility to help those less fortunate than ourselves. Giving to the poor and seeking social justice are common values across world religions and spiritual movements. Among many secularists, as well, there is often a moral imperative to address poverty and inequality.

They are not ultimately economically and politically sustainable

In addition to the moral/spiritual motivation to reject poverty and inequality, it isn’t in our long-term interests to accept such socio-economic divisions. Cost-benefit analysis of long-term homelessness, for example, show that allowing people to live on the streets – many with serious disabilities – is much costlier to society than providing them with the housing and services they need. High levels of poverty and inequality can also lead to political instability, as evident throughout history in “bread riots” and social movements. It simply isn’t sustainable over the long term to for a democratic society to accept high levels of poverty and inequality.

The vastness of poverty and inequality in our world provide clear evidence that, unfortunately, these arguments have not carried the day. Tacking poverty needs to be a priority and we need to understand it and be smart about addressing it. I hope this blog can help in that effort.

What exactly do we mean by poverty and inequality?

Poverty has become a dirty word, especially in the U.S. over the past couple decades, conjuring up images of lazy, dependent people who drain resources from the rest of us. Inequality, on the other hand, is a word that for many people seems foreign, something that doesn’t exist here, in the great land of the middle class. In fact, however, poverty and inequality are very real and very different from popular perception.

So, what do they mean? First, let’s deal with the technical definitions.

• Poverty is usually defined and measured by a governmental entity, since public social welfare and entitlement programs are usually based on these measurements. In the U.S., the Census Bureau determines poverty thresholds for various family sizes. For example, for 2009, the poverty threshold for a single person is $10,830 and for a family of four it is $22,050. (That means that household with income below those levels are considered poor).

• Measurements of inequality range from descriptive statistics of socio-economic outcomes (e.g. looking at the median household income by geography, race/ethnicity, etc.) to more sophisticated indicators such as the Gini coefficient. Essentially, these measurements provide quantitative measurements of the extent to which resources are concentrated among certain individuals or groups to the exclusion of others.

While these technical definitions are helpful – and indeed necessary – for analyzing trends in poverty and inequality, this blog will take a somewhat more flexible view. Clearly, the poverty threshold methodology used in the U.S. – first developed in the 1960s – is a relic from a very different time and does not adequately account for geographic and social changes over recent decades (namely, the fact that housing and childcare expenses have risen faster than those for food as household expenses, as well as regional differences in the cost of living). Indices of inequality can be difficult for the layperson to understand and assume that the ideal condition is always a perfectly equal distribution of resources. Therefore, in addition to highlighting statistics and research, this blog will utilize stories, opinion and social commentary to discuss the dynamics of poverty and inequality.

For the purpose of this blog, here are simple, working definitions:

  • Poverty = not having enough resources to meet basic needs of food, shelter or health
  • Inequality = an unequal distribution of economic and social resources or opportunity

Therefore, this blog is not primarily a space to debate methodological or technical issues, but rather to discuss why and how some people have fewer resources and opportunity and – most importantly – what we should be doing to make sure there is a more even playing field.

Working to end homelessness in Los Angeles

Los Angeles continues to take important steps toward ending homelessness.  I posted an overview of the release of “Home for Good,” an action plan to end chronic and veteran homelessness in LA over at the Funders Together blog:  “Seeding systems change, innovation and a plan to end homelessness in Los Angeles.”

What Tax Time can do for the Working Poor

By Joseph Martinez and Walen Ngo, United Way of Greater Los Angeles

The EITC, or Earned Income Tax Credit, has been known for over thirty years to be one of the more successful anti-poverty programs in the nation. The tax relief program is geared toward only workers earning income below a certain income threshold and is responsible for delivering much needed tax refunds to workers, who in turn use this money for medicine, rent, school supplies and food. Every year many people who are eligible for the tax credit in the U.S. and L.A. County fail to claim it, leaving behind billions in uncollected money. According to a 2008 research brief by the United Way of Greater Los Angeles, one in five taxpayers in L.A. County claimed the EITC in the 2006 tax year- that is, 750,000 taxpayers in L.A. County. These residents received a total of 1.5 billion dollars in refunds. Where does all this refund money go? What are the implications when eligible people don’t claim the refund and in essence, ‘leave it on the table’?

A new report by the New America Foundation examines the consequences. Money that is not claimed is never spent on local businesses, which in turn never create new jobs that could have been.  In addition, potential local tax revenue from this forgone economic activity is never generated. The report does an excellent job of highlighting how we are all in the proverbial “same boat.” Even if you are not low income, and not receiving the tax credit, your community still benefits by the infusion of cash coming into your business, your neighborhood and in your infrastructure via tax revenues generated.

Among some of the findings:

  • L.A. County left over 370 million dollars in unclaimed refunds in year 2006. This meant a loss of over 440 million dollars to the economy in foregone sales.
  • Over 2,700 jobs were not created due to this loss to the economy. This translates into over 123 million dollars in forgone wages.
  • The EITC is particularly important in L.A. County because it has a higher level of poverty than the state and the nation- nearly 40% are considered low income. L.A. County has a lower median income compared to other large metro areas, and has a higher proportion of minorities (a constituency which claims the EITC in no small numbers).

If poverty prevention as well as alleviation is to be a public policy goal for our communities, then EITC expansion and funding for capacity and outreach is vital.  To learn about EITC outreach efforts in Los Angeles, visit http://www.greaterlaeitc.org/.

On hiatus

It’s been awhile since I’ve posted to this blog, due simply to having too many things to do over the couple months. I’m hoping to get back to the blog more regularly in the near future.

In the meantime, you may want to check out a post I did recently over at the Funders Together blog on “Exploring the Notion of Public-Private Partnerships to End Homelessness.” It reports on a meeting we organized recently to learn about models of cross-sector collaboration in Los Angeles and across the country.

Hasta pronto.

Good News/Bad News

I have a confession to make: I fight with my daughter almost every morning. Well, “fight” might be a strong word, but part of our morning ritual is to tussle over who gets the Business section of the paper. She is the household meteorologist (a word she learned in her first grade section on “community workers”), and – in this era of downsized newspapers – the weather map in the Los Angeles Times is found in the Business section. She usually wins, finds our neighborhood in the map and declares what we can expect for the weather today.

I look at the Business page because…..well, I guess I’m a glutton for punishment. Besides some obligatory stories on the latest techie tools that are going to revolutionize consumer electronics, here are a some sober headlines from the January 6 LA Times Business section:

“Lower number of new deals under contract shows shakiness in the housing recovery.”

“Mixed data on the recover stifle stocks.”

“Only 45% of workers are happy with their jobs, the lowest rate in 22 years, survey finds.”

“Banks take revenge for new consumer-protection rules”

The media has been looking for any good news where it can find it (worker productivity is up!), but unemployment is still high, housing and stocks are shaky, and workers and consumers are still taking it on the chin.

Here’s more bad news: I’m on my way to Chicago and the weather page says to expect a high of 23 degrees. However, when I get back to LA on Friday, it’ll be sunny and 72. I guess my daughter knows something I don’t: if you live in LA and want good news, check the weather.

Segregation just isn’t news any more

The end of the year brings with it a slew of “top 10/best of/worst of” lists.  This week’s issue of Time magazine(with Ben Bernanke on the cover as Person of the Year) provides a number of lists, from books to gadgets, business deals to scandals.  On the page of Top 10 Essential Stories, there is an asterisk with what they cite as “The Most Underreported Story of 2009”

According to a January report from UCLA’s Civil Rights Project, African-American and Latino schoolchildren are more segregated than they have been since the time of Martin Luther King Jr.’s death, in 1968. In the 2006-07 school year, nearly 40% attended schools–many of them subpar “dropout factories”–where students of color made up 90% to 100% of the student body.

The report they are referring to is Reviving the Goal of an Integrated Society: A 21st Century Challenge , written by noted education and civil rights scholar Gary Orfield.

Not only do many public schools remain segregated by race, the report points out, but also by income as those same schools tend to be segregated by economic class.  Add to that the fact that those schools tend to be more likely to have unprepared teachers, college prep courses and enrichment activities and you have a whole class of students starting far behind.

If segregation is so obvious, why don’t we hear more about it?  Orfield provides this explanation of why whites think segregation is over:

Even as black and Latino students are becoming more isolated, the typical white child is in a school that is more diverse than the school white children attended a generation ago. This factor makes it especially hard for whites to understand the degree to which resegregation has taken place. In 1988, 53% of white students attended schools that were 90-100% white, but that number has slipped to 36% in the newest data. 94% of whites were in majority white schools then, but that has dropped to 87% in the most recent data. The share of whites attending multiracial schools has risen from 7% to 14%.

So, whites are becoming less segregated, but African Americans and Latinos are becoming more segregated. Overall, segregation is growing because non-whites are growing in proportion to whites.  But apparently that still isn’t much of a story.

And the winner is…

Most of the world – outside the U.S. anyway – was fixated over the last week on South Africa to learn the draw for next summer’s soccer World Cup. The 32 teams that qualified for the competition were divided into eight round-robin groups. The top two teams from each group then go into the single-elimination final sixteen until a champion is crowned on July 11, 2010 in Johannesburg.

Winners and losers will, of course, be decided on the soccer pitch, but how would these countries fare if their success were based on how well they meet the needs of their residents? The Human Development Index (HDI) is a widely used measurement of the quality of life in countries around the world. Using the HDI as a proxy for how countries would perform the World Cup (i.e. the country with the higher HDI wins each game), matchups in the second round would include (see table at the bottom for the most recent HDI for each of the countries in the World Cup, except North Korea):

Switzerland vs. Brazil
Italy vs. Japan
Portugal vs. Spain
Netherlands vs. New Zealand
Greece vs. Uruguay
Australia vs. England
U.S. vs. Germany
France vs. South Korea

Following the same logic, the quarterfinals matches would be:

Japan vs. Switzerland
Greece vs. Australia
France vs. U.S.
Netherlands vs. Spain

Australia would beat Japan in one semifinal and Netherlands would squeak by France in the other.

In the final, Australia would win over the Netherlands, giving the Socceroos their first World Cup title.

While Australia has been improving in recent years, I think I speak for most fans of the beautiful game in concluding that it’s a good thing that the HDI doesn’t determine the results on the field. Brazil, certainly one of the favorites to raise the cup, is ranked 23rd in HDI among the countries in the World Cup. Ivory Coast, with one of the lowest HDI rankings in the world (163rd out of 182), is the top team in Africa and a leading candidate to stage some major upsets.

While human development levels may be somewhat predictable and unsurprising, sport can be thoroughly unpredictable. Global inequalities persist, but soccer is the great equalizer.

Human Development Index for World Cup 2010 Countries

Rank Country HDI
1 Australia 0.970
2 Netherlands 0.964
3 France 0.961
4 Switzerland 0.960
5 Japan 0.960
6 United States 0.956
7 Spain 0.955
8 Denmark 0.955
9 Italy 0.951
10 New Zealand 0.950
11 Germany 0.947
12 England 0.947
13 Greece 0.942
14 South Korea 0.937
15 Slovenia 0.929
16 Portugal 0.909
17 Slovakia 0.880
18 Chile 0.878
19 Argentina 0.866
20 Uruguay 0.865
21 Mexico 0.854
22 Serbia 0.826
23 Brazil 0.813
24 Paraguay 0.761
25 Algeria 0.754
26 Honduras 0.732
27 South Africa 0.683
28 Ghana 0.526
29 Cameroon 0.523
30 Nigeria 0.511
31 Ivory Coast 0.484
32 North Korea n/a

Source: Human Development Report 2009

Evidence from Los Angeles that housing the homeless saves money

The Los Angeles Homeless Services Authority (LAHSA) today released a study by the Economic Roundtable that provides even more evidence that providing permanent supportive housing for the chronically homeless can ultimately provide public cost savings. These savings have been documented in research in cities across the nation, with the early work being done by Dennis Culhane and colleagues on New York.

Finally, we are beginning to have numbers that show similar savings in Los Angeles. Last month, United Way of Greater Los Angeles released a case study report of four individuals that showed a 40% decline in public costs.

Economic Roundtable’s Where We Sleep report
shows similar levels of savings, but with a much more comprehensive data set (including 10,000 recipients of General Relief in the County). This chart from the report shows how much public costs decline after someone is placed into supportive housing.

Average Monthly Public Costs for Persons in Supportive Housing and Comparable Homeless Persons

Average Monthly Public Costs for Persons in Supportive Housing and Comparable Homeless Persons
Source: Economic Roundtable, Where We Sleep, 2009

That’s a 79% reduction in average public costs. Even when accounting for the cost to provide permanent housing (average of $750 for capital and $352 for operational costs per month), there is a 41% decline in costs.

For years, studies around the country have shown similar cost savings; but a common response in Los Angeles has been, “well, we don’t know if that’s true for L.A.” (we are special here after all). With this evidence, what’s our excuse for not doing everything we can to provide permanent supportive housing for those who need it? Not only is it the right thing to do: it’s the smart thing to do.

Compassion: it’s who you know

This past weekend I participated in the third annual HomeWalk, an event to raise funds and awareness to end homelessness in Los Angeles, with thousands of other people. The walk raises hundreds of thousands of dollars each year that are distributed to organizations working to house the homeless. The money is great, but potentially more important are the efforts through the walk to educate walkers, donors and the general public about the myths and realities of, and solutions to, homelessness. By putting a human face on this tragedy, organizers help people understand that “those people” are more like “us” than we tend to think.

How we approach an issue is most often shaped by personal experiences and relationships. This point was driven home for me again by a letter to the editor in Sunday’s Los Angeles Times, in response to Gregory Rodriguez’s recent column belittling a Senator’s proposal to exclude the undocumented from the 2010 Census:

I am a lifelong Republican who voted for Richard Nixon in 1960, but have always been concerned about dehumanizing our immigrant families and workers in the U.S.

I got involved with the Day Workers Center in Laguna Beach originally to get these day laborers out of our neighborhoods. But I have come to know many of the workers. They are hardworking, believers in family values, honest and bent on improving their lives.

They do pay taxes. They do try to get their children educated. They do contribute to our local economy. More important, they teach our Anglo children the meaning of diversity and respect for difference.

Rodriguez is right in insisting that we recognize our productive noncitizen families and workers — not just because they enhance our population for congressional representation and federal spending allocations but because they belong to our local communities.

Carl Schwarz

Aliso Viejo

This guy started out wanting to get rid of day laborers, but in getting to know them he realized they just wanted the same things he did. Wouldn’t it be great if more people would take a chance to get to know “those people” they put down so much? Maybe they’d realize they’re really just a lot like “us.”