Screwed Unemployed Workers and Rising Concentrated Poverty

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The Nation

Screwed Unemployed Workers and Rising Concentrated Poverty

Unemployment insurance and poverty

Congresswoman Barbara Lee, co-chair of the Congressional Out of Poverty Caucus, voted against the recent extension of unemployment benefits because it shortened the maximum number of weeks a jobless worker could qualify.

“Instead of scaling back unemployment benefits we need to be adding weeks to help people get by when there continues to be four workers in line for each job,” said Lee.

She makes a hell of a point.

While most of the media has focused on the Democrats “pretty much getting what they wanted,” it has given short shrift to what this deal means for the long-term unemployed, currently at near-record levels, with 43 percent of unemployed people jobless for more than six months. Under the new deal they will receive fewer weeks of unemployment benefits than was available between the end of 2009 and last year, with the maximum reduced from 99 weeks to 73 weeks by September 2012

So what are the consequences of the Democrats “win” for the long-term unemployed? 

A new report from the US Government Accountability Office (GAO)—“Unemployment Insurance: Economic Circumstances of Individuals Who Exhausted Benefits”—gives some indication of what might lie ahead for these folks and others not even fortunate enough to qualify for unemployment benefits in the first place.

The GAO notes that of the 15.4 million workers who lost jobs from 2007 to 2009, half received Unemployment Insurance (UI), half didn’t, and about 2 million exhausted benefits by early 2010.

That group of 2 million had an unemployment rate of 46 percent in January 2010, and a poverty rate of 18 percent compared to 13 percent among working-age adults. More than 40 percent of those who had exhausted their benefits had incomes below 200 percent of the federal poverty line (below about $35,000 for a family of three), which is the level where many economists believe people start really struggling to pay for the basics

The good news is Mitt Romney’s strong safety net then kicks in, right? So we can anticipate that unemployed people are able to obtain a little cash welfare until that 4-to-1 (job seekers-for-every available job) ratio drops down? 

Not so much. 

Temporary Assistance to Needy Families (TANF), a cash welfare program designed to help families in distress, is a case in point. It doesn’t reach as many people as it used to—only twenty-seven for every 100 families in poverty, compared to 68 of every 100 prior to the 1996 welfare reform that both parties tout as a success. It’s also limited to people with children age 18 or younger, so over half of those who exhausted UI benefits didn’t qualify. Therefore it comes as little surprise that only 3 percent of households that exhausted UI benefits received TANF; 15 percent received food stamps, and18 percent were in families where someone received retirement, disability, or survivors benefits from Social Security programs.

What is also striking is who doesn’t qualify for unemployment benefits at all.

According to the report, 49 percent of the 15.4 million people who lost jobs between 2007 and 2009 received UI, and that’s only because the program expanded during the recession. From 2005 to 2007, only 36 percent of the 8.3 million people who lost jobs received benefits. Who’s being excluded? 

Low-wage workers, primarily.

“Those in the bottom 30 percent in earnings were half as likely to receive UI benefits as displaced workers in the top 70 percent,” the report reads.

The GAO notes that it’s tougher for these workers to meet the minimum earnings requirement and “family crises can also cause some in marginal financial situations to quit a job (for example, to care for a sick child)” which can make them ineligible in some states due to quitting “voluntarily.”

“Nearly half of displaced workers didn’t receive unemployment benefits,” says Elizabeth Lower-Basch, senior policy analyst at the Center for Law and Social Policy. “Moreover, all the young adults transitioning into the labor market who haven’t been able to get their first jobs because of the recession aren’t counted as either displaced workers or UI recipients. So both the displaced workers who didn’t receive UI and the youth entering the workforce are likely to have even higher poverty rates than those who have exhausted their UI benefits.”

In 2010, the federal extension of unemployment benefits kept 3.2 million Americans from falling into poverty. In 2012, with this recent Congressional deal reducing the maximum number of weeks of benefits, will we see the same antipoverty effect? And what about the workers who receive no benefits at all? 

Maybe it’s time to look at how the unemployment insurance system functions as a whole, and how it can reach more people.

Fair Pay for Home Care Workers

There are currently 1.8 million low-wage home care workers in an industry that earns $84 billion in annual revenues. According to the National Women’s Law Center (NWLC), more than 9 out of 10 of the workers are women, disproportionately women of color. They are currently excluded from basic federal minimum wage and overtime protections, despite the fact that their work is demanding, stressful, and so vital to millions of families. Many of these women are primary income earners for their families and the Bureau of Labor Statistics reports sub-poverty median earnings below $21,000 for full-time work ($22,314 is the poverty threshold for a family of four). 

The Depart of Labor has proposed a rule change so that home care workers finally receive the minimum wage and overtime protections they deserve. The change would help women who are working to lift their families out of poverty and also reduce pay disparities between men and women. Higher wages would also reduce high turnover and therefore improve quality and constancy of care. 

The DOL is accepting comments on the proposal from organizations and individuals and just extended the deadline to March 12.

“The home care industry is pushing back hard against the proposal,” says Joan Entmacher, vice president for family economic security at NWLC. “The number of comments received matters, so I would encourage anyone who supports this rule change to file a comment immediately.”

NWLC notes 16 states already require minimum wage and overtime pay for most home health workers, proving it can be done without adversely impacting jobs and care as the industry claims it would. Also, Addus HealthCare, one of the largest home care employers, pays overtime and travel time to all of its caregivers whether required by state law or not. The total national cost of the proposed rule change is estimated to be less than one-tenth of one percent of the industry’s $84 billion in annual revenues.

Don’t let industry dominate the DOL’s review. Make sure your voice is heard today.

A Devastating Kids Count

The Annie E. Casey Foundation’s Kids Count reports that nearly 8 million children in the US live in areas of “concentrated poverty,” defined as at least 30 percent of residents living below the federal poverty level—about $22,000 for a family of four.

That’s 11 percent of children in the country, and it’s 25 percent more than lived in concentrated poverty in 2000. What makes this even more alarming and is perhaps a testament to the proliferation of low-wage work and concentration of wealth—75 percent of these kids have at least one parent working in the labor force. 

Laura Speer, associate director for policy reform and data at the foundation, said she finds the new data “particularly disturbing” because the long-term trends have taken such a turn for the worse. Between 1990 and 2000, concentrated poverty was reduced and things were moving in the right direction. But the decade between 2000 and 2010 tells a different story.

“Poverty is re-concentrating,” she told me. “There’s more segregation in terms of income in the US and this can have really bad impacts for kids.”

As the report notes, families living in areas of concentrated poverty are more likely to face food hardship, have trouble paying their housing costs, and lack health insurance than those living in more affluent areas. Children are “more likely to experience harmful levels of stress and severe behavioral and emotional problems than children overall.” Even children in middle- and upper-income families living in areas of concentrated poverty are 52 percent more likely to fall down the economic ladder as an adult.

“Part of what we want to reinforce is the concept that children don’t grow up in isolation,” said Speer. “They are affected by both their family’s resources and also very much impacted by the community in which they live. The community is critically important because it really does for many kids equate to the opportunities that they have access to.” 

The states with the highest rates of children living in concentrated poverty are in the south and southwest, while Detroit (67 percent), Cleveland (57 percent), and Miami (49 percent) have the highest levels among the nation’s 50 largest cities.

Speer said that although the data is bleak, concentrated poverty “is not intractable.”

“There are things that can be done and a lot of innovative ideas out there that are being tried that make me hopeful,” she said.

The report points to new approaches helping people find jobs, education opportunities, and access services outside their neighborhoods, or move to neighborhoods with more opportunities. 

Public/private partnerships are developing mixed-income neighborhoods in Atlanta, Baltimore, New Orleans, and San Francisco supported by federal programs like the Choice Neighborhoods Initiative. These efforts invest in early childhood and education programs for children, and workforce development and asset-building programs for parents and residents. 

Since 2010, the federal Partnership for Sustainable Communities has supported coordination of employment, affordable housing and transportation in 103 metropolitan regions across the country, taking what Speer said is “a more long-term, realistic approach to the idea of development rather than just moving everything out to the suburbs.”

Finally, the report notes programs like the federal Moving to Opportunity demonstration project, and housing mobility programs for families with Section 8 vouchers, that show promise in helping low-income families move out of areas of concentrated poverty and access affordable housing in low-poverty neighborhoods.

But even if Speer is confident that we can take on concentrated poverty, she adds a word of caution.

“What’s scary to me is that we really don’t know what the impact of the recession is going to be on these communities in the long-term,” she said. “This is the initial glimpse at it. But it’s hard to even know what’s going to be the impact of the foreclosure crisis in the long-term on these communities.”

For further reading and additional resources please see the extended version of this post at The Nation.

Greg Kaufmann

Greg Kaufmann is the poverty correspondent for The Nation and a contributor to BillMoyers.com. He covers poverty in America primarily through his blog, This Week in Poverty. Greg has been a guest on Moyers & Company, MSNBC’s Melissa Harris-Perry, NPR’s Radio Times with Marty Moss-Coane, Here & Now, The Thom Hartmann Program, Stand Up! with Pete Dominick and The Matthew Filipowicz Show, as well as various local radio programs. His work has also been featured on Common Dreams, CBSNews.com, NPR.org, WashingtonPost.com, and BusinessInsider.com. He serves as an advisor for Barbara Ehrenreich’s Economic Hardship Reporting Project.

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