The Cycle of Poverty

The e-Advocate Quarterly Magazine

The Cycle of Poverty Jeremiah 22:3 | 1 John 3:17 James 2:15-16 | Isaiah 1:17 Luke 4:18-19 | Proverbs 22:22-23

“Helping Individuals, Organizations & Communities Achieve Their Full Potential”

Vol. XII, Issue LVI – Q-4 October| November| December 2026

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Community Mobilization; Social Intervention; Provision of Opportunities; Organizational Change and Development; Suppression [of illegal activities].

Moreover, it is our most fundamental belief that in order to be effective, prevention and intervention strategies must generally be Community Specific, Culturally Relevant, EvidenceBased, and Collaborative. The Violence Prevention and Intervention programming we employ in implementing this community-enhancing framework include the programs further described throughout our publications, programs and special projects both domestically and internationally.

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Dedication ______

Every publication in our many series’ is dedicated to everyone, absolutely everyone, who by virtue of their calling, by Divine inspiration, direction and guidance, is on the battlefield dayafter-day striving to follow God’s will and purpose for their lives. And this is with particular affinity for those Spiritual warriors who are being transformed into excellence through daily academic, professional, familial, and other challenges.

We pray that you will bear in mind: Matthew 19:26 (NIV) Jesus looked at them and said, "With man this is impossible, but with God all things are possible." (Emphasis added) To all of us who daily look past our circumstances, and naysayers, to what the Lord says we will accomplish: Blessings!

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The Advocacy Foundation, Inc.

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The Advocacy Foundation, Inc. Helping Individuals, Organizations & Communities Achieve Their Full Potential

The e-Advocate Quarterly

The Cycle of Poverty

“Helping Individuals, Organizations & Communities Achieve Their Full Potential

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Biblical Authority ______ Jeremiah 22:3 (NIV) 3

This is what the LORD says: Do what is just and right. Rescue from the hand of the oppressor the one who has been robbed. Do no wrong or violence to the foreigner, the fatherless or the widow, and do not shed innocent blood in this place.

______ 1 John 3:17 (NIV) 17

If anyone has material possessions and sees a brother or sister in need but has no pity on them,(A) how can the love of God be in that person?

______ James 2:15-16 (NIV) 15

Suppose a brother or a sister is without clothes and daily food. 16 If one of you says to them, “Go in peace; keep warm and well fed,” but does nothing about their physical needs, what good is it?

______ Isaiah 1:17 (NIV) 17

Learn to do right; seek justice. Defend the oppressed. Take up the cause of the fatherless; plead the case of the widow.

______ Luke 4:18-19 (NIV) 18

“The Spirit of the Lord is on me, because he has anointed me to proclaim good news to the poor. He has sent me to proclaim freedom for the prisoners and recovery of sight for the blind, to set the oppressed free, 19 to proclaim the year of the Lord’s favor.”

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Proverbs 22:22-23 (NIV) Saying 2 22

Do not exploit the poor because they are poor and do not crush the needy in court, 23 for the LORD will take up their case and will exact life for life.

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Table of Contents The e-Advocate Quarterly The Cycle of Poverty

Biblical Authority I.

Introduction

II.

The Culture of Poverty

III.

The Deprivation Index

IV.

The Poverty Threshold

V.

Welfare

VI.

Economic Inequality

VII.

The Feminization of Poverty

VIII.

Elitist Theory

IX.

Poverty Reduction

X.

The Working Poor

XI.

References Attachments A. Cycles of Poverty Unemployment and Low Pay B.

Educating Our Kids to Break the Cycle of Poverty

C.

Breaking the Cycle of Poverty in Young Families

Copyright Š 2015 The Advocacy Foundation, Inc. All Rights Reserved.

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Introduction In economics, the cycle of poverty is the "set of factors or events by which poverty, once started, is likely to continue unless there is outside intervention".

The cycle of poverty has been defined as a phenomenon where poor families become impoverished for at least three generations, i.e. for enough time that the family includes no surviving ancestors who possess and can transmit the intellectual, social, and cultural capital necessary to stay out of or change their impoverished condition.

In calculations of expected generation length and ancestor lifespan, the lower median age of parents in these families is offset by the shorter lifespans in many of these groups.

Such families have either limited or no resources.

There are many disadvantages that collectively work in a circular process making it virtually impossible for individuals to break the cycle. This occurs when poor people do not have the resources necessary to get out of poverty, such as financial capital, education, or connections.

In other words, impoverished individuals do not have access to economic and social resources as a result of their poverty. This lack may increase their poverty. This could mean that the poor remain poor throughout their lives.

This cycle has also been referred to as a "pattern" of behaviors and situations which cannot easily be changed.

The poverty cycle can be called the "development trap" when it is applied to countries.

Ruby K. Payne, author of A Framework for Understanding Poverty, distinguishes between situational poverty, which can generally be traced to a specific incident within the lifetimes of the person or family members in poverty, and generational poverty, which is a cycle that passes from generation to generation, and goes on to argue that generational poverty has its own distinct culture and belief patterns.

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Causes of the Cycle The followings are causes of poverty: - Low productivity rates - Low salary - Low infrastructure and corrupt governance - Business failure - Ignorance, lack of skills and technology - Unhealthiness or diseases - Disaster - Inability to access to resources such as land, finance, information, technical assistances, etc.

- No on-going education

Family Background A 2002 research paper titled "The Changing Effect of Family Background on the Incomes of American Adults" analyzed changes in the determinants of family income between 1961 and 1999, focusing on the effect of parental education, occupational rank, income, marital status, family size, region of residence, race, and ethnicity. The paper (1) outlines a simple framework for thinking about how family background affects children’s family and income, (2) summarizes previous research on trends in intergenerational inheritance in the United States, (3) describes the data used as a basis for the research which it describes, (4) discusses trends in inequality among parents, (5) describes how the effects of parental inequality changed between 1961 and 1999, (6) contrasts effects at the top and bottom of the distribution, and (7) discusses whether intergenerational correlations of zero would be desirable. The paper concludes by posing the question of whether reducing the intergenerational correlation is an efficient strategy for reducing poverty or inequality.

Because improving the skills of disadvantaged children seems relatively easy, it is an attractive strategy. However, judging by American experience since the 1960s, improving the skills of disadvantaged children has proved difficult. As a result, the paper suggests, there are probably cheaper and easier ways to reduce poverty and inequality, such as supplementing the wages of the poor or changing immigration policy so that it drives down the relative wages of skilled rather than unskilled workers. These alternative strategies would not reduce intergenerational Page 14 of 144

correlations, but they would reduce the economic gap between children who started life with all the disadvantages instead of all the advantages.

Another paper, titled Do poor children become poor adults?, which was originally presented at a 2004 symposium on the future of children from disadvantaged families in France, and was later included in a 2006 collection of papers related to the theme of the dynamics of inequality and poverty, discusses generational income mobility in North America and Europe. The paper opens by observing that in the United States almost one half of children born to low income parents become low income adults, four in ten in the United Kingdom, and one-third in Canada. The paper goes on to observe that rich children also tend to become rich adults—four in ten in the U.S. and the U.K., and as many as one-third in Canada. The paper argues, however, that money is not the only or even the most important factor influencing intergenerational income mobility.

The rewards to higher skilled and/or higher educated individuals in the labor market and the opportunities for children to obtain the required skills and credentials are two important factors. Reaching the conclusion that income transfers to lower income individuals may be important to children in the here and now, but they should not be counted on to strongly

promote generational mobility. The paper recommends that governments focus on investments in children to ensure that they have the skills and opportunities to succeed in the labor market, and observes that though this has historically meant promoting access to higher and higher levels of education, it is becoming increasingly important that attention be paid to preschool and early childhood education.

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Lack of Jobs Due To Deindustrialization Sociologist William Julius Wilson has said that the economic restructuring of changes from manufacturing to a service-based economy has led to a high percentage of joblessness in the inner-cities and with it a loss of skills and inability to find jobs. This "mismatch" of skills to jobs available is said to be the main driver of poverty.

Effects of Modern Education Research shows that schools with students that perform lower than the norm are also those hiring least-qualified teachers as a result of new teachers generally working in the area that they grew up in. This leads to certain schools not producing many students that go on to college. Students from these schools that go on to be college graduates are not as skilled as they would be if they had gone to a school with higher-qualified instructors. This leads to education perpetuating a cycle of poverty. The individuals that choose to work in the schools close to them does not adequately supply the school with enough teachers. The schools must then outsource their teachers from other areas. Susanna Loeb from the School of Education at Stanford did a study and found that teachers who are brought in from the suburbs are 10 times more likely to transfer out of the school after their initial year. The fact that the teachers from the suburbs leave appears to be an influential factor for schools hiring more teachers from that area. The lack of adequate education for children is part of what allows for the cycle of poverty to continue.

Life Shocks 2004 research in New Zealand produced a report that showed that "life shocks" can be endured only to a limited extent, after which people are much more likely to be tipped into hardship.

The researchers found very little differences in living standards for people who have endured up to 7 negative events in their lifetime. People who had 8 or more life shocks were dramatically more likely to live in poverty than those who had 0 to 7 life shocks. A few of the life shocks studied were:            

Marriage (or similar) break-ups (divorce) Forced sale of house Unexpected and substantial drop in income Eviction Bankruptcy Substantial financial loss Redundancy (being laid off from a job) Becoming a sole parent 3 months or more unemployed Major damage to home House burgled Victim of violence Page 16 of 144

    

Incarceration A non-custodial sentence (community service, or fines, but not imprisonment) Illness lasting three weeks or more Major injury or health problem Unplanned pregnancy and birth of a child

The study focused on just a few possible life shocks, but many others are likely as traumatic or more so. Chronic PTSD, complex PTSD, and depression sufferers could have innumerable causes for their mental illness, including those studied above. The study is subject to some criticism.

Tracking In Education History in the United States has shown that Americans saw education as the way to end the perpetual cycle of poverty. In the present, children from low to middle income households are at a disadvantage. They are twice as likely to be held back and more likely not to graduate from high school. Recent studies have shown that the cause for the disparity among academic achievement results from the school’s structure where some students succeed from an added advantage and others fail as a result of lacking that advantage. Educational institutions with a learning disparity are causing education to be a sustaining factor for the cycle of poverty. One prominent example of this type of school structures is tracking, which is predominantly used to help organize a classroom so the variability of academic ability in classes is decreased. Students are tracked based on their ability level, generally based on a standardized test after which they are given different course requirements. Some people believe that tracking "enhances academic achievement and improves the self-concept of students by permitting them to progress at their own pace."

The negative side is that studies have shown that tracking decreases students' opportunity to learn. Tracking also has a disproportionate number of Latinos and African Americans that have low socioeconomic status in the lower learning tracks. Tracking separates social classes putting the poor and minority children in lower tracks where they receive second-rate education, and the students that are better off are placed in upper tracks where they have many opportunities for success. Studies have found that in addition to the higher tracks having more extensive curriculum, there is also a disparity among the teachers and instructional resources provided.

There appears to be a race/class bias which results in intelligent children not receiving the skills or opportunities needed for success or social/economic mobility, thus continuing the cycle of poverty. There is an overall perception that American education is failing and research has done nothing to counter this statement, but instead has revealed the reality and severity of the issue of the existence of tracking and other structures that cause the cycle of poverty to continue.

Theories and Strategies for Breaking The Cycle of Poverty While many governmental officials are still trying to find an answer to poverty, many states and localities are making an effort to break the cycle. Mayor Bloomberg of New York City has been

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advocating a plan where parents are paid up to $5,000.00 a year for meeting certain goals that will better their lives. This policy was modeled after a Mexican initiative that aims to help poor families make better decisions that will help them in the long-term and break cycle of poverty and dependence that have been known to last for generations. In addition, many states also have been making an attempt to help break the cycle. For example, a bill has been proposed in the California Assembly that “would establish an advisory Childhood Poverty Council to develop a plan to reduce child poverty in the state by half by 2017 and eliminate it by 2027�.

Even when the plan has poverty reduction as the goal, a rise in child poverty might be the reality for many states as it was in Connecticut. States are attempting to not only decrease the number of people in the cycle of poverty, but to also adjust the stringent work requirements that resulted from Congress’s welfare reform. The tougher work restrictions have upset many poverty advocates that believe the new regulations prevent individuals that are vulnerable or that lack skills from preparing for work. California Democratic Representative McDermott believes as a result of this and other effects of the new limitations, it has been harder for individuals to escape a life of poverty.

Relatively modest increases in benefit levels for programs that assist nonworking individuals and low-income workers might well be sufficient to bring the United States into line with...other affluent nations in its degree of poverty reduction.

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Lane Kenworthy

In his book Children in Jeopardy: Can We Break the Cycle, Irving B. Harris discusses ways in which children can be helped to begin breaking the cycle of poverty. He stresses the importance of starting early and teaching children the importance of education from a very young age as well as making sure these children get the same educational opportunities as students who are richer. Family values such as nurturing children and encouraging them to do well in school need to be promoted as well as a non-authoritarian approach to parenting. Harris also discusses the importance of discouraging teenage pregnancy and finding ways in which to decrease this phenomenon so that when children are born they are planned and wanted and thus have a better chance at breaking the cycle of poverty.

It has been suggested by researchers like Lane Kenworthy that increasing welfare benefits and extending them to non-working families can help reduce poverty as other nations that have done so have had better results.

The Harlem Children's Zone is working to end generational poverty within a 100-block section of Harlem using an approach that provides educational support and services for children and their families from birth through college. This approach has been recognized as a model by the Obama administration's anti-poverty program.

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Effects on Children Children are most at the mercy of the cycle of poverty. Because a child is dependent on his or her guardian(s), if a child's guardian is in poverty, then they will be also. It is almost impossible for a child to pull him or herself out of the cycle due to age, lack of experience, lack of a job, etc.

Because children are at such a young and impressionable age, the scars they gain from experiencing poverty early in life inevitably carry on into their adult life. "Childhood lays the foundations for adult abilities, interests, and motivation." Therefore, if they learn certain poverty-related behaviors in childhood, the behaviors are more likely to perpetuate.

Studies have shown that household structure sometimes has a connection to childhood poverty. Most studies on the subject also show that the children that are in poverty tend to come from single-parent households (most often matriarchal). In 1997, nearly 8.5 million (57%) poor children in the US came from single-parent households. With the rate of divorce increasing and the number of children born out of wedlock increasing, the number of children that are born into or fall into single-parent households is also increasing. However, this does not mean that the child/children will be impoverished because of it.

According to Ashworth, Hill, & Walker (2004), both urban and rural poor children are more likely to be isolated from the nonpoor in schools, neighborhoods, and their communities.

Human nature is to have relationships with others but when a child is isolated due to their socioeconomic status, it's hard to overcome that when the status doesn't improve. Therefore, poor children also have more tense relationships which sometimes results in abnormal behavior, acting out, or other unexplained behaviors.

There have been programs developed to specifically address the needs of poor children. Francis Marion University’s Center of Excellence to Prepare Teachers of Children of Poverty has a number of initiatives devoted to equipping teachers to be more effective in raising the achievement of children of poverty. Located in South Carolina, the Center provides direct teacher training as well as facilitates research in the area of poverty and scholastic achievement.

Oftentimes the communities in which impoverished children grow up in are crime ridden areas, examples of these areas are Harlem and the Bronx. These areas have effects on children as they are often exposed to crime and maltreatment at a young age, which is proven to reduce a child's ability to learn by up to 5% Oftentimes these youth get caught up in the crime that goes

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on all around them, this involvement only worsens the effects of the cycle as they are often incarcerated or killed in many types of gang violence.

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The Culture of Poverty The Culture of Poverty is a social theory that expands on the cycle of poverty. It attracted academic and policy attention in the 1960s, survived harsh academic criticism (Goode and Eames, 1996; Bourgois, 2001; Small M.L., Harding D.J., Lamont M., 2010), and made a comeback at the beginning of the 21st century. It offers one way to explain why poverty exists despite anti-poverty programs. Critics of the early culture of poverty arguments insist that explanations of poverty must analyze how structural factors interact with and condition individual characteristics (Goode and Eames, 1996; Bourgois, 2001; Small M.L., Harding D.J., Lamont M., 2010). As put by Small, Harding, and Lamont (2010), "since human action is both constrained and enabled by the meaning people give to their actions, these dynamics should become central to our understanding of the production and reproduction of poverty and social inequality".

Early Formulations Early proponents of this theory argued that the poor are not simply lacking resources, but also acquire a povertyperpetuating value system.

According to anthropologist Oscar Lewis, "The subculture [of the poor] develops mechanisms that tend to perpetuate it, especially because of what happens to the world view, aspirations, and character of the children who grow up in it� (Moynihan 1969, p. 199). Later scholars have noticed that the poor do not have different values. The term "subculture of poverty" (later shortened to "culture of poverty") made its first appearance in Lewis's ethnography Five Families: Mexican Case Studies in the Culture of Poverty (1959). Lewis struggled to render "the poor" as legitimate subjects whose lives were transformed by poverty.

He argued that although the burdens of poverty were systemic and therefore imposed upon these members of society, they led to the formation of an autonomous subculture as children were socialized into behaviors and attitudes that perpetuated their inability to escape the underclass.

Lewis gave some seventy characteristics (1996 [1966], 1998) that indicated the presence of the culture of poverty, which he argued was not shared among all of the lower classes. “The people in the culture of poverty have a strong feeling of marginality, of helplessness, of dependency, of not belonging. They are like aliens in their own country, convinced that the Page 22 of 144

existing institutions do not serve their interests and needs. Along with this feeling of powerlessness is a widespread feeling of inferiority, of personal unworthiness. This is true of the slum dwellers of Mexico City, who do not constitute a distinct ethnic or racial group and do not suffer from racial discrimination. In the United States the culture of poverty that exists in the Negroes has the additional disadvantage of racial discrimination.

People with a culture of poverty have very little sense of history. They are a marginal people who know only their own troubles, their own local conditions, their own neighborhood, their own way of life. Usually, they have neither the knowledge, the vision nor the ideology to see the similarities between their problems and those of others like themselves elsewhere in the world. In other words, they are not class conscious, although they are very sensitive indeed to status distinctions.

When the poor become class conscious or members of trade union organizations, or when they adopt an internationalist outlook on the world they are, in my view, no longer part of the culture of poverty although they may still be desperately poor.�

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Lewis 1998

Although Lewis was concerned with poverty in the developing world, the culture of poverty concept proved attractive to U.S. public policy makers and politicians. It strongly informed documents such as the Moynihan Report (1965) and the War on Poverty more generally.

The culture of poverty also emerges as a key concept in Michael Harrington's discussion of American poverty in The Other America (1962). For Harrington, the culture of poverty is a structural concept defined by social institutions of exclusion which create and perpetuate the cycle of poverty in America.

Reactions Since the 1960s critics of culture of poverty explanations for the persistence of the underclasses have attempted to show that real world data do not fit Lewis' model (Goode and Eames, 1996).

In 1974, anthropologist Carol Stack issued a critique of it, calling it "fatalistic" and noticing the way that believing in the idea of a culture of poverty does not describe the poor so much as it serves the interests of the rich. She writes, "The culture of poverty, as Hylan Lewis points out, has a fundamental political nature. The ideas matters most to political and scientific groups attempting to rationalize why some Americans have failed to make it in American society. It is, Lewis (1971) argues, 'an idea that people believe, want to believe, and perhaps need to believe.' They want to believe that raising the income of the poor would not change their life styles or values, but merely funnel greater sums of money into bottomless, self-destructing pits."

Thus, she demonstrates the way that political interests to keep the wages of the poor low create a climate in which it is politically convenient to buy into the idea of culture of poverty (Stack 1974). Salehi Nejad (2011) argues that living in conditions of prevalent poverty leads to the development of a culture or subculture adapted to those conditions, and characterized by prevalent feelings of vulnerability, dependency, marginality, and feebleness. [3] In sociology and anthropology, the concept created a backlash, pushing scholars to look to structures rather Page 23 of 144

than "blaming-the-victim" (Bourgois, 2001). Since the late '90s, the culture of poverty has witnessed a resurgence in the social sciences, although most scholars now reject the notion of a monolithic and unchanging culture of poverty. Newer research typically rejects the idea that whether people are poor can be explained by their values. It is often reluctant to divide explanations into “structural” and “cultural,” because of the increasingly questionable utility of this old distinction. Small M.L., Harding D.J., Lamont M., (2010)

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The Deprivation Index Deprivation Indices are a measure of the level of deprivation in an area.

Examples include:     

Indices of deprivation 2004 Indices of deprivation 2007 Underprivileged area score Carstairs index Department of Environment Index

Indices of Deprivation 2004 The Indices of deprivation 2004 (ID 2004) is a deprivation index at the small area level, created by the British Department for Communities and Local Government (DCLG).

It is unusual in its inclusion of a measure of geographical access as an element of deprivation and in its direct measure of poverty (through data on benefit receipts). The ID 2004 is based on the idea of distinct dimensions of deprivation which can be recognized and measured separately. These are then combined into a single overall measure. The Index is made up of seven distinct dimensions of deprivation called Domain Indices. Whilst it is known as the ID2004, most of the data actually dates from 2001.

History Communities and Local Government (previously the Office of Deputy Prime Minister) commissioned the Social Disadvantage Research Centre (SDRC) at the Department of Social Policy and Social Work at the University of Oxford to update the Indices of deprivation 2004 (ID 2004) for England. Following an extensive public consultation (see Annex A), an independent academic peer review and a significant program of work, the new Indices of Deprivation 2007 were produced in December 2007.

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The new Index of Multiple Deprivation 2007 (IMD 2007) is a Lower layer Super Output Area (LSOA) level measure of multiple deprivation, and is made up of seven LSOA level domain indices. There are also two supplementary indices (Income Deprivation Affecting Children and Income Deprivation Affecting Older People). Summary measures of the IMD 2007 are presented at local authority district level and county council level. The LSOA level Domain Indices and IMD 2007, together with the local authority district and county summaries are referred to as the Indices of Deprivation 2007 (ID 2007).(Rusty 2009) The ID 2007 are based on the approach, structure and methodology that were used to create the previous ID 2004. The ID 2007 updates the ID 2004 using more up-to-date data. The new IMD 2007 contains seven domains which relate to income deprivation, employment deprivation, health deprivation and disability, education skills and training deprivation, barriers to housing and services, living environment deprivation, and crime.

Domain Indices 

Income The purpose of this Domain is to capture the proportions of the population experiencing income deprivation in an area.



Employment This Domain measures employment deprivation by considering people of working age who are involuntarily excluded from the world of work, either through unemployment. ill health or family circumstances.



Health and disability This Domain identifies areas with relatively high rates of people who die prematurely or whose quality of life is impaired by poor health or who are disabled, across the whole population.



Education, skills and training The purpose of the Domain is to capture the extent of deprivation in education, skills and training in a local area. The indicators fall into two sub-domains: one relating to lack of attainment among children and young people and one relating to lack of qualifications in terms of skills. These two sub-domains are designed to reflect the ‘flow’ and ‘stock’ of educational disadvantage within an area respectively. That is, the children/young people sub-domain measures the deprivation in the attaining of qualifications, while the skills sub-domain measures the deprivation in the resident working age adult population.

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

Barriers to Housing and Services The purpose of this Domain is to measure barriers to housing and key local services. The indicators fall into two sub-domains: ‘geographical barriers’ and ‘wider barriers’ which includes issues relating to access to housing such as affordability.



Living environment This Domain focuses on deprivation in the living environment. It comprises two subdomains: the ‘indoors’ living environment which measures the quality of housing and the ‘outdoors’ living environment which contains two measures about air quality and road traffic accidents.



Crime This Domain measures the rate of recorded crime for four major crime themes – burglary, theft, criminal damage and violence - representing the occurrence of personal and material victimisation at a small area level.

Each Domain contains a number of indicators, totalling 37. Two supplementary indexes have been created as a subset of the Income domain. These relate to income deprivation affecting children and income deprivation affecting older people.

Geography The Indices of deprivation 2004 are measured at the Lower Layer Super Output Area level.

Super Output Areas were developed by the Office for National Statistics (ONS) from the Census 2001 Output Areas. There are two levels, the lowest (which the Index is based upon) being smaller than wards and containing a minimum of 1,000 people and 400 households. The middle layer contains a minimum of 5,000 people and 2,000 households. Earlier proposals to introduce Upper Layer Super Output Areas were dropped due to lack of demand.

In addition to Super Output Areas, Summaries of the ID 2004 are presented at District level, County level and Primary Care Trust (PCT) level.

While each SOA is of higher resolution than the highest resolution ward index data of the IMD2000 and therefore better at identifying "pockets" of deprivation within wards the 2004 system has its problems. Some areas of deprivation can still be hidden because of the size of SOAs. Examples of this can be found by comparing central areas of Keighley using the Bradford District Deprivation Index (a Deprivation index developed by Bradford Council produced at 1991 Census Enumeration District level) with the ID2004. Additionally SOAs were tasked with providing complete coverage of England and Wales - this combined with the minimum population and household counts within each SOA means that large areas of agricultural, commercial and industrial land have to be included within a residential area that borders them Page 28 of 144

- thus when some very deprived residential areas are mapped, a large area of supposed deprivation emerges, however most of it may not be so but rather has a wide area of relative affluence around it - these can appear to be a greater problem than many smaller completely residential SOAs in which higher concentrations of deprived people live but mixed with more affluent neighbours.

Indices of Deprivation 2007 The Indices of deprivation 2007 (ID 2007) is a deprivation index at the small area level, created by the British Department for Communities and Local Government (DCLG) and released on June 12, 2007. It follows the ID2004 and because much of the datasets are the same or similar between indices allows a comparison of 'relative deprivation' of an area between the two indices.

Whilst it is known as the ID2007, most of the data actually dates from 2005, likewise most of the data for the ID2004 was from 2001.

Like the ID2004 it is unusual in its inclusion of a measure of geographical access as an element of deprivation and in its direct measure of poverty (through data on benefit receipts). The ID 2007 is based on the idea of distinct dimensions of deprivation which can be recognised and measured separately. These are then combined into a single overall measure. The Index is made up of seven distinct dimensions of deprivation called Domain Indices.       

Income Employment Health and disability

Education, skills and training Barriers to Housing and Services Living environment Crime

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Geography As the ID2004, ID2007 is measured at Lower layer Super Output Area and has similar strengths and weakness, with regards concentrated pockets of deprivation. In addition to Super Output Areas, Summary measures of the ID2007 are presented at District level, County level and Primary Care Trust (PCT) level.

Underprivileged Area Score The Underprivileged Area Score is an index to measure socio-economic variation across small geographical areas. The score is an outcome of the need identified in the Acheson Committee Report (into General Practitioner (GP) services in the UK) to create an index to identify 'underprivileged areas' where there were high numbers of patients and hence pressure on general practitioner services.

Its creation involved the random distribution of a questionnaire among general practitioners throughout the UK. This was then used to obtain statistical weights for a calculation of a composite index of underprivileged areas based on GPs' perceptions of workload and patient need. (Jarman, 1984)

Carstairs Index Developed by Carstairs and Morris (1991), the Carstairs index is an index of deprivation used in spatial epidemiology to identify Socio-economic confounding. Developed for Scotland it was an alternative to the Townsend Index of deprivation to avoid the use of households as denominators (Elliot, 1997). The Carstairs index is based on four census indicators: low social class, lack of car ownership, overcrowding and male unemployment. Areas are then split by postcode, using these variables

Department of Environment Index The Department of Environment Index (DoE) is an index of urban poverty designed to assess relative levels of deprivation in local authorities in England. (Elliot, 1997) The DoE has three dimensions of deprivation: social, economic and housing.

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The Poverty Threshold The Poverty Threshold, or Poverty Line, is the minimum level of income deemed adequate in a particular country. In practice, like the definition of poverty, the official or common understanding of the poverty line is significantly higher in developed countries than in developing countries. The common international poverty line has in the past been roughly $1 a day. In 2008, the World Bank came out with a figure (revised largely due to inflation) of $1.25 at 2005 purchasing-power parity (PPP).

Determining the poverty line is usually done by finding the total cost of all the essential resources that an average human adult consumes in one year. The largest of these expenses is typically the rent required to live in an apartment, so historically, economists have paid particular attention to the real estate market and housing prices as a strong poverty line affector. Individual factors are often used to account for various circumstances, such as whether one is a parent, elderly, a child, married, etc. The poverty threshold may be adjusted annually.

Percentage of population living on less than $1.25 per day.

UN estimates 2000–2007.

History Charles Booth, a pioneering investigator of poverty in London at the turn of the 20th century, popularised the idea of a poverty line, a concept originally conceived by the London School Board. Booth set the line at 10 to 20 shillings per week, which he considered to be the minimum amount necessary for a family of 4 or 5 people to subsist. Benjamin Seebohm Rowntree (1871–1954), a British sociological researcher, social reformer and industrialist, surveyed rich families in York and drew a poverty line in terms of a minimum weekly sum of Page 32 of 144

money "necessary to enable families ... to secure the necessaries of a healthy life", which included fuel and light, rent, food, clothing, and household and personal items. Based on data from leading nutritionists of the period he calculated the cheapest price for the minimum calorific intake and nutritional balance necessary before people got ill or lost weight. He considered this amount to set his poverty line and concluded that 27.84 percent of the total population of York lived below this poverty line. This result corresponded with that from Charles Booth's study of poverty in London and so challenged the view, commonly held at the time, that abject poverty was a problem particular to London and was not widespread in the rest of Britain. Rowntree distinguished between primary poverty, those who lacking in income and secondary poverty, those who had enough income but spent it elsewhere (1901:295-6).

Absolute Poverty Absolute poverty is the level of poverty as defined in terms of the minimal requirements necessary to afford minimal standards of food, clothing, health care and shelter. For the measure to be absolute, the line must be the same in different countries, cultures, and technological levels. Such an absolute measure should look only at the individual's power to consume and it should be independent of any changes in income distribution. The intuition behind an absolute measure is that mere survival takes essentially the same amount of resources across the world and that everybody should be subject to the same standards if meaningful comparisons of policies and progress are to be made. Notice that if everyone's real income in an economy increases, and the income distribution does not change, absolute poverty will decline.

Measuring poverty by an absolute threshold has the advantage of applying the same standard across different locations and time periods: it makes comparisons easier. On the other hand, it suffers from the disadvantage that any absolute poverty threshold is to some extent arbitrary; the amount of wealth required for survival is not the same in all places and time periods. For example, a person living in far northern Scandinavia requires a source of heat during colder months, while a person living on a tropical island does not.

This type of measure is often contrasted with measures of relative poverty (see below), which classify individuals or families as "poor" not by comparing them to a fixed cutoff point, but by comparing them to others in the population under study.

The term absolute poverty is also sometimes used as a synonym for extreme poverty. Absolute poverty is the absence of enough resources (such as money) to secure basic life necessities.

According to a UN declaration that resulted from the World Summit on Social Development in Copenhagen in 1995, absolute poverty is "a condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services."

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David Gordon's paper, "Indicators of Poverty & Hunger", for the United Nations, further defines absolute poverty as the absence of any two of the following eight basic needs:        

Food: Body Mass Index must be above 16.

Safe drinking water: Water must not come solely from rivers and ponds, and must be available nearby (less than 15 minutes' walk each way).

Sanitation facilities: Toilets or latrines must be accessible in or near the home.

Health: Treatment must be received for serious illnesses and pregnancy.

Shelter: Homes must have fewer than four people living in each room. Floors must not be made of dirt, mud, or clay.

Education: Everyone must attend school or otherwise learn to read.

Information: Everyone must have access to newspapers, radios, televisions, computers, or telephones at home.

Access to services: This item is undefined by Gordon, but normally is used to indicate the complete panoply of education, health, legal, social, and financial (credit) services.

Graph of global population living on under 1, 1.25 and 2 equivalent of 2005 US dollars a day (red) and as a proportion of world population (blue) based on 1981–2008 World Bank data

For example, a person who lives in a home with a mud floor is considered severely deprived of shelter. A person who never attended school and cannot read is considered severely deprived of education. A person who has no newspaper, radio, television, or telephone is considered severely deprived of information. All people who meet any two of these conditions – for example, they live in homes with mud floors and cannot read – are considered to be living in absolute poverty.

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The term "Absolute Poverty" is slightly misleading when defined in this manner, as there are great numbers of people who have none of these eight basic needs met, but are still grouped with those who lack only 2.

Relative Poverty Relative poverty is the "most useful measure for ascertaining poverty rates in wealthy developed nations". Relative poverty measure is used by the United Nations Development Program (UNDP), the United Nations Children's Fund (UNICEF), the Organisation for Economic Co-operation and Development (OECD) and Canadian poverty researchers. In the European Union, the "relative poverty measure is the most prominent and most–quoted of the EU social inclusion indicators."

"Relative poverty reflects better the cost of social inclusion and equality of opportunity in a specific time and space."

"Once economic development has progressed beyond a certain minimum level, the rub of the poverty problem – from the point of view of both the poor individual and of the societies in which they live – is not so much the effects of poverty in any absolute form but the effects of the contrast, daily perceived, between the lives of the poor and the lives of those around them.

For practical purposes, the problem of poverty in the industrialized nations today is a problem of relative poverty (page 9)."

History of the Concept of Relative Poverty In 1776, Adam Smith argued that poverty is the inability to afford "not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without."

In 1958, John Kenneth Galbraith argued, "People are poverty stricken when their income, even if adequate for survival, falls markedly behind that of their community."

In 1964, in a joint committee economic President's report in the United States, Republicans endorsed the concept of relative poverty: "No objective definition of poverty exists. ... The definition varies from place to place and time to time. In America as our standard of living rises, so does our idea of what is substandard."

In 1965 Rose Friedman argued for the use of relative poverty claiming that the definition of poverty changes with general living standards. Those labelled as poor in 1995, would have had "a higher standard of living than many labelled not poor" in 1965.

In 1979, British sociologist, Peter Townsend published his famous definition: "individuals... can be said to be in poverty when they lack the resources to obtain the types of diet, participate in

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the activities and have the living conditions and amenities which are customary, or are at least widely encouraged or approved, in the societies to which they belong (page 31)."

Brian Nolan and Christopher T. Whelan of the Economic and Social Research Institute (ESRI) in Ireland explained that "poverty has to be seen in terms of the standard of living of the society in question."

Relative poverty measures are used as official poverty rates by the European Union, UNICEF and the OEDC. The main poverty line used in the OECD and the European Union is based on "economic distance", a level of income set at 60% of the median household income.

Relative Poverty vs. Inequality A measure of relative poverty defines "poverty" as being below some relative poverty threshold. For example, the statement that "those individuals who are employed and whose household equivalised disposable income is below 60% of national median equivalised income are poor" uses a relative measure to define poverty. Using this definition, if everyone's real income in an economy increases, but the income distribution stays the same, then the rate of relative poverty will also stay the same.

Relative poverty measurements can sometimes produce odd results, especially in small populations. For example, if the median household in a wealthy neighborhood earns US$1 million each year, then a family that earns US$100,000 would be considered poor on the relative poverty scale, even though such a family could meet all of its basic needs and much more. At the other end of the scale, if the median household in a very poor neighborhood earned only 50% of what it needs to buy food, then a person who earned the median income would not be considered poor on a relative poverty scale, even though the person is clearly poor on an absolute poverty scale.

Measures of relative poverty are almost the same as measuring income inequality: If a society gets a more equal income distribution, relative poverty will fall. The theorem points out that if society changed in a way that hurt high earners more than low ones, then relative poverty

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would decrease, but every citizen of the society would be worse off. Likewise in the reverse direction: it is possible to reduce absolute poverty while increasing relative poverty.

The term relative poverty can also be used in a different sense to mean "moderate poverty" – for example, a standard of living or level of income that is high enough to satisfy basic needs (like water, food, clothing, housing, and basic health care), but still significantly lower than that of the majority of the population under consideration.

Basic Needs The basic needs approach is one of the major approaches to the measurement of absolute poverty in developing countries. It attempts to define the absolute minimum resources necessary for long-term physical well-being, usually in terms of consumption goods. The poverty line is then defined as the amount of income required to satisfy those needs. The 'basic needs' approach was introduced by the International Labour Organization's World Employment Conference in 1976. "Perhaps the high point of the WEP was the World Employment Conference of 1976, which proposed the satisfaction of basic human needs as the overriding objective of national and international development policy. The basic needs approach to development was endorsed by governments and workers' and employers' organizations from all over the world. It influenced the programmes and policies of major multilateral and bilateral development agencies, and was the precursor to the human development approach."

A traditional list of immediate "basic needs" is food (including water), shelter and clothing.

Many modern lists emphasize the minimum level of consumption of 'basic needs' of not just food, water, and shelter, but also sanitation, education, and health care. Different agencies use different lists.

In 1978 Ghai investigated the literature that criticized the basic needs approach. Critics argued that the basic needs approach lacked scientific rigour; it was consumption-oriented and antigrowth. Some considered it to be "a recipe for perpetuating economic backwardness" and for giving the impression "that poverty elimination is all too easy". Amartya Sen focused on 'capabilities' rather than consumption.

In the development discourse, the basic needs model focuses on the measurement of what is believed to be an eradicable level of poverty.

Professor Chris Sarlo, an economist at Nipissing University in North Bay, Canada, and a senior fellow of the Fraser Institute, used Statistics Canada's socio-economic databases, particularly the Survey of Household Spending to determine the cost of a list of household necessities. The list includes food, shelter, clothing, health care, personal care, essential furnishings, transportation and communication, laundry, home insurance, and miscellaneous; it assumes that education is provided freely to all residents of Canada. This is calculated for various communities across Canada and adjusted for family size. With this information, he determines the proportion of Canadian households that have insufficient income to afford those Page 37 of 144

necessities. Sarlo introduced his basic needs approach in 1992 in his book entitled Poverty in Canada published by the Fraser Institute. Sarlo argued that Statistics Canada's Low Income Cutoff (LICO), which uses a relative poverty line threshold was inadequate. Sarlo's basic needs poverty measure for Canada was updated in 2001 to reflect "new developments in the literature, external critiques of the approach, and better (and more comprehensive) data." For example it included out-of-pocket health-care costs. According to the Sarlo, "the basic-needs approach is partly absolute (the list [of necessities] is limited to items required for long-term physical well-being) and partly relative, reflecting the standards that apply in the individual's own society at the present time." It was updated again in 2006. The Fraser Institute's list of necessities for living creditably in Canada includes not only food, shelter, clothing, and health care, but also personal care, furniture, transportation, communication, laundry, and home insurance. It is criticized for not including any entertainment items like cable television, daily newspapers, and tickets to movies or sporting events. Based on his basic needs poverty threshold, the poverty rate in Canada has declined from about 12% of Canadian households to about 5% since the 1970s. This is in sharp contrast to Statistics Canada, the Conference Board of Canada, the Organisation for Economic Co-operation and Development (OECD) and UNESCO reports on poverty in Canada. They used the relative poverty measure considered most useful for advanced industrial nations like Canada, which Sarlo rejects.

According to a 2008 report by the Organisation for Economic Cooperation and Development (OECD), the rate of poverty in Canada, is among the highest of the OECD member nations, the world's wealthiest industrialized nations. There is no official government definition and therefore, measure, for poverty in Canada. However, Dennis Raphael, author of Poverty in Canada: Implications for Health and Quality of Life reported that the United Nations Development Program (UNDP), the United Nations Children's Fund (UNICEF), the Organisation for Economic Co-operation and Development (OECD) and Canadian poverty researchers find that relative poverty is the "most useful measure for ascertaining poverty rates in wealthy developed nations such as Canada".

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National Poverty Lines National estimates are based on population-weighted subgroup estimates from household surveys. Definitions of the poverty line do vary considerably among nations. For example, rich nations generally employ more generous standards of poverty than poor nations. Even among rich nations, the standards differ greatly. Thus, the numbers are not comparable among countries. Even when nations do use the same method, some issues may remain.

In 2015, in the United States, the poverty threshold for a single person under 65 was at an annual income of US$11,770; the threshold for a family group of four, including two children, was US$24,250. According to the U.S. Census Bureau data released on September 13, 2011, the nation's poverty rate rose to 15.1 percent in 2010.

In the UK, "more than five million people – over a fifth (23 percent) of all employees – were paid less than £6.67 an hour in April 2006. This value is based on a low pay rate of 60 percent of full-time median earnings, equivalent to a little over £12,000 a year for a 35-hour working week. In April 2006, a 35-hour week would have earned someone £9,191 a year – before tax or National Insurance".

India's official poverty level, on the other hand, is split according to rural vs. urban thresholds.

For urban dwellers, the poverty line is defined as living on less than 538.60 rupees (approximately US$12) per month, whereas for rural dwellers, it is defined as living on less than 356.35 rupees per month (approximately US$7.50).

Criticisms Using a poverty threshold is problematic because having an income slightly above or below it is not substantially different; the negative effects of poverty tend to be continuous rather than discrete, and the same low income affects different people in different ways. To overcome this problem, a poverty index or indices can be used instead; see income inequality metrics.

A poverty threshold relies on a quantitative, or purely numbers-based, measure of income. If other human development-indicators like health and education are used, they must be quantified, which is not a simple (if even achievable) task.

Using a single monetary poverty threshold is problematic when applied worldwide, due to the difficulty of comparing prices between countries. Prices of the same goods vary dramatically from country to country; while this is typically corrected for by using purchasing power parity (PPP) exchange rates, the basket of goods used to determine such rates is usually unrepresentative of the poor, most of whose expenditure is on basic foodstuffs rather than the relatively luxurious items (washing machines, air travel, healthcare) often included in PPP baskets. The economist Robert C. Allen has attempted to solve this by using standardized baskets of goods typical of those bought by the poor across countries and historical time, for

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example including a fixed calorific quantity of the cheapest local grain (such as corn, rice, or oats).

Overstating Poverty Conservative critics point out that stated poverty lines in countries with substantial welfare systems (such as the United States and Europe) fail to count in-kind transfers, whether from public or private sources, when calculating a poverty threshold. For example, if a parent pays the rent on an apartment for an adult son directly to the apartment owner, instead of giving the money to the son to pay the rent, the money does not count as direct income to the son. If a church or non-profit organization gives food to an elderly person, the value of the food is not counted as direct income to the elderly person. Rea Hederman, a senior policy analyst in the Center for Data Analysis at the Heritage Foundation, said: The official poverty measure counts only direct monetary income. It considers antipoverty programs such as food stamps, housing assistance, the Earned Income Tax Credit, Medicaid and school lunches, among others, "in-kind benefits" – and hence not income. So, despite everything these programs do to relieve poverty, they aren't counted as income when Washington measures the poverty rate.

Understating Poverty In addition to wage and salary income, investment income and government transfers such as SNAP (also known as food stamps) and housing subsidies are included in a household's income.

Studies measuring the differences between income before and after taxes and government transfers, have found that without social support programs, poverty would be roughly 30% to 40% higher than the official poverty line indicates.

Further, the U.S. Census Bureau calculates the poverty line the same throughout the U.S. regardless of the cost-of-living in a state or urban area. For instance, the cost-of-living in California, the most populous state, was 1.42 times the U.S. average in 2010 while the cost-ofliving in Texas, the second most populous state, was 0.90 (90%) of the U.S. average.

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Welfare Welfare is the provision of a minimal level of well-being and social support for all citizens, sometimes referred to as public aid. In most developed countries welfare is largely provided by the government, and to a lesser extent, charities, informal social groups, religious groups, and inter-governmental organizations.

The welfare state expands on this concept to include services such as universal healthcare and unemployment insurance.

In the Roman Empire, the first emperor Augustus provided the 'congiaria' or grain dole for citizens who could not afford to buy food every month. Social welfare was enlarged by the Emperor Trajan. Trajan's program brought acclaim from many, including Pliny the Younger. The Song dynasty government (c.1000AD in China) supported multiple programs which could be classified as social welfare, including the establishment of retirement homes, public clinics, and paupers' graveyards. According to Robert Henry Nelson, "The medieval Roman Catholic Church operated a far-reaching and comprehensive welfare system for the poor..."

Early welfare programs in Europe included the English Poor Law of 1601, which gave parishes the responsibility for providing welfare payments to the poor. This system was substantially modified by the 19th-century Poor Law Amendment Act, which introduced the system of workhouses.

It was predominantly in the late 19th and early 20th centuries that an organized system of state welfare provision was introduced in many countries. Otto von Bismarck, Chancellor of Germany, introduced one of the first welfare systems for the working classes. In Great Britain the Liberal government of Henry Campbell-Bannerman and David Lloyd George introduced the National Insurance system in 1911,[6] a system later expanded by Clement Attlee. The United States inherited England's poor house laws and has had a form of welfare since before it won its independence. During the Great Depression, when emergency relief measures were introduced under President Franklin D. Roosevelt, Roosevelt's New Deal focused predominantly on a program of providing work and stimulating the economy through public spending on projects, rather than on cash payment.

In the Islamic world, Zakat (charity), one of the Five Pillars of Islam, has been collected by the government since the time of the Rashidun caliph Umar in the 7th century. The taxes were used to provide income for the needy, including the poor, elderly, orphans, widows, and the disabled. According to the Islamic jurist Al-Ghazali (Algazel, 1058–1111), the government was

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also expected to store up food supplies in every region in case a disaster or famine occurred.

(See Bayt al-mal for further information.)

Forms Welfare can take a variety of forms, such as monetary payments, subsidies and vouchers, or housing assistance. Welfare systems differ from country to country, but welfare is commonly provided to individuals who are unemployed, those with illness or disability, the elderly, those with dependent children, and veterans. A person's eligibility for welfare may also be constrained by means testing or other conditions.

Provision and Funding Welfare is provided by governments or their agencies, by private organizations, or a combination of both. Funding for welfare usually comes from general government revenue, but when dealing with charities or NGOs, donations may be used. Some countries run conditional cash transfer welfare programs where payment is conditional on behavior of the recipients.

In the United States, depending on the context, the term “welfare� can be used to refer to means-tested cash benefits, especially the Aid to Families with Dependent Children (AFDC) program and its successor, the Temporary Assistance for Needy Families Block Grant, or it can be used to refer to all means-tested programs that help individuals or families meet basic needs, including, for example, health care through Medicaid, Supplemental Security Income (SSI) benefits and food and nutrition programs (SNAP). Social Insurance programs such as Unemployment Insurance, Social Security, and Medicare are not generally considered "welfare."

AFDC (originally called Aid to Dependent Children) was created during the Great Depression to alleviate the burden of poverty for families with children and allow widowed mothers to maintain their households. The New Deal employment program such as the Works Progress Administration primarily served men. Prior to the New Deal, anti-poverty programs were primarily operated by private charities or state or local governments; however, these programs were overwhelmed by the depth of need during the Depression. The United States has no national program of cash assistance for non-disabled poor individuals who are not raising children.

A chart showing the overall decline of average monthly welfare benefits (AFDC then TANF) per recipient 1962– 2006 (in 2006 dollars).

In 1996, the Personal Responsibility and Work Opportunity Reconciliation Act changed the structure of Welfare payments and added new criteria to states Page 43 of 144

that received Welfare funding. After reforms, which President Clinton said would "end Welfare as we know it", amounts from the federal government were given out in a flat rate per state based on population. Each state must meet certain criteria to ensure recipients are being encouraged to work themselves out of Welfare. The new program is called Temporary Assistance for Needy Families (TANF). It encourages states to require some sort of employment search in exchange for providing funds to individuals, and imposes a five-year lifetime limit on cash assistance. In FY 2010, 31.8% of TANF families were white, 31.9% were African-American, and 30.0% were Hispanic.

According to the U.S. Census Bureau data released September 13, 2011, the nation's poverty rate rose to 15.1% (46.2 million) in 2010, up from 14.3% (approximately 43.6 million) in 2009 and to its highest level since 1993. In 2008, 13.2% (39.8 million) Americans lived in relative poverty.

In a 2011 op-ed in Forbes, Peter Ferrara stated that, "The best estimate of the cost of the 185 federal means tested Welfare programs for 2010 for the federal government alone is nearly $700 billion, up a third since 2008, according to the Heritage Foundation. Counting state spending, total Welfare spending for 2010 reached nearly $900 billion, up nearly one-fourth since 2008 (24.3%)". California, with 12% of the U.S. population, has one-third of the nation's welfare recipients.

In FY 2011, federal spending on means-tested welfare, plus state contributions to federal programs, reached $927 billion per year. Roughly half of this welfare assistance, or $462 billion went to families with children, most of which are headed by single parents.

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Criticism Income transfers can be either conditional or unconditional. There is no substantial evidence that conditional transfers are more effective than unconditional ones. Conditionalities are sometimes criticized as being paternalistic and unnecessary.

Current programs have been built as short-term rather than as permanent institutions, and many of them have rather short time spans (around five years). Some programs have time frames that reflect available funding. One example of this is Bolivia’s Bonosol, which is financed by proceeds from the privatization of utilities—an unsustainable funding source. Some see Latin America’s social assistance programs as a way to patch up high levels of poverty and inequalities, partly brought on by the current economic system.

Some opponents of welfare argue that it affects work incentives. They also argue that the taxes levied can also affect work incentives. A good example of this would be the reform of the Aid to Families with Dependent Children (AFDC) program. Per AFDC, some amount per recipient is guaranteed. However, for every dollar the recipient earns the monthly stipend is decreased by an equivalent amount. For most persons, this reduces their incentive to work. This program was replaced by Temporary Aid to Needy Families (TANF). Under TANF, people were required to actively seek employment while receiving aid and they could only receive aid for a limited amount of time. However, states can choose the amount of resources they will devote to the program.

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Economic Inequality Economic Inequality refers to how economic metrics are distributed among individuals in a group, among groups in a population, or among countries. Economists generally think of three metrics of economic disparity: wealth (wealth inequality), income (income inequality), and consumption. The issue of economic inequality can implicate notions of equity, equality of outcome, and equality of opportunity.

Some studies have emphasized inequality as a growing social problem. Too much inequality can be destructive, because income inequality and wealth concentration can hinder long term growth. Early statistical studies comparing inequality to economic growth had been inconclusive, however in 2011, International Monetary Fund economists showed that greater income equality—less inequality— increased the duration of countries' economic growth spells more than free trade, low government corruption, foreign investment, or low foreign debt.

Economic inequality varies between societies, historical periods, economic structures and systems.

The term can refer to cross sectional distribution of income or wealth at any particular period, or to the lifetime income and wealth over longer periods of time. There are various numerical indices for measuring economic inequality. A widely used one is the Gini coefficient, but there are also many other methods.

Measurement Concepts Economists generally think of three metrics of economic disparity: wealth, income, and consumption. A skilled professional may have low wealth and low income as student, low wealth and high earnings in the beginning of the career, and high wealth and low earnings after the career. People's preferences determine whether they consume earnings immediately or defer consumption to the future. The distinction is also important at the level of economy:  

There are economies with high income inequality and relatively low wealth inequality (such as Japan and Italy).

There are economies with relatively low income inequality and high wealth inequality (such as Switzerland and Denmark).

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There are many different ways to measure income inequality and wealth inequality. Different choices lead to different results. OECD has inspected the following 8 types of income inequality concepts:        

Dispersion of hourly wages among full-time (or full-time equivalent) workers Wage dispersion among workers - E.g. annual wages, including wages from part-time work or work during only part of the year.

Individual earnings inequality among all workers - Includes the self-employed.

Individual earnings inequality among the entire working-age population - Includes those who are inactive, e.g. students, unemployed, early pensioners, etc.

Household earnings inequality - Includes the earnings of all household members.

Household market income inequality - Includes incomes from capital, savings and private transfers.

Household disposable income inequality - Includes public cash transfers received and direct taxes paid.

Household adjusted disposable income inequality - Includes publicly provided services.

There are many challenges in comparing data between economies, or in a single economy in different years. Examples of challenges include: 

 

 

Data can be based on joint taxation of couples (e.g. France, Germany, Ireland, Netherlands, Portugal and Switzerland) or individual taxation (e.g. Australia, Canada, Italy, Japan, New Zealand, Spain, the UK).

The tax authorities generally only collect information on income that is potentially taxable.

The precise definition of gross income varies from country to country. There are differences when it comes to inclusion of pension entitlements and other savings, and benefits such as employer provided health insurance.

Differences when it comes under-declaration of income and/or wealth in tax filings.

A special event like an exit from business may lead to a very high income in one year, but much lower income in other years of the person's lifetime.

Measurements A 2011 study "Divided we Stand: Why Inequality Keeps Rising” by the Organisation for Economic Co-operation and Development (OECD) investigated economic inequality in OECD countries, including the following factors: 



Changes in the structure of households can play an important role. Single-headed households in OECD countries have risen from an average of 15% in the late 1980s to 20% in the mid-2000s, resulting in higher inequality.

Assortative mating refers to the phenomenon of people marrying people with similar background, for example doctors marrying doctors rather than nurses. OECD found out

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 







that 40% of couples where both partners work belonged to the same or neighbouring earnings deciles compared with 33% some 20 years before.

In the bottom percentiles number of hours worked has decreased.

The main reason for increasing inequality seems to be the difference between the demand for and supply of skills.

Income inequality in OECD countries is at its highest level for the past half century. The ratio between the bottom 10% and the top 10% has increased from 1:7, to 1:9 in 25 years.

There are tentative signs of a possible convergence of inequality levels towards a common and higher

average level across OECD countries.

With very few exceptions (France, Japan, and Spain), the wages of the 10% best-paid workers have risen relative to those of the 10% lowest paid.

A 2011 OECD study investigated economic inequality in Argentina, Brazil, China, India, Indonesia, Russia and South Africa. It concluded that key sources of inequality in these countries include "a large, persistent informal sector, widespread regional divides (e.g. urbanrural), gaps in access to education, and barriers to employment and career progression for women."

A study by the World Institute for Development Economics Research at United Nations University reports that the richest 1% of adults alone owned 40% of global assets in the year 2000. The three richest people in the world possess more financial assets than the lowest 48 nations combined. The combined wealth of the "10 million dollar millionaires" grew to nearly $41 trillion in 2008. A January 2014 report by Oxfam claims that the 85 wealthiest individuals in the world have a combined wealth equal to that of the bottom 50% of the world's population, or about 3.5 billion people. According to a Los Angeles Times analysis of the report, the wealthiest 1% owns 46% of the world's wealth; the 85 richest people, a small part of the wealthiest 1%, own about 0.7% of the human population's wealth, which is the same as the bottom half of the population. More recently, in January 2015, Oxfam reported that the wealthiest 1 percent will own more than half of the global wealth by 2016. An October 2014 study by Credit Suisse also claims that the top 1% now own nearly half of the world's wealth and that the accelerating disparity could trigger a recession.

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According to PolitiFact the top 400 richest Americans "have more wealth than half of all Americans combined." According to the New York Times on July 22, 2014, the "richest 1 percent in the United States now own more wealth than the bottom 90 percent". Inherited wealth may help explain why many Americans who have become rich may have had a "substantial head start". In September 2012, according to the Institute for Policy Studies, "over 60 percent" of the Forbes richest 400 Americans "grew up in substantial privilege".

The existing data and estimates suggest a large increase in international (and more generally inter-macroregional) component between 1820 and 1960. It might have slightly decreased since that time at the expense of increasing inequality within countries.

The United Nations Development Program in 2014 asserted that greater investments in social security, jobs and laws that protect vulnerable populations are necessary to prevent widening income inequality....

There is a significant difference in the measured wealth distribution and the public’s understanding of wealth distribution. Michael Norton of the Harvard Business School and Dan Ariely of the Department of Psychology at Duke University found this to be true in their research, done in 2011. The actual wealth going to the top quintile in 2011 was around 84% where as the average amount of wealth that the general public estimated to go to the top quintile was around 58%.

Causes There are many reasons for economic inequality within societies. Recent growth in overall income inequality, at least within the OECD countries, has been driven mostly by increasing inequality in wages and salaries.

Economist Thomas Piketty, who specializes in the study of economic inequality, argues that widening economic disparity is an inevitable phenomenon of free market capitalism when the rate of return of capital (r) is greater than the rate of growth of the economy (g).

Common factors thought to impact economic inequality include:  

  

labor market outcomes globalization, by: o suppressing wages in low-skill jobs due to a surplus of low-skill labor in developing countries o increasing the market size and the rewards for people and firms succeeding in a particular niche o providing more investment opportunities for already-wealthy people policy reforms more regressive taxation plutocracy Page 50 of 144

      

computerization and increased technology, which means more skills are required to obtain a moderate or high wage ethnic discrimination gender discrimination nepotism variation in natural ability neoliberalism Growing acceptance of very high CEO salaries, e.g. in the United States since the 1960s

Theoretical Frameworks

Neoclassical Economics Neoclassical economics views inequalities in the distribution of income as arising from differences in productivity, and attribute rising inequality to rising differences in the productivity of different groups of workers. In this perspective, wages and profits are determined by the marginal productivity of each individual in the economy. Thus rising inequalities are merely a reflection of the productivity gap between highly-paid professions and lower-paid professions.

Marxian Economics In Marxian economic analysis, rising income inequality is an inherent feature of capitalism. In this analysis, capitalist firms increasingly substitute workers for capital equipment under competitive pressures to reduce costs and maximize profit. Over the long-term, this trend increases the organic composition of capital, meaning that less labor inputs (workers) are required in proportion to capital inputs, increasing unemployment and the size of the reserve Page 51 of 144

army of labour. This process exerts a downward pressure on wages. The substitution of labor for capital equipment (job automation) increases productivity per worker and thus profits for the capitalist class, resulting in a situation of relatively stagnant wages for the working class amidst rising levels of property income for the capitalist class.

Therefore, Marxian economics attributes rising inequality to both the ownership structure of capitalist economies and to rising job automation conflicting with the requirements of the wage labor system.

Labor Market A major cause of economic inequality within modern market economies is the determination of wages by the market. Some small part of economic inequality is caused by the differences in the supply and demand for different types of work. However, where competition is imperfect; information unevenly distributed; opportunities to acquire education and skills unequal; and since many such imperfect conditions exist in virtually every market, there is in fact little presumption that markets are in general efficient. This means that there is an enormous potential role for government to correct these market failures.

In a purely capitalist mode of production (i.e. where professional and labor organizations cannot limit the number of workers) the workers wages will not be controlled by these organizations, or by the employer, but rather by the market. Wages work in the same way as prices for any other good. Thus, wages can be considered as a function of market price of skill.

And therefore, inequality is driven by this price. Under the law of supply and demand, the price of skill is determined by a race between the demand for the skilled worker and the supply of the skilled worker. "On the other hand, markets can also concentrate wealth, pass environmental costs on to society, and abuse workers and consumers." "Markets, by themselves, even when they are stable, often lead to high levels of inequality, outcomes that are widely viewed as unfair." Employers who offer a below market wage will find that their business is chronically understaffed. Their competitors will take advantage of the situation by offering a higher wage to snatch up the best of their labor. For a businessman who has the profit motive as the prime interest, it is a losing proposition to offer below or above market wages to workers.

A job where there are many workers willing to work a large amount of time (high supply) competing for a job that few require (low demand) will result in a low wage for that job. This is because competition between workers drives down the wage. An example of this would be jobs such as dish-washing or customer service. Competition amongst workers tends to drive down wages due to the expendable nature of the worker in relation to his or her particular job. A job where there are few able or willing workers (low supply), but a large need for the positions (high demand), will result in high wages for that job. This is because competition between employers for employees will drive up the wage. Examples of this would include jobs that require highly developed skills, rare abilities, or a high level of risk. Competition amongst employers tends to drive up wages due to the nature of the job, since there is a relative Page 52 of 144

shortage of workers for the particular position. Professional and labor organizations may limit the supply of workers which results in higher demand and greater incomes for members.

Members may also receive higher wages through collective bargaining, political influence, or corruption.

These supply and demand interactions result in a gradation of wage levels within society that significantly influence economic inequality. Polarization of wages does not explain the accumulation of wealth and very high incomes among the 1%. Joseph Stiglitz believes that "It is plain that markets must be tamed and tempered to make sure they work to the benefit of most citizens."

Education An important factor in the creation of inequality is variation in individuals' access to education.

Education, especially in an area where there is a high demand for workers, creates high wages for those with this education, however, increases in education first increase and then decrease growth as well as income inequality. As a result, those who are unable to afford an education, or choose not to pursue optional education, generally receive much lower wages. The justification for this is that a lack of education leads directly to lower incomes, and thus lower aggregate savings and investment. Conversely, education raises incomes and promotes growth because it helps to unleash the productive potential of the poor.

In 2014, economists with the Standard & Poor's rating agency concluded that the widening disparity between the U.S.'s wealthiest citizens and the rest of the nation had slowed its recovery from the 2008-2009 recession and made it more prone to boom-and-bust cycles. To partially remedy the wealth gap and the resulting slow growth, S&P recommended increasing access to education. It estimated that if the average United States worker had completed just

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one more year of school, it would add an additional $105 billion in growth to the country's economy over five years.

During the mass high school education movement from 1910–1940, there was an increase in skilled workers, which led to a decrease in the price of skilled labor. High school education during the period was designed to equip students with necessary skill sets to be able to perform at work. In fact, it differs from the present high school education, which is regarded as a stepping-stone to acquire college and advanced degrees. This decrease in wages caused a period of compression and decreased inequality between skilled and unskilled workers.

Education is very important for the growth of the economy, however educational inequality in gender also influence towards the economy. Lagerlof and Galor stated that gender inequality in education can result to low economic growth, and continued gender inequality in education, thus creating a poverty trap. It is suggested that a large gap in male and female education may indicate backwardness and so may be associated with lower economic growth, which can explain why there is economic inequality between countries.

More of Barro studies also find that female secondary education is positively associated with growth. His findings show that countries with low female education; increasing it has little effect on economic growth, however in countries with high female education, increasing it significantly boosts economic growth. More and better education is a prerequisite for rapid economic development around the world. Education stimulates economic growth and improves people's lives through many channels.

By increasing the efficiency of the labour force it create better conditions for good governance, improving health and enhancing equality. Labor market success is linked to schooling achievement, the consequences of widening disparities in schooling is likely to be further increases in earnings inequality As of 2015 the United States, Israel, and Turkey are the only three OECD countries where the government spends more on schools in rich neighborhoods than in poor neighborhoods.

Taxes Another cause is the rate at which income is taxed coupled with the progressivity of the tax system. A progressive tax is a tax by which the tax rate increases as the taxable base amount increases. In a progressive tax system, the level of the top tax rate will often have a direct impact on the level of inequality within a society, either increasing it or decreasing it, provided that income does not change as a result of the change in tax regime. Additionally, steeper tax progressivity applied to social spending can result in a more equal distribution of income across the board. The difference between the Gini index for an income distribution before taxation and the Gini index after taxation is an indicator for the effects of such taxation.

There is debate between politicians and economists over the role of tax policy in mitigating or exacerbating wealth inequality. Economists such as Paul Krugman, Peter Orszag, and Emmanuel Page 54 of 144

Saez have argued that tax policy in the post World War II era has indeed increased income inequality by enabling the wealthiest Americans far greater access to capital than lower-income ones.

Economic Liberalism, Deregulation and Decline of Unions John Schmitt and Ben Zipperer (2006) of the CEPR point to economic liberalism and the reduction of business regulation along with the decline of union membership as one of the causes of economic inequality. In an analysis of the effects of intensive Anglo-American liberal policies in comparison to continental European liberalism, where unions have remained strong, they concluded "The U.S. economic and social model is associated with substantial levels of social exclusion, including high levels of income inequality, high relative and absolute poverty rates, poor and unequal educational outcomes, poor health outcomes, and high rates of crime and incarceration. At the same time, the available evidence provides little support for the view that U.S.-style labor-market flexibility dramatically improves labor-market outcomes. Despite popular prejudices to the contrary, the U.S. economy consistently affords a lower level of economic mobility than all the continental European countries for which data is available."

Sociologist Jake Rosenfield of the University of Washington asserts that the decline of organized labor in the United States has played a more significant role in expanding the income gap than Page 55 of 144

technological changes and globalization, which were also experienced by other industrialized nations that didn't experience steep surges in inequality. He points out that nations with high rates of unionization, particularly in Scandinavia, have very low levels of inequality, and concludes "the historical pattern is clear; the cross-national pattern is clear: high inequality goes hand-in-hand with weak labor movements and vice-versa."

A 2015 study by the International Monetary Fund found that the decline of unionization in many advanced economies starting in the 1980s has fueled rising income inequality.

Globalization Trade liberalization may shift economic inequality from a global to a domestic scale. When rich countries trade with poor countries, the low-skilled workers in the rich countries may see reduced wages as a result of the competition, while low-skilled workers in the poor countries may see increased wages. Trade economist Paul Krugman estimates that trade liberalisation has had a measurable effect on the rising inequality in the United States. He attributes this trend to increased trade with poor countries and the fragmentation of the means of production, resulting in low skilled jobs becoming more tradeable. However, he concedes that the effect of trade on inequality in America is minor when compared to other causes, such as technological innovation, a view shared by other experts. Lawrence Katz estimates that trade has only accounted for 5-15% of rising income inequality. Robert Lawrence argues that technological innovation and automation has meant that low-skilled jobs have been replaced by machine labor in wealthier nations, and that wealthier countries no longer have significant numbers of low-skilled manufacturing workers that could be affected by competition from poor countries.

Gender In many countries, there is a gender income gap which favors males in the labor market. For example, the median full-time salary for U.S. women is 77% of that of U.S. men. Several factors other than discrimination may contribute to this gap. On average, women are more likely than men to consider factors other than pay when looking for work, and may be less willing to travel or relocate. Thomas Sowell, in his book Knowledge and Decisions, claims that this difference is due to women not taking jobs due to marriage or pregnancy, but income studies show that that does not explain the entire difference. A U.S. Census's report stated that in US once other factors are accounted for there is still a difference in earnings between women and men. The income gap in other countries ranges from 53% in Botswana to -40% in Bahrain.

Gender inequality and discrimination is argued to cause and perpetuate poverty and vulnerability in society as a whole. Gender Equity Indices seek to provide the tools to demonstrate this feature of equity.

19th century socialists like Robert Owen, William Thompson, Anna Wheeler and August Bebel argued that the economic inequality between genders was the leading cause of economic Page 56 of 144

inequality; however Karl Marx and Fredrick Engels believed that the inequality between social classes was the larger cause of inequality.

Economic Development Economist Simon Kuznets argued that levels of economic inequality are in large part the result of stages of development. According to Kuznets, countries with low levels of development have relatively equal distributions of wealth. As a country develops, it acquires more capital, which leads to the owners of this capital having more wealth and income and introducing inequality.

Eventually, through various possible redistribution mechanisms such as social welfare programs, more developed countries move back to lower levels of inequality.

Plotting the relationship between level of income and inequality, Kuznets saw middle-income developing economies level of inequality bulging out to form what is now known as the Kuznets curve. Kuznets demonstrated this relationship using cross-sectional data. However, more recent testing of this theory with superior panel data has shown it to be very weak. Kuznets' curve predicts that income inequality will eventually decrease given time. As an example, income inequality did fall in the United States during its High school movement from 1910 to 1940 and thereafter. However, recent data shows that the level of income inequality began to rise after the 1970s. This does not necessarily disprove Kuznets' theory. It may be possible that another Kuznets' cycle is occurring, specifically the move from the manufacturing sector to the service sector. This implies that it may be possible for multiple Kuznets' cycles to be in effect at any given time.

Individual Preferences Related to cultural issues, diversity of preferences within a society may contribute to economic inequality. When faced with the choice between working harder to earn more money or enjoying more leisure time, equally capable individuals with identical earning potential may choose different strategies. The trade-off between work and leisure is particularly important in the supply side of the labor market in labor economics.

Likewise, individuals in a society often have different levels of risk aversion. When equally-able individuals undertake risky activities with the potential of large payoffs, such as starting new Page 57 of 144

businesses, some ventures succeed and some fail. The presence of both successful and unsuccessful ventures in a society results in economic inequality even when all individuals are identical.

Wealth Concentration Wealth concentration is a theoretical process by which, under certain conditions, newly created wealth concentrates in the possession of already-wealthy individuals or entities. According to this theory, those who already hold wealth have the means to invest in new sources of creating wealth or to otherwise leverage the accumulation of wealth, thus are the beneficiaries of the new wealth. Over time, wealth condensation can significantly contribute to the persistence of inequality within society. Thomas Piketty in his book Capital in the Twenty-First Century argues that the fundamental force for divergence is the usually greater return of capital (r) than economic growth (g), and that larger fortunes generate higher returns [pp. 384 Table 12.2, U.S. university endowment size vs. real annual rate of return]

Rent Seeking Economist Joseph Stiglitz argues that rather than explaining concentrations of wealth and income, market forces should serve as a brake on such concentration, which may better be explained by the non-market force known as "rent-seeking". While the market will bid up compensation for rare and desired skills to reward wealth creation, greater productivity, etc., it will also prevent successful entrepreneurs from earning excess profits by fostering competition to cut prices, profits and large compensation. A better explainer of growing inequality, according to Stiglitz, is the use of political power generated by wealth by certain groups to shape government policies financially beneficial to them. This process, known to economists as rent-seeking, brings income not from creation of wealth but from "grabbing a larger share of the wealth that would otherwise have been produced without their effort" Rent seeking is often thought to be the province of societies with weak institutions and weak rule of law, but Stiglitz believes there is no shortage of it in developed societies such as the United States. Examples of rent seeking leading to inequality include 





the obtaining of public resources by "rent-collectors" at below market prices (such as granting public land to railroads, or selling mineral resources for a nominal price in the US), selling services and products to the public at above market prices (medicare drug benefit in the US that prohibits government from negotiating prices of drugs with the drug companies, costing the US government an estimated $50 billion or more per year), securing government tolerance of monopoly power (The richest person in the world in 2011, Carlos Slim, controlled Mexico's newly privatized telecommunication industry).

Since rent seeking aims to "pluck the goose to obtain the largest amount of feathers with the least possible amount of hissing" – it is by nature obscure, avoiding public spotlight in legal fine Page 58 of 144

print, or camouflaged its extraction with widely accepted rationalizations (markets are naturally competitive and so need no government regulation against monopolies).

Finance Industry Jamie Galbraith argues that countries with larger financial sectors have greater inequality, and the link is not an accident.

Mitigating Factors Countries with a left-leaning legislature have lower levels of inequality. Many factors constrain economic inequality – they may be divided into two classes: government sponsored, and market driven. The relative merits and effectiveness of each approach is a subject of debate.

Typical government initiatives to reduce economic inequality include: 



Public education: increasing the supply of skilled labor and reducing income inequality due to education differentials.

Progressive taxation: the rich are taxed proportionally more than the poor, reducing the amount of income inequality in society if the change in

taxation does not cause changes in income.

Market forces outside of government intervention that can reduce economic inequality include: 

propensity to spend: with rising wealth & income, a person may spend more. In an extreme example, if one person owned everything, they would immediately need to hire people to maintain their properties, thus reducing the wealth concentration.

Effects Effects of inequality researchers have found include higher rates of health and social problems, and lower rates of social goods, a lower level of economic utility in society from resources devoted on high-end consumption, and even a lower level of economic growth when human capital is neglected for high-end consumption. For the top 21 industrialised countries, counting

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each person equally, life expectancy is lower in more unequal countries (r = -.907). A similar relationship exists among US states (r = -.620).

2013 Economics Nobel prize winner Robert J. Shiller said that rising inequality in the United States and elsewhere is the most important problem. Increasing inequality harms economic growth. High and persistent unemployment, in which inequality increases, has a negative effect on subsequent long-run economic growth. Unemployment can harm growth not only because it is a waste of resources, but also because it generates redistributive pressures and subsequent distortions, drives people to poverty, constrains liquidity limiting labor mobility, and erodes self-esteem promoting social dislocation, unrest and conflict. Policies aiming at controlling unemployment and in particular at reducing its inequality-associated effects support economic growth.

The economic stratification of society into "elites" and "masses" played a central role in the collapse of other advanced civilizations such as the Roman, Han and Gupta empires.

Health and Social Cohesion British researchers Richard G. Wilkinson and Kate Pickett have found higher rates of health and social problems (obesity, mental illness, homicides, teenage births, incarceration, child conflict, drug use), and lower rates of social goods (life expectancy by country, educational performance, trust among strangers, women's status, social mobility, even numbers of patents issued) in countries and states with higher inequality. Using statistics from 23 developed countries and the 50 states of the US, they found social/health problems lower in countries like Japan and Finland and states like Utah and New Hampshire with high levels of equality, than in countries (US and UK) and states (Mississippi and New York) with large differences in household income.

For most of human history higher material living standards – full stomachs, access to clean water and warmth from fuel – led to better health and longer lives. This pattern of higher incomes-longer lives still holds among poorer countries, where life expectancy increases rapidly as per capita income increases, but in recent decades it has slowed down among middle income countries and plateaued among the richest thirty or so countries in the world. Americans live no longer on average (about 77 years in 2004) than Greeks (78 years) or New Zealanders (78), though the USA has a higher GDP per capita. Life expectancy in Sweden (80 years) and Japan (82) – where income was more equally distributed – was longer.

In recent years the characteristic that has strongly correlated with health in developed countries is income inequality. Creating an index of "Health and Social Problems" from nine factors, authors Richard Wilkinson and Kate Pickett found health and social problems "more common in countries with bigger income inequalities", and more common among states in the US with larger income inequalities. Other studies have confirmed this relationship. The UNICEF index of "child well-being in rich countries", studying 40 indicators in 22 countries, correlates with greater equality but not per capita income.

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Pickett and Wilkinson argue that inequality and social stratification lead to higher levels of psychosocial stress and status anxiety which can lead to depression, chemical dependency, less community life, parenting problems and stress-related diseases.

Social Cohesion Research has shown an inverse link between income inequality and social cohesion. In more equal societies, people are much more likely to trust each other, measures of social capital (the benefits of goodwill, fellowship, mutual sympathy and social connectedness among groups who make up a social units) suggest greater community involvement, and homicide rates are consistently lower.

Comparing results from the question "would others take advantage of you if they got the chance?" in U.S General Social Survey and statistics on income inequality, Eric Uslaner and Mitchell Brown found there is a high correlation between the amount of trust in society and the amount of income equality. A 2008 article by Andersen and Fetner also found a strong relationship between economic inequality within and across countries and tolerance for 35 democracies.

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In two studies Robert Putnam established links between social capital and economic inequality.

His most important studies established these links in both the United States and in Italy. His explanation for this relationship is that Community and equality are mutually reinforcing... Social capital and economic inequality moved in tandem through most of the twentieth century. In terms of the distribution of wealth and income, America in the 1950s and 1960s was more egalitarian than it had been in more than a century... [T]hose same decades were also the high point of social connectedness and civic engagement. Record highs in equality and social capital coincided. Conversely, the last third of the twentieth century was a time of growing inequality and eroding social capital... The timing of the two trends is striking: somewhere around 1965–70 America reversed course and started becoming both less just economically and less well connected socially and politically.

Albrekt Larsen has advanced this explanation by a comparative study of how trust increased in Denmark and Sweden in the latter part of the 20th century while it decreased in the US and UK. It is argued that inequality levels influence how citizens imagine the trustworthiness of fellow citizens. In this model social trust is not about relations to people you meet (as in Putnam's model) but about people you imagine.

The economist Joseph Stiglitz has argued that economic inequality has led to distrust of business and government.

Crime Crime rate has also been shown to be correlated with inequality in society. Most studies looking into the relationship have concentrated on homicides – since homicides are almost identically defined across all nations and jurisdictions. There have been over fifty studies showing tendencies for violence to be more common in societies where income differences are larger.

Research has been conducted comparing developed countries with undeveloped countries, as well as studying areas within countries. Daly et al. 2001 found that among U.S States and Canadian Provinces there is a tenfold difference in homicide rates related to inequality. They estimated that about half of all variation in homicide rates can be accounted for by differences in the amount of inequality in each province or state. Fajnzylber et al. (2002) found a similar relationship worldwide. Among comments in academic literature on the relationship between homicides and inequality are:  

The most consistent finding in cross-national research on homicides has been that of a positive association between income inequality and homicides.

Economic inequality is positively and significantly related to rates of homicide despite an extensive list of conceptually relevant controls. The fact that this relationship is found with the most recent data and using a different measure of economic inequality from previous research, suggests that the finding is very robust.

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Social, Cultural, and Civic Participation Higher income inequality led to less of all forms of social, cultural, and civic participation among the less wealthy. When inequality is higher the poor do not shift to less expensive forms of participation.

Utility, Economic Welfare, and Distributive Efficiency Following the utilitarian principle of seeking the greatest good for the greatest number – economic inequality is problematic. A house that provides less utility to a millionaire as a summer home than it would to a homeless family of five, is an example of reduced "distributive efficiency" within society, that decreases marginal utility of wealth and thus the sum total of personal utility. An additional dollar spent by a poor person will go to things providing a great deal of utility to that person, such as basic necessities like food, water, and healthcare; while, an additional dollar spent by a much richer person will very likely go to luxury items providing relatively less utility to that person. Thus, the marginal utility of wealth per person ("the additional dollar") decreases as a person becomes richer. From this standpoint, for any given amount of wealth in society, a society with more equality will have higher aggregate utility.

Some studies have found evidence for this theory, noting that in societies where inequality is lower, population-wide satisfaction and happiness tend to be higher.

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Economist Arthur Cecil Pigou Argues That[:] ... it is evident that any transference of income from a relatively rich man to a relatively poor man of similar temperament, since it enables more intense wants, to be satisfied at the expense of less intense wants, must increase the aggregate sum of satisfaction. The old "law of diminishing utility" thus leads securely to the proposition: Any cause which increases the absolute share of real income in the hands of the poor, provided that it does not lead to a contraction in the size of the national dividend from any point of view, will, in general, increase economic welfare.

Philosopher David Schmidtz argues that maximizing the sum of individual utilities will harm incentives to produce.

A society that takes Joe Rich’s second unit *of corn+ is taking that unit away from someone who . . . has nothing better to do than plant it and giving it to someone who . . . does have something better to do with it. That sounds good, but in the process, the society takes seed corn out of production and diverts it to food, thereby cannibalizing itself.

However, in addition to the diminishing marginal utility of unequal distribution, Pigou and others point out that a "keeping up with the Joneses" effect among the well off may lead to greater inequality and use of resources for no greater return in utility. a larger proportion of the satisfaction yielded by the incomes of rich people comes from their relative, rather than from their absolute, amount. This part of it will not be destroyed if the incomes of all rich people are diminished together. The loss of economic welfare suffered by the rich when command over resources is transferred from them to the poor will, therefore, be substantially smaller relatively to the gain of economic welfare to the poor than a consideration of the law of diminishing utility taken by itself suggests.

When the goal is to own the biggest yacht – rather than a boat with certain features – there is no greater benefit from owning 100 metre long boat than a 20 m one as long as it is bigger than your rival. Economist Robert H. Frank compare the situation to that of male elks who use their antlers to spar with other males for mating rights.

The pressure to have bigger ones than your rivals leads to an arms race that consumes resources that could have been used more efficiently for other things, such as fighting off disease. As a result, every male ends up with a cumbersome and expensive pair of antlers, ... and "life is more miserable for bull elk as a group."

Aggregate Demand, Consumption and Debt Income inequality lowers aggregate demand, leading to increasingly large segments of formerly middle class consumers unable to afford as many luxury and essential goods and services. This pushes production and overall employment down.

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Conservative researchers have argued that income inequality is not significant because consumption, rather than income should be the measure of inequality, and inequality of consumption is less extreme than inequality of income in the US. Will Wilkinson of the libertarian Cato Institute states that "the weight of the evidence shows that the run-up in consumption inequality has been considerably less dramatic than the rise in income inequality," and consumption is more important than income. According to Johnson, Smeeding, and Tory, consumption inequality was actually lower in 2001 than it was in 1986. The debate is summarized in "The Hidden Prosperity of the Poor" by journalist Thomas B. Edsall. Other studies have not found consumption inequality less dramatic than household income inequality, and the CBO's study found consumption data not "adequately" capturing "consumption by high-income households" as it does their income, though it did agree that household consumption numbers show more equal distribution than household income.

Others dispute the importance of consumption over income, pointing out that if middle and lower income are consuming more than they earn it is because they are saving less or going deeper into debt. Income inequality has been the driving factor in the growing household debt,[127][131] as high earners bid up the price of real estate and middle income earners go deeper into debt trying to maintain what once was a middle class lifestyle.

Central Banking economist Raghuram Rajan argues that "systematic economic inequalities, within the United States and around the world, have created deep financial 'fault lines' that have made [financial] crises more likely to happen than in the past" – the Financial crisis of 2007–08 being the most recent example. To compensate for stagnating and declining purchasing power, political pressure has developed to extend easier credit to the lower and middle income earners – particularly to buy homes – and easier credit in general to keep unemployment rates low. This has given the American economy a tendency to go "from bubble to bubble" fueled by unsustainable monetary stimulation.

Monopolization of Labor, Consolidation, and Competition Greater income inequality can lead to monopolization of the labor force, resulting in fewer employers requiring fewer workers. Remaining employers can consolidate and take advantage of the relative lack of competition, leading to less consumer choice, market abuses, and relatively higher real prices.

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Economic Incentives Some modern economic theories, such as the neoclassical school, have suggested that a functioning economy entails a certain level of unemployment. These theories argue that unemployment benefits must be below the wage level to provide an incentive to work, thereby mandating inequality. Such theories state additionally that the unemployment rate cannot reduce to zero.

Some economists believe that one of the main reasons that inequality might induce economic incentive is because material well-being and conspicuous consumption relate to status. In this view, high stratification of income (high inequality) creates high amounts of social stratification, leading to greater competition for status.

One of the first writers to note this relationship, Adam Smith, recognized "regard" as one of the major driving forces behind economic activity. From The Theory of Moral Sentiments in 1759: [W]hat is the end of avarice and ambition, of the pursuit of wealth, of power, and preeminence? Is it to supply the necessities of nature? The wages of the meanest labourer can supply them... [W]hy should those who have been educated in the higher ranks of life, regard it as worse than death, to be reduced to live, even without labour, upon the same simple fare with him, to dwell under the same lowly roof, and to be clothed in the same humble attire?

From whence, then, arises that emulation which runs through all the different ranks of men, and what are the advantages which we propose by that great purpose of human life which we call bettering our condition? To be observed, to be attended to, to be taken notice of with sympathy, complacency, and approbation, are all the advantages which we can propose to derive from it. It is the vanity, not the ease, or the pleasure, which interests us.

Modern sociologists and economists such as Juliet Schor and Robert H. Frank have studied the extent to which economic activity is fueled by the ability of consumption to represent social status. Schor, in The Overspent American, argues that the increasing inequality during the 1980s and 1990s strongly accounts for increasing aspirations of income, increased consumption, decreased savings, and increased debt.

In the book Luxury Fever, Robert H. Frank argues that satisfaction with levels of income is much more strongly affected by how someone's income compares with others than its absolute level.

Frank gives the example of instructions to a yacht architect by a customer – shipping magnate Stavros Niarchos – to make Niarchos' new yacht 50 feet longer than that of rival magnate Aristotle Onassis. Niarchos did not specify or reportedly even know the exact length of Onassis's yacht.[137][138]

Economic Growth A 1999 review in the Journal of Economic Literature states high inequality lowers growth, perhaps because it increases social and political instability. A 1992 World Bank report published Page 66 of 144

in the Journal of Development Economics said that inequality "is negatively, and robustly, correlated with growth. This result is not highly dependent upon assumptions about either the form of the growth regression or the measure of inequality." NYU economist William Baumol found that substantial inequality does not stimulate growth because poverty reduces labor force productivity. Economists Dierk Herzer and Sebastian Vollmer found that increased income inequality reduces economic growth, but growth itself increases income inequality.

According to International Monetary Fund economists, inequality in wealth and income is negatively correlated with subsequent economic growth. A strong demand for redistribution will occur in societies where much of the population does not have access to productive resources. Rational voters have to internalize this dynamic problem of social choice. 2013 Economics Nobel prize winner Robert J. Shiller said that rising inequality in the United States and elsewhere is the most important problem faced in the U.S. and elsewhere. High levels of inequality prevent not just economic prosperity, but also the quality of a country's institutions and high levels of education.

Berg and Ostry of the International Monetary Fund found that of the factors affecting the duration of growth spells in developed and developing countries, income equality is more beneficial than trade openness, sound political institutions, or foreign investment.

According to economists David Castells-Quintana and Vicente Royuela, increasing inequality harms economic growth.[5] High and persistent unemployment, in which inequality increases, has a negative effect on subsequent long-run economic growth. Unemployment can harm growth not only because it is a waste of resources, but also because it generates redistributive pressures and subsequent distortions, drives people to poverty, constrains liquidity limiting labor mobility, and erodes self-esteem promoting social dislocation, unrest and conflict. Policies aiming at controlling unemployment and in particular at reducing its inequality-associated effects support economic growth.

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Economist Joseph Stiglitz presented evidence in 2009 that both global inequality and inequality within countries prevent growth by limiting aggregate demand. Economist Branko Milanovic, wrote in 2001 that, "The view that income inequality harms growth – or that improved equality can help sustain growth – has become more widely held in recent years. ... The main reason for this shift is the increasing importance of human capital in development. When physical capital mattered most, savings and investments were key. Then it was important to have a large contingent of rich people who could save a greater proportion of their income than the poor and invest it in physical capital. But now that human capital is scarcer than machines, widespread education has become the secret to growth."

In 1993, Galor and Zeira showed that inequality in the presence of credit market imperfections has a long lasting detrimental effect on human capital formation and economic development. A 1996 study by Perotti examined the channels through which inequality may affect economic growth. He showed that, in accordance with the credit market imperfection approach, inequality is associated with lower level of human capital formation (education, experience, and apprenticeship) and higher level of fertility, and thereby lower levels of growth. He found that inequality is associated with higher levels of redistributive taxation, which is associated with lower levels of growth from reductions in private savings and investment. Perotti concluded that, "more equal societies have lower fertility rates and higher rates of investment in education. Both are reflected in higher rates of growth. Also, very unequal societies tend to be politically and socially unstable, which is reflected in lower rates of investment and therefore growth."

Research by Harvard economist Robert Barro, found that there is "little overall relation between income inequality and rates of growth and investment". According to work by Barro in 1999 and 2000, high levels of inequality reduce growth in relatively poor countries but encourage growth in richer countries. A study of Swedish counties between 1960 and 2000 found a positive impact of inequality on growth with lead times of five years or less, but no correlation after ten years. Studies of larger data sets have found no correlations for any fixed lead time, and a negative impact on the duration of growth.

Some theories developed in the 1970s established possible avenues through which inequality may have a positive effect on economic development. According to a 1955 review, savings by the wealthy, if these increase with inequality, were thought to offset reduced consumer demand. A 2013 report on Nigeria suggests that growth has risen with increased income inequality. Some theories popular from the 1950s to 2011 incorrectly stated that inequality had a positive effect on economic development. Analyses based on comparing yearly equality figures to yearly growth rates were misleading because it takes several years for effects to manifest as changes to economic growth. IMF economists found a strong association between lower levels of inequality in developing countries and sustained periods of economic growth.

Developing countries with high inequality have "succeeded in initiating growth at high rates for a few years" but "longer growth spells are robustly associated with more equality in the income distribution."

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Mechanisms According to economist Branko Milanovic, while traditionally economists thought inequality was good for growth "The view that income inequality harms growth – or that improved equality can help sustain growth – has become more widely held in recent years. ... The main reason for this shift is the increasing importance of human capital in development. When physical capital mattered most, savings and investments were key. Then it was important to have a large contingent of rich people who could save a greater proportion of their income than the poor and invest it in physical capital. But now that human capital is scarcer than machines, widespread education has become the secret to growth."

"Broadly accessible education" is both difficult to achieve when income distribution is uneven and tends to reduce "income gaps between skilled and unskilled labor."

The sovereign-debt economic problems of the late twenty-oughts do not seem to be correlated to redistribution policies in Europe.

With the exception of Ireland, the countries at risk of default in 2011 (Greece, Italy, Spain, Portugal) were notable for their high Ginimeasured levels of income inequality compared to other European countries. As measured by the Gini index, Greece as of 2008 had more income inequality than the economically healthy Germany.

Equitable Growth While acknowledging the central role economic growth can potentially play in human development, poverty reduction and the achievement of the Millennium Development Goals, it is becoming widely understood amongst the development community that special efforts must be made to ensure poorer sections of society are able to participate in economic growth. The effect of economic growth on poverty reduction - the growth elasticity of poverty - can depend on the existing level of inequality. For instance, with low inequality a country with a growth rate of 2% per head and 40% of its population living in poverty, can halve poverty in ten years, but a country with high inequality would take nearly 60 years to achieve the same reduction. In the words of the Secretary General of the United Nations Ban Ki-Moon: "While economic growth is necessary, it is not sufficient for progress on reducing poverty."

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Housing A number of researchers (David Rodda, Jacob Vigdor, and Janna Matlack), argue that a shortage of affordable housing – at least in the US – is caused in part by income inequality. David Rodda noted that from 1984 and 1991, the number of quality rental units decreased as the demand for higher quality housing increased (Rhoda 1994:148). Through gentrification of older neighbourhoods, for example, in East New York, rental prices increased rapidly as landlords found new residents willing to pay higher market rate for housing and left lower income families without rental units. The ad valorem property tax policy combined with rising prices made it difficult or impossible for low income residents to keep pace.

Aspirational Consumption and Household Risk Firstly, certain costs are difficult to avoid and are shared by everyone, such as the costs of housing, pensions, education and health care. If the state does not provide these services, then for those on lower incomes, the costs must be borrowed and often those on lower incomes are those who are worse equipped to manage their finances. Secondly, aspirational consumption describes the process of middle income earners aspiring to achieve the standards of living enjoyed by their wealthier counterparts and one method of achieving this aspiration is by taking on debt. The result leads to even greater inequality and potential economic instability.

Poverty Oxfam asserts that worsening inequality is impeding the fight against global poverty. A 2013 report from the group stated that the $240 billion added to the fortunes of the world's richest billionaires in 2012 was enough to end extreme poverty four times over. Oxfam Executive Director Jeremy Hobbs said that "We can no longer pretend that the creation of wealth for a few will inevitably benefit the many – too often the reverse is true."

Jared Bernstein and Elise Gould of the Economic Policy Institute suggest that poverty in the United States could have been significantly mitigated if inequality had not increased over the last few decades.

Environment The smaller the economic inequality, the more waste and pollution is created, resulting in many cases, in more environmental degradation. This can be explained by the fact that as the poor people in the society become more wealthy, it increases their yearly carbon emissions. This relation is expressed by the Environmental Kuznets Curve (EKC). It should be noted here however that in certain cases, with great economic inequality, there is nonetheless not more waste and pollution created as the waste/pollution is cleaned up better afterwards (water treatment, filtering, ...).... Also note that the whole of the increase in environmental degradation is the result of the increase of emissions per person being multiplied by a multiplier. If there were fewer people however, this multiplier would be lower, and thus the Page 70 of 144

amount of environmental degradation would be lower as well. As such, the current high level of population has a large impact on this as well. If (as WWF argued), population levels would start to drop to a sustainable level (1/3 of current levels, so about 2 billion people [178]), human inequality can be addressed/corrected, while still not resulting in an increase of environmental damage.

Perspectives Socialism and Marxism Socialists attribute the vast disparities in wealth and income to the private ownership of the means of production by a class of owners, resulting in a situation where a small portion of the population receives unearned income in the form of property income by virtue of ownership titles in capital equipment, financial assets and corporate stock. In contrast, the vast majority of the population is dependent on income in the form of a wage or salary. In order to rectify this situation, socialists argue that the means of production should be publicly owned, so that income differentials would be reflective of individual contribution to the social product.

Marxists ultimately predict the emergence of a communist society based on the common ownership of the means of production, where each individual citizen would have free access to the articles of consumption (From each according to his ability, to each according to his need).

According to Marxist philosophy, equality in this sense is essential for freedom because equal access to the output of the means of production frees individuals from dependent relationships, allowing them to transcend alienation.

Meritocracy Meritocracy favors an eventual society where an individual's success is a direct function of his merit, or contribution. Economic inequality would be a natural consequence of the wide range in individual skill, talent and effort in human population.

Liberal Perspectives Most modern social liberals, including centrist or left-of-center political groups, believe that the capitalist economic system should be fundamentally preserved, but the status quo regarding the income gap must be reformed. Social liberals favor a capitalist system with active Keynesian macroeconomic policies and progressive taxation (to even out differences in income inequality).

However, contemporary classical liberals and libertarians generally do not take a stance on wealth inequality, but believe in equality under the law regardless of whether it leads to unequal wealth distribution. In 1966 Ludwig von Mises, a prominent figure in the Austrian School of economic thought, explains:

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The liberal champions of equality under the law were fully aware of the fact that men are born unequal and that it is precisely their inequality that generates social cooperation and civilization. Equality under the law was in their opinion not designed to correct the inexorable facts of the universe and to make natural inequality disappear. It was, on the contrary, the device to secure for the whole of mankind the maximum of benefits it can derive from it.

Henceforth no man-made institutions should prevent a man from attaining that station in which he can best serve his fellow citizens.

Robert Nozick argued that government redistributes wealth by force (usually in the form of taxation), and that the ideal moral society would be one where all individuals are free from force. However, Nozick recognized that some modern economic inequalities were the result of forceful taking of property, and a certain amount of redistribution would be justified to compensate for this force but not because of the inequalities themselves. John Rawls argued in A Theory of Justice[41] that inequalities in the distribution of wealth are only justified when they improve society as a whole, including the poorest members. Rawls does not discuss the full implications of his theory of justice. Some see Rawls's argument as a justification for capitalism since even the poorest members of society theoretically benefit from increased innovations under capitalism; others believe only a strong welfare state can satisfy Rawls's theory of justice.

Classical liberal Milton Friedman believed that if government action is taken in pursuit of economic equality then political freedom would suffer. In a famous quote, he said: A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.

Economist Tyler Cowen has argued that though income inequality has increased within nations, globally it has fallen over the last 20 years. He argues that though income inequality may make individual nations worse off, overall, the world has improved as global inequality has been reduced.[181]

Social Justice Arguments Patrick Diamond and Anthony Giddens (professors of Economics and Sociology, respectively) hold that 'pure meritocracy is incoherent because, without redistribution, one generation's successful individuals would become the next generation's embedded caste, hoarding the wealth they had accumulated'.

They also state that social justice requires redistribution of high incomes and large concentrations of wealth in a way that spreads it more widely, in order to "recognise the contribution made by all sections of the community to building the nation's wealth." (Patrick Diamond and Anthony Giddens, June 27, 2005, New Statesman) Pope Francis stated in his Evangelii gaudium, that "as long as the problems of the poor are not radically resolved by rejecting the absolute autonomy of markets and financial speculation and Page 72 of 144

by attacking the structural causes of inequality, no solution will be found for the world’s problems or, for that matter, to any problems." He later declared that "inequality is the root of social evil."

When income inequality is low, aggregate demand will be relatively high, because more people who want ordinary consumer goods and services will be able to afford them, while the labor force will not be as relatively monopolized by the wealthy.

Effects on Social Welfare In most western democracies, the desire to eliminate or reduce economic inequality is generally associated with the political left. One practical argument in favor of reduction is the idea that economic inequality reduces social cohesion and increases social unrest, thereby weakening the society.

There is evidence that this is true (see inequity aversion) and it is intuitive, at least for small face-toface groups of people. Alberto Alesina, Rafael Di Tella, and Robert MacCulloch find that inequality negatively affects happiness in Europe but not in the United States.

It has also been argued that economic inequality invariably translates to political inequality, which further aggravates the problem. Even in cases where an increase in economic inequality makes nobody economically poorer, an increased inequality of resources is disadvantageous, as increased economic inequality can lead to a power shift due to an increased inequality in the ability to participate in democratic processes.

Capabilities Approach The capabilities approach – sometimes called the human development approach – looks at income inequality and poverty as form of “capability deprivation”. [187] Unlike neoliberalism, which “defines well-being as utility maximization”, economic growth and income are considered a means to an end rather than the end itself. [188] Its goal is to “wid*en+ people’s choices and the level of their achieved well-being”[189] through increasing functionings (the things a person values doing), capabilities (the freedom to enjoy functionings) and agency (the ability to pursue valued goals).

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gender roles and customs may prevent a woman from receiving an education or working outside the home. There may be an epidemic that causes widespread panic, or there could be rampant violence in the area that prevents people from going to work for fear of their lives. [187] As a result, income and economic inequality increases, and it becomes more difficult to reduce the gap without additional aid. To prevent such inequality, this approach believes it’s important to have political freedom, economic facilities, social opportunities, transparency guarantees, and protective security to ensure that people aren’t denied their functionings, capabilities, and agency and can thus work towards a better relevant income.

Policy Responses Intended to Mitigate A 2011 OECD study makes a number of suggestions to its member countries, including:    

Well-targeted income-support policies.

Facilitate and encourage access to employment.

Better job-related training and education for the low-skilled (on-the-job training) would help to boost their productivity potential and future earnings.

Better access to formal education.

Progressive taxation reduces absolute income inequality when the higher rates on higherincome individuals are paid and not evaded, and transfer payments and social safety nets result in progressive government spending. Wage ratio legislation has also been proposed as a means of reducing income inequality. The OECD asserts that public spending is vital in reducing the ever expanding wealth gap.

The economists Emmanuel Saez and Thomas Piketty recommend much higher top marginal tax rates on the wealthy, up to 50 percent, or 70 percent or even 90 percent. Ralph Nader, Jeffrey Sachs, the United Front Against Austerity, among others, call for a financial transactions tax (also known as the Robin Hood tax) to bolster the social safety net and the public sector.

The Economist wrote in December 2013: "A minimum wage, providing it is not set too high, could thus boost pay with no ill effects on jobs....America's federal minimum wage, at 38% of median income, is one of the rich world's lowest. Some studies find no harm to employment from federal of state minimum wages, others see a small one, but none finds any serious damage."

General limitations on and taxation of rent-seeking are popular across the political spectrum.

Public policy responses addressing causes and effects of income inequality in the US include: progressive tax incidence adjustments, strengthening social safety net provisions such as Aid to Families with Dependent Children, welfare, the food stamp program, Social Security, Medicare, and Medicaid, increasing and reforming higher education subsidies, increasing infrastructure spending, and placing limits on and taxing rent-seeking.

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The Feminization of Poverty Feminization of Poverty describes a phenomenon in which women represent disproportionate percentages of the world's poor. UNIFEM describes it as "the burden of poverty borne by women, especially in developing countries". This concept is not only a consequence of lack of income, but is also the result of the deprivation of capabilities and gender biases present in both societies and governments. This includes the poverty of choices and opportunities, such as the ability to lead a long, healthy, and creative life, and enjoy basic rights like freedom, respect, and dignity. Women's increasing share of poverty is related to the rising incidence of lone mother households. The term feminization of poverty itself is controversial and has been defined in many different ways.

In 1978, Diana Pearce coined the term, "the feminization of poverty" after doing much research and seeing how many women struggled with poverty within the United States, as well as globally. According to Pearce's research, two-thirds of the poor that were over age 16 were women.

Causes Several factors affect the feminization of poverty, and these factors place women at high risk of poverty. Though low income is the major cause, there are many interrelated facets of this problem. Lone mothers are usually at the highest risk for extreme poverty because their income is insufficient to rear children. It then lowers their children's possibilities for good education and nourishment. Low income is a consequence of the social bias women face in trying to obtain formal employment, which in turn deepens the cycle of poverty. As the number of women in poverty increases, the diverse causes affecting their poverty must be examined. Poverty is multidimensional, and therefore economic, demographic, and socio-cultural factors all overlap and contribute to the establishment of poverty. It is a phenomenon with multiple root causes and manifestations.

Disparate Income Lack of income is a principal reason for women's risk of poverty as it deprives women of their basic needs and capabilities. Income deprivation prevents women from attaining resources and

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converting their monetary resources into socioeconomic status. Not only does higher income allow greater access to job skills; obtaining more job skills raises income as well. As women disproportionately earn less income than men, they are deprived of basic education and health care, which eventually becomes a cycle to debilitate women's ability to earn higher income.

Deprivation passes down from one generation of women to the next, leading to a perpetual feminization of poverty. The main reason behind this cycle of poverty is the lower earnings of women, due to having to care for their offspring. In many places, persistent gender discrimination in the labor force does not allow the majority of women quality work.

Lone Mother Households Lone mother households are critical in addressing feminization of poverty and can be broadly defined as households in which there are female headships and no male headships. Lone mother households are at the highest risk of poverty for women due to lack of Income and resources. There is a continuing increase of lone mother households in the world, which results in higher percentages of women in poverty. Lone mothers are the poorest women in society, and their children tend to be disadvantaged in comparison to their peers. Different factors can be taken into account for the rise in the number of female headship in households. When men become migrant workers, women are left to be the main caretaker of their homes. Other factors such as illnesses and deaths of husbands lead to an increase in lone mother households in developing countries.

Female headed households are most susceptible to poverty because they have fewer income earners to provide financial support within the household. According to a case study in Zimbabwe, households headed by widows have an income of approximately half that of maleheaded households, and de facto female headed households have about three quarters of the income of male headed households. Additionally, lone mother households lack critical resources in life, which worsens their state of poverty. They do not have access to the opportunities to attain a decent standard of living along with basic needs such as health and education. Lone mother households relate to gender inequality issues as women are more susceptible to poverty and lack essential life needs in comparison to men.

Social and Cultural Exclusions Poverty cannot be defined only by statistics and reports, such as the poverty line, to see whether or not people are impoverished in their respective countries. The concept of social and cultural exclusion helps to better convey poverty as a process that involves multiple agents.

Many developing countries have social and cultural norms that prevent women from having access to formal employment. Especially in parts of Asia, North Africa, and Latin America, the cultural and social norms do not allow women to have much labor productivity outside the home as well as an economic bargaining position within the household. This social inequality deprives women of capabilities, particularly employment, which leads to women having a

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higher risk of poverty. This increase in occupational gender segregation and widening of the gender wage gap increases women's susceptibility to poverty.

Measures of Poverty

An important aspect of analyzing the feminization of poverty is understanding how it is measured. It is inaccurate to assume that income is the only deprivation that affects women's poverty, and to examine this issue from a multidimensional perspective there must first be accurate research and indices available for policy makers interested in gender empowerment.

Often aggregate indices are criticized for their concentration on monetary issues, especially when data on women's income is sparse, and grouping women into one large, undifferentiated mass. Three indexes often examined are Gender-related Development Index, Gender Empowerment Measure, and Human Poverty Index. The first two are gendered- indices, in that they specifically gather data on women to evaluate gender inequalities, and are useful in understanding disparities in gender opportunities and choices. HPI, however, focuses on deprivation measures rather than income measures. GDI adjusts the Human Development Index in three ways:   

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The aim of this index is to rank countries according to both their absolute level of human development and relative scores on gender equality. Although this index has increased government attention to gender inequality and development, its three measures have often been criticized as neglecting important aspects. Its relevance, however, continues to be integral to the understanding of the feminization of poverty, as countries with lower scores may then be then stimulated to focus on policies to assess and reduce gender disparities. GEM measures female political and income opportunities through:    

Analyzing how many seats of government are occupied by women Proportion of management positions occupied by women Female share of jobs Estimated female to male income ratio

HPI is a multidimensional, non-income based approach. It takes into consideration four dimensions:    

Survival Knowledge Decent standard of living Social participation

This index is useful in understanding and illuminating the differences between human poverty (which focuses on the denial of basic rights, such as dignity and freedom) and income poverty.

For example, despite the U.S.'s high income stability, it is also ranked among the highest developed nations in human poverty. In her article, "Towards a Gendered Human Poverty Measure", Elizabeth Durbin critiques HPI and expands on the possibility of a gender-sensitive index. She argues that HPI incorporates three dimensions of poverty: life span measured by the proportion of the population expected to die before age 40, lack of knowledge measured by the proportion who are illiterate, and a decent standard of living measured by a composite index of access to health services, access to safe water, and malnutrition among children less than 5, that could specifically account for gender disparities. Despite its uses, however, it is important to note that HPI cannot be a true measure of poverty because it fails to examine certain deprivations, such as lack of property ownership and credit, that are essential to a stronger bargaining position in the household for women.

Multidimensional Approach It is critical to analyze the feminization of poverty from a multidimensional perspective, and to understand that there are many facets of gender inequality that cannot be solved by any one solution. Rather than focusing solely on lack of income and assets, it is essential to analyze human poverty and the deprivation of capabilities as a way to focus on deep-seated structural causes of poverty that policy makers may then use to empower women. The capability approach studies different aspects of poverty that can enable people, especially women, to

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become agents in their own lives. In order to address the feminization of poverty, it is necessary to focus on the opportunities and personal choices available to women.

Health Women in poverty have reduced access to health care services and resources. Gender inequality in society prevents women from utilizing care services and therefore puts women at risk of poor health. Women in poverty are specifically more vulnerable to sexual violence and risk of HIV/AIDS, because they are most often, not able to defend themselves from influential people who might sexually abuse them. Disproportionate numbers of women are affected by poorer health outcomes and the issue of poverty worsens women's health conditions. As poor health is a key factor in household poverty, increase in health services continues to be implemented in order to mitigate feminization of poverty.

Education The education of women and children, especially girls, can create greater opportunities for women to lift themselves out of poverty and increase their social position. Countries with strong gender discrimination and social hierarchies limit women's access to basic education. Even within the household, girls education is often sacrificed to allow male siblings to attend school. An important aspect of capabilities is the freedom to make informed choices and have opportunities to achieve goals, and a basic requirement to actively use resources and information is basic education. This enables not only women to reduce household poverty, but as well increases children's chances of education, and enhances maternal health and freedom of movement.

Decision-Making Power Decision-making power is central to the bargaining position of women within the household. It is how women and men make decisions that affect the entire household unit. However, women and men often have very different priorities when it comes to determining what is most important for the family. Factors that determine which member of the household has the most power in decision-making vary across cultures, but in most countries there is extreme gender inequality. Men of the household usually have the power to determine what choices are made towards women's health, their ability to go visit friends and family, and household expenditures. The ability to make choices for their own health affects both women and children's health. How household expenditures are decided affects women and children's

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education, health, and well-being. Women's freedom of mobility affects their ability to provide for their own needs as well as for the needs of their children.

In order to understand how these decisions are made in households, it is important to understand household dynamics and the factors that determine its structure. Gender discrimination within households is often rooted in patriarchal biases against the social status of women. Major determinants of the household bargaining power include control of income and assets, age, and access to and level of education. As women's decision-making power increases, the welfare of their children and the family in general benefits. Women who achieve greater education are also more likely to worry about their children's survival, nutrition, and school attendance. This is not limited to third world countries. Studies of dual-income couples in Spain have found that many decisions are contingent on social norms, and not all decisions are negotiated or decided by consensus.

Employment Employment opportunities are limited for women worldwide. The ability to materially control one's environment by gaining equal access to work that is humanizing and allows for meaningful relationships with other workers is an essential capability. Employment is not only about financial independence, but about higher security through an established legal position, real world experience, deeply important for sheltered or shy women, and higher regard within the family, which gives women a better bargaining position. Though there has been major growth in women's employment, the quality of the jobs still remains deeply unequal.

There are two kinds of employment: Formal and Informal. Formal employment is government regulated and workers are insured a wage and certain rights. Informal employment takes place in small, unregistered enterprises. It is generally a large source of employment for women. The burden of informal care work falls predominantly on women, who work longer and harder in this role than men. This affects their ability to hold other jobs and change positions, the hours they can work, and their decision to give up work. However, women who have University degrees or other forms of higher learning tend to stay in their jobs even with caring responsibilities, which suggests that the human capital from this experience causes women to feel opportunity costs when they lose their employment. Having children has also historically affected women's choice to stay employed. While this "child-effect" has significantly decreased since the 1970s, women's employment is currently decreasing. This has less to do with childrearing and more with a poor job market for all women, mothers and non-mothers alike.

Racialization To understand the feminization of poverty, we must know which women are being impoverished, in what ways and for what reasons. Minority women, specifically Black and Latina women are twice as likely as white women to be living in poverty. Yet, we tend to think of women on a collective whole, rather than break down the categories of difference. There are

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several reasons why minority women make up the majority of those in poverty, including low access to higher paying jobs and family structure.

Family Structure More women are living in poverty due to changes in the traditional family structure. The increase in divorce rates and single parenthood are two major contributing factors to change in the family structure. Female-headed families have the poorest economic outcomes, with economic well-being dependent on the mother’s marital status and race/ethnicity. White women generally have access to other income, through marriage or relationships with the highest income earners: white men. Whereas black women, in comparison to white women, are less likely to have white men as partners, and tend to have partners who earn less than white males and are less regularly employed. The absence of second income-earning adults is what impedes the well-being of minority women and children.

Education Education is considered a contributing factor to why women are more likely than men to live in poverty. 63% of female households who have children under the age of 18 do not complete high school. However, for minority women, socioeconomic factors contribute to them receiving less of an education than whites. There is a high concentration of minorities in poverty living in urban areas; this contributes to poor quality of education as there is a lack of funding in innercity schools.

Access to Higher Paying Jobs Residential segregation by race and economic class prevent low-skilled workers, especially minorities, from moving closer to suburban jobs. Female minority householders are twice as likely as their white counterparts to live in central cities. As more businesses have retreated to suburban areas, the inner-city, where most low-income minorities reside, often face a decline in employment opportunities. Women still make only seventy cents to the dollar a man makes and for minority women, they make less than that of a white women.

Solutions Potential solutions to closing the gap between minority women and white women in poverty, is to recognize the racial differences that exist in public institutions. Working toward and building political coalitions around more realistic statements of need, will work to better serve the populations that really need assistance.

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Case Studies Many developing countries in the world are exemplars of the feminization of poverty. Many countries in Asia, Africa, and parts of Europe deprive women of access to higher income and important capabilities. Women in these countries are disproportionately put at the highest risk of poverty and continue to face social and cultural barriers that prevent them from escaping poverty.

East Asia Although China has grown tremendously in its economy over the past years, its economic growth has had minimal effect in mitigating the feminization of poverty. Economic growth did not reduce gender gaps in income or provide more formal employment opportunities for women. Instead, China's economic growth increased its use of informal employment, which has affected women disproportionately. In the Republic of Korea, low wages for women helped instigate an economic growth in Korea since low-cost exports were mostly produced by women. Similar to China, Korean women mostly had the opportunity for informal employment, which deprives women of financial stability and safe working environments. Although women in East Asia had greater access to employment, they faced job segregation in export industries, which placed them at a high risk of poverty.

China is a country with a long history of gender discrimination. In order to address gender inequality issues, Chinese leaders have created more access for women to obtain capabilities.

As a result, Chinese women are granted greater access to health services, employment opportunities, and general recognition for their important contributions to the economy and society.

Morocco The female population, especially in rural areas, dominantly represents the face of poverty in Morocco. There have been two major methods to measure poverty in Morocco, which include the 'classic approach' and a second approach that pertains more towards the capabilities approach. The 'classic approach' uses the poverty line to statistically determine the impoverished population. This approach quantifies the number of poor individuals and households but does not take into account how the impoverished population lacks basic needs such as housing, food, health and education. The second approach focuses on satisfying this lack of basic needs and emphasizes the multidimensional nature of poverty.

Moroccan women represent the most economically insecure social group in the country. One of six Moroccan households are lone-mother households, which represent the most impoverished households in the country. Women are categorized to have the highest levels of socioeconomic and legal constraints, which exclude them from obtaining their basic needs. Although recent surveys show that women actively help in providing for their families economically,

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Moroccan legal texts discourage women's participation in economic productivity. Article 114 of the Moroccan Family Law states, "every human being is responsible for providing for his needs by his own powers except the wife whose needs will be taken care of by her husband." The patriarchal social structure of Morocco puts women as being inferior to men in all aspects.

Women are denied equal opportunities in education and employment before the law, as well as access to resources. As a result, the female population in Morocco suffers from deprivation of capabilities. Young girls are often excluded from educational opportunities due to limited financial resources within the household and the burden of household chores expected from them.

Over time, Moroccan women have gained more access to employment. However, this quantitative increase in labor participation for women has not been accompanied by higher qualitative standards of labor. The labor of rural women in Morocco remain unacknowledged and unpaid. Women are put into a higher risk of poverty as their domestic workload is added onto their unpaid labor. This balance of domestic labor and work outside the home imposes a burden on rural women. Since the socioeconomic exclusion of women deprive them of the capabilities to be educated and trained for certain employment skills, their susceptibility to poverty is heightened. Low educational skills of women directly relate to the limited employment options they have in society. Although both men and women are affected by unemployment, women are more likely to lose their jobs than men. Recent research in Morocco shows that economic recessions in the country affect women the most.

United Kingdom Women in the United Kingdom (UK) are deprived of employment opportunities and income, which places them at the highest risk of poverty in the country. In a 1990 study conducted in the United Kingdom (UK), nearly half of the employees in the study were women but these women counted for less than a third of the total weekly earnings. Women's weekly earnings were less than half of those of men. Although more women began to actively participate in providing for their families, over half of people in poverty were female and over 40% of impoverished households were lone-mother households. Lone-mother households were twice as likely to be poor as male-headed households.

Women in UK are denied equal opportunities in employment. Women's earnings in family income decrease as men's incomes increase. Inequality tends to be lower in households in which women gain access to full-time formal employment. Although married women's involvement in the labor market helped to keep their families out of poverty, their relatively low earnings were overall ineffective in moving their families up to the highest level of income distribution.

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Elitist Theory In political science and sociology, Elite Theory is a theory of the state which seeks to describe and explain the power relationships in contemporary society. The theory posits that a small minority, consisting of members of the economic elite and policy-planning networks, holds the most power and that this power is independent of a state's democratic elections process.

Through positions in corporations or on corporate boards, and influence over the policyplanning networks through financial support of foundations or positions with think tanks or policy-discussion groups, members of the "elite" are able to exert significant power over the policy decisions of corporations and governments. An example of this can be found in the Forbes magazine article (published in December 2009) entitled The World's Most Powerful People, in which Forbes purported to list the 67 most powerful people in the world (assigning one "slot" for each 100,000,000 of human population).

Even when entire groups are

ostensibly completely excluded from the state's traditional networks of power (historically, on the basis of arbitrary criteria such as nobility, race, gender, or religion), elite theory recognizes that "counter-elites" frequently develop within such excluded groups. Negotiations between

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such disenfranchised groups and the state can be analyzed as negotiations between elites and counter-elites. A major problem, in turn, is the ability of elites to co-opt counter-elites.

Elite theory stands in opposition to pluralism in suggesting that democracy is a utopian ideal. It also stands in opposition to state autonomy theory.

Classical Elite Theory The aristocratic version of this theory is the classical elite theory which is based on two ideas: 1. Power lies in position of authority in key economic and political institutions.

2. The psychological difference that sets elites apart is that they have personal resources, for instance intelligence and skills, and a vested interest in the government; while the rest are incompetent and do not have the capabilities of governing themselves, the elite are resourceful and will strive to make the government work. For in reality, the elite have the most to lose in a failed government.

Classical Elite Theorists Vilfredo Pareto Pareto emphasized the psychological and intellectual superiority of elites, believing that they were the highest accomplishers in any field. He discussed the existence of two types of elites: 1. Governing elites 2. Non-governing elites He also extended the idea that a whole elite can be replaced by a new one and how one can circulate from being elite to non-elite.

Gaetano Mosca Mosca emphasized the sociological and personal characteristics of elites. He said elites are an organized minority and that the masses are an unorganized majority. The ruling class is composed of the ruling elite and the sub-elites. He divides the world into two groups: 1. Ruling class 2. Class that is ruled Mosca asserts that elites have intellectual, moral, and material superiority that is highly esteemed and influential.

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Robert Michels Sociologist Michels developed the iron law of oligarchy where, he asserts, social and political organizations are run by few individuals, and social organization and labor division are key. He believed that all organizations were elitist and that elites have three basic principles that help in the bureaucratic structure of political organization: 1. Need for leaders, specialized staff and facilities 2. Utilization of facilities by leaders within their organization 3. The importance of the psychological attributes of the leaders

Elite Theorists Elmer Eric Schattschneider Elmer Eric Schattschneider offered a strong critique of the American political theory of pluralism: Rather than an essentially democratic system in which the many competing interests of citizens are amply represented, if not advanced, by equally many competing interest groups, Schattschneider argued the pressure system is biased in favor of "the most educated and highest-income members of society", and showed that "the difference between those who participate in interest group activity and those who stand at the sidelines is much greater than between voters and nonvoters".

In The Semisovereign People, Schattschneider argued the scope of the pressure system is really quite small: The "range of organized, identifiable, known groups is amazingly narrow; there is nothing remotely universal about it" and the "business or upper-class bias of the pressure system shows up everywhere". He says the "notion that the pressure system is automatically representative of the whole community is a myth" and, instead, the "system is skewed, loaded and unbalanced in favor of a fraction of a minority".

C. Wright Mills Mills published his book The Power Elite in 1956, claiming a new sociological perspective on systems of power in the United States. He identified a triumvirate of power groups—political, economic and military—which form a distinguishable, although not unified, power-wielding body in the United States.

Mills proposed that this group had been generated through a process of rationalization at work in all advanced industrial societies whereby the mechanisms of power became concentrated, funneling overall control into the hands of a limited, somewhat corrupt group. This reflected a decline in politics as an arena for debate and relegation to a merely formal level of discourse.

This macro-scale analysis sought to point out the degradation of democracy in "advanced"

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societies and the fact that power generally lies outside the boundaries of elected representatives.

A main influence for the study was Franz Leopold Neumann's book, Behemoth: The Structure and Practice of National Socialism, 1933–1944, a study of how Nazism came to power in the German democratic state. It provided the tools to analyze the structure of a political system and served as a warning of what could happen in a modern capitalistic democracy.

Floyd Hunter The elite theory analysis of power was also applied on the micro scale in community power studies such as that by Floyd Hunter (1953). Hunter examined in detail the power of relationships evident in his "Regional City" looking for the "real" holders of power rather than those in obvious official positions. He posited a structural-functional approach which mapped the hierarchies and webs of interconnection operating within the city—mapping relationships of power between businessmen, politicians, clergy etc. The study was promoted to debunk current concepts of any "democracy" present within urban politics and reaffirm the arguments for a true representative democracy. This type of analysis was also used in later, larger scale, studies such as that carried out by M. Schwartz examining the power structures within the sphere of the corporate elite in the United States.

G. William Domhoff In his controversial book Who Rules America?, G. William Domhoff researched local and national decision making process networks in order to illustrate the power structure in the United States. He asserts, much like Hunter, that an elite class that owns and manages large income-producing properties (like banks and corporations) dominate the American power structure politically and economically.

James Burnham Burnham’s early work The Managerial Revolution sought to express the movement of all functional power into the hands of managers rather than politicians or businessmen— separating ownership and control. Many of these ideas were adapted by paleoconservatives Samuel T. Francis and Paul Gottfried in their theories of the managerial state. Burnham's thoughts on elite theory were elucidated more specifically in his book The Machiavellians which discusses the thoughts of, among others, Pareto, Mosca, and Michels; it is here that Burnham attempts a scientific analysis of both elites and politics generally.

Robert D. Putnam Putnam saw the development of technical and exclusive knowledge among administrators and other specialist groups as a mechanism by which power is stripped from the democratic process and slipped sideways to the advisors and specialists influencing the decision-making process.

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"If the dominant figures of the past hundred years have been the entrepreneur, the businessman, and the industrial executive, the ‘new men’ are the scientists, the mathematicians, the economists, and the engineers of the new intellectual technology."

Thomas R. Dye Dye in his book Top Down Policymaking, argues that U.S. public policy does not result from the "demands of the people", but rather from elite consensus found in Washington, D.C.-based non-profit foundations, think tanks, special-interest groups, and prominent lobbying and law firms. Dye's thesis is further expanded upon in his works: The Irony of Democracy, Politics in America, Understanding Public Policy, and Who's Running America?.

George A. Gonzalez In his book Corporate Power and the Environment, George A. Gonzalez writes persuasively on the power of U.S. economic elites to shape environmental policy for their own advantage. In The Politics of Air Pollution: Urban Growth, Ecological Modernization and Symbolic Inclusion and also in Urban Sprawl, Global Warming, and the Empire of Capital Gonzalez employs elite theory to explain the interrelationship between environmental policy and urban sprawl in America. His most recent work, Energy and Empire: The Politics of Nuclear and Solar Power in the United States demonstrates that economic elites tied their advocacy of the nuclear energy option to post-1945 American foreign policy goals, while at the same time these elites opposed government support for other forms of energy, such as solar, that cannot be dominated by one nation.

Ralf Dahrendorf In his book Reflections on the Revolution in Europe, Ralf Dahrendorf asserts that, due to advanced level of competence required for political activity, a political party tends to become actually a provider of "political services", that is administration of local and governmental public offices. During the electoral campaign, each party tries to convince voters it is the most suitable for managing the state business. The logical consequence would be to acknowledge this character and openly register the parties as service providing companies. In this way, the ruling class would include the members and associates of legally acknowledged companies and the "class that is ruled" would select by election the state administration company that best fits its interests.

Martin Gilens and Benjamin I. Page In their statistical analysis of 1,779 policy issues Martin Gilens and Benjamin I. Page found "that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence."

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Poverty Reduction Poverty Reduction is a term that describes the promotion of economic growth that will permanently lift as many people as possible over a poverty line.

Poverty is the state of human beings who are poor. That is, they have little or no material means of surviving— food, shelter, clothes, healthcare, education, and other physical means of living and improving one's life. Some definitions of poverty, are relative, rather than absolute, poverty reduction would not be considered to apply to measures which resulted in absolute decreases in living standards, but technically lifted people out of poverty.

Poverty reduction measures, like those promoted by Henry George in his economics classic Progress and Poverty are those that raise, or are intended to raise, enabling the poor to create wealth for themselves as a means for ending poverty forever. In modern times, various economists within the georgism movement propose measures like the land value tax to enhance access by all to the natural world.

Some people undertake voluntary poverty due to religious or philosophical beliefs. For example, Christian monks and nuns take a "vow of poverty" by which they renounce luxury.

Poverty reduction measures have no role in regard to voluntary poverty.

Poverty reduction measures and other attempts to change the economies of modern huntergatherers are not addressed in this article. Hunter-gatherers, also called "foragers" live off wild plants and animals, for example, the Hadza people of Tanzania and the Bushmen of southern Africa. Theirs is a special case in which their poverty relative to the developed countries is intertwined with their traditional way of life. Governmental attempts to modernize the economies of the Hadza people, the Bushmen, and other hunter-gatherers have resulted in political, legal, and cultural controversies. They have often met with failure.

Poverty occurs in both developing countries and developed countries. While poverty is much more widespread in developing countries, both types of countries undertake poverty reduction measures.

Poverty has historically been accepted in some parts of the world as inevitable as nonindustrialized economies produced very little while populations grew almost as fast making wealth scarce. Geoffrey Parker wrote that "In Antwerp and Lyon, two of the largest cities in western Europe, by 1600 three-quarters of the total population were too poor to pay taxes, and Page 92 of 144

therefore likely to need relief in times of crisis." Poverty Reduction, or poverty alleviation, has been largely as a result of overall economic growth. Food shortages were common before modern agricultural technology and in places that lack them today, such as nitrogen fertilizers, pesticides and irrigation methods. The dawn of industrial revolution led to high economic growth, eliminating mass poverty in what is now considered the developed world. World GDP per person quintupled during the 20th century. In 1820, 75% of humanity lived on less than a dollar a day, while in 2001, only about 20% do.

Today, continued economic development is constrained by the lack of economic freedoms.

Economic liberalization requires extending property rights to the poor, especially to land. [8] Financial services, notably savings, can be made accessible to the poor through technology, such as mobile banking. Inefficient institutions, corruption and political instability can also discourage investment. Aid and government support in health, education and infrastructure helps growth by increasing human and physical capital.

Poverty alleviation also involves improving the living conditions of people who are already poor.

Aid, particularly in medical and scientific areas, is essential in providing better lives, such as the Green Revolution and the eradication of smallpox. Problems with today's development aid include the high proportion of tied aid, which mandates receiving nations to buy products, often more expensive, originating only from donor countries. Nevertheless, some believe (Peter Singer in his book The Life You Can Save) that small changes in the way each of us in affluent nations lives our lives could solve world poverty.

Economic Liberalization Extending property rights protection to the poor is one of the most important poverty reduction strategies a nation can implement. Securing property rights to land, the largest asset for most societies, is vital to their economic freedom. The World Bank concludes that increasing land rights is ‘the key to reducing poverty’ citing that land rights greatly increase poor people’s wealth, in some cases doubling it. It is estimated that state recognition of the property of the poor would give them assets worth 40 times all the foreign aid since 1945. Although approaches varied, the World Bank said the key issues were security of tenure and ensuring land transactions were low cost. In China and India, noted reductions in poverty in recent decades have occurred mostly as a result of the abandonment of collective farming in China and the cutting of government red tape in India.

New enterprises and foreign investment can be driven away by the results of inefficient institutions, corruption, the weak rule of law and excessive bureaucratic burdens. It takes two days, two bureaucratic procedures, and $280 to open a business in Canada while an entrepreneur in Bolivia must pay $2,696 in fees, wait 82 business days, and go through 20 procedures to do the same. Such costly barriers favor big firms at the expense of small enterprises where most jobs are created. In India before economic reforms, businesses had to bribe government officials even for routine activities, which was in effect a tax on business.

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However, ending government sponsorship of social programs is sometimes advocated as a free market principle with tragic consequences. For example, the World Bank presses poor nations to eliminate subsidies for fertilizer that many farmers cannot afford at market prices. The reconfiguration of public financing in former Soviet states during their transition to a market economy called for reduced spending on health and education, sharply increasing poverty.

Trade liberalization increases total surplus of trading nations. Remittances sent to poor countries, such as India, are sometimes larger than foreign direct investment and total remittances are more than double aid flows from OECD countries. Foreign investment and export industries helped fuel the economic expansion of fast growing Asian nations. However, trade rules are often unfair as they block access to richer nations’ markets and ban poorer nations from supporting their industries. Processed products from poorer nations, in contrast to raw materials, get vastly higher tariffs at richer nations' ports. A University of Toronto study found the dropping of duty charges on thousands of products from African nations because of the African Growth and Opportunity Act was directly responsible for a "surprisingly large" increase in imports from Africa.[23] Deals can sometimes be negotiated to favor the developing country such as in China, where laws compel foreign multinationals to train their future Chinese competitors in strategic industries and render themselves redundant in the long term. In Thailand, the 51 percent rule compels multinational corporations starting operations in Thailand give 51 percent control to a Thai company in a joint venture.

Capital, Infrastructure and Technology Long run economic growth per person is achieved through increases in capital (factors that increase productivity), both human and physical, and technology. Improving human capital, in the form of health, is needed for economic growth. Nations do not necessarily need wealth to

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gain health. For example, Sri Lanka had a maternal mortality rate of 2% in the 1930s, higher than any nation today. It reduced it to .5-.6% in the 1950s and to 0.6% today. However, it was spending less each year on maternal health because it learned what worked and what did not.

Knowledge on the cost effectiveness of healthcare interventions can be elusive but educational measures to disseminate what works are available, such as the disease control priorities project. Promoting hand washing is one of the most cost effective health intervention and can cut deaths from the major childhood diseases of diarrhea and pneumonia by half.

Human capital, in the form of education, is an even more important determinant of economic growth than physical capital. Deworming children costs about 50 cents per child per year and reduces non-attendance from anemia, illness and malnutrition and is only a twenty-fifth as expensive to increase school attendance as by constructing schools.

UN economists argue that good infrastructure, such as roads and information networks, helps market reforms to work. China claims it is investing in railways, roads, ports and rural telephones in African countries as part of its formula for economic development. It was the technology of the steam engine that originally began the dramatic decreases in poverty levels.

Cell phone technology brings the market to poor or rural sections. With necessary information, remote farmers can produce specific crops to sell to the buyers that brings the best price.

Such technology also helps bring economic freedom by making financial services accessible to the poor. Those in poverty place overwhelming importance on having a safe place to save money, much more so than receiving loans. Also, a large part of microfinance loans are spent on products that would usually be paid by a checking or savings account. Mobile banking addresses the problem of the heavy regulation and costly maintenance of saving accounts.

Mobile financial services in the developing world, ahead of the developed world in this respect, could be worth $5 billion by 2012. Safaricom’s M-Pesa launched one of the first systems where a network of agents of mostly shopkeepers, instead of bank branches, would take deposits in cash and translate these onto a virtual account on customers' phones. Cash transfers can be done between phones and issued back in cash with a small commission, making remittances safer.

Employment and Productivity Economic growth has the indirect potential to alleviate poverty, as a result of a simultaneous increase in employment opportunities and increase labour productivity. A study by researchers at the Overseas Development Institute (ODI) of 24 countries that experienced growth found that in 18 cases, poverty was alleviated. However, employment is no guarantee of escaping poverty, the International Labour Organisation (ILO) estimates that as many as 40% of workers as poor, not earning enough to keep their families above the $2 a day poverty line. For instance, in India most of the chronically poor are wage earners in formal employment, because their jobs are insecure and low paid and offer no chance to accumulate wealth to avoid risks.

This appears to be the result of a negative relationship between employment creation and increased productivity, when a simultaneous positive increase is required to reduced poverty.

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According to the UNRISD, increasing labour productivity appears to have a negative impact on job creation: in the 1960s, a 1% increase in output per worker was associated with a reduction in employment growth of 0.07%, by the first decade of this century the same productivity increase implies reduced employment growth by 0.54%.

Increases in employment without increases in productivity leads to a rise in the number of "working poor", which is why some experts are now promoting the creation of "quality" and not "quantity" in labour market policies. This approach does highlight how higher productivity has helped reduce poverty in East Asia, but the negative impact is beginning to show. In Viet Nam, for example, employment growth has slowed while productivity growth has continued.

Furthermore, productivity increases do not always lead to increased wages, as can be seen in the US, where the gap between productivity and wages has been rising since the 1980s. The ODI study showed that other sectors were just as important in reducing unemployment, as manufacturing. The services sector is most effective at translating productivity growth into employment growth. Agriculture provides a safety net for jobs and economic buffer when other sectors are struggling. This study suggests a more nuanced understanding of economic growth and quality of life and poverty alleviation.

Helping Farmers Raising farm incomes is described as the core of the antipoverty effort as three quarters of the poor today are farmers. Estimates show that growth in the agricultural productivity of small Page 96 of 144

farmers is, on average, at least twice as effective in benefiting the poorest half of a country’s population as growth generated in nonagricultural sectors. For example, a 2012 study suggested that new varieties of chickpea could benefit Ethiopian farmers in future. The study assessed the potential economic and poverty impact of 11 improved chickpea varieties, released by the national agricultural research organization of Ethiopia in collaboration with the International Crops Research Institute for the Semi-Arid Tropics, (ICRISAT). The researchers estimated that using the varieties would bring about a total benefit of US$111 million for 30 years, with consumers receiving 39% of the benefit and producers 61%. They expected the generated benefit would lift more than 0.7 million people (both producers and consumers) out of poverty. The authors concluded that further investments in the chickpea and other legume research in Ethiopia were therefore justified as a means of poverty alleviation.

Improving water management is an effective way to help reduce poverty among farmers. With better water management, they can improve productivity and potentially move beyond subsistence-level farming. During the Green Revolution of the 1960s and 1970s, for example, irrigation was a key factor in unlocking Asia's agricultural potential and reducing poverty.

Between 1961 and 2002, the irrigated area almost doubled, as governments sought to achieve food security, improve public welfare and generate economic growth. In South Asia, cereal production rose by 137% from 1970 to 2007. This was achieved with only 3% more land.

The International Water Management Institute in Colombo, Sri Lanka aims to improve the management of land and water resources for food, livelihoods and the environment. One project its scientists worked on demonstrates the impact that improving water management in agriculture can have. The study, funded by the Japan Bank for International Cooperation, initially upgraded and irrigated the irrigation system on the Walawe Left Bank, Sri Lanka, in 1997. In 2005, irrigation was extended to a further area. An analysis of the whole are was carried out in 2007 and 2008. This study found that access to irrigation provided families with opportunities to diversify their livelihood activities and potentially increase their incomes. For example, people with land could reliably grow rice or vegetables instead of working as labourers or relying on rainfall to water their crops. Those without land could benefit by working within new inland fisheries. Within the project's control area, 57% of households were below the poverty line in 2002 compared with 43% in 2007.

Building Opportunities for Self-Sufficiency Making employment opportunities available is just as important as increasing income and access to basic needs. Poverty activist Paul Polak has based his career around doing both at once, creating companies that employ the poor while creating "radically" affordable goods. In his book Out of Poverty he argues that traditional poverty eradication strategies have been misguided and fail to address underlying problems. He lists, “Three Great Poverty Eradication Myths�: that we can donate people out of poverty, that national economic growth will end poverty, and that Big Business, operating as it does now, will end poverty. Economic models which lead to national growth and more big business will not necessarily lead to more

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opportunities for self-sufficiency. However, businesses designed with a social goal in mind, such as micro finance banks, may be able to make a difference.

Growth vs. State Intervention: Comparative Perspective in China, India, Brazil A 2011 World Bank research article, “A Comparative Perspective on Poverty Reduction in Brazil, China, and India,” looked at the three nations’ strategies and their relative challenges and successes. During their reform periods, all three have reduced their poverty rates, but through a different mix of approaches. The report used a common poverty line of $1.25 per person, per day, at purchasing parity power for consumption in 2005. Using that metric and evaluating the period between 1981 and 2005, the poverty rate in China dropped from 84% to 16%; India from 60% to 42%; and Brazil from 17% to 8%. The report sketches an overall scorecard of the countries on the two basic dimensions of pro-poor growth and pro-poor policy intervention: “China clearly scores well on the pro-poor growth side of the card, but neither Brazil nor India do; in Brazil’s case for lack of growth and in India’s case for lack of poverty-reducing growth.

Brazil scores well on the social policies side, but China and India do not; in China’s case progress has been slow in implementing new social policies more relevant to the new market economy (despite historical advantages in this area, inherited from the past regime) and in India’s case the bigger problems are the extent of capture of the many existing policies by non-poor groups and the weak capabilities of the state for delivering better basic public services.”

Aid Welfare Aid in its simplest form is a basic income grant, a form of social security periodically providing citizens with money. In pilot projects in Namibia, where such a program pays just $13 a month, people were able to pay tuition fees, raising the proportion of children going to school by 92%, child malnutrition rates fell from 42% to 10% and economic activity grew 10%. Aid could also be rewarded based on doing certain requirements.

Conditional Cash Transfers, widely credited as a successful anti-poverty program, is based on actions such as enrolling children in school or receiving vaccinations. In Mexico, for example, the country with the largest such program, dropout rates of 16–19 year olds in rural area dropped by 20% and children gained half an inch in height. Initial fears that the program would encourage families to stay at home rather than

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work to collect benefits have proven to be unfounded. Instead, there is less excuse for neglectful behavior as, for example, children are prevented from begging on the streets instead of going to school because it could result in suspension from the program.

Welfare states have an effect on poverty reduction. Currently modern, expansive welfare states that ensure economic opportunity, independence and security in a near universal manner are still the exclusive domain of the developed nations. commonly constituting at least 20% of GDP, with the largest Scandinavian welfare states constituting over 40% of GDP. These modern welfare states, which largely arose in the late 19th and early 20th centuries, seeing their greatest expansion in the mid 20th century, and have proven themselves highly effective in reducing relative as well as absolute poverty in all analyzed high-income OECD countries.

Philosopher Thomas Pogge is a supporter of gathering funds for the poor by using a sort of Global Resources Dividend.

Development Aid A major proportion of aid from donor nations is ‘tied’, mandating that a receiving nation buy products originating only from the donor country. This can be harmful economically. For example, Eritrea is forced to spend aid money on foreign goods and services to build a network of railways even though it is cheaper to use local expertise and resources. Money from the United States to fight AIDS requires it be spent on U.S brand name drugs that can cost up to $15,000 a year compared to $350 a year for generics from other countries. Only Norway, Denmark, Netherlands and Britain have stopped tying their aid.

Some people disagree with aid when looking at where the development aid money from NGO's and other funding is going. Funding tends to be used in a selective manner where the highest ranked health problem is the only thing treated, rather than funding basic health care development. This can occur due to the a foundation's underlaying political aspects to their development plan, where the politics outweigh the science of disease. The diseases then treated are ranked by their prevalence, morbidity, risk of mortality, and the feasibility of control. Through this ranking system, the disease that cause the most mortality and are most easily treated are given the funding. The argument occurs because once these people are treated, they are sent back to the conditions that led to the disease in the first place. By doing this, money and resources from aid can be wasted when people are re-infected. This was seen in the Rockefeller Foundation's Hookworm campaign in Mexico in the 1920s, where people were treated for hookworm and then contracted the disease again once back in the conditions of which they came from. To prevent this, money could be spent on teaching citizens of the developing countries health education, basic sanitation, and providing adequate access to prevention methods and medical infrastructure. Not only would NGO money be better spent, but it would be more sustainable. These arguments suggest that the NGO development aid should be used for prevention and determining root causes rather acting upon political endeavours and treating for the sake of saying they helped.

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Some think tanks and NGOs have argued that Western monetary aid often only serves to increase poverty and social inequality, either because it is conditioned with the implementation of harmful economic policies in the recipient countries, or because it's tied with the importing of products from the donor country over cheaper alternatives. Sometimes foreign aid is seen to be serving the interests of the donor more than the recipient, and critics also argue that some of the foreign aid is stolen by corrupt governments and officials, and that higher aid levels erode the quality of governance. Policy becomes much more oriented toward what will get more aid money than it does towards meeting the needs of the people. Problems with the aid system and not aid itself are that the aid is excessively directed towards the salaries of consultants from donor countries, the aid is not spread properly, neglecting vital, less publicized area such as agriculture, and the aid is not properly coordinated among donors, leading to a plethora of disconnected projects rather than unified strategies.

Supporters of aid argue that these problems may be solved with better auditing of how the aid is used. Immunization campaigns for children, such as against polio, diphtheria and measles have saved millions of lives. Aid from non-governmental organizations may be more effective than governmental aid; this may be because it is better at reaching the poor and better controlled at the grassroots level. As a point of comparison, the annual world military spending is over $1 trillion.

Debt Relief One of the proposed ways to help poor countries that emerged during the 1980s has been debt relief. Given that many less developed nations have gotten themselves into extensive debt to banks and governments from the rich nations, and given that the interest payments on these debts are often more than a country can generate per year in profits from exports, cancelling part or all of these debts may allow poor nations "to get out of the hole".

If poor countries do not have to spend so much on debt payments, they can use the money instead for priorities which help reduce poverty such as basic health-care and education. Many nations began offering services, such as free health care even while overwhelming the health care infrastructure, because of savings that resulted from the rounds of debt relief in 2005.

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The Role of Education and Skillbuilding as Precursors To Economic Development Universal public education has some role in preparing youth for basic academic skills and perhaps many trade skills, as well. Apprenticeships clearly build needed trade skills. If modest amounts of cash and land can be combined with a modicum of agricultural skills in a temperate climate, subsistence can give way toward modest societal wealth. As has been mentioned, education for women will allow for reduced family size—an important poverty reduction event in its own right. While all components mentioned above are necessary, the portion of education pertaining to the variety of skills needed to build and maintain the infrastructure of a developing (moving out of poverty) society: building trades; plumbing; electrician; well-drilling; farm and transport mechanical skills (and others) are clearly needed in large numbers of individuals, if the society is to move out of poverty or subsistence. Yet, many well-developed western economies are moving strongly away from the essential apprenticeships and skill training which affords a clear vocational path out of modern urban poverty.

Microloans One of the most popular of the new technical tools for economic development and poverty reduction are microloans made famous in 1976 by the Grameen Bank in Bangladesh. The idea is to loan small amounts of money to farmers or villages so these people can obtain the things they need to increase their economic rewards. A small pump costing only $50 could make a very big difference in a village without the means of irrigation. A specific example is the Thai government's People's Bank which is making loans of $100 to $300 to help farmers buy equipment or seeds, help street vendors acquire an inventory to sell, or help others set up small shops. The International Fund for Agricultural Development (IFAD) Vietnam country programme supports operations in 11 poor provinces. Between 2002 and 2010 around 1,000 saving and credit groups (SCGs) were formed, with over 17,000 members; these SCGs increased their access to microcredit for taking up small-scale farm activities.

Empowering Women The empowerment of women has relatively recently become a significant area of discussion with respect to development and economics; however it is often regarded as a topic that only addresses and primarily deals with gender inequality. Because women and men experience poverty differently, they hold dissimilar poverty reduction priorities and are affected differently by development interventions and poverty reduction strategies. In response to the socialized phenomenon known as the feminization of poverty, policies aimed to reduce poverty have begun to address poor women separately from poor men. In addition to engendering poverty and poverty interventions, a correlation between greater gender equality and greater poverty reduction and economic growth has been illustrated by research through the World Bank, suggesting that promoting gender equality through empowerment of women is a qualitatively significant poverty reduction strategy.

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Gender Equality Addressing gender equality and empowering women are necessary steps in overcoming poverty and furthering development as supported by the human development and capabilities approach and the Millennium Development Goals. Disparities in the areas of education, mortality rates, health and other social and economic indicators impose large costs on well-being and health of the poor, which diminishes productivity and the potential to reduce poverty. The limited opportunities of women in most societies restrict their aptitude to improve economic conditions and access services to enhance their well-being.

Mainstreaming Gender Gender mainstreaming, the concept of placing gender issues into the mainstream of society, was established by the United Nations Fourth World Conference on Women as a global strategy for promoting gender equality; the UN conference emphasized the necessity to ensure that gender equality is a primary goal in all areas of social and economic development, which includes the discussion of poverty and its reduction. Correspondingly, the World Bank also created objectives to address poverty with respect to the different effects on women. One important goal was the revision of laws and administrative practices to ensure women’s equal rights and access to economic resources. Mainstreaming strengthens women’s active involvement in poverty alleviation by linking women’s capabilities and contributions with macro-economic issues. The underlying purpose of both the UN and World Bank policies speaks to the use of discussion of gender issues in the promotion of gender equality and reduction of poverty.

Strategies to Empower Women Several platforms have been adopted and reiterated across many organizations in support of the empowerment of women with the specific aim of reducing poverty. Encouraging more economic and political participation by women increases financial independence from and social investment in the government, both of which are critical to pulling society out of poverty.

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Economic Participation Women’s economic empowerment, or ensuring that women and men have equal opportunities to generate and manage income, is an important step to enhancing their development within the household and in society. Additionally, women play an important economic role in addressing poverty experienced by children. By increasing female participation in the labor force, women are able to contribute more effectively to economic growth and income distribution since having a source of income elevates their financial and social status. However, women’s entry into the paid labor force does not necessarily equate to reduction of poverty; the creation of decent employment opportunities and movement of women from the informal work sector to the formal labor market are key to poverty reduction. Other ways to encourage female participation in the workforce to promote decline of poverty include providing childcare services, increasing educational quality and opportunities, and furthering entrepreneurship for women. Protection of property rights is a key element in economically empowering women and fostering economic growth overall for both genders. With legitimate claims to land, women gain bargaining power, which can be applied to their lives outside of and within the household.

The ability and opportunity for women to lawfully own land also decreases the asset gap that exists between women and men, which promotes gender equality.

Political Participation Political participation is supported by organizations such as IFAD as one pillar of gender equality and women’s empowerment. Sustainable economic growth requires poor people to have influence on the decisions that affect their lives; specifically strengthening women’s voices in the political process builds social independence and greater consideration of gender issues in policy. In order to promote women’s political empowerment, the United Nations Development Programme advocated for several efforts: increase women in public office; strengthen advocate ability of women’s organizations; ensure fair legal protection; and provide equivalent health and education. Fair political representation and participation enable women to lobby for more female-specific poverty reduction policies and programs.

Good Institutions Efficient institutions that are not corrupt and obey the rule of law make and enforce good laws that provide security to property and businesses. Efficient and fair governments would work to invest in the long-term interests of the nation rather than plunder resources through corruption. Researchers at UC Berkeley developed what they called a "Weberianness scale" which measures aspects of bureaucracies and governments which Max Weber described as most important for rational-legal and efficient government over 100 years ago. Comparative research has found that the scale is correlated with higher rates of economic development.

With their related concept of good governance World Bank researchers have found much the same: Data from 150 nations have shown several measures of good governance (such as

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accountability, effectiveness, rule of law, low corruption) to be related to higher rates of economic development.

Funds from aid and natural resources are often diverted into private hands and then sent to banks overseas as a result of graft. If Western banks rejected stolen money, says a report by Global Witness, ordinary people would benefit “in a way that aid flows will never achieve”. The report asked for more regulation of banks as they have proved capable of stanching the flow of funds linked to terrorism, money-laundering or tax evasion.

Some, like Thomas Pogge, call for a global organization that can manage some form of Global Resources Dividend, which could evolve in complexity with time.

Examples of good governance leading to economic development and poverty reduction include Thailand, Taiwan, Malaysia, South Korea, and Vietnam, which tend to have a strong government, called a hard state or development state. These “hard states” have the will and authority to create and maintain policies that lead to long-term development that helps all their citizens, not just the wealthy. Multinational corporations are regulated so that they follow reasonable standards for pay and labor conditions, pay reasonable taxes to help develop the country, and keep some of the profits in the country, reinvesting them to provide further development.

The United Nations Development Program published a report in April 2000 which focused on good governance in poor countries as a key to economic development and overcoming the selfish interests of wealthy elites often behind state actions in developing nations. The report concludes that “Without good governance, reliance on trickle-down economic development and a host of other strategies will not work.” Despite the promise of such research several questions remain, such as where good governance comes from and how it can be achieved. The comparative analysis of one sociologist suggests that broad historical forces have shaped the likelihood of good governance. Ancient civilizations with more developed government organization before colonialism, as well as elite responsibility, have helped create strong states with the means and efficiency to carry out development policies today. On the other hand strong states are not always the form of political organization most conducive to economic development. Other historical factors, especially the experiences of colonialism for each country, have intervened to make a strong state and/or good governance less likely for some Page 104 of 144

countries, especially in Africa. Another important factor that has been found to affect the quality of institutions and governance was the pattern of colonization (how it took place) and even the identity of colonizing power. International agencies may be able to promote good governance through various policies of intervention in developing nations as indicated in a few African countries, but comparative analysis suggests it may be much more difficult to achieve in most poor nations around the world.

Other Approaches Another approach that has been proposed for alleviating poverty is Fair Trade which advocates the payment of an above market price as well as social and environmental standards in areas related to the production of goods. The efficacy of this approach to poverty reduction is controversial.

Community and monetary economist Thomas H. Greco, Jr. has argued that the mainstream global economy with its debt-based currency has built-in structural incentives that create poverty through keeping money scarce. Greco points to the success of modern barter clubs and historical local currencies such as the Wรถrgl Experiment at revitalizing stagnant local economies, and calls for the creation of community currency as a means to reduce or eliminate poverty.

The Toronto Dollar is an example of a local currency oriented towards reducing poverty.

Toronto Dollars are sold and redeemed in such a way that raise funds which are then given as grants to local charities, primarily ones oriented towards reducing poverty. Toronto Dollars also provide a means to create an incentive for welfare recipients to work: Toronto dollars can be given as gifts to welfare recipients who perform volunteer work for charitable and non-profit organizations, and these gifts do not affect welfare benefits.

Some have argued for radical economic change in the system. There are several fundamental proposals for restructuring existing economic relations, and many of their supporters argue that their ideas would reduce or even eliminate poverty entirely if they were implemented. Such proposals have been put forward by both left-wing and right-wing groups: socialism, communism, anarchism, libertarianism, binary economics and participatory economics, among others.

Inequality can be reduced by progressive taxation, wealth tax, and inheritance tax.

In law, there has been a move to establish the absence of poverty as a human right.

The IMF and member countries have produced Poverty Reduction Strategy papers or PRSPs. In his book "The End of Poverty", a prominent economist named Jeffrey Sachs laid out a plan to eradicate global poverty by the year 2025. Following his recommendations, international organizations such as the Global Solidarity Network are working to help eradicate poverty Page 105 of 144

worldwide with intervention in the areas of housing, food, education, basic health, agricultural inputs, safe drinking water, transportation and communications.

The Poor People's Economic Human Rights Campaign is an organization in the United States working to secure freedom from poverty for all by organizing the poor themselves. The Campaign believes that a human rights framework, based on the value of inherent dignity and worth of all persons, offers the best means by which to organize for a political solution to poverty.Makes camps of antipoverty.

Also one approach to reduce poverty was with Norplant, a form of birth control, which was approved in the United States onDecember 10th, 1990. Norplant prevents pregnancy for up to five years by gradually releasing a low dose of the hormone into the bloodstream. In an article in the Philadelphia Inquirer entitled "Poverty and Norplant: Can Contraception Reduce the Underclass?", deputy editorial-page editor Donald Kimelman proposed Norplant as a solution to inner-city poverty, arguing that "the main reason black children are living in poverty is that people having the most children are the ones least capable of supporting them. Kimelman claimed in his article "it's very tough to undo the damage of being born into a dysfunctional family. So why not make a major effort to reduce the number of children, of any race, born into such circumstances?" According to Dorothy Roberts book "Killing the Black Body: Race, Reproduction, and the Meaning of Liberty", within two years of Norplant being approved thirteen state legislatures had proposed some twenty measures to implant poor women with Norplant and a number of these bills would pressure women on welfare to use the device either by requiring implantation as a condition of receiving benefits or by offering them a financial bonus. Every state made Norplant available to women for free through Medicaid or other forms of public assistance and to teenage girls through school programs that presented Norplant as the most reasonable option. Efforts were also made to provide Norplant to women without Medicaid. As Roberts sated, "California governor Pete Wilson allocated an extra $5 million to reimburse state-funded clinics for Norplant going to women without Medicaid or Medi-Cal coverage." See full Norplant page.

Climate Change Adaptation The increase in extreme weather events, linked to climate change, and resulting disasters is expected to continue. Disasters are a major cause of impoverishment and can reverse progress towards poverty reduction.

It is predicted that by 2030, 325 million (plus) extremely poor people will be living in the 49 most hazard prone countries. Most of these are located in South Asia and Sub-Saharan Africa.

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A researcher at a leading global think-tank, the Overseas Development Institute, suggests that far more effort should be done to better coordinate and integrate poverty reduction strategies with climate change adaptation. The two issues are argued to be currently only dealt with in parallel as most poverty reduction strategy papers ignore climate change adaptation altogether, while National Adaptation Programmes of Action (NAPAs) likewise do not deal directly with poverty reduction. Adaptation-poverty linkages were found to be strongest in NAPAs from sub-Saharan Africa LDCs.

Bicycles Experiments done in Africa (Uganda and Tanzania) and Sri Lanka on hundreds of households have shown that a bicycle can increase the income of a poor family by as much as 35%.

Transport, if analyzed for the cost-benefit analysis for rural poverty alleviation, has given one of the best returns in this regard. For example, road investments in India were a staggering 3–10 times more effective than almost all other investments and subsidies in rural economy in the decade of the 1990s. What a road does at a macro level to increase transport, the bicycle supports at the micro level. The bicycle, in that sense, can be one of the best means to eradicate poverty in poor nations.

Antipoverty Organizations and Programs           

Abdul Latif Jameel Poverty Action Lab Acumen Fund Ashoka Foundation Bill & Melinda Gates Foundation BRAC CAFOD Christian Aid Compassion International Empowerment Five Talents Free the Children

           

Gawad Kalinga Habitat for Humanity Inter-American Development Bank International Day for the Eradication of Poverty International Development Association International Fund for Agricultural Development International Monetary Fund International Water Management Institute Islamic Relief Mercy Ships New Profit Inc. Omidyar Network

          

One Laptop per Child Overseas Development Institute Oxfam Raising The Village Ramon Magsaysay Awards Foundation Tearfund The Yachay Initiative UFFORSC World Bank World Bicycle Relief World Vision International

Millennium Development Goals (MDGs) Eradication of extreme poverty and hunger by 2015 is a Millennium Development Goal. In addition to broader approaches, the Sachs Report (for the UN Millennium Project) proposes a series of "quick wins", approaches identified by development experts which would cost relatively little but could have a major constructive effect on world poverty. The quick wins are:

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               

Access to information on sexual and reproductive health.

Action against domestic violence.

Appointing government scientific advisors in every country.

Deworming school children in affected areas.

Drugs for AIDS, tuberculosis, and malaria.

Eliminating school fees.

Ending user fees for basic health care in developing countries.

Free school meals for schoolchildren.

Legislation for women’s rights, including rights to property.

Planting trees.

Providing soil nutrients to farmers in sub-Saharan Africa.

Providing mosquito nets.

Access to electricity, water and sanitation.

Supporting breast-feeding.

Training programs for community health in rural areas.

Upgrading slums, and providing land for public housing.

Fields of Study that Deal with Poverty Reduction  

Development economics explains economic growth of developing countries Macroeconomics deals with entire economies while Microeconomics with individual players in the economy

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The Working Poor The Working Poor are working people whose incomes fall below a given poverty line.

Depending on how one defines "working" and "poverty," someone may or may not be counted as part of the working poor.

While poverty is often associated with joblessness, a significant proportion of the poor are actually employed. The working poor are adversely affected in terms of many organizational outcomes such as job attachment, career attainment, and job attainment because of mediating factors that are cognitive, affective, and relational.

Largely because they are earning such low wages, the working poor face numerous obstacles that make it difficult for many of them to find and keep a job, save up money, and maintain a sense of self-worth.

The official working poverty rate in the US has remained somewhat stable over the past four decades, but many social scientists argue that the official rate is set too low, and that the proportion of workers facing significant financial hardship has instead increased over the years.

Changes in the economy, especially the shift from a manufacturing-based to a service-based economy, have resulted in the polarization of the labor market. This means that there are more jobs at the top and the bottom of the income spectrum, but fewer jobs in the middle.

There are a wide range of anti-poverty policies that have been shown to improve the situation of the working poor. Research suggests that increasing welfare state generosity is the most effective way to reduce poverty and working poverty. Other tools available to governments are increasing minimum wages across a nation, and absorbing educational and health care costs for children of the working poor.

Conceptualizing Working Poverty In the United States, the issue of working poverty was initially brought to the public's attention during the Progressive Era (1890s–1920s). Progressive Era thinkers like Robert Hunter, Jane Addams, and W.E.B. Du Bois saw society's unequal opportunity structure as the root cause of poverty and working poverty, but they also saw a link between moral factors and poverty. In his study of Philadelphia's African American neighborhoods, W.E.B. Du Bois draws a distinction

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between "hardworking" poor people who fail to escape poverty due to racial discrimination and those who are poor due to moral deficiencies such as laziness or lack of perseverance.

After the Great Depression, the New Deal, and World War II, the United States experienced an era of prosperity during which most workers experienced significant gains in wages and working conditions. During this period (1930s–1950s), scholars shifted their attention away from poverty and working poverty. However, in the late 1950s and early 1960s American scholars and policymakers began to revisit the problem. Influential books like John Kenneth Galbraith's The Affluent Society (1958) and Michael Harrington's The Other America (1962) reinvigorated the discussions on poverty and working poverty in the United States.

Since the start of the War on Poverty in the 1960s, scholars and policymakers on both ends of the political spectrum have paid an increasing amount of attention to working poverty. One of the key ongoing debates concerns the distinction between the working and the nonworking (unemployed) poor. Conservative scholars tend to see nonworking poverty as a more urgent problem than working poverty because they believe that non-work is a moral hazard that leads to welfare dependency and laziness, whereas work, even poorly paid work, is morally beneficial. In order to solve the problem of nonworking poverty, some conservative scholars argue that the government must stop "coddling" the poor with welfare benefits like AFDC/TANF. On the other hand, liberal scholars and policymakers often argue that most working and nonworking poor people are quite similar. Studies comparing single mothers on and off welfare show that receiving welfare payments does not degrade a person's desire to find a job and get off of welfare.

The main difference between the working and the nonworking poor, they argue, is that the nonworking poor have a more difficult time overcoming basic barriers to entry into the labor market, such as arranging for affordable childcare, finding housing near potential jobs, or arranging for transportation to and from work. In order to help the nonworking poor gain entry into the labor market, liberal scholars and policymakers argue that the government should provide more housing assistance, childcare, and other kinds of aid to poor families.

Discussions about the alleviation of working poverty are also politically charged. Conservative scholars and policymakers often attribute the prevalence of inequality and working poverty to overregulation and over-taxation, which they claim constricts job growth. In order to lower the rate of working poverty, conservatives advocate reducing welfare benefits and enacting less stringent labor laws.

On the other hand, many liberals argue that working poverty can only be solved through increased, not decreased, government intervention. This government intervention could include workplace reforms (such as higher minimum wages, living wage laws, job training programs, etc.) and an increase in government transfers (such as housing, food, childcare, and healthcare subsidies).

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Measuring Working Poverty Absolute According to the US Department of Labor, the working poor "are persons who spent at least 27 weeks [in the past year] in the labor force (that is, working or looking for work), but whose incomes fell below the official poverty level." In other words, if someone spent more than half of the past year in the labor force without earning more than the official poverty threshold, the US Department of Labor would classify them as "working poor." (Note: The official poverty threshold, which is set by the US Census Bureau, varies depending on the size of a family and the age of the family members. To see a table of the 2009 US poverty thresholds, click here.)

The US Bureau of Labor Statistics calculates working poverty rates for all working individuals, all families with at least one worker, and all "unrelated individuals." The individual-level working poverty rate calculates the percentage of all workers whose incomes fall below the poverty threshold. In 2009, the individual-level working poverty rate in the US was 7%, compared to 4.7% in 2000. The family-level working poverty rate only includes families of two or more people who are related by birth, marriage, or adoption. According to the Bureau of Labor Statistics' definition of family-level working poverty, a family is working poor if the combined cash income of the family falls below the poverty threshold for a family of their size. In 2009,

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the family-level working poverty rate in the US was 7.9%, compared to 5.6% in 2000. Finally, the unrelated individual working poverty rate measures working poverty among those who do not currently live with any family members. In 2009 11.7% of employed unrelated individuals were poor, compared to 7.6% in 2000.

Relative In Europe and other non-US, high-income countries, poverty and working poverty are defined in relative terms. A relative measure of poverty is based on a country's income distribution rather than an absolute amount of money. Eurostat, the statistical office of the European Union, classifies a household as poor if its income is less than 60 percent of the country's median household income. According to Eurostat, a relative measure of poverty is appropriate because "minimal acceptable standards usually differ between societies according to their general level of prosperity: someone regarded as poor in a rich developed country might be regarded as rich in a poor developing country."

When conducting cross-national research on working poverty, scholars tend to use a relative measure of poverty. In these studies, to be classified as "working poor," a household must satisfy the following two conditions: 1) at least one member of the household must be "working" (which can be defined in various ways), and 2) the total household income must be less than 60% (or 50%, or 40%) of the median income for that country. Brady, Fullerton, and Cross's 2010 cross-national study on working poverty in high-income countries defines a household as working poor if 1) it has at least one employed person and 2) the total household income falls below 50% of the median income for that country. According to this relative definition, the US's working poverty rate was 11% in the year 2000, nearly double the rate produced by the US government's absolute definition. For the same year, Canada's working poverty rate was 7.8%, the UK's was 4%, and Germany's was 3.8%.

Prevalence and Trends Poverty is often associated with joblessness, but a large proportion of poor people are actually working or looking for work. In 2009, according to the US Census Bureau's official definition of poverty, 8.8 million US families were below the poverty line (11.1% of all families). Of these families, 5.19 million, or 58.9%, had at least one person who was classified as working. In the same year, there were 11.7 million unrelated individuals (people who do not live with family members) whose incomes fell below the official poverty line (22% of all unrelated individuals).

3.9 million of these poor individuals, or 33%, were part of the working poor.

Using the US Census Bureau's definition of poverty, the working poverty rate seems to have remained relatively stable since 1978. However, many scholars have argued that the official poverty threshold is too low, and that real wages and working conditions have actually declined for many workers over the past three or four decades. Social scientists like Arne Kalleberg have found that the decline in US manufacturing and the subsequent polarization of the labor

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market has led to an overall worsening of wages, job stability, and working conditions for people with lower skill levels and less formal education.

From the mid-1940s to the mid-1970s, manufacturing jobs offered many low-skilled and medium-skilled workers stable, well-paying jobs. Due to global competition, technological advances, and other factors, US manufacturing jobs have been disappearing for decades. (From 1970 to 2008, the percentage of the labor force employed in the manufacturing sector shrank from 23.4% to 9.1%.) During this period of decline, job growth became polarized on either end of the labor market. That is, the jobs that replaced medium-pay, low- to medium-skill manufacturing jobs were high-paying, high-skill jobs and low-paying, low-skill jobs. Therefore, many low- to medium-skilled workers who would have been able to work in the manufacturing sector in 1970 must now take low-paying, precarious jobs in the service sector.

US compared to Europe Other high-income countries have also experienced declining manufacturing sectors over the past four decades, but most of them have not experienced as much labor market polarization as the United States. Labor market polarization has been the most severe in liberal market economies like the US, Britain, and Australia. Countries like Denmark and France have been subject to the same economic pressures, but due to their more "inclusive" (or "egalitarian") labor market institutions, such as centralized and solidaristic collective bargaining and strong minimum wage laws, they have experienced less polarization.

Cross-national studies have found that European countries' working poverty rates are much lower than the US's. Most of this difference can be explained by the fact that European countries' welfare states are more generous than the US's. The relationship between generous welfare states and low rates of working poverty is elaborated upon in the "Risk Factors" and "Anti-Poverty Policies" sections.

The following graph uses data from Brady, Fullerton, and Cross (2010) to show the working poverty rates for a small sample of countries. Brady, Fullerton, and Cross (2010) accessed this data through the Luxembourg Income Study.

This graph measures household, rather than person-level, poverty rates. A household is coded as "poor" if its income is less than 50% of its country's median income. This is a relative, rather than absolute, measure of poverty.

A household is classified as "working" if at least one member of the household was employed at the time of the survey. The most important insight contained in this graph is that the US has strikingly higher working poverty rates than European countries.

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Risk factors There are five major categories of risk factors that increase a person's likelihood of experiencing working poverty: sectoral factors, demographic factors, economic factors, labor market institutions, and welfare generosity. Working poverty is a phenomenon that affects a very wide range of people, but there are some employment sectors, demographic groups, political factors, and economic factors that are correlated with higher rates of working poverty than others. Sectoral and demographic factors help explain why certain people within a given country are more likely than others to be working poor. Political and economic factors can explain why different countries have different working poverty rates.

Sectoral Tendencies Working poverty is not distributed equally among employment sectors. The service sector has the highest rate of working poverty. In fact, 13.3% of US service sector workers found themselves below the poverty line in 2009. Examples of low-wage service sector workers include fast-food workers, home health aids, waiters/waitresses, and retail workers.

Although the service sector has the highest rate of working poverty, a significant portion of the working poor are blue-collar workers in the manufacturing, agriculture, and construction industries. Most manufacturing jobs used to offer generous wages and benefits, but manufacturing job quality has declined over the years. Nowadays, many US manufacturing jobs are located in right-to-work states, where it is nearly impossible for workers to form a union.

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This means that manufacturing employers are able to pay lower wages and offer fewer benefits than they used to.

Demographic factors In her book, No Shame in My Game, Katherine Newman finds that "[t]he nation's young, its single parents, the poorly educated, and minorities are more likely than other workers to be poor" (p. 42). These factors, in addition to being part of a large household, being part of a single-earner household, being female, and having a part-time (instead of a full-time) job have been found to be important working poverty "risk factors." Immigrant workers and selfemployed workers are also more likely to be working poor than other kinds of workers.

Economic factors There is a widespread assumption that economic growth leads to tighter labor markets and higher wages. However, the evidence suggests that economic growth does not always benefit each part of the population equally. For example, the 1980s was a period of economic growth and prosperity in the United States, but most of the economic gains were concentrated at the top of the income spectrum. This means that people near the bottom of the labor market did not benefit from the economic gains of the 1980s. In fact, many have argued that low-skilled workers experienced declining prosperity in the 1980s. Therefore, changing economic conditions do not have as large of an impact on working poverty rates as one might expect.

Labor Market Institutions Labor markets can be egalitarian, efficient, or somewhere in the middle. According to Brady, Fullerton, and Cross (2010), "[e]fficient labor markets typically feature flexibility, low unemployment, and higher economic growth, and facilitate the rapid hiring and firing of workers. Egalitarian labor markets are bolstered by strong labor market institutions, higher wages, and greater security" (p562). The United States has an efficient labor market, whereas most European countries have egalitarian labor markets. Each system has its drawbacks, but the egalitarian labor market model is typically associated with lower rates of working poverty.

One tradeoff to this is that the "lowest skilled and least employable" people are sometimes excluded from an egalitarian labor market, and must instead rely on government aid in order to survive (p. 563).[7] If the United States switched from an efficient to an egalitarian labor market, it might have to increase its welfare state generosity in order to cope with a higher unemployment rate.

Centralized wage bargaining is a key component of egalitarian labor markets. In a country with centralized wage bargaining institutions, wages for entire industries are negotiated at the regional or national level. This means that similar workers earn similar wages, which reduces income inequality. Lohmann (2009) finds that countries with centralized wage bargaining institutions have lower rates of "pre-transfer" working poverty. The "pre-transfer" working

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poverty rate is the percentage of workers who fall below the poverty threshold based on their earned wages (not counting government transfers).

Welfare State Generosity Cross-national studies are in agreement that the most important factor affecting working poverty rates is welfare state generosity. A generous welfare state spends a higher proportion of its GDP on things like unemployment insurance, social security, family assistance, childcare subsidies, healthcare subsidies, housing subsidies, transportation subsidies, and food subsidies. Studies on working poverty have found that these kinds of government spending can pull a significant number of people out of poverty, even if they earn low wages. Lohmann's 2009 study shows that welfare state generosity has a significant impact on the "post-transfer" rate of working poverty. The "post-transfer" rate of working poverty is the percentage of working households that fall below the poverty threshold after government aid has been taken into account.

Different types of transfers benefit different kinds of low-wage families. Family benefits will benefit households with children and unemployment benefits will benefit households that include workers with significant work experience. Transfers such as old-age benefits are unlikely to benefit low-wage households unless the elderly are living in the same household.

Sometimes, even when benefits are available, those who qualify do not take advantage of them. Migrants in particular are less likely to take advantage of the available benefits.

Obstacles to Uplift The working poor face many of the same daily life struggles as the nonworking poor, but they also face some unique obstacles. Some studies, many of them qualitative, provide detailed insights into the obstacles that hinder workers' ability to find jobs, keep jobs, and make ends meet. Some of the most common struggles faced by the working poor are finding affordable housing, arranging transportation to and from work, buying basic necessities, arranging childcare, having unpredictable work schedules, juggling two or more jobs, and coping with low-status work.

Housing Working poor people who do not have friends or relatives with whom they can live often find themselves unable to rent an apartment of their own. Although the working poor are employed at least some of the time, they often find it difficult to save enough money for a deposit on a Page 117 of 144

rental property. As a result, many working poor people end up in living situations that are actually more costly than a month-to-month rental. For instance, many working poor people, especially those who are in some kind of transitional phase, rent rooms in week-to-week motels. These motel rooms tend to cost much more than a traditional rental, but they are accessible to the working poor because they do not require a large deposit. If someone is unable or unwilling to pay for a room in a motel, they might live in his/her car, in a homeless shelter, or on the street. This is not a marginal phenomenon; in fact, according to the 2008 US Conference of Mayors, one in five homeless people are currently employed.

Of course, some working poor people are able to access housing subsidies (such as a Section 8 Housing Choice Voucher) to help cover their housing expenses. However, these housing subsidies are not available to everyone who meets the Section 8 income specifications. In fact, less than 25% of people who qualify for a housing subsidy receive one.

Education The issue with education starts many times with the working poor from childhood and follows them into their struggle for a substantial income. Children growing up in families of the working poor are not provided the same educational opportunities as their middle-class counterpart. In many cases the low income community is filled with school that are lacking necessities and support needed to form a solid education. This follows students as they continue in education.

In many cases this hinders the possibility for America's youth to continue on to higher education. The grades and credits just are not attained in many case, and the lack of guidance in the schools leaves the children of the working poor with no degree. Also, the lack of funds for continuing education causes these children to fall behind. In many cases, their parents did not continue on into higher education and because of this have a difficult time finding jobs with salaries that can support a family. Today a college degree is a requirement for many jobs, and it is the low skill jobs that usually only require a high school degree or GED. The inequality in available education continues the vicious cycle of families entering into the working poor.

Transportation Given the fact that many working poor people do not own a car or cannot afford to drive their car, where they live can significantly limit where they are able to work, and vice versa. Given the fact that public transportation in many US cities is sparse, expensive, or non-existent, this is a particularly salient obstacle. Some working poor people are able to use their social networks—if they have them—to meet their transportation needs. In a study on low-income single mothers, Edin and Lein found that single mothers who had someone to drive them to and from work were much more likely to be able to support themselves without relying on government aid.

Basic Necessities Like the unemployed poor, the working poor struggle to pay for basic necessities like food, Page 118 of 144

clothing, housing, and transportation. In some cases, however, the working poor's basic expenses can be higher than the unemployed poor's. For instance, the working poor's clothing expenses may be higher than the unemployed poor's because they must purchase specific clothes or uniforms for their jobs. Also, because the working poor are spending much of their time at work, they may not have the time to prepare their own food. In this case, they may frequently resort to eating fast food, which is less healthful and more expensive than homeprepared food.

Childcare Working poor parents with young children, especially single parents, face significantly more childcare-related obstacles than other people. Often, childcare costs can exceed a low-wage earners' income, making work, especially in a job with no potential for advancement, an economically illogical activity. However, some single parents are able to rely on their social

networks to provide free or below-market-cost childcare. There are also some free childcare options provided by the government, such as the Head Start Program. However, these free options are only available during certain hours, which may limit parents' ability to take jobs that require late-night shifts.

Work Schedules Many low-wage jobs force workers to accept irregular schedules. In fact, some employers will not hire someone unless they have "open availability," which means being available to work Page 119 of 144

any time, any day. This makes it difficult for workers to arrange for childcare and to take on a second job. In addition, working poor people's working hours can fluctuate wildly from one week to the next, making it difficult for them to budget effectively and save up money.

Multiple Jobs Many low-wage workers have to work multiple jobs in order to make ends meet. In 1996, 6.2 percent of the workforce held two or more full- or part-time jobs. Most of these people held two part-time jobs or one part-time job and one full-time job, but 4% of men and 2% of women held two full-time jobs at the same time. This can be physically exhausting and can often lead to short and long-term health problems.

Low-Status Work Many low-wage service sector jobs require a great deal of customer service work. Although not all customer service jobs are low-wage or low-status, many of them are. Some argue that the low status nature of some jobs can have negative psychological effects on workers, but others argue that low status workers come up with coping mechanisms that allow them to maintain a strong sense of self-worth. One of these coping mechanisms is called boundary work. Boundary work happens when one group of people valorize their own social position by comparing themselves to another group, who they perceive to be inferior in some way. For example, Newman (1999) found that fast food workers in New York City cope with the low-status nature of their job by comparing themselves to the unemployed, who they perceive to be even lowerstatus than themselves. Thus, although the low-status nature of working poor people's jobs may have some negative psychological effects, some, but probably not all, of these negative effects can be counteracted through coping mechanisms such as boundary work.

Anti-Poverty Policies Scholars, policymakers, and others have come up with a variety of proposals for how to reduce or eliminate working poverty. Most of these proposals are directed toward the United States, but they might also be relevant to other countries. The remainder of the section outlines the pros and cons of some of the most commonly proposed solutions.

Welfare State Generosity Cross-national studies like Lohmann (2009) and Brady, Fullerton, and Cross (2010) clearly show that countries with generous welfare states have lower levels of working poverty than countries with less-generous welfare states, even when factors like demography, economic performance, and labor market institutions are taken into account. Having a generous welfare state does two key things to reduce working poverty: it raises the minimum level of wages that people are willing to accept, and it pulls a large portion of low-wage workers out of poverty by providing them with an array of cash and non-cash government benefits. Many think that increasing the United States' welfare state generosity would lower the working poverty rate. A common Page 120 of 144

critique of this proposal is that a generous welfare state would not work because it would stagnate the economy, raise unemployment, and degrade people's work ethic. However, as of 2011, most European countries have a lower unemployment rate than the US. Furthermore, although Western European economies' growth rates can be lower than the US's from time to time, their growth rates tend to be more stable, whereas the US's tends to fluctuate relatively severely.

Wages and Benefits In the conclusion of her book, Nickel and Dimed (2001), Barbara Ehrenreich argues that Americans need to pressure employers to improve worker compensation. Generally speaking, this implies a need to strengthen the labor movement. Interestingly, cross-national statistical studies on working poverty suggest that generous welfare states have a larger impact on working poverty than strong labor movements. The labor movements in various countries have accomplished this through political parties of their own (labor parties) or strategic alliances with non-labor parties, for instance, when striving to put a meaningful minimum wage in place.

Education and Training Some argue that more vocational training, especially in growth industries like healthcare and renewable energy, is the solution to working poverty. To be sure, wider availability of vocational training could pull some people out of working poverty, but the fact remains that the low-wage service sector is a rapidly growing part of the US economy. Even if more nursing and clean energy jobs were added to the economy, there would still be a huge portion of the workforce in low-wage service sector jobs like retail, food service, and cleaning. Therefore, it seems clear that any significant reduction in the working poverty rate will have to come from Page 121 of 144

offering higher wages and more benefits to the current, and future, population of service sector workers.

Child Support Assurance Given the fact that such a large proportion of working poor households are headed by a single mother, one clear way to reduce working poverty would be to make sure that children's fathers share the cost of child rearing. In cases where the father cannot provide child support, scholars like Irwin Garfinkel advocate for the implementation of a child support guarantee, whereby the government pays childcare costs if the father cannot.

Marriage Households with two wage-earners have a significantly lower rate of working poverty than households with only one wage-earner. Also, households with two adults, but only one wageearner, have lower working poverty rates than households with only one adult. Therefore, it seems clear that having two adults in a household, especially if there are children present, is more likely to keep a household out of poverty than having just one adult in a household. Many scholars and policymakers have used this fact to argue that encouraging people to get married and stay married is an effective way to reduce working poverty (and poverty in general).

However, this is easier said than done. Research has shown that low-income people marry less often than higher-income people because they have a more difficult time finding a partner who is employed, which is often seen as a prerequisite for marriage. Therefore, unless the employment opportunity structure is improved, simply increasing the number of marriages among low-income people would be unlikely to lower working poverty rates.

Ultimately, effective solutions to working poverty are multifaceted. Each of the aforementioned proposals could help reduce working poverty in the United States, but they might have a greater impact if at least a few of them were pursued simultaneously. Some would argue that the political will to increase welfare state generosity and/or build up the labor movement simply doesn't exist at this juncture in American history, but others would disagree.

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References ______ 1. http://en.wikipedia.org/wiki/Cycle_of_poverty 2. http://en.wikipedia.org/wiki/Culture_of_poverty 3. http://en.wikipedia.org/wiki/Indices_of_deprivation_2004 4. http://en.wikipedia.org/wiki/Indices_of_deprivation_2007 5. http://en.wikipedia.org/wiki/Underprivileged_area_score 6. http://en.wikipedia.org/wiki/Department_of_Environment_Index 7. http://en.wikipedia.org/wiki/Poverty_threshold 8. http://en.wikipedia.org/wiki/Welfare 9. http://en.wikipedia.org/wiki/Economic_inequality 10. http://en.wikipedia.org/wiki/Economic_inequality 11. http://en.wikipedia.org/wiki/Feminization_of_poverty 12. http://en.wikipedia.org/wiki/Elite_theory 13. http://en.wikipedia.org/wiki/Poverty_reduction 14. http://en.wikipedia.org/wiki/Working_poor 15. http://www.jrf.org.uk/system/files/poverty-employment-lowpay-summary.pdf 16. http://www.urbanchildinstitute.org/sites/all/files/databooks/TUCI_Data_Book_VII_201 2.06_education.pdf 17. http://www.nassembly.org/knowledge/documents/NHSAFull_Report2GenOSOWFamilie s.pdf

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Attachment A Cycles of Poverty Unemployment and Low Pay

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Cycles of poverty, unemployment and low pay Round-up Reviewing the evidence February 2010 Household incomes are dynamic and families can move in and out of poverty over time, with some of them becoming trapped in a cycle. What causes this kind of ‘recurrent’ poverty and how does it relate to unemployment and low pay? How could these cycles be broken?

This paper: • summarises the findings of four projects about recurrent poverty and the low-pay/no-pay cycle • examines relevant current UK policy and practice and suggests ways to create longer-lasting routes out of poverty Key points •

Incomes are dynamic, with households moving in and out of poverty over time, and policy and practice needs to reflect this.

•

About a fifth of poverty is ‘recurrent’, where people escape from poverty only temporarily.

•

Having a job, and the conditions of that job, relates strongly to recurrent poverty but other important factors included family change, qualifications, occupation, age and how the benefits system works.

•

The issue of people moving repeatedly between work and unemployment is an endemic problem in the UK and has risen by 60 per cent since 2006, mostly as a result of the recession.

•

Entering work cannot provide a sustainable route out of poverty if job security, low pay and lack of progression are not also addressed.

•

Distinctions in effectiveness between employers who used more permanent or more flexible and temporary workforces were hard to detect. Improvements to employment conditions could be made relatively easily if, as it appears, the choice of human resource model is mainly due to differences in ethos.

•

There are a number of implications for employers, governments and those providing support to individuals trapped in cycles of poverty.

These relate to job security and wage levels: - improving rights and conditions for agency workers; - raising pay through ‘living wage’ campaigns or the national minimum wage; - addressing the issues within public-sector purchasing decisions; - ensuring job and careers advice covers security, pay and progression; and - making childcare available and affordable for parents on low incomes.

Author Chris Goulden, Policy and Research, Joseph Rowntree Foundation

www.jrf.org.uk

Introduction The Joseph Rowntree Foundation’s recurrent poverty research programme examined the extent and causes of cycles of poverty. These causes stem from the circumstances of the individual and their families, the support they receive to increase their incomes and the current economic climate.

Supply and demand in the labour market are crucial factors and the issue of low-paid, insecure work is particularly pressing in the context of the recession and high levels of short- and longer-term unemployment. The downturn has decreased the security of employment and depressed wages, which is likely to make cycling between low pay and welfare more acute and widespread for those able to find work at all. In the midst of the recession, the first phase of the ‘Flexible New Deal’, outsourcing employment support for longer-term worklessness, began and other changes outlined in the Welfare Reform Act, such as greater use of benefit sanctions and the ‘Work for your Benefits’ pilot, are imminent. The future direction of welfare-to-work policy in the UK remains uncertain in the light of political instability and the longer term social and economic impacts of the recession.

Four research projects in this programme formed the basis of this Round-up. Two were based on in-depth interviews with people, often families with children, in or at the margins of insecure labour markets. A third examined the perspectives of employers and the fourth project was a statistical analysis of recurrent poverty in a nationally-representative longitudinal survey, the British Household Panel Study (BHPS). A fifth project in the programme, not yet complete, is a longitudinal qualitative analysis of people at risk of poverty based in the North East of England. This will track some of the impacts of the recession on the issues explored in this report and will be published later in 2010.

The research This paper draws on the following reports from JRF’s recurrent poverty programme (all published by the Joseph Rowntree Foundation, York) McQuaid, R., Fuertes, V. and Richard, A. (2010) How can parents escape from recurrent poverty?

Metcalf, H. and Dhudwar, A. (2010) Employers’ role in the low-pay/nopay cycle.

Ray, K., Hoggart, L., Vegeris, S. and Taylor, R. (2010) Better off working?

Work, poverty and benefit cycling Tomlinson, M. and Walker, R. (2010) Recurrent poverty: the impact of family and labour market changes.

2

Poverty is dynamic

between poverty and worklessness is far from straightforward.

Poverty is often discussed in the media and in politics as a static concept, where a group of people are labelled permanently ‘poor’ and the rest are not. In fact, poverty is highly dynamic, reflecting the shifting nature of both individual income and family change.

When longer-term data is examined, it becomes clear that a majority rather than a minority of people in the UK experience at least a year below the relative poverty line during their lifetimes (DWP, 2009a). Not only does the static depiction of poverty belie the evidence, it can also reinforce the stigmatising treatment of people with experience of poverty (Lister, 2005).

Research on the dynamics of poverty typically breaks down the experience into different types. For example, it can be described as ‘persistent’ (long periods of poverty), ‘recurrent’ (cycling in and out of poverty) and ‘transient’ (in poverty only briefly). JRF’s review of the evidence in this area (Smith and Middleton, 2007) revealed a gap in the research on ‘recurrent’ poverty in particular. While there is no single definition of this in the literature, it captures the idea of households whose exits from poverty are not maintained for any meaningful period of time: they are merely ‘bumping along the runway’ and never taking off.

It seems sensible on the face of it to assume that recurrent poverty could be related to patterns of repeated, low-paid insecure employment (cycles of poverty caused by cycles of worklessness).

However, this assumption needs to be examined carefully. Research using national survey data showed a strong association between persistent poverty and experiencing multiple transitions in and out of work (Adelman et al., 2003). The implication is that employment of the ‘wrong’ sort – low paid and insecure – could in some cases be worse than no employment at all because of the instability it brings to a family’s finances. As this shows, the dynamic relationship

The level to which cycling in and out of work is linked to recurrent poverty depends on the make-up and earnings of the whole household and how these interact and change over time. The yellow line in Figure 1 – those always below the poverty line – relates to the group identified by Adelman et al. The JRF programme on recurrent poverty is concerned with this group (persistently in poverty but cycling in and out of work) but also with those represented by the orange line (those cycling in and out of both poverty and work).

Furthermore, as will be seen, it is not only the labour market that potentially determines the risk of recurrent poverty, but also, for example, family change, so these and other socio-demographic factors are also of interest.

Recurrent poverty and the policy context There are a number of causes of recurrent poverty, based on the interaction between people’s incomes and the make-up of their households. Some of the direct and indirect explanations identified in the literature (e.g.

Jenkins et al., 2001) include: •

Repeated broken spells of employment, including temporary contracts.

•

Working irregular hours.

•

Adult relationships beginning or breaking down.

•

Children being born into or leaving households.

•

Intermittent health problems affecting employment and benefits.

Figure 1: Relationship between cycles of income and worklessness

Household income

Never poor

Recurrently poor Poverty line Always poor

Out of work

In work

Out of work

In work

3

•

Otherwise erratic income from employment, benefits, pensions or Tax Credits.

In recent years there have been some signs that policy in the UK is starting to recognise and respond to the problems caused by cycles of poverty (Cabinet Office, 2009; DWP, 2009b). The clearest policy response has been the new focus on job retention and progression, most notably in contracts for the ‘Flexible New Deal’, where there has been considerable academic enquiry and political debate about the optimum job outcome targets to set for contractors (Finn, 2008; Work and Pensions Select Committee, 2009). The old target of ‘in employment at 13 weeks’ was replaced by a 26-week job retention target but commentators have called for even longer objectives of a year or more, including the total of all spells within paid work during that period (Social Market Foundation, 2009). The Conservatives announced a one-year job retention target as part of the ‘Work Programme’ at their 2009 conference.

However, as JRF’s research programme demonstrates, people are still being hampered by a reliance on flexible/ insecure low-paid employment on the one hand and the rigidity and incompatibility of the benefits system on the other. If employers and workers need and want greater flexibility to respond to labour demand fluctuations and its causes, the welfare system needs to be able to respond effectively to the consequences.

Types and extent of recurrent poverty in Britain Changes in income are the most common but not the only way of measuring poverty over time. In their research, in addition to income-based measures, Tomlinson and Walker considered recurrence of both ‘financial strain’ (a subjective measure based on whether families are reporting in the survey that they are struggling to get by) and of ‘material deprivation’ (where families reported not owning certain consumer durables). These three dimensions of poverty all showed different trends over time when comparing successive five-year ‘windows’ between 1991 and 2005. This highlights the value of focusing not simply on a single measure of poverty or a single point in time.

Even though the trends over time differ according to which measure of poverty is taken, the same factors relating to the labour market and household change tend to reappear as causes.

Figure 2 shows the changing composition of households experiencing income poverty, financial strain and material deprivation according to the particular pattern of poverty dynamics: •

Chronic: all five years spent in poverty, financial strain or deprivation.

•

Recurrent: more than one discrete period during the five years.

•

One long spell: one period lasting two to four years.

Figure 2: Household poverty dynamics over time 100

Percentage of the working-age population

90

Chronic

80

Recurrent

70

1 long spell

60

1 short spell

50

Never

40 30 20 10 0 1991-95

1996-00 Income poverty

Source: Tomlinson and Walker (2010).

4

2001-05

1991-95

1996-00 Financial strain

2001-05

1991-95

1996-00

2001-05

Material deprivation

•

One short spell: one period lasting for a single year.

Causes of recurrent poverty

•

Never: no experience of poverty, strain or deprivation during the five-year window.

Tomlinson and Walker isolated the independent factors associated with recurrent income poverty for people of working age in Britain. ‘Independent’ in this context means that each characteristic has its own, separate impact. For example, there was an association between recurrent poverty and both single parent status and recently having a baby, over and above any link between the two factors. These causes are listed in Table 1, in order of strength of risk of recurrent poverty. For example, previous experience of poverty had an effect about four times as strong as that of having a baby on increasing the chance of recurrent poverty. Opposite effects of similar strengths would also cancel each other out – for example, getting divorced increased the risk of recurrent poverty by about the same amount that working in an ‘associate professional and technical’ occupation decreased the risk (this employment category includes jobs like web designer and paramedic).

This shows that both recurrent income poverty and recurrent material deprivation remained broadly stable in the five-year periods between the early 1990s and the mid-2000s, although recurrent financial strain declined marginally (from 18 per cent to 15 per cent) over the 15-year period. The level of material deprivation has risen but it is important to note that this is a measure of relative deprivation, as absolute standards of living have been going up. The proportion saying that they did not experience any financial strain during the fiveyear window, in contrast, rose considerably. A possible explanation is the increased availability of personal credit in terms of the amounts available, ease of access and market reach during that time. If this explanation is true, it seems likely that the picture for the subsequent period (2006 and beyond) will highlight considerable financial strain arising from the impact of the credit crunch and recession on people’s access to finance.

As Figure 2 shows, in terms of income-based measures, recurrent poverty accounts for about a fifth of the overall experience of poverty in the working-age population (slightly more for financial strain and slightly less for material deprivation). It is therefore an important matter for policy-makers’ attention. However, there is a lack of evidence about what causes recurrent poverty, a gap addressed by this programme of research.

All of the factors listed in Table 1 were highly statistically significant – that is, the relationship between the factor and the risk of poverty is highly likely to exist in the overall working-age population and not just in the sample. More details on the technical aspects of the modelling used, plus further models for different measures of poverty, can be found in Tomlinson and Walker (2010).

Table 1: Factors affecting the risk of recurrent poverty Factor

Risk of poverty

Core labour market Intermediate labour market Previous experience of poverty Peripheral labour market Couple with no dependants Associate professional and technical occupation Self-employed (permanent) Professional occupation Divorced/separated Single parent Higher level education Administrative or secretarial occupation Skilled trade occupation Age 25–34 Had a child

Decreases Decreases Increases Decreases Decreases Decreases Decreases Decreases Increases Increases Decreases Decreases Decreases Decreases Increases

Relative strength of impact

Source: Tomlinson and Walker (2010). Note: These effects were all calculated compared to relevant ‘base’ categories, which were (for cases with non-binary variables): Age 45+, no qualifications, ‘other’ household types, unskilled occupations, other economically inactive. ‘Age 18–24’ was also a significant factor but not to the level of those shown here in Table 1.

5

Figure 3: Number of men and women making a new claim for Jobseeker's Allowance who were last claiming this benefit less than six months previously 400,000 Women Men

Number of new claimants of JSA whose last claim was in the previous six months

350,000

300,000

250,000

200,000

150,000

100,000

50,000

0

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Year

Source: www.poverty.org.uk. All data are for the first quarter in the stated year.

The authors used information from the BHPS about people’s employment contracts and chances for progression in work, in order to segment the labour market into various categories. The categories covered those not employed, the self-employed and three levels of other employment – core, intermediate and periphery.

Core and intermediate workers have permanent contracts but are differentiated by chances of progression, as measured by annual salary increments and promotion prospects. Workers in the periphery are those with no chance of wage progression and include those with temporary contracts. About a fifth of the working-age population falls into each of those three groups, according to data from the 2005 BHPS (with 8 per cent self-employed and 30 per cent non-employed – looking after the home, unemployed, early retirement or otherwise ‘economically inactive’).

The analysis showed that, of the factors considered, people’s employment conditions had by far the strongest impact on the risk of recurrent poverty (and indeed other forms of poverty). People were most at risk of going on to experience recurrent poverty in the following five years if they were unemployed, economically inactive, retired early or temporarily self-employed. The latter group includes people who 6

could be working for someone else (for example, as is common in the construction industry) and are only selfemployed in a technical sense.

In contrast, being permanently self-employed or looking after a home (while having a partner in paid work) offered at least some protection compared to those highest risk groups. The other forms of employment all gave even greater protection against future recurrent poverty – workers in the core labour market had stronger defence than those in the intermediate segment and intermediate workers were better off than those in ‘peripheral’ employment. ‘Peripheral’ employment was defined in the model to include more than just temporary, low-paid work, which is one reason why it is relatively protective against future poverty.

Overall, being in the core labour market compared to being unemployed was a risk factor about five times larger than having a new baby, for example.

The authors concluded: …while personal attributes and circumstances contribute significantly to determining the risk of recurrent poverty, they are overshadowed by structural factors that shape the opportunities for financial security offered by the labour market.

It follows that policies that encourage people to find work that pay little attention to the kind of jobs that are available are unlikely to secure a significant reduction in recurrent poverty or a sustained fall in the poverty rate.

The recession and insecure, low-paid employment The analysis of national survey data outlined above shows how important the conditions of people’s employment are in determining their household’s risk of cycling in and out of poverty. The process of churning between low-paid temporary jobs and benefits has long been a major problem in the UK economy and it is being exacerbated by the impact of the recession on the labour market.

Figure 3 shows that between 1990 and 2003 there was a rise followed by a slower fall in the numbers of new claimants for Jobseeker’s Allowance (JSA) who

were last claiming this benefit less than six months previously. The number of people ‘re-claiming’ JSA rose by nearly 60% from its low point in 2006, and increased substantially in the last year (2009) as a result of the recession. This affected men and women equally. However, the downturn also increased new claims for JSA at a faster rate than that by which people are ‘cycling’ between JSA and a job. This means that 2009 saw proportionally fewer re-claimants, even though both figures have gone up. This does not mean there has been improvement in the extent of the ‘insecure employment-JSA’ cycle; it is only because that category is not growing as quickly as new JSA claims.

Other research in the recurrent poverty programme explored the perspectives of people who were facing the prospect of, or were already doing, insecure, low-paid jobs. Ray et al. interviewed lone parents (mostly women) and long-term unemployed people (mostly men) who had previously been through the UK government experiment to provide in-work financial and personal support (the Employment Retention and Advancement demonstration). McQuaid et al. interviewed mostly female lone parents who had previously been given support from the Scottish Government’s Working for Families Fund. It is important to note that the two studies in the JRF programme do not assess the impact of these initiatives.

Figure 4: Factors creating the low-pay/no-pay cycle for individuals

Labour market • Local availability • Job characteristics • Business instability

Low-pay/ no-pay cycle Personal • Lack of qualifications • Health problems • Housing costs • Debt • Personality • Work-life balance • More severe problems

Structural barriers • Lack of childcare • Benefit system • Costs of being in work • Transport • Obstacles to education and training

7

Both projects found that many people struggled to get by, experienced financial strain and remained in poverty after they had found employment. This was especially so for those who entered short-term intermittent work.

Figure 4 summarises the factors that keep people in cycles of low-pay/no-pay, highlighted by this research.

The factors affecting this cycle included aspects related directly to the job and the local labour market, but also other employment-supporting structural factors such as the availability of childcare, education and training, transport and the benefits system. Job characteristics were very important, with low pay, part-time hours and temporary contracts identified as key determinants of cycling. For parents, shift-work and anti-social hours were seen as important barriers, even for those who had childcare. Typically, there was less generous sick pay, holiday pay, pensions and potential for promotion in these jobs compared to those in stable jobs. Workplaces that did have structured training and promotion opportunities enabled people to feel supported in attempting to advance. An alternative approach – progression through moving to a new job – was potentially risky without appropriate support.

Another recent JRF study (Crisp et al., 2009) highlighted how people can feel forced into working long hours in order to make ends meet. Although some people involved in the study valued the importance of work beyond simple but vital considerations of pay, the study demonstrated how often employment did not ‘pay’ as a route out of poverty. One woman noted that: I do struggle now, I work 16 hours when I’m actually £1.02 better off a week ... which is really scary, it’s madness. But the only reason I work is for me personally and the kids, so I can say, ‘Look Mum goes out to work every week, we all have to work’ ... which is the only reason.

The characteristics of the individual, such as their health, debts and other spending decisions, as well as their personality and aspirations, were also influential.

Progression at work was not something that everybody sought, in part due to low confidence or fatalism about future prospects, but also because of trade-offs with other aspirations and motivations.

Childcare was a particular problem for parents with more than two children, or whose children had health problems or were not between 5 and 12 years of age.

The younger children needed additional care because they were not yet at school full-time and out-of-school hours provision for teenagers is generally poor. The lack of childcare available outside a ‘typical’ working week in the evening and at weekends caused difficulties for parents in finding and keeping employment. The complex interactions with and between the benefits and Tax Credits system were also a barrier for these families, 8

with the childcare element of Working Tax Credit (WTC) singled out as particularly problematic. This is because it is received four weeks after starting employment, whereas payment for childcare providers, and often a deposit, is required up front. Childcare WTC is capped at 80 per cent of total childcare costs and the remaining 20 per cent was very difficult for parents to afford. Other problems related to it being based on a limit of needing care for only two children and averaged over an annual period, when costs are in practice intermittent.

Finding money in advance is a struggle for people on low incomes who have restricted access to affordable credit.

There are relatively few elements of the welfare system designed specifically for when people move from benefits into employment – although some new ideas, such as post-employment advisory support and inwork bonuses, were trialled as part of the Employment Retention and Advancement demonstration project.

Out-of-work benefits are also generally slow to reestablish once employment has ended and there can be an income gap from the end of benefits to the first salary, which is difficult to manage.

An important part of the picture was that people in the study felt that incomes in and out of work were too low compared to what people said they needed to survive.

This resonates with work funded by JRF on what the public agree is the minimum amount needed to live on (Hirsch et al., 2009), which was often considerably more than the amount received in out-of-work benefits or working full-time on the National Minimum Wage.

Housing costs form a large proportion of what people need to spend and this was felt especially acutely among those in work. This included both high rents for those in the private rented sector and accumulated mortgage debt for low-income home-owners. Debt is also a more general issue, as it is not taken into account in routine measures of poverty but clearly affects disposable income and living standards directly.

In these studies, debt was caused by error and delays in the benefits system but also accrued to cover dayto-day living expenses while out of work. Creditors often increased pressure to pay back these debts when individuals did regain paid work. This was not the only cost that increased on getting a job; it could also mean additional transport costs, including running a car.

Moving out of the low-pay/no-pay cycle, then, is assisted and impeded by a mixture of personal and structural factors, with the characteristics of jobs and the local labour market of key importance. It is critical therefore to explore why employers feel they need to take a ‘temporary/low-pay’ approach to the organisation of their business.

The role of employers In addition to the factors that people on low incomes saw as important, other research in the programme,

by Metcalf and Dhudwar, examined the low-pay/nopay cycle from the point of view of employers. This was done through a series of 26 case studies with employers in different sectors and locations of the UK economy and an analysis of the Labour Force Survey (LFS, a national study of the working-age population) for April–June 2007. Interviews were also held with seven ‘purchaser’ companies, whose practices were thought to influence organisations providing them with services, as well as with Trade Union representatives.

The sectors covered by the case studies were cleaning, food processing, packing, waste management, education, childcare and sports and leisure. These sectors were selected because each needs to cope with fluctuations in demand for their goods or services.

The reasons for this fluctuation can vary. For instance, it can be seasonal (including the impact of school holidays), due to uncertainty over the number and scope of external contracts that are being won, or because of changing purchaser decisions.

The authors concluded: … the effect of demand fluctuations on temporary working appeared to be moderated by cost pressures and by skill requirements. Higher cost pressures pushed employers to minimise costs and to more closely match labour input to demand. With fluctuating product demand, this resulted in employing only as many permanent staffing as were needed to meet minimum demand levels, leading to the need for temporary staff when product demand was higher. This approach was only feasible because of the low

skills required or ready supply of qualified temps, enabling employers to recruit when demand grew and minimising loss of human capital and training expenditure. (Metcalf and Dhudwar, 2010).

Extent of temporary, low-paid work The LFS analysis showed that temporary employment (defined according to whether the employee reports this in the survey) is relatively rare at 6 per cent of all employees, but one in three temporary jobs are low paid, compared with one in five overall. The extent of low pay rises to two in three among seasonal workers, about one in two for casual workers and two in five among agency temps. The analysis also showed that temporary workers who are low paid are more likely than those who are higher paid to be working under that type of contract because they cannot find the permanent employment they want. They are also more likely to be working part-time than higher paid temps – and again more likely to be frustrated in their wish to work full-time. Other research (Booth et al., 2002) highlights the association between lack of training and temporary posts. These figures paint a picture of frustration and a lack of opportunities to escape the low-pay/no-pay cycle, undoubtedly for many of the reasons highlighted through the qualitative work described above.

Why do employers use temporary staff?

Generally, required skill levels were low in the industries studied with little chance for progression and small increments for promotion. Pay was at or just above the national minimum wage. Within this context, there were several factors that affected job insecurity and low pay in companies (see Figure 5). Fluctuations in demand were fundamental to the nature of the businesses but also important were cost pressures, markets dominated by a few major buyers and the relatively easy flow of labour, which all kept wages depressed. Smaller

Figure 5: Factors affecting job insecurity and low pay in companies Labour supply • Pay and quality • Employee characteristics • Unionisation • Employee turnover • Employee flexibility

Production factors • Size, indivisibilities of labour and flexibility • Location, management structure and progression • Product quality and productivity

Cost pressures • Customers • Power • Competitiveness • Sub-contracting • Major buyers

Demand fluctuations • Daily, weekly, seasonal • Losing/winning contracts • Short-notice contracts • Purchaser decisions

Ethos, organisation aims and ownership

Extent of insecurity and low pay

Employment legislation

Source: Metcalf and Dhudwar (2010).

9

companies seemed to resort to using temporary labour more readily and had fewer opportunities for staff progression. A high degree of division of labour within companies, in terms of skills required, also lowered the chances for both progression and higher pay.

Company ethos was another factor (discussed in more detail below). Legislation was a final determinant, most notably the level of the National Minimum Wage and how companies had responded to this (such as by cutting overtime or raising productivity).

Given these factors, there were three different human resource approaches used that affected employment security in the organisations studied (see Table 2).

Sometimes a blend of these approaches was used.

Companies using the ‘permanent’ model, by definition, created less of the low-pay/no-pay cycle among its employees than those using ‘core-periphery’ or ‘temp to perm’ forms of employment.

Table 2: Human resource models Model

Implications for addressing the low-pay/no-pay cycle The research with employers indicates that the ethos within a business is important but this needs greater exploration to assess the pros and cons for companies who are using different models, or mixtures of models, within separate sectors. This is crucial as, without such information, there seems little reason why such companies would change their practices of their own accord.

There are also a number of areas where further regulation, rather than persuasion, might help tackle cycles of poverty and worklessness. This could include making temporary working more costly, reducing the acceptability of such practices or increasing the relative power of employees. The latter could be achieved through implementing the EU Directive on Agency Working, reducing the time required to gain employment protection rights and counting broken periods of employment towards gaining protection.

Description

‘Permanent’

Few temporary workers, variations in demand addressed by overtime, multi-skilling and other methods

‘Coreperiphery’

A core of permanent workers, variations in demand addressed by using peripheral, temporary workers

‘Temp to perm’

Most workers employed temporarily initially and moved to permanent status depending on demand and performance

What was striking about the use of these methods was that there seemed to be little to distinguish the effectiveness of organisations, whether employers chose a permanent approach or not, except in terms of differences in ethos about employee treatment or the perceived benefits of having a more committed, betterpaid workforce. Metcalf and Dhudwar concluded that ‘employers would not go out of business if they shifted to other models which afforded more employment security for low paid workers.’ This has implications for how cycles of worklessness might be tackled. If employers can be shown the benefits – or at least be shown that there are no adverse effects – some might switch to a more ‘permanent’ approach, thus tackling at source the problem of insecure work. However, this question does need addressing using a larger dataset to examine the impacts of the choice of human resource model on effectiveness, profitability etc. in the longer term.

10

Implications for policy and practice

The Competition Commission has recently made recommendations for tackling problems caused by ‘monopsonies’ (where one buyer faces many sellers) in the grocery sector, which may assist with some of the causes of job insecurity in that sector. The role of the state as a purchaser could also be examined, in, for instance, buying policies within central and local government. Clarification is also needed on how social factors can and should be taken into account in ‘Best Value’ decisions. Ensuring that equal pay legislation is fully complied with would help raise wages, especially in the childcare and education sectors where women workers predominate. Trade Union and Living Wage campaigns could potentially be effective in raising levels of pay, in both the public and private sectors.

As shown in Figure 4, the factors affecting the low-pay/ no-pay cycle can be split into labour market conditions, structural issues that can support employment like childcare and those relating directly to the individual. In addition to considerations for employment practice, this research suggests what extra support might be given to those caught up in the low-pay/no-pay cycle.

The information and guidance provided for job reentry could be greatly improved, with people being helped to aim for jobs that do act as stepping stones to better conditions and pay. This needs national and local evidence about where and what these jobs are.

As part of this, sector-based careers ladders might be developed to show the opportunities available, including realistic options for part-time workers. The new Adult Advancement and Careers Service (DIUS, 2008), planned to start in Autumn 2010, would be an ideal opportunity to implement this kind of approach, but it will be important for the advisers in the new service to have access to high quality local information and the ability to innovate in reaching vulnerable groups. Jobcentre Plus personal advisers also have a key potential role (McNeil, 2009). In order to progress within employment, formal skills and qualifications are necessary, and sometimes sufficient, but ‘softer’ skills and people’s confidence and self-esteem also need to be developed and some of the barriers to adult education need to be addressed. The extent and nature of people’s debts and living costs and how these are affected by entries and exits from employment, all should be examined.

For parents, affordable and quality childcare, for all ages of children and across all weekly work patterns – shift-work, weekends and evenings – is needed before work can become a secure route out of poverty.

This needs to be combined with greater flexibility to suit individual circumstances in the hours that people work, balanced against the impact on employers and the overall economy. The evidence from the recurrent poverty programme pointed to particular problems with the childcare element of Working Tax Credit. In general, the way the benefits system operates has unintended negative consequences. These need to be identified and reduced, to reflect the new understanding of poverty dynamics.

Implications for addressing recurrent poverty As the modelling showed, the conditions of someone’s employment can affect their chances of getting trapped in a cycle of poverty. Other significant risk factors included household change, such as having a new baby or the breakdown of a relationship. This indicates that current levels of support relating to these kinds of family change (such as the additional Tax Credits for families with a new baby up to the age of one) do not seem to provide sufficient protection.

Nevertheless, the modelling confirms that employment does remain the best defence against poverty – but primarily for those with permanent contracts, a chance of a promotion or a pay rise and for those working in higher status occupations. People’s personal characteristics have some impact on the risks of recurrent poverty but structural labour market factors remain the strongest influence, implying that this is where the focus of efforts should lie. Otherwise, the risk remains that welfare-to-work strategies will not provide people and their families with sustainable routes out of poverty.

While this research suggests that policy may be right to focus on work as a route out of poverty, the evidence points to key factors that need to be addressed on pay and job security if this approach is to eventually lead to success on a sustainable basis. These include: • improving rights and conditions for agency workers; • increasing pay through ‘living wage’ campaigns or the national minimum wage; • addressing the issues directly in public procurement decisions and in careers advice; and • making childcare more available and affordable for parents on low incomes.

If the end of the recession means a return to growth in the number of available jobs, this could be crucial to underpin the success of the other recommendations.

11

About this paper This Round-up draws on the JRF’s programme of research on recurrent poverty, managed by Chris Goulden, a programme manager in the Policy and Research Department at JRF. The first four studies in this programme, published in February 2010, investigated the problems associated with cycling in and out of poverty and in and out of employment. A fifth study (Shildrick et al.), tracking the experiences of people in insecure sectors of the economy in Teeside before and during the recession, will be published later in 2010.

This paper was informed by other forthcoming JRF research in or related to this programme: Crisp, R., Batty, E., Cole, I. and Robinson, D. (2009) Work and worklessness in deprived neighbourhoods: Policy assumptions and personal experiences. York: JRF

Department for Work and Pensions (2009b) Building Britain’s Recovery: Achieving Full Employment. London: Stationery Office Finn, D. (2008) Lessons from contracting out welfare to work programmes in Australia and the Netherlands.

York: JRF Hirsch, D., Davis, A. and Smith, N. (2009) A minimum income standard for Britain 2009. York: JRF Jenkins, S., Rigg, J. and Devicienti, F. (2001) The dynamics of poverty in Britain. London: DWP Lister, R. (2005) Poverty. Cambridge: Polity Press McNeil, C. (2009) Now It’s Personal: personal advisers and the new public service workforce. London: IPPR Smith, N. and Middleton, S. (2007) A review of poverty dynamics research in the UK. York: JRF

Shildrick, T. et al. (forthcoming) Understanding recurrent poverty: two steps forward, two steps back. York: JRF

Social Market Foundation (2009) Vicious cycles: sustained employment and welfare reform for the next decade. London: SMF

References

Work and Pensions Select Committee (2009) DWP’s Commissioning Strategy and the Flexible New Deal.

London: House of Commons

Adelman, L., Middleton, S. and Ashworth, K., (2003) Britain’s Poorest Children: severe and persistent poverty and social exclusion. London: Save the Children Booth, A., Francesconi, M. and Frank, J. (2002) Temporary jobs: stepping stones or dead ends? The Economic Journal: 112 (480), F189-F213(25) Cabinet Office (2009) New opportunities: fair chances for the future. London: Stationery Office Department for Innovation, Universities & Skills (2008) Shaping the Future: a new adult advancement and careers service for England. London: DIUS Department for Work and Pensions (2009a) LowIncome Dynamics 1991–2007 (Great Britain). London: DWP

Published by the Joseph Rowntree Foundation, The Homestead, 40 Water End, York YO30 6WP. This project is part of the JRF’s research and development programme. These findings, however, are those of the authors and not necessarily those of the Foundation.

ISSN 0958-3084 ISBN 978 1 85935 807 8

Read more Round-ups at www.jrf.org.uk

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Attachment B Educating Our Kids to Break the Cycle of Poverty

Page 130 of 144

Educating Our Kids in order to Break the Cycle of Poverty Children are expected to arrive at kindergarten able to sit still and pay attention during class time, resolve conflicts with their classmates, and follow simple directions. They have an advantage if they are familiar with basic language and vocabulary, if they enjoy hearing stories and being read to, and if they have some knowledge about letters and numbers. These basic skills allow them to participate effectively and increase the likelihood that they will thrive in school and beyond.1,2 Children in poverty are less likely than middle-class children to develop these skills before kindergarten.3,4 Too often, poor children have fewer early learning experiences5,6 than their better-off peers. For example, poor and low-income children tend to live in homes with fewer books and less language stimulation.7 As a result, they are likely to fall behind when school begins.3,5,8-10 Some research indicates that poor and low-income children arrive at kindergarten already a full year behind other children on cognitive measures.11 These differences in kindergarten readiness translate into later academic struggles, high school dropout, adult difficulties finding work, and poorer health.12-19 Breaking this cycle of poverty in Memphis requires investing in our youngest children and ensuring that they have nurturing and enriching early experiences, including high-quality early care and educational opportunities. The earliest years of life are a period of rapid brain development. Young children’s brains are creating the vital early connections that form the basis of learning how to use language and numbers, how to control their emotions, and how to get along with others—the essential ingredients of school readiness.20 For children to arrive at kindergarten well prepared, they need parents and educators in their lives who support their early learning. Preschool and home learning help prepare children for kindergarten, regardless of their background.

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Education starts in the home.

Children are born learning! Preparing for school starts in the first days of life by nourishing a child’s natural curiosity. In optimal home learning environments, parents develop strong bonds with their children, engage in educational activities with them, and provide books and other learning materials.21,22

skills in elementary school.24,26,27

Since language development and reading are fundamental to all areas of learning, one of the most important things parents can do with their children is read to them regularly.5 Introducing children to books and reading fosters their ability to learn more easily in formal school Young children who grow up in high-quality settings.28 When it comes to reading with young learning environments are better able to develop children, more is better. Reading at least once emerging cognitive skills, such as early literacy each a week promotes early reading achieveand numeracy skills.23-25 These early skills, in ment.29 Most experts recommend that parents turn, are connected to better reading and math read to children daily!

Middle-income parents read to their children more often than low-income parents.

In the 2010 Census, 53 percent of parents nationwide reported reading to their toddlers at least seven times a week and 49 percent reported reading to their preschoolers seven or more times each week. Among low-income families, these numbers drop to 45 and 40 percent, respectively.30 Young children in Memphis are read to less than national averages.

Memphis City Schools (MCS) were asked about their families’ early childhood reading practices. The good news is that about two-thirds reported reading to their children several times each week. At the same time, only 29 percent of middle-income parents and 13 percent of low-income parents reported reading to their children daily. Alarmingly, 19 percent of low-income parents reported that they never or rarely read to their children (FIGURE 1).

At the beginning of the 2011-2012 school year, 389 parents of kindergarten students at five

FIGURE 1: How Often Does Someone in Your Home Read a Young Children’s Book With Your Child?

Source: Memphis City Schools (MCS), Office of Research & Evaluation, Pre-K data, 2011-2012

29.2%

Daily

13.0% 61.5%

Frequently

67.3% 7.7%

Never/rarely

19.1% 0%

10%

20%

30%

40%

50%

Percent Middle-income Frequently: 1-2 times a week or almost daily Never/rarely: Never or 1-2 times a month

53

Low-income

60%

70%

80%

Middle-income parents are more comfortable reading to their children than low-income parents.

Why might so few parents in Memphis read to their children daily? While chaotic and stressful lives can sometimes get in the way of reading with young children, parents’ own reading abilities could be another influence. According to Literacy Mid-South, over 120,000 adults in Memphis cannot read or write.31 However, most

100%

4.6%

90%

16.9%

80%

parents of new kindergarteners reported that they enjoy reading to their children.

As FIGURE 2 shows, middle-income parents were more comfortable reading than low-income parents.

0.6% 9.9%

Percent

70%

38.0%

FIGURE 2: How Comfortable Are you Reading to Your Child?

47.5%

Source: Memphis City Schools (MCS), Office of Research & Evaluation, Pre-K data, 2011-2012

60% 50% 40%

78.5%

30% 20% 10% 0% Middle-income Loves it

Low-income A lot

A little

Not at all

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Middle-income children show more interest in reading than low-income children.

Similar patterns of reading behavior were found when parents reported how often their kindergarten children asked to be read to or looked at books alone.

Among middle-income children, 40 percent asked someone to read to them each day, whereas only a 26 percent of low-income children did so (FIGURE 3).

Just over 46 percent of middle-income children and 38 percent of low-income children looked at books by themselves daily (FIGURE 4).

40.0%

Daily

FIGURE 3: How Often Does Your Child Ask to be Read To? Source: Memphis City Schools (MCS), Office of Research & Evaluation, Pre-K data, 2011-2012

25.6% 52.3%

Frequently

54.0% 7.7%

Never/rarely

17.3% 0%

10%

20%

30%

40%

50%

60%

Percent Middle-income

Low-income

Frequently: 1-2 times a week or almost daily Never/rarely: Never or 1-2 times a month

46.2%

Daily

FIGURE 4: How Often Does Your Child Look at Books by Him/ Herself?

Source: Memphis City Schools (MCS), Office of Research & Evaluation, Pre-K data, 2011-2012

37.7% 50.8%

Frequently

52.2% 3.1%

Never/rarely

7.4% 0%

10%

20%

30%

40%

Percent Middle-income Frequently: 1-2 times a week or almost daily Never/rarely: Never or 1-2 times a month

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Low-income

50%

60%

Middle-income parents believe their children like being read to more than low-income parents.

We also see a strong income-based difference in the degree to which parents believe their children enjoy reading. 92 percent of middle-income parents believe their children really enjoy reading, compared to only 76 percent of low-income parents (FIGURE 5).

Although many children in our community are developing a healthy interest in reading and books, the evidence indicates that there are income differences in attitudes toward reading. Low-income kindergarteners and their parents were less likely to read than their middle-income counterparts.

1.2%

100%

7.7%

90% 80%

21.0% 29.2%

Percent

70% 60%

36.1%

50% 40% 30%

63.1% 40.1%

20% 10% 0% Middle-income Loves

Likes a lot

Low-income Likes a little

Dislikes

56

FIGURE 5: How Much Does Your Child Like Being Read To? Source: Memphis City Schools (MCS), Office of Research & Evaluation, Pre-K data, 2011-2012

“It takes a village to raise a child.”

Parents’ early reading and teaching practices help children develop the skills needed to succeed in school. But parents cannot do it by themselves. In Memphis, many families struggle to provide for their children. Poverty, low levels of social support, and high levels of parental stress place these children at risk for behavioral problems and reduced cognitive outcomes.32 Participating in pre-kindergarten (Pre-K) and other high-quality early education and childcare (Head Start, for example) can help parents provide important educational experiences for young children. Research has demonstrated that these programs not only prepare children for kindergarten, but also set them on a path to continued success in school and reduce their risk of negative outcomes.33,34 In Memphis, children who attend MCS Pre-K, Head Start, or another structured child care center arrive at kindergarten more ready than children who spent the year before kindergarten at home with a relative.35 Over the last six years Memphis City Schools has responded to these needs by more than doubling the number of Pre-K slots – from 1,800 in 2005 to over 4,100 today (including 1,400 combined MCS Pre-K and Head Start slots).

Still, there are more eligible children than available slots. Because of this discrepancy, students who are at greatest risk for academic challenges are given top priority for enrollment. MCS determines this risk through developmental screening and assessment of family risk factors. Extensive research on early childhood development has identified many risk factors associated with reaching kindergarten unprepared.4,36-38 These risk factors include: r Growing up in a family that struggles financially r Teenage motherhood r Parents with less than a high school education r Having only one parent at home r Difficulty with language

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Most children who apply for MCS Pre-K have 1 or 2 family risk factors.

Among the 3,644 families who applied for MCS Pre-K the 2011-2012 school year, only 14 percent had none of these family risk factors, while 71 percent of families had 1 or 2 risk factors (FIGURE 6). Despite these struggles, these parents took an important step to help their children succeed by signing them up for Pre-K.

1.4%

13.0%

0.1% 14.2%

FIGURE 6: Percent of Children

by Number of Family Risk Factors

34.3%

37.0%

Source: Memphis City Schools (MCS), Office of Research & Evaluation, Pre-K data, 2011-2012

0 Risk Factors

1 Risk Factor

2 Risk Factors

3 Risk Factors

4 Risk Factors

5 Risk Factors

58

Children with fewer family risks perform better on developmental assessments.

In addition to assessing family risk among children applying for Pre-K, MCS also screens for developmental delays using the Brigance Screening II, a valid and reliable measure of skills in four key areas—physical motor development, social-emotional development, language development, and acquired knowledge.39,40 Brigance scores range from 0 to100 points,39 but on average these children scored below 50 even if they had no family risk factors. (FIGURE 7) Furthermore, scores tended to be lower for children with more family risk factors.

(Since only three children had all 5 family risk factors, they were not included in this analysis.)

50 45

Source: Memphis City Schools (MCS), Office of Research & Evaluation, Pre-K data, 2011-2012

42.64

41.37

40

33.36

35 Score

FIGURE 7: Brigance Screening Score by Number of Family Risk Factors

45.05

30

23.56

25 20 15 10 5 0 0 Risk Factors

1 Risk Factor

59

2 Risk Factors

3 Risk Factors

4 Risk Factors

Clearly, children whose families applied for MCS Pre-K have great potential to benefit from the quality educational experiences offered. Moreover, those who could not be offered a spot in a MCS Pre-K (due to limited capacity) will likely arrive at kindergarten less prepared to succeed unless they find other high-quality services.

While there are other high-quality options for preschool experiences, there are not enough slots available for all children. Shelby County currently only offers some combination of Head Start or Pre-K to 7,400 children each year, which is roughly half of the estimated 14,000 3- and 4-year-olds in Shelby County living in poverty.

There are other childcare and early education programs in Shelby County, but availability, location, and cost of high-quality programs are often barriers to low-income families and their children.32 Overall, our community has seen an increase in the availability of quality early educational care. However, many young children are still left unserved and more efforts at multiple levels are needed to break the cycle of poverty through early education.

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2. Duncan GJ, Dowsett CJ, Claessens A. School readiness and later achievement. Developmental Psychology. 2007; 43(6): 1428-1446.

3. Hart B, Risley TR. Meaningful differences in the everyday experience of young American children. Baltimore, MD: Paul H. Brookes Publishing Co; 1995.

4. Lee VE, Burkam DT. Inequality at the Starting Gate: Social Background Differences in Achievement as Children Begin School. Washington, DC: Economic Policy Institute; 2002.

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6. Serpell R, Sonnenschein S, Baker L, Ganapathy H. Intimate cultures of families in early socialization of literacy. Journal of Family Psychology. 2002; 16(4): 391-405.

7. Hoff E. The specificity of environmental influence: socioeconomic status affects early vocabulary development via maternal speech.

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8. Zimmerman FJ, Gilkerson J, Richards JA, Christakis DA, Xu D, Gray S, Yapanel U. Teaching by listening: The importance of adultchild conversations to language development.

Pediatrics. 2009; 124: 342-249.

9. Willms, D. (2007). Wait to Fail. Presentation to the Canadian Education Association.

10. Sell M, Imig, D. Understanding the Relationship Between Family Income and School Readiness in Memphis; 2011, February 18. Available at: http://www.theurbanchildinstitute.org/sites/all/ files/2011-02_School_Readiness.pdf. Accessed on February 1, 2012.

11. Stipek DJ, Ryan RH. Economically disadvantaged preschoolers: Ready to learn but further to go. Developmental Psychology. 1997; 33(4): 711-723.

12. Adler NE, Boyce T, Chesney MA, Cohen S, Folkman S, Kahn RL, et al. Socioeconomic status and health: The challenge of gradient.

American Psychologist. 1994; 49: 15-24.

13. Cowell, AJ. The relationship between education and health behavior: Some empirical evidence. Health Economics. 2006; 15(2): 125146.

14. Duncan, Greg., Kathleen Ziol-Guest, and Kalil A. Early-Childhood Poverty and Adult Attainment, Behavior, and Health. Child Development. 2010; 81(1): 306-325.

15. Elo IT. Preston SH. Educational differentials in mortality: United States, 1979-85. Social Science & Medicine. 1996; 42(1), 47-57.

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18. Yeung WJ, Linver MR, Brooks-Gunn J. How money matters for young children’s development: parental investment and family processes. Child Development. 2002; 73(6): 18611879.

19. The Urban Child Institute. Strengthen Shelby County by Investing in Early Childhood. 2012.

Available at: http://www.theurbanchildinstitute.org/articles/research-to-policy/policy/ strengthen-shelby-county-by-investing-in-earlychildhood. Accessed on: March 20, 2012.

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21. Zero to Three. Getting Ready for School Begins At Birth; 2011. Available at: http://www. zerotothree.org/child-development/social-emotional-development/gettingreadyforschool beginsatbirth.pdf. Accessed on March 20, 2012.

22. Bradley RH, Caldwell BM. Caregiving and the regulation of child growth and development: Describing proximal aspects of caregiving systems. Developmental Review. 1995; 15: 38–85.

23. Collins WA, Maccoby EE, Steinberg L, Hetheringotn EM, Bornstein MH. Contemporary research on parenting: The case for nature and nurture. American Psychologist; 2000; 55: 218–232.

24. Morrison, F. J., & Cooney, R. R. Parenting and Academic Achievement: Multiple Paths to Early Literacy. In J. G. Borkowski, S. L. Ramey, & M. Bristol-Power (Eds.), Parenting and the Child’s World: Influences on Academic, Intellectual, and Socioemotional Development Mahwah, NJ: Erlbaum. 2001; 141-160.

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26. Griffin EA, Morrison FJ. The unique contribution of home literacy environment to differences in early literacy skills. Early Child Development and Care. 1997; 127: 233–243.

27. Melhuish, E. C., Phan, M. B., Sylva, K., Sammons, P., Siraj-Blatchford, I., & Taggart, B. Effects of the Home Learning Environment and Preschool Center Experience Upon Literacy and Numeracy Development in Early Primary School. Journal of Social Issues. 2008;(64): 95–114.

28. Raikes H, Pan BA, Luze G, Tamis-LeMonda ST, Brooks-Gunn J, Constantine J, et al. Mother-child book reading in low-income families: Correlates and outcomes during the first three years of life. Child Development. 2006; 77: 803–1128.

29. Paratore JR. Approaches to family literacy: Exploring the possibilities. The Reading Teacher.

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30. United States Census Bureau. Reading to children by any family Member-characteristics of families and households with children age 1 to 5. A Child’s Day: 2009; 2011. Available at: http://www.census.gov/hhes/socdemo/children/ data/sipp/well2009/tables.html. Accessed on March 20, 2012.

31. Hartman, A. Literacy Mid-South Helping Memphians Read. WMCTV. 2012. Available at http://www.wmctv.com/story/16358079/ literacy-mid-south-helping-memphians-read.

Accessed on April 12, 2012.

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32. The Urban Child Institute. The State Of Children in Memphis and Shelby County: Data Book (5th ed.); 2010. Available at: http://www.theurbanchildinstitute.org/sites/all/ files/databooks/TUCI_Data_Book_V_2010. complete.pdf. Accessed on March 20, 2012.

40. Glascoe, F.P. Technical Report for the Brigance Screens. North Billerica, MA: Curriculum Associates, Inc. 2005.

33. Gormley W, Gayer T, Phillips D, Dawson B. The Effects of Oklahoma’s Universal Pre-Kindergarten Program on School Readiness. New York, NY: The Center for Research on Children in the U.S., Georgetown University, 2004.

34. Sammons, P., Elliot, K., Sylva, K., Melhuish, M., Siraj-Blatchford, & Taggart, B. The Impact of Pre-school on Young Children’s Cognitive Attainments at Entry to Reception.

British Education Research Journal. 2004; 30(5): 691-712.

35. Sell M. The Effects of Pre-K Experience on “Kindergarten Readiness Indicator” Scores: 4-year Trends, Memphis, TN: Memphis City Schools; 2009. Available at: http://www.mcsk12.net/docs/Data/PreK/ Effects%20of%20Pre-K%20Experience%20 on%20KRI%20Scores%20-%204%20Year %20Trends.pdf. Accessed on: March 20, 2012.

36. Magnuson K, Duncan G. The role of family socioeconomic resources in racial test score gaps.

Developmental Review. 2006; 26: 365-399.

37. Magnuson K, Meyers M, Ruhm C, Waldfogel J. Inequality in Preschool Education and School Readiness. American Educational Research Journal. 2004; 41: 115-157.

38. The Urban Child Institute. Research to Policy January 2011: The Implications of Teen Parenting for Early Childhood Development in Memphis.

2011. Available at: http://www.theurbanchildinstitute.org/articles/research-to-policy/overviews/ the-implications-of-teen-parenting-for-earlychildhood. Accessed on April 13, 2012.

39. Brigance, A.H. Brigance Preschool Screen-II. North Billerica, MA: Curriculum Associates, Inc. 2005.

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Attachment C Breaking the Cycle of Poverty in Young Families

Page 131 of 144

Breaking the Cycle of Poverty in Young Families Two-Generation Strategies for Working with Disconnected Young Parents & Their Children RESEARCH REPORT

DECEMBER 2013

Executive Summary Over 1.4 million youth ages 15–24 are out-of-school and out-of-work (OSOW) and are raising dependent children.1 When youth are out of the education system, lack early work experience, and cannot find employment, the likelihood is poor that they will have the means to support themselves and the needs of their children.1 Too often, this traps their families in a cycle of poverty for generations.

Until communities offer multiple pathways to connect with ladders of opportunity, many young families headed by OSOW youth will be unable to achieve financial independence.

To break the cycle of poverty, many human service organizations use two-generation approaches with “young families” (that is, families with children in which the parent is an OSOW young person ages 15–24 years).

One hallmark of these two-generation approaches is the use of strategies that address the developmental needs of the young parents, their children, and the families as a whole.

The National Human Services Assembly (NHSA), an association of America’s leading nonprofit human service providers, conducted an exploratory study of two-generation

programs already in place within its member organizations. The Annie E. Casey Foundation (AECF) supported this effort, which sought to document quality two-generation programs and identify program elements that strengthen young families. The study eventually engaged 32 NHSA members and affiliates in sharing their knowledge about two-generation approaches and providing connections to programs that re-engage young parents in education and/or work, nurture parent-child bonds, improve children’s wellbeing, and connect families with economic, social, and other supports.

Two-generation approaches are a leading strategy to create the conditions for young families to move out of poverty.

This report features case studies of twogeneration programs, describes elements associated with successful outcomes, and recommends future work.

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Definitions for Key Terms as Used in this Report Out-of-School/ Out-of-Work (OSOW) Young people ages 15–24 who are unemployed and not participating in education or job training.* (Note: sometimes OSOW youth are referred to as “disconnected youth” because of weak educational, employment, or social ties)

Two-Generation Approaches Programs that intentionally serve parents and children individually and together as a family unit. At a minimum, these approaches seek to re-engage young parents in education and/or work; nurture parent-child bonds; improve children’s wellbeing; and connect families with economic, social, and other supports.

Young Families Families with children in which the parent is a young person (15–24 years) who is out-of-school and out-ofwork (OSOW). * Parrott J, Treschan L. (2013). Barriers to Entry: The Increasing Challenges Faced by Young Adults In the New York City Labor Market. New York: JobsFirstNYC.

Background Currently, over 20% of U.S. children younger than 18 years live in poverty, and many of these poor children are in households headed by a young adult (ages 18–24).2,3 Children growing up in poverty are at increased risk of having low incomes as adults. This cycle of poverty, and its effects, are described by AECF (n.d.) as follows.

[P]overty undermines child well-being in two critical ways. The lack of income often prevents parents from meeting children’s basic needs and investing in resources and experiences that will help their children develop. The stress created by living in poverty undermines a parent’s ability to devote time, energy and attention to the job of being a good caregiver….

The tragic consequence is that children born to parents in the lowest fifth of the income scale are very likely (42%) to end up there as adults.4 High levels of childhood toxic stress contribute to intergenerational cycles of poverty.

For both OSOW youth and their children, growing up poor, experiencing trauma, and other adverse childhood experiences have been shown to disrupt brain development and impair both long-term health and economic mobility, according to the American Academy of Pediatrics. The Academy found that toxic levels of stress related to childhood adversity can impede learning and in later life are associated with unhealthy coping mechanisms (such as alcohol and illicit drug use, gambling) along with poor physical and mental wellbeing.5 The Academy (2011) notes that parents who experienced high levels of adversity in their childhoods “are less likely to be able to provide the kind of stable and supportive relationships that are needed to protect their children from the damages of toxic stress.”5 Two-generation approaches aim to interrupt the cycle of poverty by investing in both adults and children. Some nonprofit human services agencies and youth employment programs view two-generation approaches as the foremost strategy to create the conditions for young families to move out of poverty.

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Although nonprofits have had two-generation approaches for decades, few publications are broadly available that have examples of promising practices for two-generation approaches to strengthening young families.

To close this gap, NHSA conducted an exploratory study of existing two-generation practices for young families with children in which the parent is a young person (15–24 years) who is out-of-school and unemployed.

The focus was on two-generation approaches with four interrelated services that: 1) Re-engage the OSOW youth in education, job training, or early work experiences.

2) Nurture the bond between parent and child.

3) Improve the child(ren)’s wellbeing.

4) Connect the family as a whole with economic, social, and other supports.

As the case studies show, two-generation approaches are getting young families on paths leading toward economic independence. Highlighting their promising practices—the aim of this report—is a first step toward building support among policymakers, employers, communitybased organizations, and other stakeholders to make a full commitment to young families.

Ultimately, achieving significant and longlasting gains for children and young adults will require cultural and systemic change.

Who Are OSOW Youth?

About 6.7 million youth ages 16–24 are not in school or in a job, according to Civic Enterprises, Everyone Graduates Center, America’s Promise Alliance, and the Alliance for Excellent Education. The collaboration reports that about half of these OSOW youth are high school dropouts.6 Compared to their peers, students who are less likely to graduate include adolescents from low-income families, young people with disabilities, African American and Hispanic youth, and students with limited English proficiency.6 One in five (21%) OSOW young people are also parents, as reported by AECF’s Kids Count.1 Because these youth are outside the education system, lack early work

Breaking the Cycle of Poverty in Young Families

experience, and cannot find employment, they have few immediate prospects to fully support themselves and their children.1 A variety of factors—many beyond their control—can contribute to young people having limited economic, educational, or social ties to their communities. Further, these life circumstances may be ongoing, creating barriers to OSOW youth who are trying to get back on track. > Depression and Other Mental Health Conditions. Researchers attribute 10% of all high school dropout actions to mental disorders.7 > Exposure to Violence. Over 60% of youth have experienced some sort of violence during their lifetime.8 These types of traumatic experiences can have a longlasting negative effect on health, brain development, and functioning.9 > Homelessness. Experiencing homelessness threatens—even disrupts—the stability of young families and places enormous stress on all family members. About 1.68 million youth (ages 16–21) are runaways or are experiencing homelessness.10 > Involvement in Child Welfare System.

About half of youth who had been in foster care do not graduate from high school.11 > Non-Citizens. In 2012, 12% of non-citizen youth could be categorized as OSOW, compared to 8% of their peers with U.S. citizenship.12 OSOW YOUTH AS PARENTS Just as many OSOW young parents aspire to securing good jobs, they also want to be effective, nurturing parents. Yet, most adolescent (ages 13–17) and emerging adult (ages 18–25) brains are still evolving into their adult form, and this developing maturity affects parenting decisions and practices.13 According to the National Center on Family Homelessness, emerging adults are still developing their identities, tend to focus more on themselves than others, desire learning and growth experiences, can behave inconsistently, and sometimes take risks without fully considering consequences.

This period of growth, though, is marked by gains in thinking and problem solving skills.13 While young parents’ development can be enhanced by relating to their children, they may not yet have the maturity needed to fully nurture children and sufficiently buffer them from toxic stress.

The combination of parenting and trying to provide for their family contribute to the high stress levels common to OSOW youth raising children. This stress can interfere with the maturation process.13

Young parents may not yet have the maturity needed to nurture children and buffer them from toxic stress.

Notably, most young parents deeply care for their children, and this asset is instrumental to breaking intergenerational poverty.

The deep care that young parents have can be a powerful motivator for staying in a two-generation program. The programs, in turn, can support nurturing parent-child relationships, which are fundamental to children’s social-emotional, physical, and mental development.15,16

What Is a TwoGeneration Approach?

The Aspen Institute has identified three main types of two-generation approaches. > Whole-Family Approaches take a holistic view of the family, both parents and children, and design interventions that intentionally enhance the wellbeing of both generations. > Parent-Child Approaches are directed at parents of children, and the children also receive some sort of support. > Child-Parent Approaches primarily serve children, but parents also receive some support.2

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Whole-family approaches are the focus of this NHSA research. See Jewish Community Services (JCS) of Baltimore for an example of parent-child approaches.

In the context of young families in which the parents are OSOW youth, two-generation approaches should, according to AECF, bundle services to reconnect: > Children to pathways for healthy development via in-home visits, early childhood education and care, and preventive health services. > OSOW youth to pathways to college or careers via programs that lead to academic certifications, valuable job skills, and early work experiences. > Young families to networks, including supportive adult relationships as well as neighborhood organizations.1 In this construct, two-generation strategies not only simultaneously serve both children

Jewish Community Services (JCS) of Baltimore Building individuals’ and families’ ability to become self-sufficient is an integral part of the mission of JCS Baltimore—an affiliate of the Association of Jewish Family and Children’s Agencies. According to Joan Grayson Cohen, Senior Manager, JCS Baltimore starts this process by assisting prospective clients—which include young families with OSOW parents—with applying for public benefits and other community services. After they apply, JCS Baltimore provides a comprehensive set of supports that help young parents and other clients overcome adversity and progress toward self-sufficiency.

The set includes: > Service coordination to assist clients in navigating systems in order to access programs and services. > Career services, such as employment assistance. > Mental health services, such as therapy and counseling. > Life skills development, such as coaching clients on how to apply for child care vouchers and teaching them how to create a budget.

“Getting people in jobs and situations where they are functioning on their own” is paramount to creating a successful future, Cohen says. For some young families, Cohen reports that mental health services may also be especially important if the parents have suffered from abuse and other childhood trauma. In these cases, therapy and counseling are a means for the young people to learn how to overcome adversity in a positive way.

These services also set the stage for effective parenting.

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and parents, they also attend to the family as a whole.

Attention to the family as a whole is essential. A prior NHSA synthesis of research, practice, and expert insights identified family as the most important asset shaping the lives and outcomes of children and youth.16 This analysis also found that children best thrive in families that offer them three fundamentals: loving, nurturing relationships; financial stability; and positive connections to social and community networks.16 EVIDENCE FOR TWOGENERATIONAL APPROACHES Prior research has demonstrated that a two-generation approach can disrupt the cycle of poverty.2,17 The Aspen Institute’s review found promising evidence that all three types of approaches can effectively reconnect young families to opportunity.2 A separate 2013 Urban Institute review of evaluated interventions to improve the wellbeing of disconnected mothers (of any age) and their children identified two-generation strategies as a promising approach.17 THE CASE FOR INVESTING IN OSOW YOUTH When young people are unemployed and lack basic job credentials, governments spend more money to support them over the long term. One Civic Enterprises study projected a future lifetime taxpayer burden of $258,040 for each OSOW 16 year old.

The same study estimated that the total taxpayer burden for all OSOW youth ages 16–24 years is $1.56 trillion.18 Emerging research in the field has projected a positive return on investment for programs that enable OSOW youth to attain a high school diploma. The return stems not only from reductions in long-term public assistance, but also from lower levels of crime and the economic benefits of a more educated workforce.18 Thus, investing in connecting youth to pathways for college and careers can benefit society.

Breaking the Cycle of Poverty in Young Families

Methodology As previously noted, the goal of this small exploratory study was to identify promising practices for two-generation approaches using a case study approach informed by the literature and expert opinion. The first step entailed a focused literature review and interviews with five experts in the youth development and human services fields.

This work provided a base understanding of existing knowledge of two-generation interventions and the population of young families with children in which the parent is an OSOW youth.

Toward the end of the initial phase, NHSA contacted member organizations with networks that deliver services to youth and families. The case study objectives were threefold.

1. Demonstrate the feasibility of twogeneration approaches to reconnecting young families to opportunity.

2. Provide an array of examples of how to integrate a two-generation approach into program and service models.

3. Identify promising practices that may be effective in achieving positive outcomes for young families.

NHSA directly interviewed 17 national organizations—all NHSA members—using a semi-structured guide about two-generation practices in their network of service providers.

Interviewees and other NHSA members provided information and referrals to local affiliates that exemplified leading practices in two-generation approaches to young families.

The initial criterion for selecting case studies was the availability of objective data about program effectiveness; however, few programs had formal evaluations. NHSA subsequently selected organizations based on the use of whole-family approaches and the availability of program information.

NHSA gave priority to programs that exemplified national family-strengthening practices (see Leading Family-Strengthening Practices) as a surrogate for data indicating program quality.

Leading Family-Strengthening Practices As identified by NHSA in 2007, 10 family-strengthening practices had emerged across the human services sector from a decade of investment supported by the Annie E. Casey Foundation. Research and practice indicated that the best family-strengthening programs: > Build on family and neighborhood strengths. > Strengthen the capacity of families to function effectively and progress toward self-sufficiency. > Intentionally address the needs of the family as a whole or collective unit (a “whole-family” approach). > Respond flexibly to family and community circumstances. > Create or strengthen partnerships across service systems. > Help to prevent crises by meeting needs early. > Make services accessible in neighborhoods where people live and work. > Tailor services to help the individual in the context of family and community. > Involve families and communities in the design and delivery of family supports and services.

Source: National Human Services Assembly. (2007). Family Strengthening Writ Large: On Becoming a Nation that Promotes Strong Families and Successful Youth. Family Strengthening Policy Center.

A third step was conducting qualitative, semi-structured interviews with these local practitioners. The interview guide sought information about population served, program goals and components, availability of outcome data, and practices that were perceived as instrumental to success.

Supplementary information included program materials, available evaluations, and a few interviews with former program participants. Each organization reviewed its case study for accuracy.

Finally, NHSA reviewed the case studies as a body of new knowledge to identify common practices that practitioners had flagged as instrumental to achieving positive outcomes. NHSA staff reviewed this preliminary set of practices against the knowledge gleaned in the first phase and refined the set. The final set of practices is presented in the Elements of Success section.

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Beyond the Label: Crittenton Sees Whole Person The National Crittenton Foundation relates to each young woman as a multifaceted individual. Each individual young woman is valued as a unique, distinct person instead of as a member of a group. While conducting research for this brief, NHSA interviewed several graduates of Crittenton programs. With Crittenton support, each graduate had overcome immense obstacles during her young life and embarked on promising pathways. One young woman recalled being a “good” student who was always “off the radar” in a school filled with youth whose situation presented as more worrisome. When the young woman shared her problems with her parents and counselors, they made light of her troubles. Soon, she was pregnant.

After that, faculty, staff, and even her family no longer saw her as a high school student. Instead, she was now a “teen mom.” After entering a Crittenton program, the young woman learned that she was a complex, multi-dimensional person with distinct roles—teenager, mother, student, and person—to play in separate spheres of her life. Today, after drawing on Crittenton services to build a vision for the future, she is enrolled in a master’s degree program.

Case Studies of TwoGeneration Programs for Young Families (Case studies are presented on pages 9–12.)

FINDINGS The case studies not only demonstrate that the two-generation approach is feasible but also provide a rich array of examples. The featured organizations were diverse, served a variety of young family populations, had assorted program goals, and drew upon

While two-generation approaches are feasible and appear to be effective if implemented well, whole-family interventions are not simple. different sources of funding. The service mix varied depending on the availability of other community resources, program partners, and program goals. That the wholefamily, two-generation approach could be successfully adapted to a heterogeneous set of programs suggests the model is amenable to widespread replication.

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Further, evaluations of a few of the featured programs suggest that two-generation approaches, when implemented with quality, can generate positive outcomes for young people, their children, and the family as a whole. Output and anecdotal information across the case studies also suggest positive results.

While two-generation approaches are feasible and appear to be effective if implemented well, the case studies together highlight that whole-family interventions are not easy or simple given the complexity of young families’ situations. First, most OSOW young parents are not fully prepared for the multiple roles they have rapidly acquired. Second, the families may be homeless, family members may be involved in the child welfare or justice systems, and they often have minimal connections to their community. A single intervention or two cannot provide the full range of supports necessary so young families have the means to be healthy and independent. Rather, the formidable challenges they face require a coordinated set of multiple services, such as education, health care, housing, legal services for custody issues, and home visiting interventions (and more). Third, the agencies must serve multiple persons at different life stages and the family as a whole. Case managers have to be knowledgeable about child, youth, and family development as well as effective interventions for each.

ELEMENTS OF SUCCESS Eight elements of success emerge from a cross-case analysis of the featured programs. Many of these promising practices are echoed in the literature and expert opinion. These elements are interrelated but also distinct. The elements fall into two categories: program design and services.

PROGRAM DESIGN High-quality, two-generation programming uses a whole-family approach. Programs simultaneously promote the OSOW youths’ workforce readiness, the young person’s capabilities as head of household and as parent, the child(ren)’s wellbeing, and the family’s stability.

Breaking the Cycle of Poverty in Young Families

Because of the dynamics of serving multiple generations at different life stages, actual program operations tend to be multi-faceted, intensive, and longer-term. > Multi-Faceted. The featured programs use a combination of preventive services and interventions to provide young parents with the tools to raise their children in a positive environment. Weaving together diverse resources for individual families means case managers must know and be able to navigate the myriad systems that OSOW young families may encounter. > Intensive. Because of the complex situation of young families, reconnecting them to opportunity is an intensive process. Program staff must work with individual families to create and implement specialized plans. Notably, group-oriented services (such as job training, parenting classes) can complement individualized services. > Longer-Term. Giving young families a strong start tends to require services over a 6–24 month period or longer.

Many young parents are still developing the capacity to nurture children and get and keep jobs that can support a family.

The programs offer young persons the time, resources, and supportive environment to develop brain maturity, education and workforce credentials, and parenting know-how. Also, some young parents benefit from behavioral health interventions to overcome barriers, such as trauma, depression, or substance abuse. > Collaborative. All of the programs cultivate working partnerships with other sources of support for children, young people, and families. Organizational partners include government agencies, employers, many other service providers, and civic groups (such as faith-based institutions, play groups). Case managers also facilitate partnerships with individuals in the community who care about young families’ success. These collaborations are absolutely essential to strengthening young families. Further, the programs use these

partnerships to connect with potential clients, easily refer families to other community resources, train staff, and, sometimes, fund services.

Elements of Success Program Design

SERVICES

> Multi-faceted

Overall, two-generation approaches for young families integrate a developmental perspective into service delivery. Such a view recognizes that individuals and social groups (such as families) have an inherent capacity to grow, extend their potential, and adapt to external influences. The featured programs all tap into young parents’ aspirations for their children’s future as a powerful motivator to do the hard work of preparing for careers and raising children. Services promoted healthy development by helping young families access supports, become more employable, and overcome obstacles.

> Intensive > Longer-term > Collaborative Services > Positive youth development > Baby boosts > Family development > Social connections

POSITIVE YOUTH DEVELOPMENT The fundamentals of positive youth development theory guide nearly all aspects of the featured two-generation programs.

(See What Is Positive Youth Development?)

Two-generational approaches for young families integrate a developmental perspective into service delivery.

Specifically, young people work with a caring, knowledgeable adult whom they trust, and the program culture is positive. Services emphasize building on the young person’s strengths (rather than focusing on problems), and youth provide input about their development plans and take ownership of their decisions and their lives. Flexible program structures enable case managers to creatively tailor services for the unique situation of each young person and family.

In two-generation approaches, this framework guides programs to build young parents’ educational credentials, job skills, initial work experiences, and employmentrelated networks. These assets are critical to landing good jobs.

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BABY BOOSTS

What Is Positive Youth Development?

Positive youth development is an intentional, pro-social approach that engages youth within their communities, schools, organizations, peer groups, and families in a manner that is productive and constructive; recognizes, utilizes, and enhances youths’ strengths; and promotes positive outcomes for young people by providing opportunities, fostering positive relationships, and furnishing the support needed to build on their leadership strengths.

Source: The Interagency Working Group on Youth Programs.

Accessed 10/17/2013 from http:// findyouthinfo.gov/youth-topics/ positive-youth-development

The featured programs deliberately promote children’s healthy development through multiple services, which NHSA calls “baby boosts.” > Timely health services for the children, including prenatal care. After birth, twogeneration programs connect young families to preventive well-child care. Both medical and family services emphasize early detection of and care for health conditions and developmental delays. > Early childhood education and care serve both child and parent. Two-generation programs help young parents find safe, nurturing child care providers so they can go to school, training, or work. Some agencies secure placement with Head Start or high-quality providers that have educators and environments that deliberately nurture child development and work with parents as partners. > Parent-child attachment. Program staff affirm positive interactions between parents and their children, such as by drawing attention to how children express affection and praising parents for active listening. Further, if young parents and their children are separated, the programs quickly bring them back together, such as by finding suitable housing, using frequent supervised visits, and encouraging involvement by the non-custodial parent (as appropriate). > Parenting education and training.

Enriching parenting skills helps children thrive. For example, parenting classes and home visiting services teach young parents about stages of child development and practices that nurture development, such as creating routines, removing hazards, and providing positive discipline.

FAMILY DEVELOPMENT Quality two-generation programs attend to the young family as a whole. OSOW young parents are themselves still developing, and their situations often impact their ability to fully mature and help their children to thrive. For example, the youth may have high stress levels from getting by with minimal income, caring for an infant, and earning a

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GED. This dynamic makes it vitally important that programs quickly and continuously promote family development. The featured programs work to: > Stabilize family life. In the short term, the programs focus on immediate needs, such as affordable housing and enrollment in food stamps, Medicaid or SCHIP, and other governmental and private programs (such as local food pantries). > Develop young parents’ abilities to head a household. A nuanced tactic is helping young parents develop a “family mindset” of being responsible for raising their children, thinking of themselves as parents, and viewing their family as contributing to the greater community.

More explicitly, some programs help young parents with life skills, such as learning how to rent housing, manage finances, make plans, and navigate community systems. > Provide other building blocks for the future. Wrap-around supports for the family as a whole may include English as a second language classes; work supports (such as tax credits, income supports, transportation assistance); and asset development (such as savings accounts).

SOCIAL CONNECTIONS All families need positive social and emotional support from family members, peers, neighbors, and community groups who care about them. The featured programs deliberately strengthen young parents’ existing ties to caring people and supportive adults.

Some also build relationships between young families and natural helpers in the community who informally look after the family, especially after they graduate from the programs.

To expand their network, programs also encourage young parents to become involved in their community, such as by joining faithbased communities or taking children to weekly library programs. Several programs nurture young parents’ relationships with peers who share their experiences of working to develop a better life. This type of peer network further reduces social isolation and makes programs fun.

Breaking the Cycle of Poverty in Young Families

CASE STUDIES: Two-Generation Programs for Young Families Association of Jewish Family and Children’s Agencies (AJFCA)

and lack of resources available for nonEnglish speakers.

According to Lisa Budlow, Director of Programs at AJFCA, her organization’s member agencies are working to create a whole-family solution for OSOW youth with children. AJFCA is a membership association for over 100 Jewish family service agencies across the United States and Canada. They range in size from small departments of local Jewish federations to some of the largest human services agencies in North America. AJFCA has a flexible approach to programming and tailors their efforts across their membership network. Their members provide vital services to clients of all ages, faiths, and economic backgrounds. They counsel families, feed the hungry, assist the elderly, and protect the vulnerable. United by their traditional Jewish values, many of their organizations strive to serve in a collaborative manner relying on community connections, flexibility, and creating and maintaining lasting relationships. When asked what she sees as making the most difference with young families, Budlow answered: “community outreach, and being an agency that makes itself accessible” to the community at large.

In order to gain trust from community members, it is important to be seen as an agency that is there to help.

With more than 25 years of evidence, the Triple P curriculum has shown tremendous levels of success, including a 35% reduction in emergency room visits for child injuries, and a 44% reduction in out-of-home place­ ments.i Research has shown that Triple P has also helped end the cycle of poverty related to physical punishment during childhood.ii Many behavioral problems in adult life, including depression, anxiety, hopelessness, drugs and alcohol abuse, and general psychological maladjustment stem from the experience of physical abuse in childhood, which Triple P prevents.ii

Jewish Family Service San Diego Linda Hutkin-Slade, Divisional Director of Clinical and Community Services at JFS San Diego, an AJFCA affiliate, explained the “work done at JFS is to protect the vulnerable, build self-sufficiency, build the parentchild bond, stop the cycle of poverty, and teach individuals how to parent in an effective way—not to repeat the cycle of violence.”

JFS San Diego has over 50 programs, at least half of which focus on young parents and families. Through the Positive Parenting Program (called “Triple P” and funded by the County of San Diego), JFS is able to focus on low-income families with children ages 0–5, especially non-English speakers through Head Starts and elementary schools in historically socioeconomically disadvantaged areas. Triple P participants often struggle with challenging situations that increase their stress levels as parents, such as single parenthood, immigration concerns,

Hutkin-Slade believes that aiming interventions like the Triple P program at parents as early as possible makes the greatest difference for young families. By breaking the cycle of abuse common to families who have decreased social mobility due to their financial circumstances, the chances for success in life improves. Echoing the words of Ruby Payne,iii she notes that living in poverty is a “cultural difference” and explains that “when people tend to be judgmental of these kids” (e.g., as lazy, ignorant) more harm than good is caused.

In general, people “just don’t really understand what their lives are like,” especially for someone coming from a middle class, well-educated community. Having social service practitioners who are willing to actively go into the community that is home to OSOW youth and their children is useful.

By helping to break down barriers between social service provider and client—both physical, such as transportation-related, and emotional, such as being forced to

i Bornstein, D. (2013). The Benefits of Positive Parenting.

The New York Times (Feb. 20). Available from: http://opinionator.blogs.nytimes.com/2013/02/20/ helping-the-parents-to-spare-the-children/ ii Durrant J, Ensom R. (2012). Physical Punishment of Children: Lessons From 20 Years of Research. Canadian Medical Association Journal, 184 (12). Available from: http://www.cmaj.ca/content/184/12/1373.full?ijkey= 363180cf4deb4c39780e1e8cf0775efce2b8df3d& keytype2=tf_ipsecsha iii Payne, an American educator, is best known for her book, A Framework for Understanding Poverty, and her work on the culture of poverty and its relation to education.

She has argued that the culture of the middle class is different than the culture of poverty.

leave their comfort zone and enter a neighborhood where others might judge them in order to receive a service—greater advancements in service provision can be made.

National Crittenton Foundation The National Crittenton Foundation is the umbrella for the 27 members of the Crittenton family of agencies around the country serving approximately 20,000 families per month. For more than 129 years, this network has supported young women and girls—many of whom are young, single mothers—and their children with multi-generation approaches.

Each member agency is independent and tailors its services to community needs, yet they all share a similar guiding philosophy: build on “what works”—the strengths and resilience in the young families’ lives, instead of trying to fix what is wrong. In practice, this means that Crittenton agencies tend to focus on “bonding and attachment, parenting skills, health, education goals, and career development and workforce training,” according to Jeannette Pai-Espinosa, President.

Many young women supported by Crittenton agencies say the biggest driver of success for them is to be able to achieve goals and move into the middle class. The young parents know they need education, but feel traditional educational pathways don’t always work for them. Accordingly, Crittenton agencies involve these women in designing programs that work for them. By asking for their input, the agencies engage the women in actively working toward their own success.

In interviews with young women enrolled in their program network, the women revealed that they are looking for social capital, especially connections important to becoming upwardly mobile. In response, Crittenton agencies now intentionally help program participants develop relationships with a “cheerleader” or “advocate” to help them achieve goals. Community connections are also important to helping young families overcome obstacles such as lack of access to child care, a reliable car, or tutoring support.

According to Pai-Espinosa, “the most significant—but least articulated—goal of the network’s dual-generational programs is

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to help young families build and achieve a different vision for their life.” Crittenton’s young mothers often come from families challenged by multiple generations of young parenthood, low academic achievement, and living at or below the poverty line.

Breaking these cycles requires a holistic approach. Often Crittenton agencies do this by having on-site high schools with early childhood learning centers so that both parents and children are able to continue their education and development. The families also can access on-site health care to minimize time outside the classroom while mothers take their children for check-ups and immunizations. To promote financial stability, Crittenton runs credit recovery programs as well as job and career development services.

A majority of Crittenton participants are survivors of high levels of childhood trauma, adversity, and violence. Given the prevalence of these traumatic experiences, Crittenton staff use the Adverse Childhood Experiences (ACE) instrument to assess negative exposures that individuals have had while growing up.iv Staff help begin the healing by giving young mothers the “unconditional support and love that they never thought they would have.” Parenting programs, such as “Loving Your Baby From The Inside Out” in Helena, Montana, take the next step by teaching the young mothers that “they can be good moms by developing a sense of attachment and bonding” with their child and by making positive choices for their family.

National Urban League (NUL) The National Urban League is a historic civil rights and urban advocacy organization dedicated to economic empowerment in historically underserved communities.

Founded in 1910 and headquartered in New York City, the National Urban League has improved the lives of more than two million people nationwide through direct service programs that are implemented locally by its 95 Urban League affiliates in

iv Developed in 1995 by a doctor at Keiser Permanente and sponsored by the CDC with more than 17,000 patients, this 10 point scale has shown that the higher the score, the greater the chance of negative outcomes later in life.

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36 states and the District of Columbia. The organization also conducts public policy research and advocacy activities from its Washington, DC, bureau.

Northern Virginia Urban League A local affiliate of the National Urban League, the Northern Virginia Urban League (NVUL) serves pregnant and parenting teens (ages 13–19) with a multi-generational approach through its Resource Mothers program.

The home-visiting program model is from the Virginia Department of Health, which established Resource Mothers to help teens make the transition to parenting and to achieve healthy outcomes for both baby and mother. The “resource mothers” are trained community health workers who have raised their own children. These mentors work with youth in their family and school contexts, assure timely receipt of prenatal and well-child care, connect young families to community resources, and guide teens in their new parenting responsibilities and efforts to become self-sufficient. NVUL and other Resource Mothers programs participate in the Virginia Home Visiting Consortium, which trains home visitors and promotes high standards of care. Funding from the City of Alexandria, Fairfax County Consolidated Community Funding Pool, and the Virginia Department of Health enables NVUL to deliver Resource Mothers.

NVUL’s Director of Programs, Yvette Bailey, describes Resource Mothers as a comprehensive approach, addressing the needs of the child and the mother from A to Z. The first step is bringing pregnant teens to a center during their first trimester to start prenatal care. Subsequent appointments are scheduled during non-school hours.

Once the babies are born, the program emphasizes well-baby care for immunizations and early detection of any health conditions or developmental delays. For the mother, the new health objective is to delay future pregnancies.

The home-visiting component for NVUL’s programs is truly multi-generational.

Resource mothers go to young women’s homes and work with whoever is in their lives. This in-person presence enables the mentors to tailor services to each unique situation. One thing Bailey’s team has noticed is that “when there is disconnect between the teen’s parents, the mother, and the baby’s father, the teen is under

a lot of stress.” High levels of stress can contribute to premature birth, low birth weight, and negative developmental outcomes for the child. Accordingly, resource mothers are skilled at opening up communication and exploring family dynamics to see what support is needed where (e.g., food, housing, mental health) so as to reduce stress levels on the teen and baby.

The baby’s well-being is always in mind.

Resource mothers connect young families to high-quality early childhood care providers that deliberately promote infant development, not just meet basic needs. Also, resource mothers monitor infants for developmental delays in case support services are needed.

This is an important part of NVUL’s program because developmental delays can contribute to academic problems and eventual school dropout, which in turn perpetuates intergenerational poverty.

High school graduation (or GED) is another way that the Resource Mothers program helps young families gain footholds on ladders to opportunity. If a teen mother has truancy problems or has dropped out, her resource mother organizes school partners and others to talk together with the teen and develop a plan for resuming her education.

After graduation, the mentors encourage the young moms to start at a two- or fouryear college. When teen fathers want to drop out, resource mothers urge them to stay in school so they are better able to support their children over the years.

Strong family and community partnerships plus a high-performing group of resource mothers are the hallmarks of NVUL’s successful program, according to Bailey. Referrals to Resource Mothers come from Alexandria and Fairfax public schools and local health departments. NVUL works closely with schools’ guidance counselors and social workers to address barriers that could keep pregnant and parenting students from earning their high school diplomas. Before young families leave the program, resource mothers make sure they are connected to community groups for ongoing support.

NVUL’s group of skilled health workers is another key program asset. Bailey reports that their resource mothers are effective because “they understand the communities where our girls come from and are passionate about what they do.”

Breaking the Cycle of Poverty in Young Families

United Neighborhood Centers of America (UNCA) UNCA builds neighborhoods with neighbors.

UNCA is a national advocate for social justice and community building that is inclusive, holistic, asset-based, and in the tradition of the settlement house movement. UNCA’s members comprise a voluntary network of nonprofit community-based organizations including settlement houses, neighborhood and community centers, and similar community-building organizations. Since 1911 UNCA has worked to strengthen and empower its member centers as they work alongside neighborhood residents both to improve conditions in some of America’s poorest urban areas and to strengthen youth and families. UNCA’s members are found in a wide variety of neighborhoods and build community with neighbors as diverse as urban America itself. Diversity, flexibility, and authentic and engaged relationships with neighbors are some of their greatest assets. With multi-generational programs and services that serve as context for relationship building, UNCA’s members embody a whole-family, multi-generational approach to community progress.

In January 2014, the UNCA network will join together with the Alliance for Children and Families network to comprise one powerful and unified force for social justice and positive community change.

Martha O’Bryan Center An UNCA member agency, the Martha O’Bryan Center in Nashville, Tennessee, serves the poorest of the poor: most families make less than $6,000 per year. Over time, the Center has created an integrated “highway of services” across clients’ life spans.

These include multiple programs that help young parents engage in school, job training, and work while also attending to the wellbeing of their children. As explained by Marsha Edwards, CEO, the program succeeds in part by not calling the young parents “disconnected,” a label that disparages their lives by assuming the youth are “disconnected from things we think they should be connected to” and that overlooks the youths’ strengths and life experiences. Instead, the Center works to ensure that all people, including young families, are “tied together.”

This philosophy underlies Tied Together, the Center’s signature parenting program for young families. What started as a course to build parenting skills, Tied Together has grown into a program model that has strengthened more than 350 young families. Tied Together is a 10-week parent education program with a key emphasis on bringing together the community—from physicians, to librarians, to educators, to other young parents—to support young parents as they raise their children. The program does this by having staff and experts from various agencies, including the Department of Children’s Services (DCS), come to the Center so parents can connect with them and feel more confident in reaching out for resources to support them on their parenting journey. By having DCS participate as a key partner, Tied Together encourages parents to regard DCS as an agency that supports their families. In addition, Tied Together offers a resource fair so young parents learn about community offerings for their families. Finally, the program reinforces engagement with other young parents who have similar situations.

The parenting component of Tied Together has goals such as reducing infant mortality and childhood injuries. Program staff use a Center-developed curriculum that is paired with the evidence-based Nurturing Parent curriculum and is implemented in a way that is fun, invigorating, and upbeat so that parents want to participate. The curriculum is grounded in the belief that “parents are the experts on their children.” It teaches parents how to ask their children’s pediatricians questions and how children’s brains develop so youth have realistic expectations and can give their children positive support in their development at different “ages and stages.” One of the most important parts of the curriculum is a two-week focus on loving guidance. By teaching parents positive alternatives to physical punishment, Tied Together protects children from hitting and other trauma that can impede healthy development. Another aspect helps youth differentiate “good” information from information that is questionable.

The Center and Tied Together work with Vanderbilt University sociologist Dr. Kimberly Bess. She has conducted an external program evaluation. The Center uses the findings to further strengthen its model program.

Youth Advocate Programs (YAP) Youth Advocate Programs (YAP) provides a unique, community-based alternative for young people who would otherwise be homeless or in the juvenile justice, child welfare, or behavioral health systems.

Through YAP, young people are able to stay within their home communities and near their families. Community advocates work with young people to help them graduate from YAP having developed positive connections with pro-social people, places, and activities within their community. They are able to live safely in a secure and stable home, with improved skills, having their basic needs better met, and as part of a strengthened, more cohesive family.

YAP’s model is research-based and uses program evaluations and new research to continuously improve its program delivery.

The federal Office of Juvenile Justice and Delinquency Prevention, National Council on Crime and Delinquency, and the Annie E. Casey Foundation, among others, have recognized YAP’s model as a promising or effective alternative to institutional care.

Grounded in the belief that each child has unique needs and assets, YAP uses a strengths-based approach to bring about change. Advocates are matched with young people with whom they share strengths, interests, and culture, including the same neighborhood. The advocates work with the youth and their families to create holistic, individualized plans to reconnect youth to their communities, including:

> Engaging youth, their families and broader family teams (parents, caregivers, and others who are supportive of the youth) to create individualized plans of support.

> Serving as case managers who unify services across educational, employment, health, child welfare, and other systems and engage youth in purposeful activities to achieve the goals in the young person’s plan.

> Organizing supportive community residents, organizations, associations, and other community resources to support the youth, family, and family team.

> Involving youth and their families in giving back to the community. This develops their sense of value and competency and enhances youth ownership in and connection to the community.

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> Most importantly, championing youth and providing unconditional support. YAP employs a “no-reject, no-eject policy”: youth will not be kicked out of the program because their case is tough and/or complex.

Parenthood For young parents, the advocates integrate parenting and child wellbeing into the individualized plan and its implementation.

The flexibility of the YAP model enables this whole-family, multi-generational approach in all programs. For example, a YAP fatherhood program in Atlantic City, New Jersey, helps strengthen young fathers’ involvement in their children’s lives by developing not only youths’ understanding of what it means to be a nurturing dad but also their ability to use conflict resolution skills to resolve interpersonal issues.

Trauma Most YAP youth have experienced trauma, both before and during their involvement with the system. Trauma is often misunderstood or ignored, causing further isolation and disconnection from the community.

Youth in YAP often have parents who also experienced trauma, which impacts their ability to parent and care for their children.

Because of this, YAP works with the young people’s parents, not just the youth, to address trauma.

Challenge While YAP maintains a no-reject, no-eject policy, sometimes system mandates can jeopardize a youth’s progress. For example, if at the end of YAP’s services, the youth doesn’t meet a specific system-imposed requirement, the referring authority may place the youth into the system/institution for which YAP was the alternative. However, YAP’s commitment to keeping youth safely home in their communities doesn’t end when a system mandate forces a youth back to an institution. YAP works in partnership with state and local governments to reduce reliance on policies and practices that favor institutionalizing youth and to promote policies and practices that maximize the use of effective community-based alternatives.

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YWCA USA YWCA USA leads a national network of YWCA member organizations that is dedicated to eliminating racism, empowering women, and promoting peace, justice, freedom, and dignity for all. Each local YWCA offers programs to realize the work of the mission and to meet the unique needs of their local community. At the national level, YWCA USA provides members with technical assistance and capacity-building services, such as identifying “best in show” programs and making them available to all members of the network. Based on this work, YWCA USA has learned of local associations’ two-generation approaches to serving young OSOW parents and their children. A common thread among these YWCAs’ programs for young families, according to Casey Harden, Vice President of Association Services, is finding the “sweet spot” in pairing access to practical supports (ranging from basic needs to education) with cognitive behavioral change in counseling.

This pairing empowers young women to achieve emotional and economic selfsufficiency, as exemplified by one such program in Washington State.

YWCA Seattle | King | Snohomish The Young Parent Program at YWCA Seattle | King | Snohomish uses “housing as a carrot to reconnect OSOW mothers with education and employment opportunities,” as described by Sue Sherbrooke, CEO. This combination of housing, education, and employment training is necessary to reconnect young families to opportunity. Tamarack Randall, Director of the Young Parent Program, puts it best: “Having housing without education and employment means the chances of keeping housing is very low. Having employment but no housing means maintaining employment will be very difficult.”

Central to the program is intensive case management that is grounded in a strengthsbased approach. When young people begin, case managers do an initial assessment that identifies their barriers as well as their strengths. Because young people often struggle to identify their strengths, Randall reports that “being able to work with young women” to recognize their talents is really important. Case managers can then figure out barriers and needs, and how to best address those. The Young Parent Program is extremely flexible by

design because the participants are incredible diverse—ranging from those with a 7th grade education to a high school GED, or an immigrant with limited or no English to a native speaker.

While focusing on the needs of the parent, the Young Parent Program also promotes child wellbeing. It does this on multiple levels. First, the program ensures that all children are enrolled in preschool or daycare. This helps give young parents the time to work through their goals. Also, by providing a parenting class, young parents are given the tools to be stronger parents for their children.

Through the Young Parent Program, youth in transitional housing or shelters work with a housing case manager to ensure that their current housing situation is made more stable. If they are in a shelter, the program finds them transitional housing.

If they are in transitional housing, a more permanent solution is found. Part of the success of the program is due to ensuring that each case manager has special training on how best to work with young parents.

As part of this process, the case manager coordinates wrap-around services, especially by connecting the young women to services for domestic violence, mental health, and drug abuse.

An education and employment case manager helps with job searches and tutoring.

The first goal is to make sure those enrolled get a GED or a high school diploma because without that credential, they cannot get a good job. Beyond that, the program is responsive to what goals young women set for themselves. According to Randall, the core idea is that by “letting them make a goal, we can hold them accountable for it.”

Program participants make use of the YWCA’s Young Parent Center, which has computers, job search tools, tutoring, etc. By providing a place for young people all in the same situation, YWCA is able to make them feel safe, comfortable, and supported.

The success of the program speaks for itself.

Nearly 80% of participants who exited the program exited “positively.” That is, they did at least one of the following: attained their GED, entered into more stable housing, got a job, or enrolled in post-secondary education or vocational training. In addition, a vast majority of those 80% achieved multiple positive outcomes.

Breaking the Cycle of Poverty in Young Families

Programmatic Challenges In our research, policy experts, nonprofit leaders, and program managers all focused on a central challenge: government-funded systems are not designed with young families in mind. The primary systems that affect young families are early child education and care, K–12 education, welfare, workforce development, higher education, child welfare, and justice. Each system has its own priorities and requirements, typically centered on one or just a few population groups. Systems that primarily serve adolescents may not have a deliberate approach to adolescents who are parents and living independently. Systems that primarily serve adults may be inaccessible or less helpful to underage youth. Programs that primarily serve childless adults may have performance goals that are unrealistic for young persons who are parents.

As a result, government funding, regulations, and program requirements often hamper the ability of nonprofit human services and youth development organizations to help young parents build promising futures for their families. Common barriers that nonprofit service providers encounter are fourfold. > Doubling of Issues. By serving both parent and child, the issues are “doubled.”

Two-generation interventions need to have expertise in multiple systems and to devote time in order to open multiple doors and coordinate disparate services. > Funding Silos. Over the years, the development of funding silos has made it difficult for providers to cobble together the wide range of resources that young families need to get on their feet. > Legal Age. Some systems may treat the young parent both as a minor and as a parent with full rights. For example, a teen parent may be living on his/her own, yet find that housing programs or leasing companies require them to be at least 18 years. Or, a young parent may be aging out of foster care but yet be underprepared for managing a household, especially one with children.

Comprehensive Dropout Recovery Interventions The Civic Marshall Plan (CMP) focuses on using evidence-based strategies to address the dropout crisis and engages leading organizations from across sectors to align their efforts with the CMP. Dropout recovery is one CMP element that is especially relevant to OSOW youth because it calls for further investment in youth who are no longer enrolled in high school.* YouthBuild USA is one example of a comprehensive and effective dropout recovery intervention for low-income youth. When young people ages 16–24 enroll in a YouthBuild program, they work full-time toward attaining a GED or high school diploma and enhancing their job skills by building housing for low-income community residents. They get paid a stipend for their work producing housing, and for this service, many also earn an AmeriCorps education award toward post-secondary education. Besides providing youth with responsibility, opportunities to develop skills, and leadership experiences, YouthBuild achieves results because programs create a positive minicommunity of adults and youth who are committed to each other’s success and where young people feel the active support and mentoring of caring adults. After 6–24 months, YouthBuild graduates are ready for college or to continue their career in the construction industry. Twenty-six percent of YouthBuild students are parents, and many state that they are powerfully motivated by a desire to provide security and opportunity to their children. * Balfanz, Robert; Bridgeland, John M.; Bruce, Mary; & Fox, Joanna Hornig. (2013). Building a Grad Nation: Progress and Challenge in Ending the High School Dropout Epidemic. America’s Promise Alliance.

> Disparate Government-Funded Systems.

The absence of high-level coordination, conflicting goals, and different rules about legal age tend to hinder service providers’ ability to tap into multiple programs needed for young families’ development plans.

In the case studies, the agencies work around these barriers in part by employing specialists who can navigate through and weave together multiple systems. Collaborations also partially mitigate these challenges.

But these types of work-arounds can be resource-intensive and may not achieve the impact that would be possible if policymakers provided flexible funding and program structures that enable supports to follow youth and families across systems.

National Human Services Assembly 13

Research Limitations and Recommendations The findings described in this report are exploratory, as appropriate for the study objective and design. The two primary limitations are the use of a convenience sample and reliance on agency self-reports for the case studies. Follow-on research should examine the findings in more depth, such as with a full literature review, additional case studies, and site visits to collect other types of data.

Even so, the process enabled NHSA to profile six programs that were quite diverse in populations served, goals, service mix, and type of agency. That the heterogeneous programs had practices in common, and that these practices have been recommended in prior research, is a strength.

Organizations Contributing to the Research* Adventist Community Services

National Crittenton Foundation

Alliance for Children and Families

National Fatherhood Initiative

Association of Jewish Family and Children’s Agencies

National Urban League

Association of Junior Leagues International

Northern Virginia Urban League

Catholic Charities USA CenterLink Child Trends Goodwill Industries International International Association of Jewish Vocational Services Jewish Community Services of Baltimore

National Youth Employment Coalition Prevent Child Abuse America Salvation Army Salvation Army Eastern Michigan Division Salvation Army Metropolitan Division (Chicago) Search Institute The Dibble Institute United Neighborhood Centers of America United Way Worldwide

Jewish Family Service San Diego

Volunteers of America

Lutheran Services in America

Youth Advocate Programs

Martha O’Bryan Center National Center on Family Homelessness

More in-depth research is needed. Some program evaluations have or are quantifying the impact of two-generation approaches, but program funders do not consistently support systematic evaluations. Additional quantitative analyses and program evaluations would provide much needed insight into the effect of program design on outcomes. In the interim, service providers and others can turn to the National Youth Employment Coalition’s Promising and Effective Practices Network for researchbased practices that are associated with successful transitions to adulthood (see textbox, page 15).

Researchers, policymakers, service providers, and advocates must also look beyond best practices to the complex interplay between programming and public policy. By identifying obstacles to high-quality interventions, work-arounds currently used, and effective policy support at the local, state, and federal levels, the field can scale up twogeneration approaches.

Recommendations Systematically addressing systems-level barriers to two-generation approaches would enable nonprofit agencies to serve more young families better than is currently possible. A first step is shifting negative views that some decision makers have about OSOW youth who are also parents. Experts and practitioners in NHSA interviews reported widespread social bias against teen parents, high school dropouts, young people who had been involved in the justice system, and families experiencing homelessness.

Recently, the White House Council for Community Solutions has made an effort to understand the needs of OSOW youth as well as the costs associated with their lack of community connections.20

YWCA Seattle | King | Snohomish YWCA USA YouthBuild USA

*This program brief does not necessarily reflect the opinions of the individuals or organizations consulted in this research.

14

Breaking the Cycle of Poverty in Young Families

Second, change at the community level would entail developing ladders to connect young families to opportunity. At the community level, AECF calls for: > Expanding the availability of child care, especially in schools and at the workplace. > Investing in education and workforce development systems that offer multiple pathways to success in communities with high concentrations of OSOW youth.

Because young families have different situations and goals, a single or inflexible pathway is unlikely to enable these young parents to compete for good jobs. > Improving the quality of jobs that employ young people. Job quality is more than wages that can support a family. Quality also relates to supportive working conditions, opportunities for career advancement, and policies, such as flexible scheduling, that are responsive to personal caregiving responsibilities. > Providing additional support to families in which parents are OSOW youth.1 Third, governments at all levels can unlock funding silos and give service providers more flexibility. The federal government has begun this process by establishing the Interagency Working Group on Youth Programs. This group brings together 18 federal agencies that support programs and services focusing on youth. Coordinating youth investments is one way the group strives to collectively improve youth outcomes. Specific tactics include aligning and simplifying federal guidance for youth programs, coordinating youth programming and funding support at all levels of government, and coordinating technical assistance efforts. The group also plans to assess and disseminate models of collaboration and information about effective partnership strategies.21 State and local governments could adapt this federal model or create partnerships with stakeholders that find ways to assure programs seamlessly support young families as they progress toward economic independence.

National Youth Employment Coalition (NYEC) The National Youth Employment Coalition (NYEC) is a national membership network with more than 250 member organizations; about 40 percent of members offer education, training, employment services, early work experience, and other supports to OSOW youth as they prepare for the job market.

For almost 20 years, NYEC has provided critical leadership in the youth workforce preparation field through its Promising and Effective Practices Network (PEPNet). This structured system enhances the quality of programs that prepare young people to become productive and self-sufficient workers, taxpayers, parents, and citizens. NYEC’s efforts are grounded in substantial research linking high quality programs to successful outcomes.

Three interrelated components in PEPNet elevate program quality by gradually building the capacity of organizations and programs to use effective practices. > PEPNet Quality Standards. Research-based practices that enable program excellence and are associated with consistent outcomes related to successful transitions to adulthood. > PEPNet Tools. Resources and supports to help youth programs achieve PEPNet standards, such as the PEPNet Quality Self-Assessment and Quality Improvement Planning Template. > PEPNet People. A learning network of nationally recognized youth programs and other professionals who share practical strategies, examples, and lessons about successful efforts with youth.

PEPNet standards are grounded in a developmental approach that focuses on building youth competencies and that takes a whole-person perspective that is inclusive of youths’ family context. The standards endorse the use of case managers to weave together supports that help youth achieve their goals. This flexible approach means that when youth are parents, case managers help young parents secure reliable childcare; gain access to food stamps, Medicaid, and other economic supports; and connect with other community resources for families.

According to Mala Thakur, Executive Director, the most effective service that youth programs can provide is connecting a young person to a caring adult.

This relationship empowers the young person to realize changes they need to make “to go further in the labor market, re-engage in education, and address risky behaviors or other challenges that may impede development, personally or in the workforce.” NYEC also emphasizes using employment as a key engagement tool. By helping to build job and soft skills, self-efficacy, and a resume, employment opens up more doors to a young person than previously possible. Employment is a form of education that youth find relevant; further, working helps to expand their network, puts money in their pockets, and gives youth a chance to contribute to society.

National Human Services Assembly 15

Moving Forward

Acknowledgements

The future economic prosperity of the nation is directly tied to the capacity of today’s children and youth to contribute as the workers and business owners, parents, and civic leaders of tomorrow. With 1.4 million young parents who are out-of-school and out-of-work, their future—and that of our nation—is at risk.

Utilizing a two-generation approach to reconnect OSOW young families with ladders of opportunity is a promising strategy to change this trajectory and interrupt the cycle of poverty in communities nationwide.

This research was funded by the Annie E. Casey Foundation. We thank them for the support but acknowledge that the findings and conclusions presented in this report are those of the authors alone and do not necessarily reflect the opinions of the Foundation.

The National Human Services Assembly would like to thank our member organizations for giving of their time, information, and expertise during the research process.

We would also like to thank a few researchers, experts, and practitioners: Natalie Coupe, Kristen Moore, Kay Reed, Jen Rison, and Gene Roehlkepartain.

Endnotes 1 The Annie E. Casey Foundation. (2012). Youth and Work: Restoring Teen and Young Adult Connection to Opportunity. Kids Count

The National Human Services Assembly would like to thank the Annie E. Casey Foundation for making this research and report possible.

Policy Report.

2 Aspen Institute. (2012). Two Generations, One Future: Moving Parents and Children Beyond Poverty Together. Ascend Report.

3 Redd Z, Karver TS, Murphey D, Moore KA, & Knewstub D. (2011). Two Generations in Poverty: Status and Trends among Parents and Children in the United States, 2000–2010. Child Trends Research Brief #2011–25. Washington, DC: Child Trends.

4 The Annie E. Casey Foundation. (n.d.). About Casey. Baltimore, MD: Author.

5 Shonkoff JP, Garner AS. (2011). The Lifelong Effects of Early Childhood Adversity and Toxic Stress. Pediatrics 129(1): e232–e246.

6 Balfanz R, Bridgeland JM, Bruce M, Fox JH. (2013). Building a Grad Nation: Progress and Challenge in Ending the High School Dropout Epidemic. America’s Promise Alliance.

7 Breslau J, Lane M, Sampson N, & Kessler RC. (2008). Mental Disorders and Subsequent Educational Attainment in a U.S. National Sample. Journal of Psychiatric Research, 42(9), 708–716.

8 Finkelhor D, Turner H, Ormrod R, Hamby S, Kracke K. (2009). Children’s Exposure to Violence: A Comprehensive National Survey.

Juvenile Justice Bulletin.

9 Child Welfare Information Gateway. (2011). Supporting Brain Development in Traumatized Children and Youth. Washington, DC: U.S. Department of Health and Human Services, Children’s Bureau.

10 Molino AC. (2007). Characteristics of Help-Seeking Street Youth and Non-Street Youth. National Symposium on Homelessness Research.

1 Kennedy K. (2011). Experts: Half of foster kids quit high school. Boston Globe (Oct. 31).

1 12 Child Trends. (2013). Youth Neither Enrolled in School Nor Working. Washington, DC: Author.

13 DeCandia CJ, Bassuk E. (2012). Meeting the Needs of Young Families Experiencing Homelessness: A Guide for Service Providers and Program Administrators. National Center on Family Homelessness, Strengthening At-Risk and Homeless Young Mothers and Children.

14 Search Institute. (2013). Developmental Relationships: A New Strategy for Search Institute and a New Emphasis for Youth Development and Education. Minneapolis, MN: Author.

15 Appleyard K, Berlin LJ. (2007). Supporting Healthy Relationships Between Young Children and Their Parents: Lessons from Attachment Theory and Research. Durham, NC: Duke University, Center for Child and Family Policy. Available from https://childandfamilypolicy. duke.edu/pdfs/pubpres/SupportingHealthyRelationships.pdf

16 National Human Services Assembly. (2007). Family Strengthening Writ Large: On Becoming a Nation that Promotes Strong Families and Successful Youth. 24. Family Strengthening Policy Center.

17 Golden O, McDaniel M, Loprest P, & Stanczyk A. (2013). Disconnected Mothers and the Well-Being of Children: A Research Report.

Washington, DC: The Urban Institute.

18 Belfield CR, Levin HM, Rosen R. (2012). The Economic Value of Opportunity Youth. Civic Enterprises.

19 Corporation for National and Community Service. (2013). White House Council for Community Solutions. Available from: http://www. serve.gov/?q=site-page/white-house-council-community-services 20 Interagency Working Group on Youth Programs. (2013). Pathways for Youth: Draft Strategic Plan for Federal Collaboration. Available from: http://findyouthinfo.gov/docs/Pathways_for_Youth.pdf

Copyright © 2013 by National Human Services Assembly Founded in 1923, the National Human Services Assembly is an association of leading human services providers. It was created by top national executives in the sector who believed their organizations could accomplish more collectively than individually to advance their missions and optimize performance. The Assembly has grown to include more than 80 members, mostly the national headquarters of service provider organizations. These organizations and their respective national networks collectively engaged with nearly every household in America—as consumers of services, donors, and volunteers.

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CONTRIBUTORS TO THE DEVELOPMENT OF THIS DOCUMENT:

Irv Katz, President and CEO, National Human Services Assembly Karen Key, Executive Vice President and COO, National Human Services Assembly Tara James, Director, Policy and External Relations, National Human Services Assembly Molly French, Consultant, National Human Services Assembly Alexander Heit, Research Fellow, National Human Services Assembly

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Q-1 2027 Q-2 2027

LIII

Q-1 2026 Q-2 2026 Q-3 2026 Q-4 2026

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The e-Advocate Journal of Theological Jurisprudence Vol. I - 2017 The Theological Origins of Contemporary Judicial Process Scriptural Application to The Model Criminal Code Scriptural Application for Tort Reform Scriptural Application to Juvenile Justice Reformation Vol. II - 2018 Scriptural Application for The Canons of Ethics Scriptural Application to Contracts Reform & The Uniform Commercial Code Scriptural Application to The Law of Property Scriptural Application to The Law of Evidence

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Legal Missions International Issue Vol. I I II III IV

Title 2015

Quarterly st

God’s Will and The 21 Century Democratic Process The Community Engagement Strategy Foreign Policy Public Interest Law in The New Millennium

Vol. II

2016

V VI VII VIII

Ethiopia Zimbabwe Jamaica Brazil

Vol. III

2017

IX X XI XII

India Suriname The Caribbean United States/ Estados Unidos

Vol. IV

2018

XIII XIV XV XVI

Cuba Guinea Indonesia Sri Lanka

Vol. V

2019

XVII XVIII XIV XV

Russia Australia South Korea Puerto Rico

Q-1 2015 Q-2 2015 Q-3 2015 Q-4 2015

Q-1 2016 Q-2 2016 Q-3 2016 Q-4 2016

Q-1 2017 Q-2 2017 Q-3 2017 Q-4 2017

Q-1 2018 Q-2 2018 Q-3 2018 Q-4 2018

Q-1 2019 Q-2 2019 Q-3 2019 Q-4 2019

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Issue

Title

Vol. VI

2020

XVI XVII XVIII XIX XX

Trinidad & Tobago Egypt Sierra Leone South Africa Israel

Vol. VII

2021

XXI XXII XXIII XXIV XXV

Haiti Peru Costa Rica China Japan

Vol VIII

2022

XXVI

Chile

Quarterly

Q-1 2020 Q-2 2020 Q-3 2020 Q-4 2020 Bonus

Q-1 2021 Q-2 2021 Q-3 2021 Q-4 2021 Bonus

Q-1 2022

The e-Advocate Juvenile Justice Report Vol. I – Juvenile Delinquency in The US Vol. II. – the Prison Industrial Complex Vol. III – Restorative/ Transformative Justice Vol. IV – The Sixth Amendment Right to The Effective Assistance of Counsel Vol. V – The Theological Foundations of Juvenile Justice Vol. VI – Collaborating to Eradicate Juvenile Delinquency

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The e-Advocate Newsletter 2012 - Juvenile Delinquency in the US Genesis of the Problem Family Structure Societal Influences Evidence-Based Programming Strengthening Assets v. Eliminating Deficits 2013 - Restorative Justice in the US Introduction/Ideology/Key Values Philosophy/Application & Practice Expungement & Pardons Pardons & Clemency Examples/Best Practices 2014 - The Prison Industrial Complex 25% of the World's Inmates Are In the US The Economics of Prison Enterprise The Federal Bureau of Prisons The After-Effects of Incarceration/Individual/Societal 2015 - US Constitutional Issues In The New Millennium The Fourth Amendment Project The Sixth Amendment Project The Eighth Amendment Project The Adolescent Law Group 2016 - The Theological Law Firm Academy The Theological Foundations of US Law & Government The Economic Consequences of Legal Decision-Making The Juvenile Justice Legislative Reform Initiative The EB-5 International Investors Initiative 2017 - Organizational Development The Board of Directors The Inner Circle Page 139 of 144

Staff & Management Succession Planning Bonus #1 The Budget Bonus #2 Data-Driven Resource Allocation 2018 - Sustainability The Data-Driven Resource Allocation Process The Quality Assurance Initiative The Advocacy Foundation Endowments Initiative The Community Engagement Strategy 2019 - Collaboration Critical Thinking for Transformative Justice International Labor Relations Immigration God's Will & The 21st Century Democratic Process 2020 - Community Engagement The Community Engagement Strategy The 21st Century Charter Schools Initiative Extras The NonProfit Advisors Group Newsletters The 501(c)(3) Acquisition Process The Board of Directors The Gladiator Mentality Strategic Planning Fundraising 501(c)(3) Reinstatements The Collaborative US/ International Newsletters How You Think Is Everything The Reciprocal Nature of Business Relationships Accelerate Your Professional Development The Competitive Nature of Grant Writing Assessing The Risks

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About The Author John C (Jack) Johnson III Founder & CEO

Having become disillusioned with the inner-workings of the “Cradle-to-Prison” pipeline, former practicing attorney Johnson set out, in 2001, to try to help usher-in fundamental changes in the area of Juvenile and Transformative Justice.

Educated at Temple University, in Philadelphia, Pennsylvania and Rutgers Law School, in Camden, New Jersey, Jack moved to Atlanta, Georgia to pursue greater opportunities to provide Advocacy and Preventive Programmatic services for at-risk/ atpromise young persons, their families, and Justice Professionals embedded in the Juvenile Justice process in order to help st facilitate its transcendence into the 21 Century.

There, along with a small group of community and faith-based professionals, “The Advocacy Foundation, Inc." was conceived and implemented over roughly a thirteen year period, originally chartered as a Juvenile Delinquency Prevention and Educational Support Services organization consisting of Mentoring, Tutoring, Counseling, Character Development, Community Change Management, Practitioner Re-Education & Training, and a host of related components.

The Foundation’s Overarching Mission is “To help Individuals, Organizations, & Communities Achieve Their Full Potential”, by implementing a wide array of evidence-based proactive multi-disciplinary "Restorative & Transformative Justice" programs & projects currently throughout the northeast, southeast, and western international-waters regions, providing prevention and support services to at-risk/ at-promise youth, to young adults, to their families, and to Social Service, Justice and Mental Health professionals” everywhere. The Foundation has since relocated its headquarters to Philadelphia, Pennsylvania, and been expanded to include a three-tier mission.

In addition to his work with the Foundation, Jack also served as an Adjunct Professor of Law & Business at National-Louis University of Atlanta (where he taught Political Science, Business & Legal Ethics, Labor & Employment Relations, and Critical Thinking courses to undergraduate and graduate level students). Jack has also served as Board President for a host of wellestablished and up & coming nonprofit organizations throughout the region, including “Visions Unlimited Community Development Systems, Inc.”, a multi-million dollar, award-winning, Violence Prevention and Gang Intervention Social Service organization in Atlanta, as well as Vice-Chair of the Georgia/ Metropolitan Atlanta Violence Prevention Partnership, a statewide 300 organizational member violence prevention group led by the Morehouse School of Medicine, Emory University and The Atlanta-Based Martin Luther King Center.

Attorney Johnson’s prior accomplishments include a wide-array of Professional Legal practice areas, including Private Firm, Corporate and Government postings, just about all of which yielded significant professional awards & accolades, the history and chronology of which are available for review online.

www.TheAdvocacyFoundation.org Clayton County Youth Services Partnership, Inc. – Chair; Georgia Violence Prevention Partnership, Inc – Vice Chair; Fayette County NAACP - Legal Redress Committee Chairman; Clayton County Fatherhood Initiative Partnership – Principal Investigator; Morehouse School of Medicine School of Community Health Feasibility Study - Steering Committee; Atlanta Violence Prevention Capacity Building Project – Project Partner; Clayton County Minister’s Conference, President 2006-2007; Liberty In Life Ministries, Inc. – Board Secretary; Young Adults Talk, Inc. – Board of Directors; ROYAL, Inc - Board of Directors; Temple University Alumni Association; Rutgers Law School Alumni Association; Sertoma International; Our Common Welfare Board of Directors – President)2003-2005; River’s Edge Elementary School PTA (Co-President); Summerhill Community Ministries; Outstanding Young Men of America; Employee of the Year; Academic All-American - Basketball; Church Trustee.

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www.TheAdvocacyFoundation.org

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