What changes in the future can we make in order to be successful? How can we cut poverty? What political changes should we make to help our economy grow?
The Top 10 Solutions to Cut Poverty and Grow the Middle Class
#1 https://www.americanprogress.org/issues/poverty/news/2014/09/17/97287/the-top-10-solutions-to-cut-poverty-and-grow-the-middle-class/
The Census Bureau released its annual income, poverty, and health insurance report yesterday, revealing that four years into the economic recovery, there has been some progress in the poverty rate as it fell from 15 percent in 2012 to 14.5 percent in 2013, but there was no statistically significant improvement in the number of Americans living in poverty. Furthermore, low- and middle-income workers have seen little to no income growth over the past decade, as the gains from economic growth have gone largely to the wealthiest Americans.
With flat incomes and inequality stuck at historically high levels, one might assume that chronic economic insecurity and an off-kilter economy are the new normal and that nothing can be done to fix it. But there is nothing normal or inevitable about elevated poverty levels and stagnant incomes. They are the direct result of policy choices that put wealth and income into the hands of a few at the expense of growing a strong middle class.
The good news is that different policy choices can bring different outcomes. When the government invests in jobs and policies to increase workers’ wages and families’ economic security, children and families see improved outcomes in both the short and long term.
Here are 10 steps Congress can take to cut poverty, boost economic security, and expand the middle class.
1. Create jobs
The best pathway out of poverty is a well-paying job. To get back to prerecession employment levels, we must create 5.6 million new jobs. At the current pace, however, we will not get there until July 2018. To kick-start job growth, the federal government should invest in job-creation strategies such as rebuilding our infrastructure; developing renewable energy sources; renovating abandoned housing; and making other common-sense investments that create jobs, revitalize neighborhoods, and boost our national economy. We should also build on proven models of subsidized employment to help the long-term unemployed and other disadvantaged workers re-enter the labor force.
In addition, the extension of federal unemployment insurance would have created 200,000 new jobs in 2014, according to the Congressional Budget Office. Indeed, every $1 in benefits that flows to jobless workers yields more than $1.50 in economic activity. Unfortunately, Congress failed to extend federal unemployment insurance at the end of 2013, leaving 1.3 million Americans and their families without this vital economic lifeline.
2. Raise the minimum wage
In the late 1960s, a full-time worker earning the minimum wage could lift a family of three out of poverty. Had the minimum wage back then been indexed to inflation, it would be $10.86 per hour today, compared to the current federal minimum wage of $7.25 per hour. Raising the minimum wage to $10.10 per hour and indexing it to inflation—as President Barack Obama and several members of Congress have called for—would lift more than 4 million Americans out of poverty. Nearly one in five children would see their parent get a raise. Recent action taken by cities and states—such as Seattle, Washington; California; Connecticut; and New Jersey—shows that boosting the minimum wage reduces poverty and increases wages.
3. Increase the Earned Income Tax Credit for childless workers
One of our nation’s most effective anti-poverty tools, the Earned Income Tax Credit, or EITC, helped more than 6.5 million Americans—including 3.3 million children—avoid poverty in 2012. It’s also an investment that pays long-term dividends. Children who receive the EITC are more likely to graduate high school and to have higher earnings in adulthood. Yet childless workers largely miss out on the benefit, as the maximum EITC for these workers is less than one-tenth that awarded to workers with two children.
President Obama and policymakers across the political spectrum have called for boosting the EITC in order to right this wrong. Importantly, this policy change should be combined with a hike in the minimum wage; one is not a substitute for the other.
4. Support pay equity
With female full-time workers earning just 78 cents for every $1 earned by men, action must be taken to ensure equal pay for equal work. Closing the gender wage gap would cut poverty in half for working women and their families and add nearly half a trillion dollars to the nation’s gross domestic product. Passing the Paycheck Fairness Act to hold employers accountable for discriminatory salary practices would be a key first step.
5. Provide paid leave and paid sick days
The United States is the only developed country in the world without paid family and medical leave and paid sick days, making it very difficult for millions of American families to balance work and family without having to sacrifice needed income. Paid leave is an important anti-poverty policy, as having a child is one of the leading causes of economic hardship. Additionally, nearly 4 in 10 private-sector workers—and 7 in 10 low-wage workers—do not have a single paid sick day, putting them in the impossible position of having to forgo needed income, or even their job, in order to care for a sick child. The Family and Medical Insurance Leave Act, or FAMILY Act, would provide paid leave protection to workers who need to take time off due to their own illness, the illness of a family member, or the birth of a child. And the Healthy Families Act would enable workers to earn up to seven job-protected sick days per year.
6. Establish work schedules that work
Low-wage and hourly jobs increasingly come with unpredictable and constantly shifting work schedules, which means workers struggle even more to balance erratic work hours with caring for their families. Ever-changing work schedules make accessing child care even more difficult than it already is and leave workers uncertain about their monthly income. Furthermore, things many of us take for granted—such as scheduling a doctor’s appointment or a parent-teacher conference at school—become herculean tasks. The Schedules That Work Act would require two weeks’ advance notice of worker schedules, which would allow employees to request needed schedule changes. It would also protect them from retaliation for making such requests—and provide guaranteed pay for cancelled or shortened shifts. These are all important first steps to make balancing work and family possible.
7. Invest in affordable, high-quality child care and early education
The lack of affordable, high-quality child care serves as a major barrier to reaching the middle class. In fact, one year of child care for an infant costs more than one year of tuition at most states’ four-year public colleges. On average, poor families who pay out of pocket for child care spend one-third of their incomes just to be able to work. Furthermore, federal child care assistance reaches only one in six eligible children.
Boosting investments in Head Start and the Child Care and Development Block Grant, as well as passing the Strong Start for America’s Children Act—which would invest in preschool, high-quality child care for infants and toddlers, and home-visiting services for pregnant women and mothers with infants—will help more struggling families obtain the child care they need in order to work and improve the future economic mobility of America’s children.
8. Expand Medicaid
Since it was signed into law in 2010, the Affordable Care Act has expanded access to high-quality, affordable health coverage for millions of Americans. However, 23 states continue to refuse to expand their Medicaid programs to cover adults up to 138 percent of the federal poverty level—making the lives of many families on the brink much harder. Expanding Medicaid would mean more than just access to health care—it would free up limited household income for other basic needs such as paying rent and putting food on the table. Having health coverage is also an important buffer against the economic consequences of illness and injury; unpaid medical bills are the leading cause of bankruptcy. Studies link Medicaid coverage not only to improved health, improved access to health care services, and lower mortality rates, but also to reduced financial strain.
9. Reform the criminal justice system and enact policies that support successful re-entry
The United States incarcerates more of its citizens than any other country in the world. Today, more than 1.5 million Americans are behind bars in state and federal prisons, a figure that has increased fivefold since 1980. The impact on communities of color is particularly staggering: One in four African American children who grew up during this era of mass incarceration have had a parent incarcerated.
Mass incarceration is a key driver of poverty. When a parent is incarcerated, his or her family must find a way to make ends meet without a necessary source of income Additionally, even a minor criminal record comes with significant collateral consequences that can serve as lifelong barriers to climbing out of poverty. For example, people with criminal records face substantial barriers to employment, housing, education, public assistance, and building good credit. More than 90 percent of employers now use background checks in hiring, and even an arrest without a conviction can prevent an individual from getting a job. The “one strike and you’re out” policy used by public housing authorities makes it difficult if not impossible for individuals with even decades-old criminal records to obtain housing, which can stand in the way of family reunification. Furthermore, a lifetime ban—for individuals with felony drug convictions—on receiving certain types of public assistance persists in more than half of U.S. states, making subsistence even more difficult for individuals seeking to regain their footing, and their families.
In addition to common-sense sentencing reform to ensure that we no longer fill our nation’s prisons with nonviolent, low-level offenders, policymakers should explore alternatives to incarceration, such as diversion programs for individuals with mental health and substance abuse challenges. We must also remove barriers to employment, housing, education, and public assistance. A decades-old criminal record should not consign an individual to a life of poverty.
10. Do no harm
The across-the-board spending cuts known as sequestration—which took effect in 2013—slashed funding for programs and services that provide vital support to low-income families. Sequestration cost the U.S. economy as many as 1.6 million jobs between mid-2013 and 2014. Some relief was provided this January, when Congress passed the Consolidated Appropriations Act of 2014, but many important tools to help low-income individuals and families pave a path to the middle class—such as adult and youth education and training programs, child welfare, and community development programs—were on a downward funding trend even before sequestration took effect.
As Congress considers a continuing resolution to fund the federal government past October 1 and avoid another government shutdown, it should reject further cuts to programs and services such as the Special Supplemental Nutrition Program for Women, Infants, and Children, or WIC, which provides vital nutrition assistance to pregnant women and mothers with new babies. Thereafter, Congress should make permanent the important improvements made to the EITC and the Child Tax Credit as part of the American Recovery and Reinvestment Act of 2009, which are set to expire in 2017. And it should avoid additional cuts to vital programs such as the Supplemental Nutrition Assistance Program, or SNAP, formerly known as food stamps, which suffered two rounds of deep cuts in 2013 and 2014.
Conclusion
It is possible for America to dramatically cut poverty. Between 1959 and 1973, a strong economy, investments in family economic security, and new civil rights protections helped cut the U.S. poverty rate in half. Investments in nutrition assistance have improvededucational attainment, earnings, and income among the young girls who were some of the food stamp program’s first recipients. Expansions of public health insurance have lowered infant mortality rates and reduced the incidence of low birth rates. In more recent history, states that raised the minimum wage have illustrated the important role that policy plays in combating wage stagnation.
There is nothing inevitable about poverty. We just need to build the political will to enact the policies that will increase economic security, expand opportunities, and grow the middle class.
Rebecca Vallas is the Associate Director of the Poverty to Prosperity Program at the Center for American Progress. Melissa Boteach is the Vice President of Half in Ten and the Poverty to Prosperity Program at the Center.
#2: https://www.forbes.com/sites/garyshapiro/2013/01/23/six-ways-to-create-economic-growth/#757364bf7e32
Six Ways to Create Economic Growth
Why are politicians ignoring the math and the desire of the American public? A recent Gallup pollfound that out of a list of 12 policy issues, Americans cited restoring a strong economy and job market as the number one priority for President Obama in his second term. The economy, jobs and the role of government were the central issue in the government election, yet listening to the President’s big government Inauguration speech, the deficit and jobs were barely mentioned. I expected more given four years of stunted job growth, rising debt, and a January 2013 Government Accountability Report starkly declaring that “absent policy changes – the federal government continues to face an unsustainable path.”
What can be done to fix our current economic downturn and cut the deficit? Congress will have to lead on the big issues. The Simpson Bowles Commission, created by President Obama, proposed a reasonable set of shared pain proposals that are a great starting point for debate. But even without Simpson Bowles, here are a few common-sense proposals which would reverse the “new normal” with policies focused on economic growth.
1. Promote economic growth through innovation. Just as we saw at the 2013 International CES®, innovation and start-ups fuel our economic growth. They are the ultimate job creators who start with ingenious ideas, take risks and create value for the American consumer. Our nation has been built by encouraging entrepreneurship and innovation. Especially in our current economic downturn, it is crucial that we pursue national policies that promote innovation to ensure that there will be enough prosperity to carry on into the next generation.
2. Strategic immigration reform. As other countries aggressively reach out to skilled immigrants, we have made it more difficult for foreign entrepreneurs to come to and stay in America. Our refusal to let more highly skilled immigrants into America is costing jobs, delaying economic recovery and harming our international leadership in innovation and entrepreneurship. We should grant automatic green cards to STEM graduate students from U.S. universities and pass the Dream Act to allow law-abiding people brought to the U.S. as children to become citizens. The Startup Act is another common sense measure that would create green cards for immigrants who register through a business and meet employment and investment benchmarks in the U.S. We should work to expand and remove the country caps on H1-B visas and fix the EB-5 program, which would give visas to immigrants who invest at least $500,000 and create at least 10 jobs.
3. End the war on drugs. We have spent billions, incarcerated millions and made the situation worse. Why not follow Spain’s lead and treat the addicted and decriminalize and tax marijuana? Evidence shows that legalization does not add to drug use and can generate large revenues. Economists have estimated that legalizing marijuana would save the government $7.7 billion per year on enforcement. Of this savings, $5.3 billion would go to state and local governments, while $2.4 billion would be accrued to the federal government. Two states who voted recently to legalize marijuana, Colorado and Washington, are expected to bring in $550 million in revenue combined.
4. Require unemployed workers to volunteer. We encourage unemployment by rewarding the unemployed. All research shows the longer the unemployment payments the longer the jobless stay jobless. By shortening the duration of unemployment insurance and requiring those receiving checks to volunteer at a non-profit, both parties can benefit. By contributing to society, they can gain skills, contacts and references that will help them be successful in the next job they attain and in turn, we would see fewer people claiming unemployment.
5. Cut health care costs. Let’s be honest about our ability to afford Social Security and Medicare and means test based on wealth – including assets. We simply can’t afford to pay for these any more. We can stop incentivizing doctors to use the most expensive drugs. Many doctors are paid a percentage of the cost of the drugs they use. If we ban drug company rebates to doctors and pay by the injection rather than the cost of the drugs, then we will cut Medicare spending. We must also allow Americans to buy prescription drugs from overseas. Thanks to the deal that the White House cut with drug companies, we have a wall around our nation for imported drugs and every nation in the world pays a lot less for the same drugs. We will save billions if we can pay what any other country pays.
6. Remove unnecessary and unclear laws. Industries often set international standards for testing and measurement, but the Department of Energy (DoE), flush with cash, seems intent on hiring consultants to create new and redundant test procedures. For example, there are industry standards for measuring energy usage in TVs and cable set-top boxes. Current DoE rulemakings waste taxpayer money reinventing the wheel. In addition, these new laws can also be ambiguous, making it harder for businesses to know if they are violating the laws. Government prosecutors have made their reputation at the agencies like the National Labor Relations Board (NLRB), the Federal Trade Commission (FTC) and the Fish and Wildlife Service by threatening legal action against great companies like Boeing, Gibson and Google. Unfair laws like these waste government resources and hurt the competitiveness of U.S. companies.
#3
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