The Sand Trap of Poverty
State Policies That Cause California to Have
the Highest Poverty Rate in the Country
EOPS/CARE Conference
March 3, 2015
Mike Herald, WCLP
The Sad Truth
• Childhood poverty means that a child is:
– less likely to finish high school
-- more likely to be poor
-- less likely to be working as a young adult
• The longer that children are poor during the
early years, the worse are adult outcomes
• The younger the child, the worse are adult
outcomes.
We’re Number ONE!
• California has the highest poverty rate of any
state in the country. 23.6 percent under the
SPM.
• One in four children in California are growing
up in poverty.
• More than 1 million blind, aged and disabled
Californians now live below the poverty line.
These Problems Don’t
Happen By Accident
• Poverty is a choice.
• Poverty is often based on a stereotype that
gets reflected in policy decisions.
• Poverty is often caused by “solutions” that
create more problems than they correct.
Poverty is a Choice
Who Said This?
• “I say we’re not going to adopt a socialist
system with Leninism and all the rest of it. So,
where are we going? France and Germany,
they’re all in retreat. This is a challenging
point. The modern economy is based on
individuals, with most of the money moving
towards the top. That’s the system. And we try
to mitigate that. But I would say the country is
moving more to the right.
But is the Governor Correct?
• Governor seems to suggest there is a limit to what can be done to reverse
inequality.
• A recent report by the Office of Economic Co-Operation and Development
(OECD) from December 2014 reports that “reducing income inequality
would boost economic growth.”
• Well known radicals like the IMF, Standard and Poor’s and Morgan Stanley
concur with the OECD.
• In fact if the United States had taken steps to reduce income inequality in
1990, the gross domestic product would have increased by seven
percentage points.
• A key way to reduce inequality is increasing income of the bottom forty
percent. In another words more investment by government not less.
OECD, Trends in Income Inequality and its Impact on Economic Growth, Bud Fedrico Cingano, http://www.oecd-ilibrary.org/social-issuesmigration-health/trends-in-income-inequality-and-its-impact-on-economic-growth_5jxrjncwx19v6j-en
Stereotype as Policy
• In the 1980’s and 1990’s some blamed
society’s ills on “welfare queens.”
• To rid ourselves of the scourge we decided to
ban welfare for children born to welfare
families to discourage more births.
• Outcome 1 – young women kept having kids.
• Outcome 2 – A couple of million kids grew up
in deep poverty with a host of negative
outcomes.
Solutions Become Problems
• In the 1980’s the state was having trouble collecting
minor traffic fines.
• Solution? – Suspend driver’s licenses if people don’t pay.
• Whoops – Now we have more than 4 million persons
with a suspended license and $8 billion in uncollected
traffic fines. That worked well.
• Suspensions cost people jobs and then they can’t pay.
But because they don’t have a license they can’t get a job
and then the fines go up.
• End result is we trap families in perpetual poverty.
But All is Not Lost
• There is more interest in reducing poverty
than any time in recent memory.
• In recent years we have increased CalWORKs
grant by 10% but they are still at 42% of FPL.
• We repealed laws banning CalWORKs and
CalFresh to persons with drug convictions.
• We repealed the double truancy rule.
• We “banned the box” on Government job
applications.
More Reasons for Hope
• EOPS students w/o children are now eligible for
CalFresh.
• We created a new “Rapid Re-Housing” program for
CalWORKs families at-risk of homelessness.
• We reduced burdensome wage garnishments by
banning them for medical debt and raising the
income level before wages are garnished.
• The CalWORKs program is now permanent at the
community colleges.
But There is a Lot Left to be Done
• 2 million children live in deep poverty
• A full time minimum wage worker in a family
of four earns below the poverty level.
• 120,000 children are denied CalWORKs
because they were in a family on welfare.
• CalWORKs “reforms” resulting in more
sanctions and fewer adults going to
community college.
What’s on the Agenda for 2015?
• Repeal the Maximum Family Grant - SB 23
(Mitchell)
• Increase the Minimum Wage to $13 - SB 3
(Leno)
• Increase CalWORKs grants above deep poverty
• Increase SSI grants above the poverty level.
• Eliminate use of license suspensions and
waive unpaid traffic fines so people can get
out of poverty. SB 405 (Hertzberg)