Economic Security Cabinet Town Hall Meeting

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Cathleen Clements, Esq., Director Office of Public Policy & Client Advocacy

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Good afternoon. My name is Cathleen Clements and I am the director of The Children's Aid Society’s Office of Public Policy & Client Advocacy. Children’s Aid has a 155-year-long history of working with low-income New York City children, youth and families, providing guidance and resources to ensure current well-being and future potential. With over 100 programs and more than 45 locations that touch the lives of more than 150,000 children every year, Children’s Aid is one of the country’s largest and most innovative child and family social services agencies.

We are gratified by the Governor’s commitment to creating economic security for children and families in New York. To illustrate the plight of many of the families we work with, I’d like to describe the lives of Hector and Elena Cruz. Like so many families, working full time does not mean raising their family out of poverty. It just means that they are exhausted, depressed and desperately poor. Hector and Elena,1 who live in East Harlem, are the parents of three children ages 4 to 13. Hector came to this country 15 years ago and is a proud new citizen. He works full time tending the raw bar at an upscale restaurant and earns about $2,000 a month. Elena works off the books at a laundromat 25 hours a week at $6 per hour, earning about $650 a month. Together they net about $2,650 monthly, which makes them eligible for only $124 in monthly food stamps. Neither Hector nor Elena receives health care benefits through their employers, but they enrolled in the state’s Family Health Plus insurance program through Children’s Aid’s Health Care Access Program and pay no premiums due to their low-income status. The rent for their one-bedroom apartment is $1,200 a month. The children share the bedroom, sleeping in bunk beds, and Hector and Elena sleep on a pullout couch that has seen better days.

Even with both parents working, once they pay their rent, monthly expenses and $500 for food, they have little disposable income for clothing, computers, books or toys. Their children are growing up in poverty. The children wear outgrown clothing and shoes, which Paolo at age 13 is starting to resent. If they run out of food, Elena goes to a food pantry for free groceries. She knows that they should eat more fresh fruit and vegetables, but they are expensive, so rice and beans are the mainstays of their diet. The Cruz family is not alone.

  • Despite the lowest welfare rolls in 40 years, the city’s poverty rate, under the Mayor’s new calculation, is 23 percent.2 Over one-third of the city’s children live in poverty.
  • Employment and wages have fallen by 5.5 percent for the lowest third of workers and only half of low-income full-time wage earners have health insurance of any sort. 3

The Children's Aid Society is dedicated to helping children and youth become happy, healthy, and successful adults, and to that end, we surround families with a wide array of services and programs. We know the Cruz family and many more in similar circumstances because they benefit from our services. However, we also believe that a major component of our mission must also be committed to defining and combating the root causes of poverty and ending its devastating effect on our children. The lack of resources and options that define poverty are themselves a staggering deterrent to a child’s well being. While the cause and solutions to poverty are indeed complex, I’d like to describe three pivotal policies that, if instituted on a federal and state basis, would significantly improve the lives of these children and help to move families to economic self-sufficiency:

  • Work should provide a road out of poverty.
  • Sustaining two-parent families reduces child poverty.
  • Post-secondary education lifts families out of poverty.

I. Work Should Provide a Road Out of Poverty Parents who work full time should not have to raise their children in poverty. They should be paid enough to provide such basic necessities as adequate food, stable housing, appropriate clothing, and health and dental care. Since the majority of children living in poverty have parents who are employed full time, 4 several important steps must be taken to make work pay: Support living wage initiatives. The median hourly wage for the primary worker in poor families is about $9. At an increase of 4 percent per year, it would take 11 years to reach $14, the average hourly wage for middle-income families.5 Adoption of a living wage law in New York would require contractors and businesses to reward hard work with adequate pay and benefits. Jurisdictions that have implemented this law have found only small increases in contract costs and no adverse effects on business programs. A study by the University of California and the Ford Foundation found that the Los Angeles living wage law raised the salaries for nearly 10,000 jobs with minimal employment loss. 6 Efforts to raise the minimum wage, whose real-dollar value fails to keep pace with inflation, should be abandoned for this more enlightened, humane and effective initiative. 7 Provide universal access to high-quality healthcare. Only 49 percent of low-income families with at least one full-time worker receive health insurance through an employer. As a direct result, 16 percent of full-time workers heading low-income families report fair or poor health, compared with 7 percent of workers in middle-income families. Low-income families are also more likely than middle-income families to have a child in poor health. 8 Expand the Earned Income Tax Credit. The state’s current EITC excludes families earning less than $13,750 annually, the income of a full-time minimum-wage earner, effectively barring 50 percent of low-income black and 47 percent of Hispanic children from this benefit. The EITC credit should be available to all low-income wage earners. 9 2. Sustaining Two-Parent Families Reduces Child Poverty In today’s economy, two incomes are necessary to raise most families into the middle class. However, 51 percent of children in low-income families live with a single parent. 10 Building the capacity of young adults to form two-parent families begins early in their lives and can have the practical effect of creating strong and resilient families with better earning power. Teach children and adolescents to sustain meaningful and life-long adult partnerships. Children in two-parent families have almost three times the available resources of children in one-parent families. 11 Teaching critical skills for managing conflict, effective communication, and long-term goal planning are effective means of developing and sustaining two-parent families. 12 Create relationships for youth with strong supportive role models. Providing opportunities for mentoring, counseling, and other relationships with a caring adult can influence academic achievement, truancy rates, substance abuse and long-term relationships. 13 Institute proven models for teen pregnancy prevention to discourage early childbearing. Besides reducing pregnancy and birth rates for teen girls by 50 percent, effective programs can improve contraceptive use among female teens and provide greater sexuality and reproductive knowledge, better health care, greater computer use, better preparation for and participation in employment, and more college visits. 14 Promulgate tax policies that encourage parents to live together to raise their children. Eliminating the marriage penalty, forgiving child support arrears for fathers who join the household, and applying the same filing benefits to co-habiting families as married families could help all parents rethink separate living arrangements. Furthermore, it would raise household income and provide children with two parents in their homes. 3. Post-secondary Education Lifts Families Out of Poverty Only 24 percent of children whose parents have at least some college education live in low-income families, versus 56 percent whose parents have a high school diploma and 84 percent who have not graduated from high school.15 Any action to move families out of poverty must include significant steps to encourage not only completion of high school, but enrollment in post-secondary education, including both college and trade schools. Work to decrease the high school dropout rate for inner city youth. While a recent study shows that the nation’s overall graduation rate is about 70 percent, New York City has a graduation rate of 59 percent. 16 To intervene on this statistic, we must:

  • Provide intensive after-school programming. Out-of-school-time activities generate positive effects on the achievement rates of low-performing or at-risk students in reading and mathematics and help to establish a strong positive relationship to learning. This is particularly true if youth participate in after-school programs consistently, over time, and are highly engaged. The After-School Corporation (TASC) reports that youth from families living at or below the poverty line prior to enrolling in an after-school program gained more points than expected in math scores after both one and two years of after-school participation. 17
  • Provide incentives to remain in school. Students who drop out of school may do so in order to earn money for themselves and their families. Providing a monthly stipend to students who remain in school through graduation will reward positive behavior and provide some economic relief to poor families.
  • Improve the quality of public schools. While nationwide, 50 percent of minority youth graduate within four years, in New York the figure stands at 30 percent. Class size is also an important factor: more effective schools have smaller class sizes and more extracurricular programs to compete with the lure of the streets after school. Early intervention is the best way to reduce the number of dropouts. Only by better preparation in the early grades will students be able to function successfully in high school and beyond.18

Begin career building in preschool. Recruiting and enrolling families in Early Head Start and sustaining the relationship through a smooth transition into elementary school have been shown to promote post-secondary education among participants. 19 In Children’s Aid Head Start programs, the collaboration among parents, children and teachers is also used to promote additional schooling for parents. Provide workforce development services for disconnected youth. Nearly one in six (almost 170,000) of New York City’s youth is disconnected from mainstream society. The rate for New York City males (16.2 percent) is twice the rate for males nationally (7.7 percent). 20 These stark figures point directly to the need for more transitional and workforce development services for youth. To that end, Children's Aid’s Next Generation Center provides a model for targeting both in- and out-of-school youth between the ages of 14 and 24. The Center’s Summer Institute conducts seven-week, paid summer employment and life skills training programs. Workshops focus on building leadership and teamwork skills, engaging participants in new areas of professional interest and artistic expression, and creating projects to benefit the surrounding South Bronx neighborhood. Funding the model city-wide would intervene on the escalating problems associated with this population. Increase access to federal and state post-secondary financial aid. Education raises income and decreases reliance on the social safety net, 21 and the Governor’s plan to ask the Legislature to create a low-cost student loan program to make New York more competitive with other states would provide a leg up for thousands of needy young adults. Federal and state subsidies ensure that interest rates are reasonable and that repayment rates are fair. But Congress is increasingly shifting to tax credits, a practice that does not help low-income individuals who do not owe income taxes. Aggressive efforts should be made to deter this shift away from need-based aid, which provides the primary entry into higher earning potential for low-income youth. Conclusion: Programmatic Responses Alone Won’t Alleviate Child Poverty Agencies such as The Children's Aid Society implement sound, comprehensive youth development programs in community schools and neighborhood centers that have been proven to greatly benefit children, youth and families. Nonetheless, these programs alone are insufficient to prevent child poverty. Community leaders must launch a strong and vocal campaign to encourage collaboration by government and private industry to ensure that hardworking parents are not mired in economic despair and that urban youth have the opportunities necessary to make them productive, independent members of society. Only then will we at Children’s Aid actualize our mission: To ensure the physical and emotional well-being of children and families, and to provide each child with the support and opportunities needed to become a happy, healthy and productive adult. Notes 1 In this actual case, the family’s names have been changed to protect their privacy. 2 “City Refines Formula to Measure Poverty Rate,” The New York Times, June 14, 2008. The national poverty line for a family of three is $17,600 in annual earnings. 3 Ibid. 4 "Living at the Edge: Employment Alone is Not Enough for American’s Low-Income Children and Families” N. Cauthen, H. Lu, National Center for Children in Poverty, Columbia University, August 2003. 5 Ibid. 6 Examining the Evidence: The Impact of the Los Angeles Living Wage Ordinance on Works and Business, David Fairris, Department of Economics, University of California, 2005. “This study offers compelling evidence that living wage laws can improve the quality of life for low-income workers.” 7 The federal minimum wage would be worth $8.89 today if Congress had updated it based on the rate of inflation; stead it stands at $5.15, 42% below its real value in 1968. Economic Policy Brief, Brennan Justice Center, June 2005. 8 The Urban Institute, August 2005. 9 Ibid. 10 Living at the Edge, supra. 11 Income Equality Among America’s Children, G. Acs, M. Gallagher, The Urban Institute, 2005. 12 Strengthening Marriage and Two-Parent Families, C. Jarchow, National Conference of State Legislators, February 2003. 13 Agents of Change: Pathways Through Which Mentoring Relationships Influence Adolescents’ Academic Adjustment, J. Rhodes, J. Grossman, N. Resch, Child Development, November/December 2000. 14 Teen Pregnancy Prevention Program, Michael Carrera, Ph.D., Philliber Research Associates, May 2001. 15 Parents’ Low Education Leads to Low Income, Despite Full Time Employment, National Center for Children in Poverty, 2003. 16 Christopher Swanson, EPE Research Center, and The Bill & Melinda Gates Foundation, 2006. 17 Lauer, P.A., Akiba, M., Wilkerson, S.B., Apthorp, H.S., Snow, Dl, & Martin-Glenn, M., The Effectiveness of Out –of-School-Time Strategies in Assisting Low Achieving Students in Ready and Mathematics; A Research Synthesis, (Updated ed.). Aurora, C): Mid-continent Research for Education and Learning, 2004; Weiss, H.B., Little, P.M.D., & Bouffard, S. M., More Than Just Being There: Balancing the Participation Equation, in H.B. Weiss, P.M.D. Little & S.M. Bouffard (Editors) & G.G. Noam (Editor in Chief), New Directions in Youth Development: Vol. 105. Participation in Youth Programs: Enrollment, Attendance and Engagement, (pp. 15-31). San Francisco: Jossey-Bass. Spring 2005: Reisner, E.R., White, R.N., Russell, C.A., and Birmingham, J., Building Quality, Scale and Effectiveness in After-School Programs: Summary Report of the TASC Evaluation, Washington, DC: Policy Studies Associates, 2004. 18 Out of School, Out of Work … Out of Luck? New York’s Disconnected Youth, Community Service Society, 2005. 19 Long-Term Effects of Head Start, E. Garces, T. Duncan, J. Currie, National Bureau of Economic Research, 2000. 20 Out of School, Out of Work … Out of Luck? New York’s Disconnected Youth, supra. 21 Parents’ Low Education Leads to Low Income, Despite Full Time Employment, supra.

For further inquiries please contact: The Children’s Aid Society Office of Public Policy and Client Advocacy (212) 358-8930