When confronted with the issue of poverty, how do you typically react? A few common reactions come to mind: Indifference (“at least it’s not me”), resignation (“the poor will always be with us”), compassion (expressed through charitable contributions), appeals to meritocracy (“pull yourself up by your bootstraps”) and warnings about rewarding dependency (“give a mouse a cookie…”).
Indifference and resignation confuse me as they seem to disown our commitment to upward mobility that is central to the American Dream. Charitable contributions are critical to our community, exemplified by Tulsa’s moniker as “America’s most philanthropic city;” however, treating cancer with aspirin is not a sustainable solution. As for the concept of meritocracy, many who make this argument ignore the fact that we are far from living on a level playing field. Meanwhile, public assistance programs rarely enable dependency. It should be obvious that no one wants to be poor.
So, what is the state of poverty in our community? The federal poverty level for a family of three is $20,780, roughly half of Tulsa’s self-sufficiency benchmark of $46,889. Knowing this, first consider the stress that families in poverty live with as they face this chasm between their income and self-sufficiency. Next, consider that living this way is not uncommon as one in six people in Tulsa County live below the poverty line, including one in four children. That’s 37,000 children.
For the world’s most prosperous country of all time — with gross domestic product approaching $60,000 per capita — these numbers are shocking, yet we seem resigned to accept them as a permanent reality. Perhaps we should judge modern societies not by GDP, but rather by the way those with wealth and power treat those lacking wealth and power. While we may never eradicate poverty, we can certainly do better than one in four children. And at the very least, we should do no harm. With that in mind, here are three steps we can take to address this issue.
First, we should replace cliffs with off-ramps in our public assistance programs. Public benefits provide essential goods and services such as food, housing, child care and health insurance. Yet cliff effects are prevalent across these programs as families face steep reductions in benefit amounts as earned income rises. An Oklahoma Policy Institute analysis of cliffs across several programs finds that after accounting for taxes and benefits, a single mother earning $16 per hour is no better than if she were earning $11 per hour. This perverse outcome is driven by higher taxes, plus reductions in housing assistance, earned income tax credits, child-care subsidies and lost Medicaid eligibility. It is hard to believe that those who are trying to escape poverty must live in a world where $11 is greater than $16. We must address cliff effects across these programs by raising eligibility caps and building in gradual off-ramps so that reductions in benefits never exceed increases in earned income. First, do no harm.
Second, the minimum wage is not remotely livable. Earning $7.25 per hour on a full-time basis is equivalent to just over $15,000 annually, well below self-sufficiency earnings. For a single-parent with one child, monthly expenses for housing, food and child care exceed the earnings of a full-time minimum wage worker of $1,300 per month. Moreover, the purchasing power of our current minimum wage has declined 17% since the last increase in 2009 and is 31% less than the value in 1968 when it was equivalent to $10.54 in today’s dollars. Restoring the value of the minimum wage would have wide-ranging effects. According to the Economic Policy Institute, raising the minimum wage to $12 per hour would increase the wages of 35 million workers nationwide and result in $17 billion in savings to government assistance programs. In Oklahoma, such an increase would affect 414,000 people, equivalent to 27% of our workforce. Ninety percent of those affected are over the age of 20, living independently and would be more able to cover basic living expenses, avoid hunger and eviction and potentially save for the future. Oklahoma is in the minority of states that sticks with the federal standard of $7.25 per hour. If our Legislature fails to act yet again in 2020, they should at least rescind pre-emption, which prevents communities from raising minimum pay locally. If they are unable to take this modest step, then we should follow our neighbors in Arkansas and Missouri who responded favorably to a statewide ballot initiative last year and voted overwhelmingly to raise minimum pay to $11-$12 per hour.
Lastly, we need to invest as a state in our workforce, much like we incentivize capital investment. Our state faces a significant skills gap. Currently, 40% of our workforce has earned a post-secondary credential; however, employers advise that by 2025, 77% of new jobs will require post-secondary education. We also know that median income for those with some post-secondary education is 22% higher than median income for high school graduates. Given the benefits for workers and our state’s economy, we must invest in human capital. For those preparing to enter the workforce, we should expand work-based learning experiences such as Union Public Schools’ Career Connect program and initiatives that provide sector-based training and job placement services for young adults such as WorkAdvance’s Next Up program. For those already in the workforce, the state should incentivize employers to expand tuition reimbursement benefits and Incumbent Worker Training to support credential attainment among employees. These steps would increase post-secondary attainment as demanded by employers, as well as improve the earning potential of our workforce.
While it will take time to reduce the prevalence of poverty, there are several steps we can take. Doing so is simply a question of priorities. Do we care enough about the well-being of our neighbors, including the 37,000 children in Tulsa County living in poverty, to take these steps and alleviate the stress in their daily lives? Or will we remain indifferent and continue offering platitudes about bootstraps? We should waste no time in confronting this question and respond with urgency.
Michael DuPont is a program officer for the Charles and Lynn Schusterman Family Foundation and a member of the Tulsa World Community Advisory Board. Opinion pieces by board members appear in this space most weeks.