Report: Welfare a barrier to economic mobility for low-income workers

by David Bass | Sep 18, 2024

Georgia news, in the news, current events, Georgia happenings, GA happenings

Report: Welfare a barrier to economic mobility for low-income workers

At a campaign stop in North Carolina last month, Vice President Kamala Harris suggested that efforts to combat price gouging are needed to help poor and middle-class households. But a new research report shows that government transfer benefits are contributing to the financial burdens and limitations of low-income households.

The report from the Georgia Center for Opportunity highlights how social safety-net programs, while providing a baseline of support, may inadvertently deter low-income workers from seeking higher-paying jobs due to the “benefits cliff.”

The report, titled “Workforce Engagement: A Missing Link in Understanding Income Inequality,” examines how programs like food stamps, Medicaid, and housing subsidies create barriers to long-term financial independence.

The benefits cliff occurs when a small increase in wages results in a significant reduction or loss of government benefits, leaving workers with a net loss in income. This phenomenon discourages individuals from pursuing career advancements and higher-paying jobs.

The report emphasizes that these safety-net benefits can create disincentives for the lowest-paid workers to move up the economic ladder. After adjusting for taxes and transfer payments, the bottom quintile has nearly the same net income as the second quintile, despite earning almost four times less. This is primarily due to the higher level of government support received by the former group.

Read the full article here

Why Focus More on Public Safety and Order? Kids Need More of It.

by David Bass | Sep 17, 2024

A new book, Doing Right by Kids, explores the impact that community violence has on children's opportunities for economic and social mobility.

Why Focus More on Public Safety and Order? Kids Need More of It.

Key Points

Community violence is one of the factors examined in a new book called “Doing Right by Kids,” which examines how we can improve relationships, institutions, and community environments to expand upward mobility among kids.
The book features a chapter from GCO’s director of criminal justice initatives, Josh Crawford, explaining how community violence affects kids and their futures. See an excerpt below.
“Doing Right by Kids” is a thoughtful, accessible guide to improving opportunities in the communities where children’s lives are formed. Get a copy of the book here.

Public safety and community violence are more critical now than they have ever been. With increasing societal tensions and the lingering effects of the pandemic, Americans—including Georgians—want to feel secure in their neighborhoods. The path to achieving this sense of security is clear: fund the police, hold violent offenders accountable, and ensure a fair and just system that doesn’t allow fear and lawlessness to prevail.

At the Georgia Center for Opportunity, we believe that addressing public safety and community violence is essential for creating thriving communities. This belief is echoed in a new book, “Doing Right by Kids: Leveraging Social Capital and Innovation to Increase Opportunity,” which features a pivotal chapter by our very own Josh Crawford, GCO’s director of criminal justice initiatives.

In his chapter, Josh explores the significant impact of public safety and community violence on children and provides insightful solutions for rebuilding social capital and fostering safe environments.

Below is an excerpt from Josh’s chapter, “Kids and Community Violence: Costs, Consequences, and Solutions.” You can also read the full chapter here.

A new book, Doing Right by Kids, offers new ideas for improving upward mobility for disadvantaged kids.

When it comes to improving opportunities for kids, we need better ideas. Now they’re here.

Get your copy of Doing Right by Kids

A new book, Doing Right by Kids, offers new ideas for improving upward mobility for disadvantaged kids in America.

When it comes to improving opportunities for kids, we need better ideas. Now they’re here.
Get your copy of “Doing Right by Kids” today.

“Doing Right by Kids” Excerpt: Why Focus More on Public Safety and Public Order?

Walk into any suburban coffee shop in a low-crime neighborhood and look around. You’ll quickly notice the tables are populated by tens of thousands of dollars’ worth of laptops and smartphones, and designer purses sit on the floor. These items often go unguarded when patrons pick up their coffees or go to the bathroom. It’s the normal course of business in these establishments. No one fears these items will be stolen. There is an unconscious presupposition of public safety. This is what happens when the public order is upheld.

When this presumption of safety falls apart, however, people change their behavior. Following the expansion of remote work during the coronavirus pandemic, workers in New York City cited violence and crime as the primary reasons for not wanting to return to the office. Research on crime avoidance also finds that households will pay a premium to avoid violence. One 2011 study of families in the San Francisco Bay Area in California found that the average household was willing to pay $472 per year to avoid a 10 percent increase in violent crime.

The United States has had varying degrees of success in public safety over the years. In the modern context, violent crime peaked in the United States in 1991 with 758.1 instances per 100,000 people, an increase of more than 470 percent from 1960. Homicide, the most destructive and permanent of the violent offenses, peaked in 1980 at a rate of 10.2 per 100,000 residents and in 1991 with a rate of 9.8 per 100,000 residents; in 1960 the murder rate had been almost half that at 5.1 per 100,000 residents.

After 1991, as a result of a number of changes in policing, sentencing, and a wide array of other hotly debated factors, homicide and violent crime declined significantly in cities across the country (Figures 1 and 2). This decline continued until 2014, when the homicide rate reached 4.4 per 100,000 and the violent-crime rate was 379.4 per 100,000. While this was a huge improvement from the highs of 1991, the violent-crime rate in 2014 was still more than double the rate in 1960. It has trended in the wrong direction in recent years, with a jump in homicides in 2020.

Figure 1. US Homicide Rate per 100,000, 1960-2022

As of 2014, the violent crime rate was still more than double the rate in 1960.

Figure 2. US Violent-Crime Rate per 100,000, 1960-2022

US Violent Crime Rate Trend per 100,000 from 1960-2022.

While the long-run decline in crime is important, it is ultimately too reassuring because no one lives in “the nation.” Aggregated data erase important variations from state to state, city to city, and neighborhood to neighborhood. People live in communities, not the whole nation.

Despite these declines in violent crime often being disproportionately experienced in disadvantaged neighborhoods, violence continues to concentrate at the sub-city level. One study of gun violence in Boston, for example, found that these crimes were concentrated in less than five percent of one-block street segments and intersections. The “law of crime concentration” generally states that in large cities, about 50 percent of crime occurs in about five percent of street segments. Crime is even more concentrated in smaller cities, where, on average, between two and four percent of street segments are responsible for 50 percent of violence. These micro-communities lack the minimum levels of safety and order that are precursors for human flourishing, and the effects of their violence propagate beyond these few hot zones.

Philosopher and political theorist James Burnham observed:

Human beings must have at least a minimum security in life and property, must be able to move through the streets and between the cities, must accept certain common rules in their mutual intercourse, or civilization does not exist. If this necessary order is subverted, the civilization is destroyed, whether the subversion takes place from the best or worst of motives, whether or not it is in some supposedly moral sense justified, whether it is carried out by saints or devils. At some point the guardians of a civilization must be prepared to draw the line.

For far too many children, this kind of order has been inconsistent at best and nonexistent at worst. For children in these neighborhoods, violence is pervasive and affects them both directly and indirectly. Those directly affected are the youth that join criminal street gangs and become perpetrators, as well as those who are either victimized themselves or kin to victims. Those indirectly affected are those who neither become perpetrators nor victims but who contend with the persistent fear, stress, and isolation that comes with growing up in a community with high rates of violence.

Bridging the gap for America’s kids

Overall, “Doing Right By Kids” explores the truth that, while material hardship among American children is at an all-time low, upward mobility is still difficult for children in poor households and neighborhoods. Despite reduced hardship, children born to disadvantaged parents are still likely to grow up disadvantaged due to counterproductive policies within our safety net.

The belief that increased financial support alone will advance poor children is inadequate. While progressive strategies have fallen short, conservative skepticism towards government intervention has also neglected the needs of these children.

Truly supporting America’s kids requires focusing on the building blocks of healthy and fulfilling lives—from neighborhood environments to family life to educational opportunities. “Doing Right By Kids” offers innovative proposals to rebuild social capital by strengthening relationships and institutions for children and adolescents, advocating for experimental approaches to identify effective, scalable policies.

For policymakers, community leaders, parents, and concerned citizens, “Doing Right by Kids” is a thoughtful, accessible guide to learning more about what kids really need from us and our society in order to thrive.

Go here to get a copy and to share the book with neighbors and colleagues.

How safety-net benefits discourage low-income workers from escaping poverty

by David Bass | Aug 8, 2024

The proven building blocks of child development can empower communities to get involved in helping parents raise highly capable kids.

How safety-net benefits discourage low-income workers from escaping poverty

Key Points

A new research paper from GCO shows the ways social safety-net programs like food stamps and Medicaid provide critical support but also discourage career advancement.
The “benefits cliff” is a significant barrier, where earning more can mean losing benefits, deterring workers from seeking higher-paying jobs.
Government benefits can blur the true income disparity between low-income and middle-income households.
Policy reforms are needed to remove these barriers and encourage upward mobility.

At a time when income inequality and lack of economic mobility are hot topics, a report from the Georgia Center for Opportunity (GCO) sheds light on how our social safety-net system could be contributing to these trends.

Entitled “Workforce Engagement: A Missing Link in Understanding Income Inequality,” the report explores how government support unintentionally discourages low-income workers from escaping poverty. The report also presents actionable policy solutions to avoid that trap.

What Are Safety-Net Benefits?

Safety-net systems include programs like food stamps, housing subsidies, and Medicaid, designed to provide financial assistance to those in need. While these programs are essential, they can inadvertently create barriers to long-term financial independence. This phenomenon is known as the “benefits cliff,” where individuals and families turn down career advancement opportunities to avoid losing government benefits.

The Source of Income Disparities

The GCO report reveals that government benefits often obscure the true income disparities between low-income and middle-income households.

When examining work-capable households, the unearned income from government benefits can paint a misleading picture of economic equality. Without these benefits, it’s clear that households in the lowest income quintile earn significantly less than their counterparts in higher income quintiles.

The report also highlights how these safety-net benefits can create disincentives for the lowest-paid workers to move up the economic ladder. For instance, after adjusting for taxes and transfer payments, the net income of households in the lowest quintile is almost equal to those in the second quintile, despite the latter earning nearly four times more.

This equalization is largely driven by government transfers, which provide significantly more support to the bottom quintile compared to the second quintile. This scenario leads to nearly identical average per capita net incomes between these groups.

The cover of the Worker Engagment report

Workforce Engagement

A Missing Link in Understanding Income Inequality

The compelling new report that examines the unintended consequences of our nation’s social safety-net system on low-wage workers.

Download the full report

Policy Recommendations

Understanding the dynamics of income inequality and the unintended consequences of social safety-net systems is crucial for fostering economic mobility and improving the quality of life for low-income workers.

To boost workforce engagement and reduce reliance on social safety nets, the report suggests several policy reforms:

Reducing Benefits Cliffs: Adjust thresholds for benefit eligibility to prevent sudden losses of support as income increases.
Work Incentives: Offer incentives for part-time workers to transition into full-time roles.
Education and Training: Provide better access to educational resources and vocational training programs.

GCO is dedicated to working within underserved communities to understand the realities of poverty and the public policies that perpetuate it. Our previous research, including on intergenerational poverty, underscores that America’s social safety net is designed to address situational poverty rather than systemic poverty.

Marriage Rates in Georgia Are Down. But Marriage Still Matters For Quality of Life and Upward Mobility.

by David Bass | Jun 27, 2024

Marriage rates in Georgia are down, which is a factor to watch for overall well-being.

Marriage Rates in Georgia Are Down. But Marriage Still Matters For Quality of Life and Upward Mobility.

Key Points

Georgia has seen a decline in marriage rates, mirroring a national trend. Only 30% of Georgians have been married at least once, and U.S. marriage rates have fallen by nearly 60% over the past 50 years.
Despite these trends, marriage remains a significant predictor of adult well-being, more so than education, race, age or gender. Married individuals often report higher happiness and satisfaction levels, and benefits include emotional stability, financial security, and social support.
We must address economic, education, and social safety-net barriers to marriage while creating a supporting environment that fosters marriage and family formation.

Recent reports, including a piece from Axios, have highlighted a concerning trend in Georgia—declining marriage rates.

According to data from the American Community Survey, only 30% of Georgians have been married at least once in their lives. This is indicative of a larger national trend: The marriage rate across the U.S. has fallen by nearly 60% over the past 50 years.

While societal pressures to marry have lessened and many young people doubt the benefits of marriage, this decline raises important questions about the impact on individual well-being and societal mobility.

Marriage rates in Georgia are a leading factor in quality of life

Helping people form healthy, committed relationships is a key pillar of the Georgia Center for Opportunity’s mission to help all Georgians flourish. Relationships are essential to well-being in general, but marriage has a particular impact on the quality of life and upward mobility for men, women, and children.

Quality of life

Marital status is one of the strongest predictors of adult well-being, surpassing other factors like education, race, age, and gender. According to the Institute for Family Studies and Gallup, married individuals often report higher levels of happiness and satisfaction compared to their unmarried peers. This isn’t just about companionship—marriage can provide emotional stability, financial security, and social support, all of which contribute to a better quality of life.

Upward mobility

Marriage also plays a critical role in economic mobility. Couples often benefit from dual incomes, shared resources, and consolidated expenses, making it easier to save and invest in the future. This financial stability can lead to better opportunities in terms of education, homeownership, and overall wealth accumulation. Essentially, marriage can act as a catalyst for achieving a higher economic status and breaking free from cycles of poverty.

Benefits for children

Children raised in two-parent, married families often experience greater stability and economic advantages, contributing significantly to their overall well-being. Additional research from the Institute for Family Studies shows that children who live in households with married parents experience more financially secure environments, less conflict, and more parental support.

Marital status is key factor in personal well-being and quality of life.

According to polling from Gallup, married people report higher levels of happiness and life satisfaction. This is another indicator of how essential relationships are for personal well-being and quality of life.

Marital status is a key factor for personal well-being and quality of life.

Certain barriers in Georgia make marriage and its benefits hard to pursue

Despite marriage’s benefits, Georgia has several barriers that discourage marriage as a path to fulfilling relationships and flourishing lives. Educational challenges and a social safety net that frequently discourages marriage are a couple of significant roadblocks that can make it harder for people to pursue marriage.

Educational challenges

Educational attainment is another significant barrier. Those with higher levels of education are more likely to marry, but educational opportunities are not evenly distributed across the state. Addressing these disparities could encourage higher marriage rates and, consequently, greater upward mobility.

A social safety net that punishes marriage

Another significant barrier to marriage in Georgia is the “marriage penalty” embedded within many social safety net programs. The term refers to the phenomenon where low-income individuals or couples may actually lose financial benefits by getting married.

Programs such as Medicaid, housing assistance, and food stamps often have income thresholds that discourage marriage. When two low-income individuals marry, their combined income might exceed these thresholds, leading to a reduction or complete loss of benefits—creating a “benefits cliff.”

This financial disincentive can make marriage less appealing for low-income individuals who rely on these crucial programs to make ends meet. By losing access to necessary support, the economic stability that marriage can potentially offer is compromised, perpetuating a cycle where the cons outweigh the pros.

Addressing these safety-net barriers is essential for fostering an environment where marriage can thrive and contribute positively to individual and societal well-being.

The way forward

While the decline in marriage rates in Georgia is a complex issue influenced by various societal and economic factors, it’s essential to recognize the underlying benefits of marriage. Beyond the romantic ideals, marriage plays a pivotal role in enhancing quality of life and facilitating upward mobility.

To counteract the downward trend, it’s necessary to address the barriers that discourage marriage and create a more supportive environment for couples.

9 Benefits of Work for Teens and Young Adults

by David Bass | Jun 14, 2024

In addition to earning money, the benefits of work for teens include positive impacts on mental health, physical health, and relationships.

9 Benefits of Work for Teens and Young Adults

Key Points

Research has shown that there are numerous benefits of work for teens and young adults across all areas of life, including finances, relationships, and physical and mental health.
Labor force participation rates show teens and young adults are working less than previous generations.
Encouraging teens and young adults to work can be a valuable way of helping them lead meaningful lives and become healthy, resilient adults.

As summer break approaches for many teens and young adults, most will be looking forward to leisurely activities like a trip to the beach, camping, or even summer camp. Kids at this developmental age indeed need relaxation and rejuvenation over summer breaks, but it is also a valuable opportunity to reap lifelong benefits.

Parents, guardians, or even mentors may want to encourage their teen to get a summer job—not just to earn a little spending money but because work has many other benefits to the health and resiliency of teens.

It’s true that the brains and bodies of kids need some time to relax and rejuvenate after a long school year—and taking a much-needed break in the summer months can be a good thing. There’s also a lot to be said for getting a summer job that teaches the value of work and offers benefits that reap dividends over the course of their lives.

Work is good for young people

Research shows that seasonal and part-time employment for teenagers and young adults has almost universally positive impacts. The truth is that holding down a summer job is something that previous generations commonly experienced—and enjoyed—but kids today have been comparatively shielded from working until much later in life.

In fact, according to the U.S. Bureau of Labor Statistics, the summer labor force participation rate for 16- to 24-year-olds in July 2023 was only 60.2%—slightly down from the previous year’s rate of 60.4%. By comparison, back in July 1989, the rate peaked at 77.5% before trending downward over the next 20-plus years to settle between 60.0% and 60.6% from 2012 to 2018.

Since then, the rate dropped significantly to 57.3% in 2020 due to the economic dislocation caused by the COVID-19 pandemic, though it has since returned to pre-COVID levels at around 60%.

Contrasting by gender, the 2023 gap in summer labor force participation was the smallest on record—at only 0.4%—with only 60.4% of young men working compared to 60.0% for young women. Interestingly—and not surprisingly—the gender gap was its widest at 40.9 percentage points back nearly 75 years ago in July 1950. Also not surprising is that today most summer jobs for teens and young adults are in leisure and hospitality (25%), retail trade (18%), and education and health services (13%).

Clearly, the current generation of teens and young adults is working less than their predecessors. But what’s the impact on their lives?

They not only miss out on the financial benefits of earning money, but also on learning “soft” skills and attitudes that will positively impact them for the rest of their lives, including time management, respect for supervisors, following instructions, being reliable, demonstrating an upbeat attitude, dressing appropriately, accepting constructive criticism, and even using work-appropriate language.

As teens and young adults take on fewer seasonal or part-time jobs, they miss out on the benefits of work.

In July 2023, the summer labor force participation rate for 16- to 24-year-olds was 60.2%. In July 1989, the rate peaked at 77.5%. The drop means more young people are missing out on the benefits of work.

For young people, benefits of work span all areas of a healthy life

Beyond this, the Georgia Center for Opportunity (GCO) team has thoroughly reviewed the literature and found that there are nine benefits for work that help teens and young men and women develop a strong work ethic that lays the foundation for success in every area of life:

1. Personal finances: When we think of work, we immediately think of a paycheck. That’s the most obvious benefit. Work enables kids to buy both necessities and luxuries, to pay for education, even to start saving for retirement. Attaching to work early is also important for avoiding the trap of the social safety-net system that can unintentionally keep people mired in poverty.

2. Serving others: Earning money in a free market economy shows the ability to create value by serving others and learning self-reliance.

3. Economic impact: The more people work, the more the economy grows. This creates a more prosperous society and leaves those who work personally better off than those who don’t work. Those who don’t work deny society resources that could have made everyone better off—while simultaneously pulling resources away from other important societal needs.

4. Personal well-being: Work confers dignity and respect. It provides a sense of meaning and purpose in life. In contrast, those who don’t work are, overall, less happy and experience higher levels of personal and familial stress, sadness, despair, hopelessness, apathy, and depression.

5. Mental health: Those who work experience improved mental health outcomes and have higher self-esteem, fewer psychosomatic symptoms, less anxiety, and decreased suicide risk.

6. Alcohol and substance abuse: Those who work generally have reduced drug use and improved treatment outcomes. The impact of substance abuse appears to be greater on those who don’t work.

7. Physical health and lifespan: Those who don’t work generally have poorer physical health, including disrupted sleep patterns, higher risk for cardiovascular disease and respiratory infections, and shorter longevity.

8. Family relationships: Working has a particularly positive impact on males when it comes to family formation. Young men who work are much more likely to marry and have a family.

9. Crime: Working typically has a positive effect on teens and young adults by increasing future wages, building human capital, and reducing criminal behavior and recidivism—especially for economic crimes involving property damage, theft, and drugs.

Taken together, the evidence is strong for teens and young adults to start working on a seasonal or part-time basis. Whether it’s learning to manage a summer job in between camps, family vacation, and other enrichment activities or working during the academic year after school or on the weekends, the benefits of employment go far beyond earning money.

While it may be fashionable for parents to shelter their children from the working world as long as possible to allow them to enjoy a more carefree and leisurely adolescence, the data—and generational wisdom—show that we do kids more harm than good by unduly delaying their exposure to the workforce.