Nicole’s story: How a raise meant losing food stamp benefits for this mom of four

Nicole’s story: How a raise meant losing food stamp benefits for this mom of four

correctional officer

Nicole’s story: How a raise meant losing food stamp benefits for this mom of four

Nicole had high hopes when she moved her family from a rural area in south Georgia to Henry County in the Atlanta metro. The cost of living went up, but the job opportunities were more plentiful and paid much better: She went from making $25,000 a year to over $35,000 as a corrections officer.

But that’s when Nicole got an unpleasant surprise. Her new salary level meant that her safety-net benefits from the government went entirely away—not reduced, but entirely eliminated. She ended up getting around a $10,000 raise but losing approximately $12,500 in benefits.

“I ended up getting kicked off social services because I made a couple dollars more than the max I could,” Nicole shared.

Nicole is 32 years-old and the single mother of four boys. “I’m the only income. I don’t get child support payments or anything else,” she said.

Losing her benefits—particularly food stamps—was a severe blow, especially during the pandemic. Although she has gotten help from local church-based food banks to help her make ends meet, her situation is still stressful.

To further bridge the gap, Nicole is working as much overtime as possible. But she would need to earn significantly more—to the tune of $25 an hour—in order to fully make up for the benefits she has lost. Even in an economy where wages are quickly rising for many workers, that raise level is a tough haul.

 

What needs to change?

Nicole encountered what we call the “benefit cliff,” where well-intentioned policies actually prevent people from getting off public services. They make just enough to lose their benefits, but not enough to make up for those lost benefits. The result is a system that keeps people trapped in poverty rather than one that propels them toward self-sufficiency and the dignity that comes with it.

While it is wonderful to see how the community has stepped up to help Nicole fill the gaps left from her losing access to food stamps, not everyone is so fortunate.

So, what’s the best pathway forward? Our goals should be to shore up the safety net for those who truly need it, eliminate these benefit cliffs, and create a system that encourages (rather than discourages) people from climbing the economic ladder. Along these lines, here are three possible ways forward:

 

  • The food stamp program could be fully redesigned to eliminate the benefit cliffs.

 

  • Separate pools of funds (from public, private, and charitable resources) could be set up as temporary stop-gap measures to get people like Nicole beyond the cliff.

 

  • Nicole could work with someone who understands the cliffs to help her strategize a career and pay progression to effectively jump over the cliff.

 

The Success Sequence provides an outline of how to reverse the cycle of poverty in our communities. GCO uses this as a framework for much of our work.

#DareToClimb media campaign

This is why the Georgia Center for Opportunity (GCO) recently launched the #DareToClimb media campaign. The campaign is designed to raise awareness and share stories of those trapped in government assistance programs that, while well-intentioned, are structured in a way that often does more harm than good. GCO believes it is important to share the stories of these courageous men and women who have overcome obstacles in their lives to achieve self-sufficiency.

To learn more, follow the #DareToClimb hashtag.

** The $35,000 income limit is based on Nicole’s interview with us. Although our calculations show it will be somewhat higher, the impact and stress she is experiencing will be the same.

 

The Best Administrative Structure for Welfare

The Best Administrative Structure for Welfare

The Best Administrative Structure for Welfare

By Erik Randolph

When someone needs financial help or workforce training from the government, where do they go?

If we just allowed people to navigate federal programs on their own, the average person would be completely overwhelmed.

 

mother and daughter in poverty
According to the U.S. Government Accountability Office, there are more than 80 federal assistance programs for low-income persons and 43 federal employment and job-training programs at the federal level, with little overlap. Just listing the programs would exceed the word limit for a typical blog. 

Fortunately, states have some control over the process for some of the larger programs, like food stamps and Medicaid, that serve millions of Americans.

Georgia’s Gateway Strategy

Compared to many states, Georgia is ahead. The state government has spent years and $262 million to streamline its eligibility systems of means-tested programs into an integrated system known as the Georgia Gateway.

Here there is just one “door” to enter to qualify for some of the big federal means-tested programs entrusted to the states to administer.

The awarding-winning Gateway allows individuals to apply for ten programs across four state agencies, including  food stamps; food packages from the Women, Infants, and Children Program; Medicaid; subsidized childcare; and Temporary Assistance for Needy Families.

The Department of Human Services runs the eligibility system at an annual operating cost of about $62 million, but the department does not administer all the programs themselves. For example, the Department of Community Health administers the Medicaid program, and the Department of Early Care and Learning administers the subsidized childcare program. 

Integrated eligibility systems are far more convenient for the customers, requiring them to enter only one door, instead of up to five separate doors in the case of Georgia. It also streamlines the application process for the customer. 

On the administrative side, all the hard work is done behind the scenes. The automated systems can share information between programs. Moreover, the technology sets up the state to accomplish future streamlining, consolidation, and reform.

Despite all these advantages of the Gateway, there is still room for improvement. Take Utah’s system, for example. 

Utah’s Integrated System

Although Georgia is ahead of many states, Utah may be the furthest ahead. 

As explained in a recent American Enterprise Institute report, Utah streamlined 23 workforce programs across six state agencies into a Department of Workforce Services.

In addition to helping customers with employment, Utah treats basic welfare programs as support services. These include food stamps, subsidized childcare, financial assistance, and medical programs. Customers also can file claims for unemployment insurance and apply for disability services

The Utah system is clean and easy for the customer. Its “no wrong door” policy allows easy access to help in finding employment and receiving support services. It also sends a clear message that Utah prioritizes work as a solution.

Behind the scenes, Utah works with various federal agencies to make the system work. It is not an easy task. It requires creative solutions and continual effort on part of the state to take on the many hassles that come with dealing with the federal government, including the burdensome task of securing “waiver” approvals to federal law from the federal agencies.

However, the goal is worthwhile. It creates an easier experience for the customers,  at  overall less administrative cost.

Much More Work Needs to Be Done

Utah is showing the way, but much more work needs to be done. 

There are still welfare benefits that the federal government does not allow states to administer. These program benefits are additional doors that people must enter, requiring additional effort to apply for those benefits and hoops to jump through to get assistance. 

In other words, while Georgia has integrated eligibility systems, and Utah has gone even further with its integration, there are federal government programs outside the control of the states. These include the Earned Income Tax Credit, the Supplemental Security Income, and public housing.

Furthermore, as we have written about, the rules themselves still need fixing to eliminate welfare cliffs and marriage penalties. 

Nevertheless, progress is being made, and the work continues on. 

Do you have experience with the Georgia Gateway and other assistance programs?  Or perhaps experience in another state? Share your experiences in the comments below.

Erik Randolph is Director of Research at the Georgia Center for Opportunity. This blog reflects his opinion and not necessarily that of the Georgia Center for Opportunity.

List of Programs per the Government Accountability Office, Reports GAO-15-516 and GAO-19-200.

  • 21st Century Community Learning Centers
  • Additional Child Tax Credit
  • Adoption Assistance
  • Adult Education Grants to States (Adult Education and Family Literacy Act)
  • Affordable Care Act Maternal, Infant, and Early Childhood Home Visiting Program
  • American Indian Vocational Rehabilitation Services
  • Career and Technical Education – Basic Grants to States
  • Chafee Foster Care Independence Program
  • Child and Adult Care Food Program (lower-income components)
  • Child Care and Development Fund
  • Child Support Enforcement
  • Choice Neighborhoods Implementation Grants
  • Commodity Supplemental Food Program
  • Community Based Job Training Grants
  • Community Development Block Grants
  • Community Service Employment for Older Americans
  • Community Services Block Grant
  • Compensated Work Therapy
  • Consolidated Health Centers
  • Disabled Veterans’ Outreach Program
  • Earned Income Tax Credit
  • Education for the Disadvantaged- Grants to Local Educational Agencies (Title I, Part A)
  • Emergency Food and Shelter Program
  • Environmental Workforce Development and Job Training Cooperative Agreements (Brownfield Job Training Cooperative Agreements in 2011report)
  • Exclusion of Cash Public Assistance Benefits
  • Family Planning
  • Federal Pell Grants
  • Federal Supplemental Educational Opportunity Grants
  • Federal TRIO Programs
  • Federal Work-Study
  • Food Distribution Program on Indian Reservations
  • Foster Care
  • Foster Grandparent Program
  • Fresh Fruits and Vegetables Program
  • Gaining Early Awareness and Readiness for Undergraduate Programs
  • Grants to States for Workplace and Community Transition Training for Incarcerated Individuals
  • H-1B Job Training Grants
  • Head Start
  • Higher Education: Aid for Institutional Development programs and Developing Hispanic-Serving Institutions programs
  • HOME Investment Partnerships Program
  • Homeless Veterans’ Reintegration Program (Homeless Veterans’ Reintegration Project in 2011 report)
  • Homeless Assistance Grants
  • Housing Opportunities for Persons with AIDS
  • Improving Teacher Quality State Grants
  • Indian and Native American Program (Native American Employment and Training in 2011 report)
  • Indian Education – Bureau of Indian Education
 

  • Indian Education—Formula Grants to Local Educational Agencies
  • Indian Health Service
  • Indian Housing Block Grant
  • Indian Human Services (Division of Human Services)
  • Job Corps
  • Job Placement and Training Program (Indian Employment Assistance in 2011 report)
  • Job Training, Employment Skills Training, Apprenticeships, and Internships
  • Legal Services Corporation
  • Local Veterans’ Employment Representative Program
  • Low-Income Home Energy Assistance Program
  • Low-Income Housing Tax Credit
  • Maternal and Child Health Block Grant
  • Mathematics and Science Partnerships
  • d settings.
  • Medicaid
  • Medical Care for Low- Income Veterans Without Service-Connected Disability
  • Migrant and Seasonal Farmworker Program
  • National Breast and Cervical Cancer Early Detection Program
  • National Farmworker Jobs Program
  • National School Lunch Program (free and reduced- price components)
  • Native American Career and Technical Education Program (Career and Technical Education – Indian Set-Aside in 2011 report)
  • Native Employment Works (Tribal Work Grants in 2011)
  • Native Hawaiian Career and Technical Education Program
  • Nutrition Assistance Program for Puerto Rico
  • Nutrition Service for the Elderly
  • Older Americans Act Grants for Supportive Services and Senior Centers
  • Older Americans Act: National Family Caregiver Support Program
  • Projects with Industry
  • Public Housing
  • Reentry Employment Opportunities (Reintegration of Ex-Offenders in 2011 report)
  • Refugee and Entrant Assistance – Discretionary Grants (Refugee and Entrant Assistance – Targeted Assistance Discretionary Program from 2011 is now part of this program)
  • Refugee and Entrant Assistance – Targeted Assistance Grants
  • Refugee and Entrant Assistance – Voluntary Agencies Matching Grant Program
  • Refugee and Entrant Assistance State/Replacement Designee Administered Programs ((Refugee and Entrant Assistance – Social Services Program from 2011 is now part of this program)
  • Registered Apprenticeship
  • Rental Housing Bonds Interest Exclusion
  • Rural Education Achievement Program
  • Rural Rental Assistance Payments
  • Ryan White HIV/AIDS Program
  • School Breakfast Program (free and reduced-price components)
  •  Second Chance Act Technology-Based Career Training Program for Incarcerated Adults and Juveniles (Second Chance Act Reentry Initiative in 2011 report)
  • Section 8 Housing Choice Vouchers
  • Section 8 Project-Based Rental Assistance
  • Senior Community Service Employment Program
  • Social Services and Targeted Assistance for Refugees
  • Social Services Block Grants
  • Special Supplemental Nutrition Program for Women, Infants and Children (WIC)
  • State Children’s Health Insurance Program
  • State Supported Employment Services Program
  • State Vocational Rehabilitation Services Program (Rehabilitation Services – Vocational Rehabilitation Grants to States in 2011 report)
  • Summer Food Service Program
  • Supplemental Nutrition Assistance Program
  • Supplemental Security Income
  • Supportive Housing for Persons with Disabilities
  • Supportive Housing for the Elderly
  • Tech Prep Education State Grants
  • Temporary Assistance for Needy Families
  • The Emergency Food Assistance Program
  • Title I Migrant Education Program
  • Trade Adjustment Assistance for Workers
  • Transition Assistance Program
  • Transitional Cash and Medical Services to Refugees
  • Tribal Technical Colleges (United Tribes Technical College in 2011 report)
  • Tribally Controlled Postsecondary Career and Technical Institutions
  • Veterans Pension and Survivors Pension
  • Veterans’ Workforce Investment Program
  • Vocational Rehabilitation and Employment (Vocational Rehabilitation for Disabled Veterans in 2011 report)
  • Voluntary Medicare Prescription Drug Benefit- Low-Income Subsidy
  • Wagner-Peyser Act Employment Service (Employment Service/Wagner-Peyser Funded Activities in 2011 report)
  • Water and Waste Disposal Systems for Rural Communities
  • Weatherization Assistance
  • Work Opportunity Tax Credit
  • Workforce Investment Act Adult Activitiesa
  • Workforce Investment Act Youth Activitiesb
  • WIOA National Dislocated Worker Grants (WIA National Emergency Grants in 2011)
  • WIOA Youth Program (WIA Youth Activities in 2011 report)
  • Women in Apprenticeship and Nontraditional Occupations
  • Youth Partnership Programs (Conservation Activities by Youth Service Organizations in 2011 report)
  • YouthBuild

DISINCENTIVES FOR WORK AND MARRIAGE IN GEORGIA’S WELFARE SYSTEM

Based on the most recent 2015 data, this report provides an in-depth look at the welfare cliffs across the state of Georgia. A computer model was created to demonstrate how welfare programs, alone or in combination with other programs, create multiple welfare cliffs for recipients that punish work. In addition to covering a dozen programs – more than any previous model – the tool used to produce the following report allows users to see how the welfare cliff affects individuals and families with very specific characteristics, including the age and sex of the parent, number of children, age of children, income, and other variables. Welfare reform conversations often lack a complete understanding of just how means-tested programs actually inflict harm on some of the neediest within our state’s communities.

Culture, Economics, and Poverty

Atlanta

We had an unusual experience last week, with President Obama participating in, of all things, a panel discussion on poverty with three leading public intellectuals, E.J. Dionne, Jr., Robert Putnam, and Arthur Brooks. The conversation ranged pretty widely, with a number of issues coming up, some of which didn’t get all that much attention. I know that there were some hot button moments, which received a good bit of radio and television air time, not to mention editorial and blogosphere commentary, but I’d rather take a deep breath and proceed just a bit more calmly.

Let me begin by observing that the President displayed flashes of the persona that made him at least somewhat appealing when he first appeared on the national scene. He at least said he wanted to get past the partisan divide where one side spoke only about economics and the other only about culture:

The stereotype is that you’ve got folks on the left who just want to pour more money into social programs, and don’t care anything about culture or parenting or family structures, and that’s one stereotype.  And then you’ve got cold-hearted, free market, capitalist types who are reading Ayn Rand and…think everybody are moochers.  And I think the truth is more complicated.

I think that there are those on the conservative spectrum who deeply care about the least of these, deeply care about the poor; exhibit that through their churches, through community groups, through philanthropic efforts, but are suspicious of what government can do.  And then there are those on the left who I think are in the trenches every day and see how important parenting is and how important family structures are, and the connective tissue that holds communities together and recognize that that contributes to poverty when those structures fray, but also believe that government and resources can make a difference in creating an environment in which young people can succeed despite great odds.

And it seems to me that if coming out of this conversation we can have a both/and conversation rather than either/or conversation, then we’ll be making some progress.

I agree: let’s talk about poverty in terms both of the economic straits in which individuals and families find themselves and of the culture (embodied in the media, schools, and government programs, as well as in churches and other community institutions) that should, but doesn’t necessarily, encourage responsibility for oneself, for one’s partner(s), and for any and all children one brings into the world.

Here are some takeaways from the conversation. There was, in the first instance, a good bit of talk about the disparity of opportunities available to those at different ends of the economic spectrum. Robert Putnam set the tone here, alluding to evidence from his recent book that our poor kids get much less support and have much less to which to look forward than do their wealthy counterparts:

[Y]ou can see it in measures of family stability.  You can see it in measures of the investments that parents are able to make in their kids, the investments of money and the investments of time.  You can see it in the quality of schools kids go to.  You can see it in the character of the social and community support that kids — rich kids and poor kids are getting from their communities.

The President responded to this opening by referring to an idealized portrait of community that Putnam draws in the book, one where, despite class differences, everyone shares in the same social and public institutions:

[W]hen I read Bob’s book, the first thing that strikes you is when he’s growing up in Ohio, he’s in a community where the banker is living in reasonable proximity to the janitor at the school.  The janitor’s daughter may be going out with the banker’s son.  There are a set of common institutions — they may attend the same church; they may be members of the same rotary club; they may be active at the same parks — and all the things that stitch them together.  And that is all contributing to social mobility and to a sense of possibility and opportunity for all kids in that community.

Perhaps that was true in some ethnically and religiously homogeneous small towns and urban neighborhoods—Alan Ehrenhalt’s The Lost City is eloquent on this subject—but I have my doubts about it as a sweeping generalization. While, for example, private schools did not proliferate until the 1960s, they have long been available to Roman Catholics (as an alternative to the erstwhile weak-tea Protestantism of the public schools) and to the very wealthy (think Phillips Exeter, Andover, and Choate in the Northeast, as well as Westminster and Woodward here in Atlanta). And anyone who has lived in the South would know that there at least once was a socioeconomic pecking order among Protestant churches, with an enormous contrast between, say, the up-market Episcopalians and the down-market Primitive Baptists. (Indeed, if anything, the decline of the mainline churches and the rise of evangelicalism have served to counteract this phenomenon, so that a much broader socioeconomic spectrum is represented in the pews in many churches on any given Sunday).

Nevertheless, there are three ways community thus conceived can arguably promote social mobility. There are, first of all, the cultural norms of hard work and personal responsibility that can be shared across class boundaries. In this respect, so-called positive role models are not distant abstractions, but personal acquaintances. Peer pressure doesn’t come from (or only from) local gang members but—one hopes—from high-achieving classmates and neighbors. Second, the networks of opportunity readily available to the affluent become open to classmates and acquaintances who don’t have access to them on their own. Finally, because everyone participates in these public institutions, everyone cares about their continued vitality. Thus, for example, parents get involved in PTA’s, care about school board elections, and are active in promoting “investments” (one of the President’s favorite words) in public education. In the Georgetown conversation, we hear something about the last two considerations, but very little (and in any event not enough) about the first.

But if this talk about community isn’t simply to be a nostalgic reminiscence about or longing for something we’ve lost, it behooves us to ask what, practically, we can do to restore it (or preserve it where it still exists).

It would, for example, be impossible—not to say highly undesirable—to compel everyone to attend public schools. While I could imagine some political leaders succumbing to that temptation and trying to regulate private schools out of existence, to the degree that education remains primarily a state and local responsibility, I can’t imagine such a policy sweeping the nation.   And even if—horror of horrors—private options were taken off the table, people have historically voted with their feet, exercising “school choice” by moving into a neighborhood whose public schools are attractive. Political efforts to negate the effects of private residential choices haven’t found favor with voters or, for that matter, with the Supreme Court.

This is where, I humbly submit, school choice programs that empower especially lower income people to place their children in better schools actually show some promise of making the aforementioned benefits of community available. Children can escape an essentially homogeneous peer culture that is inimical to achievement and move into schools where parents are involved and there are positive role models. Too bad the President and his party consistently oppose school choice, preferring all too often simply to demand more funding for public schools, as if government by itself can compensate for the social ills that inevitably accompany dysfunctional communities.

A similar statism is implicit in the President’s comments about the role of religion in dealing with the problem of poverty. Here’s what he said:

[W]hen I think about my own Christian faith and my obligations, it is important for me to do what I can myself — individually mentoring young people, or making charitable donations, or in some ways impacting whatever circles and influence I have.  But I also think it’s important to have a voice in the larger debate.  And I think it would be powerful for our faith-based organizations to speak out on this in a more forceful fashion.

This may sound self-interested because there have been — these are areas where I agree with the evangelical community and faith-based groups, and then there are issues where we have had disagreements around reproductive issues, or same-sex marriage, or what have you.  And so maybe it appears advantageous for me to want to focus on these issues of poverty, and not as much on these other issues….

There is great caring and great concern, but when it comes to what are you really going to the mat for, what’s the defining issue, when you’re talking in your congregations, what’s the thing that is really going to capture the essence of who we are as Christians, or as Catholics, or what have you, that this is oftentimes viewed as a “nice to have” relative to an issue like abortion.  That’s not across the board, but there sometimes has been that view, and certainly that’s how it’s perceived in our political circles.

While President Obama didn’t go as far as Robert Putnam in mischaracterizing the relative weight of religious emphasis on poverty as opposed to social issues, these remarks do imply that, in his view, social issues like abortion and same-sex marriage play a distractingly large role in the outward-looking role of all too many Christian churches. He does hedge and qualify his statement a bit, but the larger point is that, so far as “our political circles” are concerned, the church’s witness on poverty takes a back seat to its positions on abortion and same-sex marriage. As many have pointed out, this is simply mistaken, but it reveals something about what sorts of actions matter to the President. Furthermore, I’ve argued elsewhere that the President’s principal interest in faith-based groups seems to be mobilizing public support for government action, rather than encouraging their activity as an alternative or supplement to government. He doesn’t see—or at least doesn’t want to highlight—what churches and other faith-based organizations can do as actors in civil society, as possible alternatives to government action. We aren’t supposed to help ourselves or help one another but through the instrumentality of the government. The national conversation on poverty should largely be devoted to what government can do.

I’d like to conclude with a reflection on perhaps President Obama’s most solid contribution to the conversation:

[W]e can all stipulate that the best antipoverty program is a job, which confers not just income, but structure and dignity and a sense of connection to community.  Which means we have to spend time thinking about the macro-economy, the broader economy as a whole.

He’s right in every facet of his statement. Having a job is not just about the income, but also about the self-discipline that comes from having to meet obligations to employers, customers, and clients and the dignity that comes from being able to take care of oneself and one’s family. And these relationships are the backbone of every community. I do not mean hereby to deprecate the institutions of civil society—churches, neighborhood associations, and so on—but they don’t prosper without the dignified contributions (both personal and financial) of more or less self-reliant individuals.

While it is clear that our economy hasn’t in recent years generated enough good jobs to lift our least fortunate brothers and sisters out of poverty, I found little in President Obama’s remarks that gave me much confidence that he held the key to success in this regard. We can’t redistribute our way to a better future, so a simple—almost demagogic—focus on inequality won’t do. As Arthur Brooks argued—frequently and effectively, in my view—there is no substitute for a dynamic and productive economy as a generator of wealth. And, as he also argued, ensuring that everyone benefits requires making hard choices that our political classes haven’t demonstrated their willingness to make.

Perhaps conversations like the one that took place last week will provide an opening for further, deeper exchanges of views and for genuinely productive policy-making. But I’m sad to say that I’m not holding my breath.

Baltimore & Opportunity

Baltimore, Maryland Row Houses

A week ago today the city of Baltimore was set ablaze by its own citizens. The media storm following the protests and riots is the latest in a string of events that continue to orient our attention as a society to the lack of economic and social opportunity in America

David Brooks, an Op-Ed columnist for the New York Times, wrote an excellent piece on The Nature of Poverty a week ago. Brooks draws attention to the importance of the social dynamics that undercut attempts to improve the conditions of urban poor through increased spending and policy solutions.

What Brooks notes in his article, and many others recognize, is that when dealing with poverty, one must deal with the causes of poverty and the psychological and developmental effects of poverty. One-size-fits-all programs fail to do justice to the ways in which individual circumstances vary. Some people have short-term needs – such as gas to get to work – while others need more structured and long-term oriented assistance – such as acquiring the skills necessary to compete in a very competitive job market. This requires panoply of social programs specifically targeted to lift people out of poverty for good.

A safety net in good working order is crucial to a healthy economy, but poor families don’t just need help – they need the right kind of help. Giving people money really does make them better off. Yes, it’s better to have more money to buy groceries and other basic necessities, but improving inequality through handouts has no consistent correlation with upward mobility.

Baltimore is the perfect example of the fact that getting more money from the government doesn’t really make you less poor, and a testament to the fact that poverty is enabled to linger through the impoverishment of our social relations.

Click here to read Brooks’ article.

 

Image Credit: Carol M. Highsmith’s America, Library of Congress, Prints and Photographs Division, Row Houses, Baltimore, Maryland.

Communities that Foster Upward Mobility

Ladder

Today, poor children in America have a limited shot at moving up the economic ladder into the middle or upper class. A study in 2012 by the Pew Charitable Trust shows that “[t]hose born at the top and bottom of the income ladder are likely to stay there as adults.” Further, “More than 40 percent of Americans raised in the bottom quintile of the family income ladder remain stuck there as adults, and 70 percent remain below the middle.”

In terms of economic mobility, America is losing its identity as the “land of opportunity.”

In January 2014, Raj Chetty, Nathaniel Hendren, Patrick Kline, and Emmanuel Saez, economists from Harvard and Berkeley, released a study with interesting insights regarding this issue of upward mobility. Their study explores community characteristics that foster upward mobility for lower-income children. The study measures two outcomes: absolute mobility, or the way children progress up the income ladder into adulthood, and relative mobility, or the income disparity between children who grew up rich and poor in the same community as they reach adulthood.

The researchers in the study looked at households in “commuting zones,” or what are basically metropolitan areas, in order to compare the economic mobility of children in various communities. Interestingly, they found that kids who grow up in certain metropolitan areas are far more likely to climb into the top two-fifths of American household income distribution than kids from families with the same relative income from other metropolitan areas. This led them to look into what the specific community factors are that foster opportunity. Their research reveals some very telling patterns:

1. Family Structure

The single most important factor in communities that foster economic mobility is family structure. Chetty et al. found that children raised in communities with high percentages of single mothers are significantly less likely to achieve both absolute and relative mobility. As such, “[c]hildren of married parents…have higher rates of upward mobility if they live in communities with fewer single parents.”

What makes this finding particularly significant is that this is the first major study showing that rates of single parenthood at the community level are linked to children’s economic prospects over the course of their lives. Previous research has shown that children raised by two married parents are significantly more likely to climb the income ladder, but this is the first serious study to show that lower-income kids from both single and married-parent families are more likely to flourish if they are in a community with high shares of two-parent families.

2. Racial & Economic Segregation

Second, they found that children raised in communities that are racially and economically segregated – that is, communities that cluster lots of poor kids together – are less likely to achieve economic mobility. In fact, segregation and family structure are the only two community characteristics that had a consistent correlation with upward mobility in their study.

It is helpful to think of racial and economic segregation as isolation – that is marginalization from both the mainstream economy and the norms that allow middle-income people to flourish. These norms are often contagions that go unnoticed and unmentioned in middle-to-upper-class communities. What is missing for so many children stuck in cycles of poverty is social inclusion, which overlaps with the third factor.

3. Social Capital

Social Capital often goes unmentioned in conversations about economic mobility because it is so difficult to capture in social-scientific terms. Moreover, social capital highlights how complex and connected poverty is because it cannot be separated out from other community factors. The methodology of social scientists encourages that complex problems be broken down into distinct elements to make it easier to analyze and tweak through targeted programs. But to address the problem of social capital is to enter into the complexity of poverty and see how approaches that ignore social capital actually rob disadvantaged groups of the coherence of their experience.

Here is why social capital is so important: You could have two people with exactly the same income who actually live very different lives based on the different social networks they have. For some, achieving upward mobility is a perfectly compatible, even expected, progression within their networks and lifelong relationships. Being a part of their family and maintaining strong relationships with loved ones basically means moving up the economic and social ladder. When hard times hit, they have the support structure they need to get back on their feet. For others, achieving upward mobility means separating themselves from family and loved ones, which may cause them to lack the connections and support they need to withstand an economic crisis.

The breakdown of the social bonds in American communities actually hurts the poor the most. Many people talk about inequality, but this study shows that the problem is not inequality but a lack of economic and social inclusion. Social capital is intertwined with family structure since adults in two-parent families have a much easier time devoting themselves to the kinds of activities that build social capital in a neighborhood. Social capital is also closely correlated to access to quality schools, which leads to the fourth community factor that fosters upward mobility.

4. Access to Quality Schools

Though it is certainly not a new finding, Chetty and his colleagues found that poor kids are far more likely to succeed if they have access to high quality education. Though the study does not mention the need for school choice, it is clearly a necessity by the fact that too many schools are providing a poor education to children who have no other options available to them.

GCO believes that the best and most effective way to provide access to high quality education for children from low-income households is through a variety of school choice initiatives, particularly Education Savings Accounts (ESAs) and Tuition Tax Credit Programs. Throwing more money at failing schools that lack competition and the ability to innovate is not the solution.

Conclusion

The study by Chetty et al. has a lot of other interesting findings worthy of consideration, but the four community characteristics that have been mentioned – two-parent families, racial and economic integration, social capital, and access to quality schools – are the ones with the strongest and most consistent correlation with upward mobility. These factors help to set those cloistered and marginalized from mainstream norms on a pathway to opportunity.

At GCO, we are committed to addressing limited social mobility in Georgia. We seek to identify barriers to opportunity and promote legislative, policy, and community solutions that allow people to achieve middle class by middle age. Our hope is that Georgia and America at large will once again become a “land of opportunity” for all people.