Nancy K' Cauthen, PhD

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The Consequences of Poverty for Children and Our
Nation

• Nancy K. Cauthen, PhD
• Deputy Director, National Center for Children in
  Poverty
• The Parent-Child Home Program Annual Conference
• Uniondale, NY May 5, 2008

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National Center for Children in Poverty
Who we are

• NCCP is the nations leading public policy center
  dedicated to promoting the economic security,
  health, and well-being of Americas low-income
  children and families.
• Part of Columbia Universitys Mailman School of
  Public Health, NCCP promotes family-oriented
  solutions at the state and national levels.
• Our ultimate goal Improved outcomes for the next
  generation.

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The Consequences of Poverty
Overview of todays presentation

• Defining poverty
• Data on low-income children and families
• What the research tells us about poverty and
  child development
• Why our nations leaders should address child
  poverty
• What can be done

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Defining Poverty
A common-sense definition

• Poverty means not having enough money to afford
  basic necessities.
• It means not having a cushion to fall back on
  when hardship strikesa job loss, a serious
  illness, the breakup of a relationship.
• Poverty is also about not having access to things
  that higher-income families take for granted,
  e.g., decent housing, safe neighborhoods, good
  schools, adequate medical care.

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Defining Poverty
The government defines poverty as having income
below a certain level
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Defining Poverty
The government measure is widely agreed to be
outdated

• Current measure was established in the 1960s.
• It was based on research showing that families
  spent about 1/3 of their incomes on food, so
  poverty level food costs (economy food plan)
  x 3.
• Since then, the measure has been updated only for
  inflation.
• But food is now only 14 of a typical familys
  budget, and costs for housing, medical care, and
  child care are much higher than 40 years ago.

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Defining Poverty
Low income is a better measure of need

• Research indicates that it takes an income of
  about twice the current poverty level to cover a
  familys basic needs.
• 42,000 for a family of 4
• 35,000 for a family of 3
• Figures vary from state to state, and vary by
  urban, suburban, and rural areas.

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Defining Poverty
Basic Needs Budgets Single parent with two
children, 3 and 6 years
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Low-Income Children Families
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Low-Income Children Families
Low-income rates vary by state and region

• 42 of children in the South11.4 millionlive in
  low-income families.
• 40 of children in the West7.1 millionlive in
  low-income families.
• 36 of children in the Midwest5.7 millionlive
  in low-income families.
• 34 of children in the Northeast4.3 millionlive
  in low-income families.

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Low-Income Children Families
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Low-Income Children Families
Low-income rates vary by race/ethnicity

• 63 of American Indian children0.3 millionlive
  in low-income families.
• 61 of Latino children9.2 millionlive in
  low-income families.
• 60 of black children6.5 millionlive in
  low-income families.
• 27 of Asian children0.8 millionlive in
  low-income families.
• 26 of white children11.0 millionlive in
  low-income families.
• Even though whites are the least likely to be
  low-income, the largest group of low-income
  children is white.

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Low-Income Children Families
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Low-Income Children Families
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Low-Income Children Families

• Low-income children have working parents
• 56 of low-income children have a parent who
  works full-time, year round.
• Another 25 have a parent who works part-time or
  part-year.
• But they work in low-wage jobs that typically
  offer few benefits (such as health insurance,
  paid sick leave), little stability, and few
  opportunities for advancement.

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Low-Income Children Families

• A high school diploma is no longer sufficient to
  guarantee a decent-paying job
• 56 of children whose parents have only a high
  school diploma are low income.
• 82 of children whose parents have not completed
  high school are low income.
• Yet we know that maternal education is the single
  largest predictor of childrens school
  achievement.

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What the Research Tells Us

• Poverty threatens childrens development
• Poverty can
• impede childrens cognitive development and
  ability to learn
• contribute to behavioral, social, and emotional
  problems
• cause and exacerbate poor health
• Effects of poverty on childrens health and
  development depend on the timing, duration, and
  intensity of poverty in childhood.

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What the Research Tells Us

• Poverty threatens childrens development (cont)
• Risks are greatest for children who experience
• poverty when they are young
• persistent and deep poverty
• other risks in addition to poverty (e.g., living
  in a single-parent family having parents w/out a
  high school degree having parents who use drugs,
  are involved in violent relationships)

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What the Research Tells Us
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What the Research Tells Us

• Poverty-related gaps show up early in life
• Many low-income young children enter school
  without the language, social, and emotional
  skills to succeed.
• At age 4, children below the poverty line are 18
  months below the developmental norm for their
  age, and by age 10, the gap is still present.
• By third grade, children with well-educated
  parents know 12,000 words, while children with
  less- educated parents know only 4,000 words.

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What the Research Tells Us
Kindergarten Average Reading, Math, and General
Knowledge Standardized Test Scores by Income
Source E. Gershoff. Low Income and the
Development of Americas Kindergartners (2003).
National Center for Children in Poverty.
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What the Research Tells Us

• Early experiences have lasting consequences
• The architecture of a childs brain provides
  the foundation for all future learning, behavior,
  and health.
• Once the architecture is built, it cannot be
  changed, which makes it difficult, although not
  impossible, to change behavior.
• Stable and stimulating environments in the early
  years help create a sturdy foundation for later
  school achievement, economic productivity, and
  responsible citizenship.

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What the Research Tells Us

• How family income makes a difference
• Money helps parents provide the experiences,
  resources, and services that are essential for
  children to thrivegood health care, stimulating
  early learning programs, adequate housing, good
  schools, money for books and enriching
  activities.
• Financial stress increases parents risks for
  depression, substance abuse, and domestic
  violence, which in turn interfere with effective
  parenting.

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What the Research Tells Us

• Why so much economic hardship in such a wealthy
  country?
• Given its wealth, the US has unusually high rates
  of child poverty and income inequality.
• These conditions are not inevitable they are a
  function both of the economy and government
  policy.
• When the economy is strong, and when federal
  policy supports for low-income familiesEITC,
  health insurance, child care subsidiesare
  expanded, low-income rates go down, as they did
  in the 1990s.

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What the Research Tells Us

• Why so much economic hardship in such a wealthy
  country? (cont)
• Other industrialized countries have lower child
  poverty rates because they prevent hardship by
  providing assistance to all familiesnot just
  those who have hit rock bottom.
• These supports typically include child
  allowances, child care assistance for all
  working families, national health insurance, paid
  time off (for sickness and parental leave to care
  for young children)supports that help offset the
  high cost of raising children.

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What the Research Tells Us

• Why so much economic hardship in such a wealthy
  country? (cont)
• In the US, middle- and especially upper-income
  families receive numerous government benefits
  that help them maintain and improve their
  standard of livingbenefits largely unavailable
  to low-income families.
• Examples tax-subsidized benefits provided by
  employers (e.g., health insurance, retirement
  accounts), tax breaks for home owners (e.g.,
  deductions for mortgage interest, tax exclusions
  of profits from home sales).

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What the Research Tells Us

• Why so much economic hardship in such a wealthy
  country? (cont)
• Most people dont think of these tax breaks as
  government benefits.
• But they cost the federal treasury nearly 3 times
  as much as means-tested benefits that go to low
  and moderate income families.
• In short, its possible to reduce child poverty,
  but doing so will require significant shifts in
  government policy.

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Why Our Nation Should Address Child Poverty

• In addition to the consequences for children
• Our nations high rate of child poverty exacts a
  high toll on the US economy.
• Child poverty costs the US 500 billion a year in
  lost productivity and spending on medical care
  and criminal justice.
• By limiting childrens potential, we hinder our
  nations ability to compete globallyour students
  are not as well prepared as those from other
  advanced, industrialized nations.

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Why Our Nation Should Address Child Poverty

• Long-term economic trends are troubling
• After World War II, our country built a strong
  middle classgovernment invested in people (e.g.,
  GI bill) and infrastructure (e.g., highways,
  transportation, suburban development).
• Unions helped workers secure wages high enough to
  support a family and affordable health and
  retirement benefits.
• But it all began to unravel in the 1970s and
  1980s.

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Why Our Nation Should Address Child Poverty

• Ordinary families are more vulnerable
• Protections for unions and workers were slowly
  eroded.
• Good manufacturing jobs were increasing
  replaced by bad service jobs.
• Businesses began to cut back benefits and shift
  more risk to employees (for health insurance and
  retirement).
• Banks and credit card issuers were deregulated,
  which means that families who borrow money assume
  greater risks.

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Why Our Nation Should Address Child Poverty

• Ordinary families are more vulnerable (cont)
• Incomes for the vast majority of Americans have
  increased very little, once inflation is taken
  into account.
• The savings rate has declined steadily since the
  1970s and now hovers around zero.
• Prices for food, gasoline, health care have risen
  9 since 2006, while prices for luxury and
  discretionary goods have risen only 2.
• Many families who are not poor are economically
  vulnerableone crisis away from financial ruin.

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Why Our Nation Should Address Child Poverty

• Inequality is on the riseand mobility is down
• Income share of the top 1 of earners is at its
  highest level since 1929.
• Economic mobility is on the declinethe chances
  of moving up are much lower than at other points
  in Americas past.
• Families can move down as well as up
  African-American families are far more likely
  than whites to experience downward mobility.
• The American Dream has become an empty promise.

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What Can Be Done

• Long-term policy goals
• Restore the social compact between workers and
  employers.
• Increase the bargaining power of workers.
• Restore the social compact between workers and
  government those who work hard and play by the
  rules ought to be able to support a family.
• Most American families need the government to
  take on greater responsibility for providing
  health insurance AND subsidizing the cost of
  child care.

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What Can Be Done

• In the meantime, heres an anti-poverty policy
  agenda for families and children
• Change the policy conversation.
• Make work pay
• Support parenting, not just work.
• Ensure access to quality early care and learning
  opportunities for the highest-risk children

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What Can Be Done

• Change the policy conversation
• Policy discussions about children and poverty
  tend to focus only on the symptoms of povertylow
  educational achievement, social and behavioral
  problems, and poor health.
• Yet poverty itself is the single biggest threat
  to healthy child development.
• Improving child outcomes requires explicit
  attention to lifting families up economically.

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The Consequences of Poverty

• For more information
• Visit NCCPs website
• www.nccp.org
• Contact me
• Nancy K. Cauthen, Deputy Director
• 646.284.9626
• cauthen_at_nccp.org