Gender Lens on Poverty Primer - Page 5

7.  What works: Strategies that relieve poverty

Simply put, poverty, especially among women, can be reduced by devoting more financial resources to the safety-net programs that both prevent poverty and assist those who are already living in poverty. In fiscal year 2012, 12 percent of the federal budget went to safety-net programs such as the Earned Income Tax Credit (EITC), Supplemental Nutrition Assistance Program (SNAP), school meals, and housing and child care assistance, among others (but excluding Social Security and Medicare/Medicaid). Though the U.S. contributes far less to anti-poverty programs than its peer nations, we know that when the programs operate effectively, they go a long way to prevent higher poverty rates. (For more on anti-poverty programs that have shown to be effective, see here.) With these programs, women are more able to support their families, find and maintain work, put their children in safe child care, obtain education and work-ready skills, and live in affordable, clean housing. The top four anti-poverty programs known to be effective—Social Security, EITC, SNAP, and unemployment insurance—are described below:

  • Social Security: Widely known as the most effective anti-poverty program, Social Security provides a monthly income for about 57 million individuals who are retired, disabled or belong to families of retired, disabled, or deceased workers. The elderly make up the lowest poverty rate age group, and Social Security is largely responsible for that. According to 2011 data, Social Security lifted 21.4 million people (including 14.4 million elderly) out of poverty. Without Social Security, the poverty rate among the elderly would have been 43.6 percent that year, instead of 8.7 percent. At the same time, the results are mixed for women; poverty among elderly women spiked by 18 percent in 2012, even with Social Security.

  • Earned Income Tax Credit: The Earned Income Tax Credit (EITC) is a refundable tax credit for low- and moderate-income workers and their families. By one estimate, EITC reduced the Supplemental Poverty Measure’s poverty rate by 2.8 percent—from 18.9 percent to 16.1 percent—in 2011. Together with the Child Tax Credit, EITC lifted 9.4 million people, primarily women and their 4.9 million children, out of poverty that year. Children make up the largest age group living in poverty; thus, the child poverty rate would be much higher still without EITC. According to the Economic Policy Institute, EITC is “by far, the most progressive tax expenditure in the income tax code” and “reduces poverty significantly, with children constituting half of the individuals it lifts out of poverty.”
  • Supplemental Nutrition Assistance Program: The Supplemental Nutrition Assistance Program (SNAP)—formerly known as the Food Stamps Program—is a highly effective anti-hunger program designed to assist low-income families. Approximately 72 percent of SNAP recipients (out of 47 million) are families with children. In 2013, the average monthly benefit per person was  $133.08, and the maximum benefit for a household of four was $632 ($36 less, after a cut imposed by the 2009 Recovery Act that started in November 2013). Despite policymakers' disagreements over whether safety-net programs create dependency, a recent study showed that food assistance programs such as SNAP lead women to increase in economic self-sufficiency, as measured in higher educational attainment and earnings, and decreased participation in welfare.

  • Unemployment insurance: Unemployment insurance provides temporary benefits for workers who become unemployed through no fault of their own, offering partial replacement of wages while they search for work. In 2010, according to one Census estimate, 900,000 children and 2.3 million working-age adults were kept out of poverty due to unemployment insurance. Without unemployment insurance, poverty rates would have been 23.2 percent for children (as opposed to 22 percent), and 14.9 percent for non-elderly adults (as opposed to 13.7 percent).

In addition, there are several other ways to protect those living at or near the poverty level while also strengthening the social fabric as a whole, including measures for fair wages, affordable housing, daycare, and paid leave, as described below.

  • Reduce the gender pay gap and occupational segregation: Until women are paid as equally as men for equal work, they will continue to struggle to make adequate income for themselves and their families. The Equal Pay Act and other measures have been enacted, but have not adequately closed the wage gap. As a result, the wage differential persists. By some estimates, the wage gap is as high as 26.1 percent among some retail sales workers, and as low as 9.4 percent among secretaries and administrative assistants. Likewise, women are excluded and discouraged from participating in many professions that pay higher salaries and have better workplace protections that could help them to achieve a higher standard of living. Since the 2008 recession, even more women have been hired into low-wage sectors, putting them at a significant disadvantage for economic mobility. Organizations such as the National Domestic Workers Alliance are bringing to light the inequities inherent in these sectors, while also building political and social currency to regulate wage and benefit protections, and organizing workers to act on their own behalf.

  • Increase minimum wage: About 60 percent of minimum wage workers and 73 percent of tipped workers are women. Even if a woman were to work full-time, receiving the federal minimum wage of  $7.25/hour, she would earn $14,500/year; if she had two dependents, her household would be counted as poor. Tipped workers work as low-level employees of restaurants, hotels, and nail salons. With the federal minimum wage for tipped work frozen at  $2.13 since 1991, the poverty rate is particularly high among these workers. Once deemed a “job killer” issue, increasing the minimum wage is increasingly being seen by a growing number of business leaders as a way to boost the economy. Increasing the minimum wage would contribute to reducing the gender pay gap and lift many families out of poverty. Regardless of morality, increasing the minimum wage enhances economic sustainability.
  • Increase affordable housing: The lack of affordable housing and housing assistance programs is understood to be the essential cause of the homelessness and housing crisis by experts. Female-headed households, which represent a significant share of poor households, have little chance of affording adequate housing without subsidies, which are increasingly hard to come by. The federal government’s Section 8Housing Choice Voucher Program helps approximately 2.1 million low-income households (more than 5 million people). However, according to one analysis, roughly 23 percent of families eligible for Section 8 actually received rental assistance in 2011. Housing affordability is generally defined as paying no more than 30 percent of the annual household income on housing. Yet there is no state in which a household that makes the minimum wage can afford a one- or two-bedroom apartment at Fair Market Rent. A household needs to make at least $37,960 to rent a two-bedroom apartment; that is, the household needs to earn at least $18.25/hour to make that apartment affordable. At the same time, the federal government spends more on housing-related direct assistance and tax subsidies for higher-income households. 
     
  • Increase affordable, accredited, quality child care: Affordable, reliable, quality child care is crucial for all mothers who are in the paid work force; it allows them to maintain their employment and increases their ability to invest in educational or training opportunities. As a country with no nationwide, subsidized child care programs (unlike our peer nations), the majority of households in the U.S. simply cannot afford child care costs. Child care is a very serious threat to the economic security of low-income, single, female-headed households—72 percent of single mothers worked outside the home and had children under six years of age in 2008, yet the average cost for full-day infant care is about 41 percent of the average income for single-mothers. In some locations, single mothers pay as much as 67 percent of their average income for child care, leaving little room in their budget for other expenses such as food, housing, transportation, or medical care. Programs such as Child Care and Development Block Grant, Head Start/Early Head Start, and Temporary Assistance for Needy Families, which help low-income families to obtain quality child care and education, need to be expanded.
     
  • Standardize paid sick/family leave policies: Generally, it is well-known that the U.S. has inadequate family-friendly workplace policies. For working women, the burden is especially great; more than their male peers, women tend to be caretakers for their children, parents and family members in need. Despite this, there is no federal-level policy on paid leave for personal illness or to address family members’ illness. Over 40 percent of workers in private industries do not have access to paid sick days. The U.S. is the only country among its peer nations that does not have a nationwide program for paid leave for new parents, or state paid family leave insurance laws (with the exception of California, Washington, New Jersey, and Rhode Island). Most advanced-economy countries offer work-family friendly policiessuch as paid leave, to take care of personal sickness or family members’ health needs.

 

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