Anti-poverty programs help alleviate costs: More must be done to reduce burdens

economic-forecast-headerDespite recent U.S. Census Bureau data showing reductions in the poverty rate and increases in household median income, more than 909,000 Virginians still face double jeopardy in today’s economy. Not only do they live below the poverty line, they also face high costs in areas such as rent, food, child care and predatory lending.

That’s the finding of “The High Cost of Being Poor in Virginia,” a new report released today by the Virginia Interfaith Center for Public Policy and the Coalition on Human Needs.

Among the report’s highlights:

  • 60 percent of Virginia’s households with annual incomes below $20,000 spend more than half of their income on rent alone.
  • Child care accounts for another exorbitant expense. The average cost in Virginia for an infant in a child care center is nearly $10,500 a year; for an infant and a four-year-old, it’s nearly $18,500. A family at the poverty line with an infant and toddler in child care would have to spend 76 percent of its income on child care, if paying the state average cost. Without a subsidy, low-income families have no choice but to make cheaper and often less reliable arrangements.
  • Anti-poverty programs help many. Programs such as low-income refundable tax credits, SNAP, free or reduced-price school lunch and child care subsidies have helped lift tens of millions of Americans out of poverty, including 438,000 Virginia residents.
  • But many anti-poverty programs don’t reach many who are eligible and other programs would do more good if their benefits were higher or if more people were eligible.

“Low-income refundable tax credits have lifted 190,000 Virginians out of poverty each year, on average, from 2011 to 2013, and another 160,000 were lifted out of poverty each year, on average, from 2009 to 2011 due to SNAP,” said Kim Bobo, Executive Director for the Virginia Interfaith Center for Public Policy, co-sponsor of the report. “88,000 Virginians no longer live below the poverty line because of housing subsidies. Anti-poverty programs are sound investments in Virginia and particularly for Virginia’s children. We must do all we can to close the opportunity gap for our state’s youngest citizens. Like any sound investment, the more we put in, the more we get out.”

“It is good news that the poverty rate is down, median household income is up, and more Americans are finally benefitting from an improved economy, coupled with federal programs that increase income or reduce expenses,” said Deborah Weinstein, Executive Director of the Coalition on Human Needs. “But the more troubling news is that the poor and near-poor live in a precarious situation. The simple fact is, it is expensive to be poor in Virginia.”

The High Cost of Being Poor in Virginia found many ways in which it is expensive to be poor:

  • Rents consuming huge proportions of income
  • Higher food prices because of lack of access to markets
  • Late fees for unpaid rent and evictions
  • Poor housing conditions leading to health issues, which in turn lead to missed days of school or work
  • Lack of paid sick days, paid leave, and unpredictable work schedules
  • Predatory lending practices such as pay day lending

The report includes recommendations for reducing poverty further for the 909,000 adults and children who live at or below the poverty line in Virginia.

These recommendations include increasing federal funding for housing and child care subsidies; expanding the Earned Income Tax Credit and Child Tax Credit; increasing SNAP benefits and improving  Child Nutrition programs while reauthorizing them; expanding health care coverage to low-income Americans by drawing down federal Medicaid dollars in the 19 states that have not done so;  a strong rule finalized from the Consumer Financial Protection Bureau to stop predatory lending; and raising the minimum wage and helping workers get more paid hours through paid sick leave and more predictable hours.

The full version of “The High Cost of Being Poor in Virginia” is available at http://www.virginiainterfaithcenter.org/special-report-high-cost-poor-virginia/

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