The Hoosier Poverty Problem Needs Real Solutions

Indiana’s Kids Rely on Smart Poverty Policies from Hoosier Lawmakers

By: Andrew Bradley

More than one in five Hoosier children are stuck living in poverty, and they need Indiana’s policymakers to tackle innovative policy solutions to help secure their future. Data recently released by Kids Count and the Indiana Youth Institute reveal that the poverty rate for Indiana’s children has worsened over the past decade, jeopardizing the economic well-being not just for today’s kids, but also the social and economic future of our state.

But poverty doesn’t have to be a forgone conclusion for Hoosier families: by implementing “two-generation” policies that do double duty by helping parents put themselves on the pathway to economic success while simultaneously putting kids on the path to educational and personal success, Indiana can turn around a decade lost to economic decline.

While the Kids Count data book has some bright spots for Indiana children, including gains in health coverage and educational attainment, the worsening economic trends show where Indiana’s policymakers’ attention needs to turn. The data finds that as of 2012, 22.1% (350,000) of Indiana’s children were living below 100% of Federal Poverty Guidelines (FPG), down 0.5% from a year ago, but up dramatically from just 15.7% in 2004. The rate of child poverty has worsened even since the recession ended in 2009, when 19.9% of Hoosier kids lived in poverty.

The Kids Count data also suggests that the lack of economic security of Indiana’s kids’ parents and communities endangers the entire family. A full 30% of Indiana’s children have parents that lack secure employment, up from 28% in 2008. Perhaps most disturbing is the increase of Hoosier children living in areas of concentrated poverty, up almost four-fold from only 3% (48,000 kids) in 2000 to 11% (182,000 kids) in 2012.

Sadly, these figures only confirm the research that we at the Indiana Institute for Working Families have been reporting: our working families have suffered a ‘lost decade’ economically, made worse by a policy climate inhospitable to low-income Hoosier families. According to our ‘Status of Working Families in Indiana 2012’ report, Indiana has seen a 30% increase in child poverty since 2007, the 8th largest increase in the U.S. and greater than that of all our neighbors in that period except Michigan.

Beyond the narrow federal measure of poverty, we know that 38.7% of Hoosier children live in low-income families (that is, those below 200% FPG), ranking 32nd in the nation. These are working families, too: 72.8% of Indiana’s low-income families already work, with low-wage jobs only on the rise. In fact, 41.5% of Indiana’s children under 13 from working families were living below 200% of the poverty line in 2012, ranking 33rd in the nation according to Working Poor Families Project data.

It would be negligent (not to mention naïve) for Indiana’s policymakers and advocates to pin their hopes solely on the educational gains of children and rely on Hoosier kids to grow up to solve the state’s deep-rooted problems of poverty on their own. That’s because when children grow up poor, the effects of poverty often don’t melt away even under the best of circumstances. According to a study by the Urban Institute, “persistent poverty among children is of particular concern, as the cumulative effect of being poor may lead to especially negative outcomes and limited opportunities.” The stark truth is that after a decade of growing child poverty, Indiana’s policymakers and advocates commit malfeasance by avoiding serious attempts to alleviate the economy’s impact on low-income families.

However, Indiana’s policymakers have a history of taking two steps back for every step forward on child poverty. This year, the Institute included as part of our 2014 policy agenda a proposal to smooth out the ‘Cliff Effect’ that happens when a $0.50 bump in income leads to the loss of up to $8,500 in quality child care benefits. This low-cost proposal was introduced as a bill during the recent session of the General Assembly, but it didn’t go far in the Statehouse.

Indiana also has the potential to take a step forward with a pilot program that could lead to universal pre-kindergarten. But the state would take at least two steps back if it follows through with the idea of “obtaining a Head Start and a Child Care and Development Fund (CCDF) block grant to fund pre-kindergarten or early learning education programs in Indiana”, which would in effect take from the futures of infants and toddlers to fund a program for 4 year olds.

To reverse the trend of inadequate policies, Indiana must intentionally invest where its needs are the greatest: in the economic well-being of both Indiana’s kids and their families. To see permanent improvement in Indiana’s stubborn child poverty problem, the state should purposefully seek to implement “two-generation solutions” that help the whole family by giving an economic boost to low-income parents while providing the foundation of future success for their kids. While the term isn’t new, advocates including the Annie E. Casey Foundation and the Aspen Institute are now championing state-based two-generation policies that focus on adult-focused systems that serve low-income parents and children.

Many of the strategies dovetail with initiatives that Indiana has already begun to explore, and have the potential to benefit parents by helping them develop marketable education and skills while also improving kids’ chances at success by providing a more secure and stable home environment. Here are a few examples:

  • Provide education & training to both generations at once: parents are better able to earn high-quality degrees and credentials (which would help Indiana reach its Big Goal) when children have access to high-quality childcare and families are supported with wraparound services. An example is CareerAdvance in Tulsa (described in this brief by CLASP), which provides skills training for parents leading to a degree in health sciences while simultaneously connecting to child care, transportation, and links to services such as HeadStart that provide “intensive parenting support”.
  • Multiply the impact of workforce development: combine the Indiana Career Council’s new Sector Strategies Taskforce with the current momentum of early childhood education in the state. According to the Aspen Institute, the “combination of high quality early childhood education (preschool through 3rd grade) with sectoral job training leading to high skill/high wage employment, supplemented by wrap-around family and peer support services, will lead to long-term academic and economic success for low-income families”.
  • Expand access to financial literacy and assets for all members of the family: policies that unlock economic opportunity and financial literacy are more powerful when they impact every family member. Indiana’s federal representatives should support child savings accounts and financial education for low-income students, while simultaneously removing asset limits and encouraging prize-linked savings for parents, all key parts of Indiana’s Assets & Opportunity Network agenda. Meanwhile, Indiana should be careful to protect existing policies such as the state’s Earned Income Tax Credit against attempts at ‘simplification’ that would strip away important tools with little in return for working families.

This is just the tip of the iceberg: Indiana’s policymakers and advocates can immerse themselves in a whole arsenal of research studies and policy proposals that provide options for customized state-based two-generation solutions. Beyond that, stakeholders should stay tuned in late 2014 for the most up-to-date data and policy recommendations from the Institute’s upcoming ‘Status of Working Families in Indiana’ report.

Armed with the data of Indiana’s decade-long, untreated crisis of child poverty and a full toolbox of two-generation solutions, the state has no excuse not to make progress towards reducing the poverty rate of Hoosier children and their families in 2015.

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