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On November 10, 1997, the Massachusetts Community Action Program Association (MASSCAP) released Running in Place: A Report on Poverty in Massachusetts. The report, a comprehensive survey of unpublished Census Bureau data, exposes many of the myths of poverty and shows that despite the economic recovery during the early 1990s, poverty in Massachusetts remains a serious problem. The report concludes with a series of important policy recommendations intended to reduce the poverty and its impacts in the Commonwealth.
"Understanding and addressing the problems of the poor and near-poor should be a high priority for policy makers, particularly during this period of overall economic growth," said MASSCAP President Alan Sax. "This is exactly the time when state policy should focus on ending poverty, not just welfare, as we know it. Our report ensures that new policies will be based on facts rather than on myths."
The report, using Census data from 1993 to 1995, shows surprisingly high levels of poverty in Massachusetts even during the economic recovery.
The overall poverty rate was 10.4 percent, with higher rates among both the young and the elderly.
The child poverty rate was 16 percent.
The poverty rate among young children was even higher, at 18 percent.
The poverty rate among elderly was 13 percent.
Because children are disproportionately poor, they make up a large share of the total population of poor in Massachusetts. Over one-third of the poor people in Massachusetts -- 37 percent -- are children; there were 229,000 poor children in Massachusetts in the early 1990s.
The prevalence of poverty is particularly disturbing for black and Hispanic families. Overall, the poverty rate for whites was eight percent, for blacks was 31 percent, and for Hispanics it was 48 percent. Among children, the numbers are even more striking: while 10.3 percent of white children are poor, 46 percent of black children and 61 percent of Hispanic children are poor. In other words, blacks were four times as likely as whites to be poor, while Hispanics were six times as likely.
The report gives special attention to the plight of the working poor in Massachusetts. Nearly half of all poor families in the Commonwealth -- 48 percent -- have at least one adult worker in the family. Even at today’s minimum wage of $5.25 an hour, a year-round full-time worker would fall $2,000 below the poverty line for a family of three and $5,500 below the poverty line for a family of four.
The work experience in poor families is often significant. Among poor families with children where an adult works, the average number of weeks worked is 38, the equivalent of nine months of work. Nearly one in five of these families work 50 weeks a year, and 10 percent work full time, year round. "The inability of working parents to keep their families out of poverty in this, the third richest state in the nation, cries out for public attention," said Sax.
Additionally, the demographics of working poor families varies from common perceptions. Nearly half -- 43 percent -- are two-parent families, two-thirds are white, and three-quarters have at least a high school diploma.
Many of the same problems faced by those below the official poverty lines — $12,900 for a family of three and $16,500 for a family of four — are also faced by families who are near poverty. This report also considered those with very low incomes: families whose incomes were below 150 percent of the poverty line, or $19,350 for a family of three or $24,750 for a family of four.
Over one million people, or 17 percent of the population, have very low incomes.
While 14 percent of whites have very low incomes, 43 percent of blacks and 59 percent of Hispanics fall into this category.
Among children the rates are even higher. 17 percent of white children live in families with very low incomes, while 62 percent of blacks and 71 percent of Hispanic children do.
Six out of seven families whose income falls between the poverty line and 150 percent of poverty have at least one adult worker in the household.
"The large number of people who struggle very close to the poverty line should be troubling to Massachusetts policy makers," said Alan Sax. "And with fewer than one in three Hispanic children growing up in families with anything resembling even modest means is appalling. This report should make it clear that it is time to address the problem of low income in Massachusetts."
The report concludes with a number of important policy recommendations that, if enacted, would reduce poverty in Massachusetts and reduce the impact of poverty for those who remain poor. Among the most important of these include the following:
Protect Low-Income Families During Energy Deregulation -- Every effort must be made to ensure that low-income households receive real and substantial savings from deregulation of the energy industry. Residential consumers should be guaranteed a rate savings of at least 10 percent and preferably 15 percent. Additionally, low-income households should receive a discount of 60 percent off normal residential rates. Finally, non-profit community based organizations should be encouraged to act on behalf of low-income people to help them ensure access to competitive rates.
Index the Minimum Wage -- Unlike Social Security, the primary anti-poverty program for the elderly, the minimum wage is not indexed for inflation. Thus, except when Congress or the legislature acts affirmatively to raise the minimum wage, the real value of the minimum wage erodes each year. The legislature should index the minimum wage to the rate of inflation, to guarantee that working poor families do not fall further behind year after year.
Improve Access to Health Care -- Since 1987, Massachusetts has fallen from first in the nation in terms of the share of the populations covered by health insurance to 21st. To combat that, the state should make health care reform a high priority. Medicaid eligibility should be expanded to include all children through age 18 whose family income is up to 200 percent of the poverty line; pregnant women should be eligible for Medicaid up to 200 percent of the poverty line; the benefit package for children served by the Children’s Medical Security plan should be expanded; and perhaps 50 percent of any revenue Massachusetts receives from a national settlement with tobacco companies should be used to expand health care access among low-income working families.
Improve Access to Child Care -- A major impediment for working poor parents to enter or remain in the labor force is the availability of affordable child care. The legislature should act immediately to provide full funding for child care subsidies, to ensure that all poor and near-poor parents have access to child care. Additionally, the state should increase eligibility for the subsidy from the current 50 percent of median income to 85 percent of median income.
Establish a Property Tax Circuit Breaker -- Housing costs are a major share of the cost of living for poor families, particularly here in Massachusetts. A property tax circuit breaker would limit the share of household income that could be spent on property taxes to perhaps 10 percent of income. It would be targeted to those with incomes up to around $30,000, and would be available to renters whose rent payments includes the cost of property taxes.
Protect the Revenue Base -- Programs for low-income families require that government have adequate funding; experience in recent years has shown clearly that when the state runs into a deficit, programs for low- and moderate-income families are often the first targets for budget cutters. In light of that, it is vital that the legislature not approve large, permanent, and unaffordable tax cuts including the proposed reduction in the income tax rate from 5.95 percent to 5.0 percent or the reduction in the tax on dividend income from 12 percent to 5.95 percent.
"These proposals will not, of themselves, end poverty in Massachusetts," acknowledged MASSCAP President Alan Sax. "But they would start us moving in the right direction again. Now, while the economy is strong and state coffers are full, is the time to start addressing the continuing struggles faced by the poorest among us.
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