History of poverty tells a complex tale

2014-06-08T00:00:00Z 2014-09-22T15:33:06Z History of poverty tells a complex taleEd Bierschenk edwin.bierschenk@nwi.com, (219) 933-4195 nwitimes.com

On an unseasonably cool, gray, rainy day in mid-May, a long line of people stood for up to three hours waiting for food outside the Moose Lodge along Broadway Street in Chesterton.

In Hammond, 80-year-old Rosemary Zimmerman said, "It's been a lifesaver for us," as she stood waiting with her granddaughter near the front of the line at Pantry on the Go. She generally praises the service, although the gray-haired grandmother does say it would be better "if they had more in the way of meat ..."

Zimmerman doesn't go as often as she could to obtain food from the pantry, saying there are others she believes are in greater need, including those with disabilities.

In the first 10 years after its opening in 1982, the Food Bank of Northwest Indiana had distributed about 700,000 to 1 million pounds of food annually to those in need in Northwest Indiana.

Now, Executive Director Arleen Peterson said, thanks to the support of such generous sponsors as the Van Til family, the Food Bank gives out about 5 million pounds of food annually to distribute from about 100 food pantries in Lake and Porter counties.

While the support has grown, organization spokeswoman Megan Sikes estimates the food bank is meeting only about a third of the need in Lake and Porter counties.

Despite the drop in Indiana's unemployment rate, the poverty rate and the long lines of those needing food haven't seemed to diminish.

"The lines are just as long as they were two to three years ago," Peterson said.

In the 50 years since Democratic President Lyndon Johnson declared war on poverty, both conservatives and liberals point to the failures of the battle, though for different reasons.

In the past five decades, the U.S. has seen its poverty level drop to 15 percent of the population in 2012 from more than 22.1 percent in 1959.

In Indiana, the poverty rate in 1959 was 17.5 percent, while in 2012 it was 15.6 percent. Looking at those two years alone, it appears Indiana has not made much progress in reducing poverty despite the scores of programs instituted over the past half-century.

Focusing only on those two years, however, would not provide an accurate picture of poverty in the state over the long term.

Indiana poverty hit by manufacturing loss, recession

The state's poverty rate averaged 12 percent between 1960 and 2008, including nine years when it was in single digits between 1995 and 2003, according to a recent Pew Charitable Trust Stateline article.

Since 2008, the year of the Great Recession, however, the poverty rate has averaged 15.5 percent. Stateline is a nonpartisan, nonprofit news service of the Pew Charitable Trusts that provides daily reporting and analysis on trends in state policy.

James P. Ziliak, with the University of Kentucky Center for Poverty Research, notes Indiana's close ties to the manufacturing industry when talking about why the rate has changed so dramatically.

In the last 30 years, many manufacturing businesses have moved to the southern part of the U.S. or out of the country, he said.

Ziliak saw the impact firsthand as a Fort Wayne resident in the early 1980s when the departure of International Harvester caused large unemployment.

Between 1995 and 2005, the U.S. lost more than 3 million manufacturing jobs, with most of the loss occurring between 2000 and 2005. Much of that loss came from the Great Lakes region, with Michigan and Ohio seeing the biggest losses. Between 2000 and 2003 alone, Indiana lost 156,000 jobs, with about two-thirds of those in manufacturing, according to a report done by Morton J. Marcus for the Kelly School of Business at Indiana University.

Between March 2008 and March 2009, Indiana lost 51,242 industrial jobs, according to Manufacturers' News Inc. — the sharpest decline the industry directory said it had ever reported for the state. There have been some modest gains, however, in the last couple of years.

Historically, poverty rates have tended to move up and down following changes in the unemployment rate. But this trend hasn't held in the aftermath of the recent recession, according to Elizabeth Kneebone, a fellow at the Metropolitan Policy Program at the Brookings Institute and co-author, with Alan Berube, of "Confronting Suburban Poverty in America." 

On a broader scale, Ziliak said prior to Johnson's War on Poverty, there were still pockets of malnutrition in the country where children might be seen with bloated bellies and stick-thin limbs like one might see among those living in third-world countries.

"Those basically don't exist anymore," he said.

Programs cut poverty notably for blacks, elderly

Ziliak said without access to the programs created over the last 50 years, "we would be talking of 30 percent of the population being in poverty, rather than 15 percent."

Ziliak and others, like Sheldon Danziger, with the Gerald R. Ford School of Public Policy at the University of Michigan, point to the impact of Johnson's programs on opening access to minorities. To obtain federal aid under some of the programs, hospitals and others had to commit to providing services to everyone. 

The other population that benefited hugely from the programs, such as Medicare, were the elderly.

Ziliak notes that today, one in seven people receives food stamps, and the expansion of the Social Security programs in the 1960s, '70s, and early '80s have had a big effect, especially when it comes to reducing elderly poverty.

"Areas where we failed in my view was that not enough attention was dedicated to solving long-term poverty issues," said Ziliak, who points to a declining commitment to higher education.

A study by the Chronicle of Higher Education showed that while Indiana has provided more funding for education over the past 25 years, most of the rising costs have been borne by students and their families.

The average poverty rate among the states in 1959 was 24 percent, with more than half the people in Mississippi living in poverty, according to a paper written for the Pew Charitable Trusts. In 2012, by contrast, the average poverty rate there was 14.3 percent, writes Stateline writer Jake Grovum.

As noted, Indiana's poverty rate in 1959 was below the national average, at 17.5 percent. The state's poverty rate averaged 12 percent between 1960 and 2008, including those nine years when it was in single digits.

Since 2008, however, Grovum notes Indiana's official rate has averaged 15.5 percent. That rate is higher than the national average and only 2 percentage points less than what it was in 1959. Mississippi still has the highest poverty rate in the country at 22 percent, but that is less than 50 percent what it was more than 55 years ago.

Poverty rates misleading, some say

In a paper for the conservative think tank, The Heritage Foundation, authors Robert Rector and Rachel Sheffield argue that only a small number of the 46 million classified as poor by the U.S. Census Bureau in 2010 really fit that description.

In their paper, "Understanding Poverty in the United States: Surprising Facts about America's Poor," they point to a 2009 U.S Department of Agriculture survey in contending that most of the poor do not experience hunger or food shortages.

Their household food security survey showed that 96 percent of poor parents said their children were never hungry at any time during the year because they could not afford food, and that 82 percent of poor adults reported never being hungry at any time in the prior year due to a lack of money for food.

They do acknowledge some families face hardships and note that one in five poor adults will experience temporary food shortages and hunger at some point in a year.

The authors contend that welfare policy needs to address the causes of poverty and not merely the symptoms. "Among families with children, the collapse of marriage and erosion of the work ethic are the principal long-term causes of poverty," write the authors.

Others, however, contend the chief culprit of poverty is not the lack of effort, but lack of opportunity.

"A lot of the folks at the poverty level are doing their darndest and working two to three jobs," said Dan Murchek, deputy chief of police for the Lake County Sheriff's Department and a Northwest Indiana Workforce board member.

Poverty also seems to be spreading out from the urban centers, and programs to serve the poor are not always accessible in suburban areas.

According to a report by the Social IMPACT Research Center, about one third of the Chicago area's poor population lived in the suburbs in 1990. By 2011, however, that number had climbed to about half of the region's poor being located in the suburbs.

In their book, "Confronting Suburban Poverty in America," Kneebone, of the Brookings Institute, and Berube write about this trend.

Between 2000 and 2011, the number of poor suburban residents nearly doubled, far outpacing the growth rate in core cities like Chicago and Joliet, they note. In a recent interview, Kneebone said one of the challenges with poverty in the suburbs is that programs to help the poor are more fragmented.

Another trend seen over the past few years has been a shift in the types of jobs;  Kneebone points to this trend as a reason why poverty numbers may not decrease even as employment levels rise, as seen in the past. 

Kneebone referred to an August 2012 brief by the National Employment Law Project, which noted that while most job losses in the recent recession were mid-wage jobs, the recent growth in jobs has been mainly in lower-wage employment.

Lower-wage occupations that grew the most during the recovery included retail salespersons, food preparation workers, laborers and freight workers, waiters and waitresses, personal and home care aides, and office clerks and customer representatives.

The Indiana Institute for Working Families said there also has been a decades-long decline in the state's median household income. From 2008 to 2012, the median household income dropped to $46,974 in 2012, from $50,964 in 2008. Perhaps this explains, in part, why even though unemployment rates have dropped, an increase in the state's income tax receipts that had been predicted by budget forecasters did not materialize. 

"The tourism and hospitality industry in the U.S. is larger than the automotive manufacturing industry," noted Speros A. Batistatos, president of the South Shore Convention and Visitors Authority at its annual tourism luncheon in May.

However, compensation in these two industries is vastly different, according to the Bureau of Labor Statistics.

The average hourly wage for nonsupervisory employees in the transportation manufacturing industry was $24.93 in April 2014, and they worked an average of 43.9 hours. Even those involved in just assembly jobs made an average, or median, salary of $18.16 per hour.

By contrast, the average hourly wages for nonsupervisory employees in the leisure and hospitality industry in April 2014 was $11.96, and they worked an average of only 26.2 hours a week.

Those numbers work out to an average annual salary of $16,294; the U.S. poverty guideline for a family of three in 2014 was $19,790.

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