The EITC, or Earned Income Tax Credit, has been known for over thirty years to be one of the more successful anti-poverty programs in the nation. The tax relief program is geared toward only workers earning income below a certain income threshold and is responsible for delivering much needed tax refunds to workers, who in turn use this money for medicine, rent, school supplies and food. Every year many people who are eligible for the tax credit in the U.S. and L.A. County fail to claim it, leaving behind billions in uncollected money. According to a 2008 research brief by the United Way of Greater Los Angeles, one in five taxpayers in L.A. County claimed the EITC in the 2006 tax year- that is, 750,000 taxpayers in L.A. County. These residents received a total of 1.5 billion dollars in refunds. Where does all this refund money go? What are the implications when eligible people don’t claim the refund and in essence, ‘leave it on the table’?

A new report by the New America Foundation examines the consequences. Money that is not claimed is never spent on local businesses, which in turn never create new jobs that could have been.  In addition, potential local tax revenue from this forgone economic activity is never generated. The report does an excellent job of highlighting how we are all in the proverbial “same boat.” Even if you are not low income, and not receiving the tax credit, your community still benefits by the infusion of cash coming into your business, your neighborhood and in your infrastructure via tax revenues generated.

Among some of the findings:

• L.A. County left over 370 million dollars in unclaimed refunds in year 2006. This meant a loss of over 440 million dollars to the economy in foregone sales.
• Over 2,700 jobs were not created due to this loss to the economy. This translates into over 123 million dollars in forgone wages.
• The EITC is particularly important in L.A. County because it has a higher level of poverty than the state and the nation- nearly 40% are considered low income. L.A. County has a lower median income compared to other large metro areas, and has a higher proportion of minorities (a constituency which claims the EITC in no small numbers).

If poverty prevention as well as alleviation is to be a public policy goal for our communities, then EITC expansion and funding for capacity and outreach is vital.  To learn about EITC outreach efforts in Los Angeles, visit http://www.greaterlaeitc.org/.

In the meantime, you may want to check out a post I did recently over at the Funders Together blog on “Exploring the Notion of Public-Private Partnerships to End Homelessness.” It reports on a meeting we organized recently to learn about models of cross-sector collaboration in Los Angeles and across the country.

Hasta pronto.

I look at the Business page because…..well, I guess I’m a glutton for punishment. Besides some obligatory stories on the latest techie tools that are going to revolutionize consumer electronics, here are a some sober headlines from the January 6 LA Times Business section:

“Lower number of new deals under contract shows shakiness in the housing recovery.”

“Mixed data on the recover stifle stocks.”

“Only 45% of workers are happy with their jobs, the lowest rate in 22 years, survey finds.”

“Banks take revenge for new consumer-protection rules”

The media has been looking for any good news where it can find it (worker productivity is up!), but unemployment is still high, housing and stocks are shaky, and workers and consumers are still taking it on the chin.

Here’s more bad news: I’m on my way to Chicago and the weather page says to expect a high of 23 degrees. However, when I get back to LA on Friday, it’ll be sunny and 72. I guess my daughter knows something I don’t: if you live in LA and want good news, check the weather.

According to a January report from UCLA’s Civil Rights Project, African-American and Latino schoolchildren are more segregated than they have been since the time of Martin Luther King Jr.’s death, in 1968. In the 2006-07 school year, nearly 40% attended schools–many of them subpar “dropout factories”–where students of color made up 90% to 100% of the student body.

The report they are referring to is Reviving the Goal of an Integrated Society: A 21st Century Challenge , written by noted education and civil rights scholar Gary Orfield.

Not only do many public schools remain segregated by race, the report points out, but also by income as those same schools tend to be segregated by economic class.  Add to that the fact that those schools tend to be more likely to have unprepared teachers, college prep courses and enrichment activities and you have a whole class of students starting far behind.

If segregation is so obvious, why don’t we hear more about it?  Orfield provides this explanation of why whites think segregation is over:

Even as black and Latino students are becoming more isolated, the typical white child is in a school that is more diverse than the school white children attended a generation ago. This factor makes it especially hard for whites to understand the degree to which resegregation has taken place. In 1988, 53% of white students attended schools that were 90-100% white, but that number has slipped to 36% in the newest data. 94% of whites were in majority white schools then, but that has dropped to 87% in the most recent data. The share of whites attending multiracial schools has risen from 7% to 14%.

So, whites are becoming less segregated, but African Americans and Latinos are becoming more segregated. Overall, segregation is growing because non-whites are growing in proportion to whites.  But apparently that still isn’t much of a story.

Winners and losers will, of course, be decided on the soccer pitch, but how would these countries fare if their success were based on how well they meet the needs of their residents? The Human Development Index (HDI) is a widely used measurement of the quality of life in countries around the world. Using the HDI as a proxy for how countries would perform the World Cup (i.e. the country with the higher HDI wins each game), matchups in the second round would include (see table at the bottom for the most recent HDI for each of the countries in the World Cup, except North Korea):

Switzerland vs. Brazil
Italy vs. Japan
Portugal vs. Spain
Netherlands vs. New Zealand
Greece vs. Uruguay
Australia vs. England
U.S. vs. Germany
France vs. South Korea

Following the same logic, the quarterfinals matches would be:

Japan vs. Switzerland
Greece vs. Australia
France vs. U.S.
Netherlands vs. Spain

Australia would beat Japan in one semifinal and Netherlands would squeak by France in the other.

In the final, Australia would win over the Netherlands, giving the Socceroos their first World Cup title.

While Australia has been improving in recent years, I think I speak for most fans of the beautiful game in concluding that it’s a good thing that the HDI doesn’t determine the results on the field. Brazil, certainly one of the favorites to raise the cup, is ranked 23rd in HDI among the countries in the World Cup. Ivory Coast, with one of the lowest HDI rankings in the world (163rd out of 182), is the top team in Africa and a leading candidate to stage some major upsets.

While human development levels may be somewhat predictable and unsurprising, sport can be thoroughly unpredictable. Global inequalities persist, but soccer is the great equalizer.

Human Development Index for World Cup 2010 Countries

Source: Human Development Report 2009

Finally, we are beginning to have numbers that show similar savings in Los Angeles. Last month, United Way of Greater Los Angeles released a case study report of four individuals that showed a 40% decline in public costs.

Economic Roundtable’s Where We Sleep report shows similar levels of savings, but with a much more comprehensive data set (including 10,000 recipients of General Relief in the County). This chart from the report shows how much public costs decline after someone is placed into supportive housing.

Average Monthly Public Costs for Persons in Supportive Housing and Comparable Homeless Persons

Source: Economic Roundtable, Where We Sleep, 2009

That’s a 79% reduction in average public costs. Even when accounting for the cost to provide permanent housing (average of $750 for capital and $352 for operational costs per month), there is a 41% decline in costs.

For years, studies around the country have shown similar cost savings; but a common response in Los Angeles has been, “well, we don’t know if that’s true for L.A.” (we are special here after all). With this evidence, what’s our excuse for not doing everything we can to provide permanent supportive housing for those who need it? Not only is it the right thing to do: it’s the smart thing to do.

How we approach an issue is most often shaped by personal experiences and relationships. This point was driven home for me again by a letter to the editor in Sunday’s Los Angeles Times, in response to Gregory Rodriguez’s recent column belittling a Senator’s proposal to exclude the undocumented from the 2010 Census:

I am a lifelong Republican who voted for Richard Nixon in 1960, but have always been concerned about dehumanizing our immigrant families and workers in the U.S.

I got involved with the Day Workers Center in Laguna Beach originally to get these day laborers out of our neighborhoods. But I have come to know many of the workers. They are hardworking, believers in family values, honest and bent on improving their lives.

They do pay taxes. They do try to get their children educated. They do contribute to our local economy. More important, they teach our Anglo children the meaning of diversity and respect for difference.

Rodriguez is right in insisting that we recognize our productive noncitizen families and workers — not just because they enhance our population for congressional representation and federal spending allocations but because they belong to our local communities.

Carl Schwarz

Aliso Viejo

This guy started out wanting to get rid of day laborers, but in getting to know them he realized they just wanted the same things he did. Wouldn’t it be great if more people would take a chance to get to know “those people” they put down so much? Maybe they’d realize they’re really just a lot like “us.”

In this vein, TIME’s recent cover story describes “What’s Still Wrong with Wall Street.” Allan Sloan writes:

Welcome to Round 2 of Main Street vs. Wall Street. The divide is the worst I’ve seen in my 40 years of writing about finance. In a new TIME poll, 75% of the respondents say they believe Wall Street will revert to business as usual, 67% want the government to force pay cuts, and 59% want more government regulation.

Main and Wall are never going to love each other. And they probably shouldn’t, because their interests aren’t identical. But if we’re going to get through this mess as a society and regain our prosperity, Main Street and Wall Street need to understand each other. And they don’t.

(To see some interesting poll data, as well as a telling graph from Thomas Piketty and Emmanuel Saez’s research on income inequality, check out the PDF version of the article.)

Sloan concludes with four ideas for fixing the disconnect, the first two geared toward policy makers, the latter two directed to you and me.

1) Break up institutions that are too big to fail so that we can allow them to fail.
2) Tell the truth, and play it down the middle.
3) Put not your faith in the Fed or Uncle Sam.
4) And for heaven’s sake, don’t put your faith in Wall Street.

To reinforce these points, I might add that Nancy Gibbs’s article in the same issue on “The Case for Modesty, in an Age of Arrogance” should be required reading for all of us.

Well, according to the 2009 Greater Los Angeles Homeless Count – released today – it hasn’t. The 2009 figure – 48,053 persons homeless in Los Angeles County every night – represents a 38% decline from the 2007 count. This is actually part of a trend over the past four years, as shown in the following chart:

When the 2007 numbers came out lower than 2005, a common justification was that the count became more precise as the methodology improved, implying that the earlier count wasn’t as accurate. Having been briefed on this year’s methodology, I agree that the 2009 count is the most reliable we’ve had yet. But, it still begs the question of whether we’re really seeing declines. As one news article characterizes it, “whether the drop was real or the by-product of fuzzy math in previous years, is hard to say.”

Leaders in Los Angeles are trying to frame the results in the positive, claiming that the decline is the result of increased public and private efforts to house the homeless. As Michael Arnold, Executive Director of LAHSA, stated in reaction to the numbers, “We know, we can sense, we can feel that there’s a change out there. These numbers provide us with some documentation, that things are really happening in Los Angeles.”

As I’ve written about before, there has been real, quiet progress in addressing homelessness in Los Angeles. That work is to be applauded. At the same time, we shouldn’t forget that we still have tens of thousands of people in Los Angeles who will sleep on the streets today. We still have plenty of work to do.