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/.

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.

The poverty rate has generally been between 10-15% since the mid-1960s, so this isn’t a dramatic trend, but there are obviously concerns that it could continue to rise over the next couple years due to the recession. Also, it is important to remember that the income levels at which poverty is measured are relatively low by today’s standards. For example, for 2008 a single person had to have an income under $10,991 to be considered poor, while a family of two parents and two kids had to have an income under $21,834. Clearly a much higher percentage than 13% of Americans are struggling to make it in this economy.

By the way, if you’re interested in how poverty is measured and current calls to update it to today’s realities, check out http://www.povertymeasure.org/

The pattern is to curtail financing for services that might help the poor while ramping up law enforcement: starve school and public transportation budgets, then make truancy illegal. Shut down public housing, then make it a crime to be homeless. Be sure to harass street vendors when there are few other opportunities for employment. The experience of the poor, and especially poor minorities, comes to resemble that of a rat in a cage scrambling to avoid erratically administered electric shocks.

We certainly see this how we treat the homeless in our society. A recent report called “Homes Not Handcuffs” highlights the fact that cities across the nation are creating punitive measure against the homeless (e.g. for sitting or sleeping in public places) without providing adequate shelter or places to live. Overall, 4 out of 10 homeless persons in the U.S. are “unsheltered.” In Los Angeles, 8 out of 10 are unsheltered, partly explaining why the report listed the City of Angels as the “meanest city” toward the homeless.

In a July 21 post, Joel Roberts explains how pleasantly surprised he was at the response to a volunteer training session:

Clearly, leaders of this initiative were nervous, worried about low attendance. A small number of volunteers would’ve meant the community was not interested in addressing homelessness.

But by five minutes after the starting hour, the room was packed. Over 100 local volunteers were there—from faith groups, the local university, service agencies, businesses, and the community as a whole. There was clearly an excited buzz during the meeting.

Volunteer Richard Hackett blogged in a July 24 post how participating in the effort had changed his perspective:

The variety of circumstances surrounding the reason for each individual’s homelessness varied. I encountered those that were mentally ill, the extremely intelligent who had earned a college degree, drug and alcohol abusers, displaced family units, and those running from the law.

I found myself reflecting after a days worth of surveys, that all of these transgressions (whether their own or those against them) as bad as they might seem, are no different than some of the sins I have committed in my life. There is goodness in each of the people I met this week. I saw that during the interviews I conducted.

And in a July 26 post, Patricia Loughrey blogged how the people she met are ready for a place to live.

But Juan is ready. He is in perfect position. Slip a house around Juan and he’ll fit right in. Put an address on his front porch and he’ll be ready to wake up and walk into a new day. Juan is ready.

And Carla is ready. And Byron, and Pops, Gerald, and Peanut, Patrice and Clyde. They’re all ready. And so are the other 350 people sleeping outside this week in central Long Beach: they are ready.

Latin America has some of the highest levels of inequality in the world. According to the 2007/2008 Human Development Report, the ratio of income controlled by the richest 10% to the poorest 10% in the U.S. is 15.9 (in Japan it is 4.5 and in Finland 5.6). In contrast, in Ecuador it is 44.9, in Brazil it is 51.3, Colombia 63.8, and Bolivia a whopping 168.1. With such high levels of unequal distribution of income, it isn’t surprising that crime is also on the rise.

Without a recent history of civil war or military oppression as in other Latin American countries, Ecuador was previously seen as an oasis of relative tranquility. When I lived here in the early 1990s, I travelled throughout the capital city and the country on bus and on foot, and was never robbed or really even felt insecure, though I did take common sense precautions because I knew that petty crimes were somewhat common. Each time I come back, however, I hear stories of increasing insecurity and even violent crime.

Several years ago, I was stunned by the explosion of fancy shopping malls in Quito, with prices at or higher than those in the U.S., and I couldn’t help but wonder what would be the psychological effects of a globalized consumerism out of the reach of the masses would be on society. Having access to better goods and services is a good thing, but in this case having all the latest toys and luxury items thrown in your face but without the educational and economic opportunities to afford them could only lead to problems, I reasoned.

On one of our first days here, I got to experience these contradictions first hand. Due to the vision of some dedicated municipal leaders and transportation planners, Quito has made some positive improvements in public transit, namely the electric Trolebus, which runs from the north to the south of the city and gets about 200,000 riders everyday. It’s a convenient way to get through the increasingly congested city, and we decided to take it to a new children’s museum (El Museo Interactivo de Ciencia). The museum was wonderful, engaging for both our 6 and 9 year old, another example of many of the positive artistic and cultural developments in Quito in recent years. On the trip back, however, my sister-in-law had her wallet taken from her purse in the crowded Trole, putting a damper on the day. We were conscious of the risk and careful but were not able to avoid this unfortunately common occurrence.

These problems are not unique to Ecuador or Latin America, of course (and shouldn’t discourage anyone from visiting them because there are so many wonderful places and things to experience). But they should also provide caution to societies like the U.S. that are experiencing growing social and economic disparities. Inequality may be good for a few for awhile, but the social disintegration that will likely prevail eventually isn’t good for anyone.

The most familiar of these stories is the extensive reporting by Steve Lopez on Skid Row and his friendship with Nathaniel Ayers, which resulted in “The Soloist” book and movie. Other recent stories may not be as well-known but are just as compelling.

Esmeralda Bermudez wrote about Khadijah Williams, an 18 year old who has long been homeless but is going to Harvard this year. Sandy Banks has written about Eddie Dotson, a man who created his own home in tight spaces near LA freeways and who was reconnected with his children through the columns. Banks’ most recent column highlights how Dotson “captured a community,” and she makes the important point that overcoming the odds wasn’t just a matter of personal will. Each of these special people received help from someone.

We should be inspired by these personal stories of triumph, while remembering that it is up to us to make sure that all the Nathaniels, Khadijahs, and Eddies out there have the opportunity experience similar victories.

A new report from the LA-based Economic Roundtable attempts to meet those needs by providing a wealth of the most recent data on how the current recession is affecting everything from employment, income, housing, poverty and health in Los Angeles and the state. Using historical data on recessions and employment projections from respected forecasters, the report produces estimates for how residents will fare over the coming years. If you are interested in where we’ve been and could be going, check out Ebbing Tides in the Golden State: Impacts of the 2008 Recession on California and Los Angeles County.

In general, the report sees conditions continuing to worsen over the next year but then starting to improve steadily by 2011 or 2012. It even provides estimates of how much poverty and homelessness will increase or decrease. Are these accurate? Of course there is no way to know. As the Nobel Prize laureate physicist Niels Bohr said, “Prediction is very difficult, especially about the future.” At the very least, Ebbing Tides in the Golden State provides an important overall understanding of how deep the recession is affecting us.

The deprivations of the formerly affluent Nouveau Poor are real enough, but the situation of the already poor suggests that they do not necessarily presage a greener, more harmonious future with a flatter distribution of wealth. There are no data yet on the effects of the recession on measures of inequality, but historically the effect of downturns is to increase, not decrease, class polarization.

The recession of the ’80s transformed the working class into the working poor, as manufacturing jobs fled to the third world, forcing American workers into the low-paying service and retail sector. The current recession is knocking the working poor down another notch — from low-wage employment and inadequate housing toward erratic employment and no housing at all. Comfortable people have long imagined that American poverty is far more luxurious than the third world variety, but the difference is rapidly narrowing.

We shouldn’t discount the negative effects the current crisis is having on a wide range of families who make up the newly poor; but neither should we forget the long-term poor, who will be less likely to bounce back once the crisis turns.

“Prices in urban corner stores are almost always higher, economists say. And sometimes, prices in supermarkets in poorer neighborhoods are higher”

“Time is money, they say, and the poor pay more in time, too. When you are poor, you don’t have the luxury of throwing a load in to the washing machine and then taking your morning jog while it cycles.”

“The poor pay more in hassle: the calls from the bill collectors, the landlord, the utility company.”

“The rich have direct deposit for their paychecks. The poor have check-cashing and payday loan joints, which cost time and money.”

The article contains lessons from several “guest lecturers,” the poor themselves. Take a look and learn from their stories. Many of the things that most of us take for granted – shopping for fresh fruits and vegetables, paying bills and borrowing a little money, finding decent childcare – are infinitely more difficult for the poor.

The Annie E. Casey Foundation has been at the forefront of identifying the high cost of poverty, both for individuals and society. For example, see the essay on “The High Cost of Being Poor” in their 2003 edition of the Kids Count Report, as well as a Resource Kit with strategies for helping people overcome the high cost of poverty.