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Pathways to Economic Stability

Pathways to Economic Stability

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10 Ways the Federal Government can Alleviate Poverty and its Devastating Effects

As the nation turns its eyes to the national political conventions in Cleveland and in Philadelphia, it is important that both political parties focus on poverty and on policy solutions to address this critical issue.  Among the ten largest cities in the nation, Philadelphia ranks first in residents living in poverty. As experts who have been working for 50 years to help low income Philadelphians achieve economic stability, Community Legal Services of Philadelphia (CLS) advocates for the following changes to help our clients and lift people out of poverty nation-wide:

  1. Support reentry initiatives as part of criminal justice reform

Nearly one in three Americans has a criminal record and one in two children has a parent with a criminal record.These individuals face intractable barriers to full participation in society and consequently are likely to live in poverty.To build upon the strong federal reentry efforts of the last year, the federal government, as the largest employer in the nation, must lead the way in hiring people with criminal records.We urge that the forthcoming OPM regulations governing federal agency hiring include the EEOC’s guidelines for evaluating criminal records found in its 2012 guidance on consideration of criminal records by employers, and to postpone background screening until the last stage of hiring.We also encourage the extension of fair hiring rules to federal contractors.

The best way for individuals to avoid criminal record discrimination is for their criminal records not to come up in background checks.At least 23 states expanded expungement and sealing between 2009-2014 and Pennsylvania is poised to take record-clearing a step further with “Clean Slate” bills (SB 1197/HB 1984) that would automatically seal minor convictions and arrests after a period without further criminal charges. Following this lead expungement should be made available for federal cases, as would be done by the REDEEM Act.Finally, employers’ ability to see old and irrelevant criminal records should be limited.

We also urge the government to end the criminalization of poverty. The Ferguson protests shined light for the first time nationally on the burden of court fines and fees, but Ferguson was just the tip of the iceberg.Court debt issues were felt here, where the courts tried to collect four decades’ worth of debt from one out of every five Philadelphians.We commend Attorney General Loretta Lynch for her “Dear Colleague” letter on court fines and fees, and encourage follow-up education and enforcement to attack the never-ending cycle of debt faced by people with criminal records.

Finally, the federal government should take steps to eliminate housing discrimination for people with criminal records. Education of public housing authorities and landlords, along with enforcement of Title VIII by HUD, are critical next steps to HUD’s recently issued guidance on consideration of criminal records in housing decisions under the Fair Housing Act.

  1. Provide better job opportunities for individuals facing barriers to employment

Even as the U.S. economy adds jobs, individuals with barriers to employment – people with criminal records, young adults without a work history, older adults – remain unable to find work.In Pennsylvania, over 250,000 people per year are on active supervision by the criminal justice system.A year after returning home from prison, 60% of people remain unemployed.The youth unemployment rate is at least three times higher than the adult rate, and nearly 30% of Philadelphians aged 16 to 24 are unemployed.Even for youth who do not have juvenile or criminal records, finding employment is tough, especially without prior work experience or references.The federal Workforce Investment Opportunity Act (WIOA) provides some funding for transitional jobs for targeted populations, but the funding does not go far enough.Federal funding is needed to support meaningful transitional jobs programs, to allow individuals facing barriers to employment to earn wages that stabilize their families, while building work history and contributing to their employers and communities.

  1. Make sure work pays

To alleviate poverty, we must ensure that people can find work, that work pays a fair and family sustaining wage, that all workers can take advantage of our nation’s safety net, and that workers have a right to organize to improve their working conditions. So that work pays for all workers, we must raise the minimum wage, which would help 135,000 workers in Philadelphia alone. We must allow all workers to benefit equally from minimum wage and overtime laws by eliminating the tipped minimum wage and removing exemptions for workers like agricultural workers.  We should expand the safety net to include independent contractors, contingent workers, and on-demand workers. All workers should have paid family and sick leave, and we should strengthen collective bargaining rights.  Finally, the value of the EITC should be increased to further reward work, especially for workers who don’t have children, or whose children are grown or are not living with them.

  1. Eliminate the waiting list for child care subsidies

Currently, if a low-income parent gets a job, they must find a way to pay for child care on their own for several months until they reach the top of the waiting list for child care subsidies. Many low-income parents lack the family supports that will provide free or low-cost care while they wait — preventing them from taking jobs at all, or causing them to lose jobs quickly. Congress recently reauthorized the Child Care Block Grant, but did not add additional funding. In order to address the waiting list and help low-income parents find and maintain employment, federal and state legislators must add funding for the program.

  1. Strengthen the safety net

Federal public benefits not only alleviate poverty, but are critical to helping people become economically secure. The TANF block grant amount should be raised to keep up with inflation, so basic necessities are not out of reach for so many people. There should be reforms to how the program is evaluated, so the focus is on alleviating poverty (especially deep poverty) and helping families to get good jobs, rather than measuring whether people are being kept busy. Reforms should also allow more opportunities for education and training.

The SNAP benefit amount should also be raised and time limits for food stamps for able-bodied adults without dependents (ABAWDs) should be repealed in recognition of the fact that many people cannot find work despite their best efforts and that the health of our community members impacts all of us. In June of this year, 10,000 Pennsylvanians lost their food stamps as a result of reinstated time limits.

Funding for Medicaid expansion should be preserved for low-income working families under the Affordable Care Act. The federal government should ensure that states who have expanded or are expanding Medicaid do not play politics with patient health by implementing unaffordable premiums and other barriers to coverage.

Water must be affordable. The federal government should recognize and promulgate nationwide standards for universal, equal access to safe, affordable, and adequate water and sanitation.Philadelphia will soon be implementing the Income-Based Water Rate Assistance Program, calculating low-income customers’ water and sewer bills at amounts ranging from 2-3% of monthly household income, establishing a best practice that should be endorsed nationwide.

  1. Reform Social Security to aid low-income older adults and people with disabilities

Congress must update the financial eligibility rules for the Supplemental Security Income (SSI) program, which provides vital benefits for low-income older adults and people with disabilities.  For example, the asset limits for SSI -- $2,000 for individuals and $3,000 for married couples – have not been updated since 1989.  Had the asset limits been adjusted for inflation, these limits would be more than four times as high today.  Modernization of the asset rules is thus long overdue.  By maintaining outdated asset limits, the SSI program discourages vulnerable recipients from building up savings and keeps many in poverty. 

Congress should also fully fund the President's FY 2017 budget request of $13.067 billion for the Social Security Administration's (SSA) Limitation on Administrative Expenses (LAE). People who are denied SSI and Social Security Disability Insurance (SSDI) now need to wait an average of 543 days just to have a hearing, compared to the average 360 day wait time in 2011.The U.S. House of Representatives Appropriations Committee's decision to cut the President’s budget request for SSA by $1.2 billion, $263 million below the Fiscal Year 2016 spending level, would severely compromise SSA’s ability to meet the growing demand for social security benefits.Failing to provide vital funding to SSA could result in closing or limiting hours at additional SSA field offices where many applicants already wait one month for an appointment.Insufficient funding may also worsen delays for phone service on SSA’s 800 number where people already wait an average of 15 minutes and 10% of people get a busy signal. Finally, without additional funding, SSA will not be able to address the historically high backlog of over 1 million cases waiting for a hearing.

  1. Make housing affordable and promote fair housing

The federal government has a large role to play in maintaining affordable housing and addressing the eviction crisis. Providing access to affordable housing is cost-effective, and reduces the collateral costs of homelessness, such as health issues and medical, legal, social services, and shelter expenses. Unfortunately, among very low income renters (defined as incomes up to 50% of their area median), HUD found that 7.7 million households in 2013 were either living in substandard housing and/or paying more than half their monthly income in rent. Safe, affordable, and habitable shelter should be seen as a basic human need and right. HUD should take steps to strengthen and enforce federal guidance, tools, and standards that will work to eliminate inequities in access to housing opportunities.

Racial isolation and segregation is deepening in US major cities, which contributes significantly to disparities in access to stable housing and economic opportunity.Racial and ethnic minorities are disproportionately impacted by displacement and segregation, with less access to local living-wage jobs, good schools, grocery stores, green spaces, and community institutions. Marginalized racial and ethnic households are also disproportionately burdened by housing costs and income inequality. According to the Center for Housing Policy, national studies have shown that “working households that are headed by non-white individuals have a significantly higher rate of severe housing cost-burden than white-headed households.”

Landlords sometimes refuse to rent to tenants who participate in the Housing Choice Voucher Program (Section 8) or who wish to use non-traditional sources of income to pay their rent, such as child support and alimony payments. The federal Fair Housing Act prohibits landlords from discriminating against tenants based on their race, color, religion, sex, national origin, disability, and familial status. In addition to these federally-protected characteristics, states and local municipalities can choose to further protect tenants through enacting new laws or amending existing laws. For example, some states and municipalities have passed laws that prohibit landlords

from discriminating against tenants based on their age, marital status, sexual orientation, and source of income, which usually includes housing vouchers as an income source. In order to affirmatively further fair housing, address disparities in housing needs, and overcome patterns of gentrification and segregation, we must encourage equitable and ethical neighborhood redevelopment that extends beyond building housing and that provides services, protections, and supports to existing communities.

  1. Stabilize neighborhoods by preventing mortgage foreclosure

In order to stabilize neighborhoods and help break the cycle of poverty, the federal government should ensure that homeowners have access to programs that can help them to save their homes. In 2014, 38% of Philadelphia homeowners earned less than $35,000.Of the 30 largest U.S. cities, only Detroit has a higher percentage of low-income homeowners.Access to programs that help homeowners avoid foreclosure is vital towards preventing the decline of communities.

The federal Home Affordable Modification Program (HAMP) will sunset at the end of 2016.  We need a consistent, transparent loan modification program to replace it.  The Federal Housing Finance Administration (FHFA) must ensure that Fannie Mae and Freddie Mac continue to set the industry standard with affordable and sustainable loan modifications that take borrower income into account.  FHA, VA, and RHA must maintain their effective home retention options for borrowers facing hardships and make sure that the mortgage companies serving government-insured loans comply with their obligations to help those borrowers avoid foreclosure.  There must also be funding to replace the terminating MHA funding for foreclosure prevention, including the 24 hour HOPE hotline which helps people understand their options to avoid foreclosure, and the national network of HUD-certified housing counselors. 

HUD has recently announced reforms to its Distressed Assets Stabilization Program (DASP) but the agency must go further in protecting homeowners. HUD should institute meaningful quality control over FHA servicers to ensure that borrowers get the protections they are entitled to.  Homeowners should also get notice that their servicer has designated their loan for DASP and an opportunity to dispute their eligibility for FHA loss mitigation before their loan is sold. These reforms would go a long way towards preventing mortgage foreclosure and homelessness.

  1. Stop the poor from being preyed upon

The continued vitality of the Consumer Finance Protection Bureau (CFPB) must be ensured to defend low-income consumers against unfair, deceptive or abusive practices.Created in the wake of the 2008 financial crisis, the CFPB is the only federal agency whose sole mission is to protect consumers by ensuring a fair and transparent financial services marketplace.Since opening its doors five years ago, the CFPB’s enforcement actions have provided almost $12 billion in relief to 27 million Americans victimized by illegal practices, and its rulemaking initiatives have established and proposed new protections from harmful financial practices.Unfortunately, efforts are underway to weaken the agency’s authority, independence, and funding, which must be opposed to ensure protection for low-income consumers.

This year, the CFPB is working to create new rules to protect consumers nationwide from predatory payday loans, “rip-off” forced-arbitration clauses which prohibit consumers from joining together to get relief in court, and abusive debt collection.Strong national rules in these areas will help ensure that low-income consumers do not lose their limited income to unscrupulous actors and that they can get redress for any illegal actions.To ensure the best protections, the CFPB should strengthen its proposed rules on payday lending and arbitration.While high-cost payday lending is already illegal in Pennsylvania, low-income residents would benefit by having a strong national rule that ends debt-trap lending nationwide and bolsters the enforcement of our state law.The CFPB must strengthen its proposed rule by requiring lenders to ensure that every loan is affordable to borrowers, without any exceptions that risk sending the message that 300% interest rate loans are safe and affordable when in fact they are dangerous and harmful.Similarly, we support the proposed rule to restore consumers’ ability to band together to protect their rights in class actions, but urge the CFPB to prohibit forced-arbitration in individual cases as well.Victims of consumer scams must have the ability to be made whole by taking the scammers to court.

We also urge the CFPB and all federal agencies to make more of their materials available in other languages.Last year, 13% of CLS's clients spoke a primary language other than English. Both the CFPB and Federal Trade Commission (FTC) publish many of their materials in Spanish.This is helpful.But not all of the materials are published in Spanish, and CLS serves a large number of clients who only speak Cantonese, Russian, Vietnamese, and other languages.All federal agencies should publish all of their consumer education materials in Spanish and publish more of their consumer education materials in other languages.

These measures would help people understand their consumer rights, and be better protected from scams and abusive practices, which would leave people in poverty much less vulnerable to being preyed upon.

  1. Help vulnerable youth to transition successfully to adulthood

Young people transitioning to adulthood, particularly young people with justice system involvement, young people with disabilities, and young parents, are at a high risk of living in poverty and even becoming homeless due to difficulty finding work, lack of access to public benefits and affordable housing, and increased financial strain. More resources must be devoted towards ensuring that vulnerable youth have the support needed to stabilize their lives and access opportunity.

The national youth unemployment rate is over three times the rate for adults. Jobs programs for youth, such as Jobs Corps, need additional federal funding, and it is important to ensure that such programs are open and accessible to young people who have juvenile or criminal records.

Juvenile and criminal records often pose barriers to employment for youth.  By age 23, it is estimated that 41% of young adults have been arrested at least once, and in Philadelphia the youth arrest rate is three and a half times the national average. Youth of color are particularly likely to be arrested, convicted, and incarcerated. Involvement with the justice system presents a significant barrier to finding employment or obtaining an education. Efforts to prevent juvenile justice system involvement must be bolstered.

In addition to preventing juvenile justice system involvement, the federal government should also increase its investment in prevention services to families to enable youth to stay safely in their own homes. Teen-oriented services such as after school programming, tutoring, mentoring, and job programs are essential to prevent truancy, delinquency and other behavioral issues so that teens are less likely to be placed in residential programs and are more successful in their homes and communities. There should also be more shelter placements for youth when they do become homeless, especially placements that take into account the need for young parents to remain with their children.

Youth should be connected to services and job training programs while they are still in school to ensure they have the support they need to successfully transition to adulthood.  Planning for the transition from high school to post-secondary education or employment is important and legally mandated for youth with disabilities, but they often leave high school unprepared for their next steps.  Vocational rehabilitation and job training programs should be fully funded and should collaborate with schools so that youth can move seamlessly from school to the next program that will help them move towards their goals.   Youth who have left school should be given priority access to vocational rehabilitation and job training programs.

To speak with one of CLS' attorneys about these policy recommendations, please contact Caitlin Brown.

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