I have invited you to travel with me for over a month in exploring the 2014 National KIDS COUNT Data Book as it pertains to Kentucky. We have talked about the stellar progress in health; the mixed bag of results we find in education; and, the changing dynamics of family life as seen in the “family and community” domain. In today’s blog, we probe economic well-being which is a deep, overarching, and stubbornly persistent barrier we have to overcome before Kentucky can ever become the best place in America to be young.
The numbers can almost overwhelm you. More than one in four children in Kentucky live in poverty. Almost 260,000 of Kentucky’s kids find themselves in poverty, a number that has significantly increased since KIDS COUNT began in 1990. Another illustrative data point is children in families where neither parent has secure employment. Let’s be clear about what that means – those are the families where mom or dad is most probably working two or three or four part-time jobs, none of which pay benefits but all of which pay – at best – the minimum wage. In other words, that data point highlights families that are working hard and sinking fast. And, as you would guess, there is a myriad of additional data that paints the portrait of poverty in the Commonwealth.
If you are reading this blog, chances are that you already understand the power of this one domain. Economic well-being drives outcomes in every other area of child well-being. You cannot talk education without talking economics. You cannot talk health without talking economics. You cannot talk safety or family stability or any facet of what it means to be a Kentucky kid without talking family economics. That means we must take action in definitive and immediate ways if we are to move the overall state of Kentucky’s children.
In the midst of all this bad news around economic well-being, there is good news. Opportunities abound that are pragmatic, bi-partisan and can deliver immediate impact. While neither a comprehensive list nor a silver bullet solutions formula, I would suggest three action commitments:
- Get real about tax and budget reform
While comprehensive tax reform is an emboldening and needed idea, there doesn’t seem to be common ground to make that happen right now. So, where does that leave us? Actually we have plenty of options that can make a real difference for poor families in Kentucky. And there is no better place to start than with a refundable state Earned Income Tax Credit. We have written about that tax proposal here often. A bi-partisan idea. A policy with the most effective track record of any measure in combating poverty at the federal level. And a reform that puts money in the pockets of working families and local communities which delivers a strong return on investment for the state budget. Let’s challenge our legislators and whomever the new Governor will be during the 2016 session to tackle tax reform by starting with a refundable state EITC.
- Get tough on predatory practices.
Talk to a low-income family. Talk to a grassroots service provider. Talk to an elected leader or a pastor with an ear to the ground. You will come away from those conversations knowing the grip of the debt cycle on Kentucky families, and often you’ll hear stories of how these families fell into a debt trap from predatory lending. At an economic level and as a moral issue, this should be a no-brainer. Yet putting protections in place around payday lending hasn’t had success in Kentucky. We hope you ask your legislator to step up on this issue. Low-income families have too many odds stacked against them to also have to combat the debt trap often caused by payday loans.
- Get imaginative about seed capital ideas.
If the first idea requires pragmatism and the second requires guts, then the third idea requires imagination. Growing businesses understand the power of venture or seed ideas. Those are the ideas that begin with a seed planted here and there, nurtured with care, and then leveraged for much broader change within an industry.
There are any number of groups that proffer an array of seed capital ideas around boosting family economics. I am particularly fascinated by the ideas that come from Corporation for Enterprise Development (CFED). CFED asserts that there are any number of roads to create what it terms “pathways to economic security and opportunity.” The CFED list of notions includes ways to boost family savings; financial education and access; consumer protection; asset limits; home ownership; and, entrepreneurship. Within those broader categories, CFED suggests some specific innovative strategies. As an example, within the financial education and access policy arena, lots of attention is paid to financial literacy as part of the K-12 system to prepare the next generation of wage earners – there’s an idea that Kentucky could take and run with. Or I am especially fascinated by the CFED emphasis on micro-businesses for vulnerable rural and urban communities within the entrepreneurship section. My point is not that we need to take CFED’s hypotheses – or that of any other national group – as the yellow brick road to Kentucky prosperity. But I do believe that ideas such as those backed by CFED could usher in an era where we approach economic well-being with proactive rather than reactive measures. Gandhi whispers to Kentucky – “Poverty is the worst form of violence.” It is time to end that kind of violence to Kentucky’s kids and families by becoming pragmatists on tax reform; tough on modern day money changers; and imaginative builders of pathways to prosperity.