The poverty rate is highest among children, with nearly 16 million children growing up below the poverty line. More than 30 percent of minority children today live in poverty. And almost half of American children who are born to parents on the bottom rung of the income ladder remain at the bottom as adults. These children tend not to have the range of opportunities that have long characterized the American experience. For example, the aggregate impact of child poverty in the United States leads to reduced skills development and economic productivity, increased crime, and poorer health, all of which is conservatively estimated by recent research to cost the United States more than $620 billion per year.1
The Great Recession caused many middle-class families to confront unemployment and economic hardship, and even fall into poverty. Millions more families were struggling long before the recession began, and found themselves falling further after the recession took hold. The effects of the recession drove the typical (or median) household income to its lowest level since 1996, with the poverty rate increasing to 15.1 percent in 2010, with 46.2 million Americans living in poverty, which for a three-person family means earning less than $18,530 per year. Over 50 million more Americans are on the edge of poverty.
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As the first president to have worked in public housing, President Obama understands the need for this approach. The President is deeply familiar with how poverty connects to every aspect of a family’s life and a neighborhood’s success, as well as the innovations our community developers have forged to fight poverty and community distress. The President knows fighting poverty requires flexibility, adaptability, and above all, a comprehensive focus. That is why, in describing the Harlem Children’s Zone, he noted that we need an “all-encompassing, all hands on deck” approach.
The uniquely people- and place-based nature of the challenge of poverty in America requires people-based and place-based responses to expand access to opportunity. It is not enough to focus only on economic circumstances of individual families; we must also be clear-eyed about the opportunities and stressors that surround them where they live.
The Department of Health and Human Services is working closely with community groups and states to identify those neighborhoods and areas with the highest rates of uninsured individuals to help guarantee that the Affordable Care Act brings insurance coverage to those places with populations most in need. In addition to improving coverage, we have added to the health infrastructure in the most underserved areas. With investments made possible by the Recovery Act, more than 2,800 grants were awarded to health centers for construction, renovation, new equipment, and the implementation of health information technology; and 127 new health center sites were created, providing comprehensive, quality primary health care services to medically underserved communities and vulnerable populations with limited access to health care. The Affordable Care Act has continued this effort with almost 600 capital projects and the creation of nearly 300 new service delivery sites. Health centers’ expansion into high-poverty neighborhoods recognizes these communities lack access to even basic preventive care, and it will change the mix of supports available to residents, providing an opportunity for coordination for developers serving high-need residents.
While we’ve discussed many of the Obama administration’s most powerful efforts to expand opportunity in families’ lives, the remainder of this chapter focuses on the place-based aspects of the Obama administration’s larger strategies. To successfully revitalize high-poverty neighborhoods, change the trajectories of kids in those neighborhoods, and compete in the twenty-first century economy, we must follow the example that innovative local actors have set across the country—solving housing, education, safety, workforce, and health challenges concurrently, in partnerships built across government, business, and nonprofit sectors.
The Obama administration’s new direction also includes efforts to improve health and health care. When families lack health insurance, they not only face limited access to care, but also a far greater risk of getting sick and incurring a mountain of health care bills that can lead to financial ruin. The Affordable Care Act will expand health insurance coverage to more than 30 million Americans. Many of those Americans have incomes well below the poverty line or that hover just above it but who remain ineligible for Medicaid today. Coverage means both access to care and protection against the financial risk that can come with illness. Access to affordable coverage is also critical to staying healthy and productive.
Recognizing that education is a key to success, the Obama administration has made historic investments to ensure that all children enter school ready to learn and all Americans have access to a complete and competitive education, from cradle-to-career. Typically, educational failure clusters in communities of need. Lack of school readiness among the youngest children, chronically poor-performing elementary and secondary schools, and limited postsecondary completion compound and sustain intergenerational poverty. But integrated approaches can overcome these persistent challenges. Many of the lowest-achieving schools targeted for improvement under Race to the Top, an Obama administration competition to encourage and reward states that are creating the conditions for innovation and reform, are located in communities where local leaders are pursuing a range of neighborhood revitalization initiatives. So are many of the lowest-achieving schools targeted for significant reforms through School Improvement Grants that support their turnaround. In addition, our investments in improving access to high-quality early education have created opportunities for program alignment and the ability for community developers to leverage improvements in educational opportunity, as the administration has expanded Head Start, invested in efforts to expand evidence- based teaching methods, and required programs that do not meet quality benchmarks to compete against others for continued Head Start funding.
Indeed, during the past three years, the Obama administration has worked hard to put Americans back to work while building a foundation to address poverty and create ladders of opportunity for all Americans. The $7 billion invested through the Neighborhood Stabilization Program not only fought decline and blight in hard-hit communities, but it is also on track to create 90,000 jobs in the places that need them most.4 More than 400,000 education-related jobs were created or saved by investments in the Recovery Act, ensuring that teachers remained in classrooms and children continued learning.5 Through the Recovery Act, the Obama administration invested in summer and year-round jobs for disadvantaged youth, which placed more than 367,000 young people in jobs.6 In addition, investments in the Recovery Act placed more than 260,000 low-income individuals in subsidized jobs.7