Reports Show Link Between Poverty and Negative Outcomes for Children and Families

On June 11, 2003, the Annie E. Casey Foundation released the 14th annual KIDS COUNT Data Book showing state-by-state progress on indicators of child well-being and an essay on The High Cost of Being Poor. These publications confirm the basic link between poverty and a range of negative outcomes - illness, academic failure, and early pregnancy - that can powerfully diminish a child's prospects of future achievement and success.

The best prediction of outcomes for children is the financial security of their families. Over the past decade, social policy reforms have helped almost 2.5 million parents transition from welfare to work. Yet far too many low-income working families still encounter numerous obstacles in escaping poverty and building economic security.

Low-income families find it nearly impossible to build the savings and assets so critical for achieving self-sufficiency. Many of these families pay two-to-three times more for basic goods - housing, food, child care, and transportation - and many also fall prey to predatory lenders and pay high subprime rates for loans. Their increased job earnings are excessively taxed as a result of lost or diminished subsidies and supports. These low-income families are "just one crisis away from economic catastrophe," says Douglas W. Nelson, president of the Annie E. Casey Foundation in Baltimore.

What can be done to level the playing field?

Many states and communities are working hard to address this issue. Yet much more needs to be done to ensure that low-income families can build assets and a better future for their children. Long-term comprehensive approaches are needed. Some potential solutions proposed by the Foundation include:

• Encourage quality retailers to locate in low-income communities. Helping mainstream businesses to see the market potential of low-income neighborhoods is essential.
  
  
• Provide financial tools for low-income consumers. With access to financial education, fair financial services, and opportunities to build credit, these consumers will be able to make sounder financial decisions and move beyond the grasp of predators to begin building assets.
  
  
• Promote regulatory reforms that protect low-income consumers. Curbing exploitive practices through regulatory reforms at the federal, state and local levels will reduce the predators that victimize families filing for tax returns and refundable tax credits.
  
  
• Reinforce the financial benefits of work with tax credits, subsidies and policies that protect earning and benefits. Protecting and expanding tax credits and decreasing the bite of high costs for food, housing, transportation and child care out of already scant paychecks and savings will help bolster and stretch the income and earnings of low-income families.

No single strategy is enough by itself to help America's most vulnerable working families become economically self-sufficient. Taken together, however, these strategies comprise a long-term, realistic and comprehensive approach to addressing this critical national goal.

For more information, visit www.aecf.org and www.kidscount.org.