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Poverty and the Economy

 

Since the economic recession of 2008, Georgia has experienced slow economic growth and continues to have one of the highest poverty rates in the nation. More than 1.8 million Georgians live below the poverty line, including over 20% of children. Poor Georgians are also more likely to be minority and elderly. Barriers that contribute to the state’s high poverty rates include a shortage of childcare and early education opportunities, scarce affordable quality education opportunities and a lack of public transportation. Georgia’s low minimum wage also inhibits economic growth and keeps low-income families in poverty.

 

More Georgians are working in historically low-wage sectors of the economy such as food service or retail than ever before. A minimum wage hike would not only help those workers but also put upward pressure on all wages and create more paying customers for all businesses. Low wages are particularly troubling for families trying to raise children as research shows that a low family income decreases the chances of a child’s future success. 66% of Georgia voters agree that someone who works-full time should be paid enough to keep them out of poverty and voters in the conservative states of Nebraska and South Dakota recently agreed in ballot referendums. The current minimum wage is not tied to inflation and workers earning $7.25 an hour cannot afford basic needs such as food, housing, healthcare, and transportation. In other states that have raised wages, worker productivity has increased and they have not seen a net loss of jobs. In fact, it is estimated that a rise in Georgia’s minimum wage to $10.10 an hour would increase the state GDP by $812 million and create 2900 jobs over 3 years. Most minimum wage workers are employed by large corporations such as Walmart or McDonalds, who can afford a wage increase without cutting jobs. Some companies such as Gap and IKEA have already voluntarily raised wages, citing economic benefit. As Georgia’s economy tilts more toward low-paying jobs, a higher minimum wage is a sensible way to give hard-working families a pathway to the middle class and build a strong foundation for economic growth.

 

Lack of access to education is also a major barrier to economic prosperity for many of Georgia’s poor. Low income children are more likely to underperform in grade school. They often lack the support structure at home that is necessary for achieving scholarly success. Other issues include not enough early childhood education programs, underfunded schools, and rising costs of college tuition. Median salary is $51,979 for someone with a Bachelor’s degree but only $27,706 for someone with only a high school degree.

 

For many working families and heads of households, child care services are essential to gain the freedom to get and maintain a job. Parents who receive child care services are more likely to increase their income, work more hours, and stay employed longer. The current government program, Georgia’s Child Care and Parent Services (CAPS), is underfunded and inadequate. Most of the funding comes from federal grants. The current program is not available to parents while they pursue a postsecondary 2-year or 4-year degree and is not available to parents seeking a job, which could keep them from being able to attend interviews. There are also very strict income requirements, more stringent in Georgia than allowed by federal law. Lastly, the reimbursement rates of child care are below market average, leaving some of the cost still needing to be paid out-of-pocket by the parents. Recommendations for improving access to child care include increasing income eligibility for this program, decreasing co-pays, and increasing general funding.

 

There are other issues that keep families below the poverty line. Lack of transportation options, especially in rural areas, can keep someone from being to travel to and from work and limit where they can go interview for jobs. Rent prices are rising in cities and most mortgages in rural areas are for mobile homes, which involve high interest loans where the signees do not own the land that their home is on. A lack of adequate health care and health insurance leads to more hospitalizations, higher medical bills, less preventive care, and can limit ability to work. One solution to the health care crisis would be for Georgia to expand Medicaid under the Affordable Care Act, which would lower the rate of uninsured among Georgia’s poor.

 

In conclusion, Georgia needs to address the fundamental causes of poverty in order to help low-income families and boost the entire economy. Solutions include accessible early childhood and postsecondary education, a higher minimum wage, and increased child care funding.

http://gbpi.org/


Committee to Elect Michael Smith
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