Most school districts across New York State are experiencing a steady rise in the number of students residing in economically disadvantaged households. This increase comes despite nearly a decade of economic recovery since the depths of the Great Recession in 2009 and 2010.
The Earned Income Tax Credit (EITC) is a large and critically important anti-poverty program that encourages and rewards work, yet contains one significant flaw – the single, lump sum nature of the payment. This annual disbursement is a challenge for many families, who must reconcile the once-a year payment with their week-to-week needs.
The positive effect of the EITC is lessened by high interest rates incurred by many recipients in the months prior to receiving their refund. Many low-income families are extremely dependent on their tax refund, and the EITC along with other tax credits make up a large portion of their annual income. A single mother with two children who makes $15,000 per year receives over $7,200 from the state and federal EITC each spring. This comprises nearly half her annual wage earnings. Maintaining household spending discipline for the subsequent year is quite difficult, and many households find themselves in a precarious financial position a few months after receiving their tax refund. This challenge is exacerbated by the factthat many low-income workers are employed seasonally, and have to manage through significant periods each year with no wage income.
To address this shortcoming locally, Rochester residents should be given the opportunity (and an incentive) to save a portion of their annual EITC, which would then be disbursed monthly throughout the year. Doing so would transition the EITC from a once-a-year lump sum payment to a type of wage supplement, giving families a steadier stream of income and allowing them to better manage their household finances.
No Comments on Improve Financial Stability through a Year-Round EITCAs noted in the last post, the racial disparities between blacks and whites in Rochester, NY are part of a larger pattern found throughout the greater Rust Belt. The Great Lakes region, stretching from Minnesota to through Upstate New York, has much higher levels of African-American poverty than the country as a whole, and a higher black-to-white poverty ratio than most parts of the country.
But what about the disparity between whites and Hispanics? How does the Rochester region compare to the rest of the country?
1 Comment on Racial Disparities in Poverty in the Rochester Region – Part 2ACT Rochester recently released a report, titled “Hard Facts,” that examined racial disparities in the Rochester region. The report’s findings were stark and troublesome. Across a broad range of different indicators (including health, education, income, and life expectancy), black and Hispanic residents in the Rochester region fare far worse than whites. And the Rochester region has greater disparities, and worse outcomes, than New York State and the United States.
But in contrast to prior reports issued by ACT Rochester that explored poverty in the Rochester region (with a particular focus on the City of Rochester), this study did not identify or assess any comparison geographies. I decided to analyze American Community Survey poverty data, and compare the Rochester region to other communities with at least 10,000 black residents. If one looks at the rate of African-American poverty in the Rochester region relative to other Metropolitan Statistical Areas (MSA) in the United States, a clear pattern emerges.
1 Comment on Racial Disparities in Poverty in the Rochester Region – Part 1