One in Three Poor Children in America Lives in the South

One in Three Poor Children in America Lives in the South

Children’s Defense Fund

Vol. 20, No. 2, 1998 pp. 5-9

Memphis, Tennessee – Despite a booming national economy and budget surpluses in fifteen Southern states (Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia) a new Children’s Defense Fund report reveals that one-fourth of Southern children (5.5 million) remain poor. Half of them-2.6 million-live in extreme poverty with family incomes below half the federal poverty line. This means a family of three has to survive on cash income below $120 a week or $5.75 a person a day.

“This is not enough to feed, clothe, house, and educate a child,” said CDF President Marian Wright Edelman at an action forum on Children, Race & Poverty held May 4-5 at the National Civil Rights Museum in Memphis where Dr. King was assassinated in 1968.

“It is shameful that thirty years after Dr. King spent his final days fighting for better jobs, wages, education, and health care for children and families, child poverty rates in the South remain the same: 22.3 percent. Equally disturbing is the fact that the rest of the nation is ‘catching up’ with the South.”

Rising Inequity: Nation “Catching Up” with South

The CDF report, The High Price of Poverty for Children of the South, authored by Arloc Sherman, says the child poverty rate for all U.S. children in families jumped nearly 50 percent between 1969 and 1996-from 14 to 20 percent. In fact, 1996 marked the first time that the South no longer surpassed other sections of the U.S. in the number of children who live in poverty. The West’s child poverty rate is the same as the Southern child poverty rate.

“Something is wrong in America when, in 1996, the number of very poor people who live below half the poverty line (a mere $8,018 for a family of four) increased, while the current income of households in the top five percent increased by $12,500 and when Fortune 500 CEOs averaged $7.8 million each in total compensation which exceeds the average salaries of 226 school teachers a year,” Edelman added.

Although the high child poverty rates once unique to the South have now spread to other sections of the country, the South continues to have most of the nation’s worst pockets of poverty. Of the 100 poorest counties for children, 84 of them are located in the South. In these counties child poverty rates range from 43.7 percent in Val Verde County, Texas to 65 percent in Owsley County, Kentucky, the county with the highest proportion of poor children in America in 1993.

Rural counties (those outside a metropolitan area) account for seventy-nine of the eighty-four counties with very high child poverty. Because rural areas often have less expensive housing than other areas, it is reasonable to ask whether these counties are as poor as they seem. Although the Census Bureau is currently studying ways to adjust for geographical differences in cost of living, the present poverty definition relies on a single set of poverty thresholds, which are applied nationwide without adjustments for local variations in the cost of living.

The best available information on county-by-county cost differences, however, suggests that the cost of living in the South’s high-poverty counties is not dramatically different from the nation as a whole.

Wide Racial Gaps Remain

Although half of the poor children in the South are white, racial gaps in poverty rates remain wide. Black children in Southern families today are two and one-half times more likely than their white counterparts to be poor. This racial gap has eased only slightly from three decades ago, when the child poverty rate for Black children was three times higher.

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Since 1969, Southern poverty rates have risen slightly for white children in families (from about 13 percent to about 16 percent in 1996) and fallen for Black children in families (from about 49 percent in 1969 to 40 percent in 1996). These poverty rates by race now resemble the nation as a whole.

Because Black children account for an especially large share of all children in the South, however, Black children make up a large share of poor Southern children as well. Nearly as many poor Southern children are Black (2.5 million in 1996) as are white (2.8 million). In other sections of the U.S. by contrast, poor White children outnumber poor Black children by three to one.

Overlapping these racial comparisons, Census Bureau figures show that more than 1 million poor children in the South are Hispanic. The high poverty of Hispanic children in Southern families (36 percent) is approaching that of Black children. In Census data, Hispanic children may be of any race and most are classified as white. The large number of poor Hispanic children is due in part to the inclusion of Texas in the Census Bureau’s definition of the South.

Poverty Causes Child Hunger

Child poverty profoundly affects the healthy development and educational success of Southern children. Thanks in great measure to federal food stamps and child nutrition programs, starvation has abated. But hunger is still present in the South. More than 1.2 million Southern households (4.3 percent) experienced hunger in 1995 according to the U.S. Department of Agriculture. Another 3 million Southern households lacked secure access to food but did not have all the signs of hunger.

The nation’s highest rates of hunger were in the Southeastern states of Alabama, Kentucky, Mississippi, and Tennessee, as well as in the Pacific states of Alaska, California, Hawaii, Oregon, and Washington.

Recent changes in welfare policy may make hunger worse for families with children. Among 411 families who had recently lost cash assistance in one Southern state, a 1997 government survey found that 27 percent had been

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unable to buy food at some point in the past, usually since losing benefits. In fact, families were twice as likely to have had problems buying food after losing welfare (15.3 percent) than when they still received welfare (6.6 percent). A later survey had similar findings.

More Southern Children Lack Health Insurance

Besides having the deepest poverty and most hunger, the South is home to the highest number and percentage of uninsured children of all four sections of the United States. One out of six children in the South (18.6 percent, or 4.8 million children) was without any form of health insurance or Medicaid in 1996. This proportion is higher than for the nation, where one child in seven (15.1 percent) lacks insurance.

Looked at another way, 42 percent of all uninsured children live in the South, even though those states contain only 34 percent of all U.S. children. The lack of insurance for Southern children is largely accounted for by the lack of private coverage offered by employers. Fully 38.5 percent of Southern children lacked private health insurance, compared with 33.6 percent of children nationwide.

South Adopts Harshest Welfare Policies

Since passage of the 1996 welfare law, the number of children and parents receiving welfare assistance across the nation has dropped by 20 percent. Some of the deepest caseload declines have been in the South where the caseload fell by more than 27 percent from August 1996 to September 1997, representing close to one milllion people no longer receiving assistance.

The new law provides states considerable flexiblity in designing welfare programs, and the Southern states have typically chosen the most restrictive policies in terms of child care assistance, education and job training options, time limits on eligibility for benefits, and sanctions for failure to comply with program rules. Benefit levels in the South have also consistently been lower than the rest of the nation. Moreover, although Southern states have a higher proportion of poor children than the rest of the nation, ten of the these states provide welfare benefits to smaller proportions of those poor children than the national average.

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Working Parents Earn Below-Poverty Wages

Despite strong job growth in much of the South-the numbers of employed Southerners grew 54 percent faster than in the rest of the nation between 1990 and 1997-this section of the U.S. continues to suffer a disproportionate concentration of jobs paying below-poverty wages. More than one in four working parents in the South (28 percent) earn hourly wages that cannot lift a four person family out of poverty, a higher proportion than in the rest of the nation (23 percent).

Most Southern poor families are working families. More than seven out of ten poor families with children in the South (72 percent) were working families in 1995, enduring poverty despite having at least one member who worked part-time during the year. Working poor families are even more common in the South than in the rest of the nation, where they comprise six out of ten poor families with children (61 percent).

Education Key to Income Disparities

In the South and across the nation, a fundamental split is emerging among America’s families-the widening gap in earnings between parents with and without a college education.

“During the 1980s, [Southern] workers with a high school diploma or less saw their real earnings stagnate or decline,” notes a 1996 report by North Carolina-based MDC, Inc. At the same time, Southern workers “with four years or more of college posted significant gains in earnings.” This growing gap by education level is found throughout the nation. As a result, more and more workers without a college education are left with earnings too low to lift a family of four out of poverty.

Making matters worse in the South, young adults generally continue to receive less education in the South than elsewhere. In March 1996, the proportion of 25- to 34-years olds who had not completed high school was greater in the West (18 percent) than in the South (14 percent) But for every other age group, the South had a lower high school completion rate than any other section of the U.S – West, Midwest, or Northeast. College completion rates among 25- to 34- year-olds were lowest in the South as well.

Southern Child Poverty Costs $50 Billion A Year

The damage to Southern children caused by each additional year of poverty at current levels is likely to have a substantial effect on the regional economy. CDF projects that, for every year that 5.5. million Southern children experience poverty, the amount they will later produce in the workplace will decline by about $50 billion, measured in 1996 dollars.

How large is $50 billion? This amount is larger than the total annual personal income the South received in 1995 from all farming plus the entire regional automotive industry and electronics industry combined. Moreover,

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the estimate of $50 billion is conservative in that it excludes other costs of child poverty to the Southern economy, such as poor children’s greater likelihood of repeated schooling, medical expenditures arising from chronic disability, and crime.

The $50 billion estimate was derived from similarly shocking nationwide cost estimates made by CDF, with the assistance of leading scholars including Nobel-prize winning economist Robert M. Solow of the Massachusetts Institute of Technology. As detailed in CDF’s report Poverty Matters, the American labor market as a whole stands to lose as much as $130 billion in future productive capacity for every year that 14.5 million American children continue to live in poverty. The $50 billion estimate represents the South’s share of the $130 billion national total, based on the South’s proportionate share of children in poverty.

This $50 billion estimate marks the first attempt ever to calculate the costs of child poverty in the South. The projection does not attempt to take into account certain details specific to the Southern economy, such as the South’s greater proportion of poor children living below one-half of the offical poverty line, nor the South’s generally lower lifetime earnings compared to the national average. More detailed calculations that took account of these features might result in either a slightly higher or slightly lower estimate of poverty’s true costs.

What is clear is that all segments of Southern society share in paying the costs of children’s poverty – and would share in the gains if child poverty is eliminated. The costs of poverty will likely spill over to employers and consumers, making it harder for businesses to expand technology, train workers, or shoppers to buy a full range of high-quality products.

Moreover, these estimates of lost productivity do not include additional costs of poverty that will be borne by schools, hospitals, and taxpayers, as poor children are held back in school and require special education and tutoring; fail to earn and contribute as much in taxes; experience a lifetime of heightened medical problems and reliance on social services; and are exposed to problems like lead poisoning and family breakdown that in turn contribute to future crime.