Keeping Mainers out of Poverty: Let Me Count the Ways

(Originally posted in Line Items, a blog of the Maine Center for Economic Policy)
by Jody Harris

Too many Maine families struggle to put food on their tables and keep a roof over their heads. That our neighbors suffer in this tough economy is shameful, particularly since we know there are specific programs that can boost people out of poverty, making them bill-paying, tax-paying, and consumer-goods-buying citizens once again.

U.S. Census data released last week reinforce what we already knew –that Maine has a poverty problem, especially among children. Even many who do not meet the technical definition of poverty are barely getting by. One-third of Maine families cannot pay for their basic needs: food, clothing, heat, health care, and housing. This means that one out of every three of our neighbors cannot adequately feed their kids or keep them warm.

More than that, too many Maine families live on the brink of financial catastrophe. A layoff notice, major illness, or some other calamity could send them over the edge. For other families, poverty creeps up on them gradually as their wages fail to keep pace with rising costs.

Here are seven ways that we can help Mainers to survive, to realize stability during short-term emergencies, and to achieve financial security. These are proven means to lift people out of poverty and put them on the path to prosperity. Yet, despite their effectiveness, these seven steps are continually under attack by lawmakers in Washington and Augusta.

Seven Ways to Lessen Poverty: Count Them

Food Supplements

Food stamps, or the Supplemental Nutrition Assistance Program (SNAP), keep millions of people, mostly children, out of poverty. According to Moody’s Analytics, food stamps provide the most bang for the buck for the economy, especially during a recession.

Health Care

Health insurance is not only a means to preserve Mainers’ health, keep people out of emergency rooms, and maintain productive workers, it also prevents people from falling into poverty. Medical costs cause more than 60% of bankruptcies in this country.

Property Tax Relief

The Maine Residents Property Tax and Rent Refund (aka, the “circuit breaker”) program provides property tax relief to working class Mainers who were left out of recent income tax cuts. According to Maine economists Michael Allen and Richard Woodbury, the refund program does more than any other form of property tax policy to deliver relief to those whose burden is highest.

Earned Income Tax Credit (EITC)

A refundable federal income tax credit, the EITC rewards work and encourages single parents to leave welfare for work. The EITC lifts more children out of poverty than any other program.

Job-training

Improving job skills is fundamental to higher wages and lower poverty. To fill the high-skills job opportunities of the 21st Century and attract the employers who offer them, Maine must do a better job targeting its education and training dollars to programs that will prepare students for today’s jobs. To be truly effective in moving people out of poverty, job training programs must help  working parents with child care and transportation, as the Parents as Scholars program does.

Post-secondary Education and Research & Development (R&D)

No other combination of investment will do as much to raise incomes in Maine. If Maine graduated more students from college and increased our investment in R&D to the national average, our incomes would rise rather than lag behind at 30th in the nation.

If we think about the range of poverty solutions from keeping Mainers’ heads above water, to preventing those on the edge from falling backwards into poverty, to helping people get ahead, there is a lot we can do. It simply takes resolve on the part of lawmakers –a commitment to their neighbors, especially every third one.