Promoting Job Growth

While the economic recovery began- though slowly - in 2009, the employment rate has lagged behind. This makes it incredible difficult for families who are unable to secure work - and it makes it critical for policy to be focused on initiatives that lead to increased opportunities for employment.

The American Recovery and Reinvestment Act was created to increase the demand for goods and services - above what it would normally be - in order to preserve jobs during the recession and to create jobs during the recovery. The non-partisan Congressional Budget Office recently released a report regarding the number of jobs that were created by ARRA - between October and December of 2011. The report states that ARRA created and protected up to 2 million jobs as well as boosted the number of hours that people worked. A related brief by the Center on Budget and Policy Priorities, addressing ARRA's success in creating jobs, states that:

"Among ARRA's most effective provisions for saving and creating jobs, according to CBO's estimates, are direct purchases of goods and services by the federal government, transfer payments to states (such as extra Medicaid funding), and transfer payments to individuals (such as increased food stamp benefits and additional weeks of unemployment benefits). CBO's estimates indicate that tax cuts are less effective job producers, and tax cuts for higher-income people have very low bang for the buck."

In times of high unemployment considering strategies that will successfully produce jobs is an important aspect of promoting broader economic growth in your state and meeting the needs of the families in your constituency. For additional strategies to promote employment and to support working families visit the PolicyforResults fact sheet series - Policymakers' Corner.

The Early Learning Challenge

On May 25th, the federal government announced it will allocate 500 million to a new Race to the Top competition establishing and expanding high-quality early learning programs. These competitive grants, called The Early Learning Challenge, will allow states to develop child care and preschool programs pertaining to health, social, emotional, and educational outcomes for children from birth to age 5, particularly serving underprivileged populations. The application for funds under the Race to the Top Early Learning Challenge encourage states to increase access to early learning programs for low-income children, construct interconnected and clear systems that correlate early care and education programs, bolster training for the early learning workforce, implement comprehensive assessments based on sound recommendations, and assist parental decision-making regarding early childhood care. The Early Learning Challenge offers a promising opportunity for states to receive financial support for early childhood care and education and serves as a worthwhile alternative to explore.

For more information on the strategies pertaining to the development of early learning programs and policy initiatives, visit Policy for Results.

Closing State Deficits

All of the 48 states that have released budget proposals for fiscal year 2012 have proposed deep cuts. In light of that, it is important for policymakers at the state level to consider what additional or alternative measures are available to close state deficits. The Center on Budget and Policy Priorities report, A Balanced Approach to Closing State Deficits, suggests that states that rely solely or primarily on budget cuts to close deficits are hurting residents and businesses that need immediate assistance and are also reducing demand in the economy and impeding their state’s economic recovery. The report suggests using a more balanced approach to closing deficits that includes:

• Efficiency – focusing on the goals of expenditures and whether there are better ways to reach those goals;
• Using all available resources – employing reserves and rainy day funds responsibly and wisely;
• Scrutinizing all spending, not just what is appropriated through the budget – including programmatic expenditures made in the form of tax breaks;
• Improved collections – aggressively seeking taxes due that are not being paid;
• Tax increases – particularly those that have a more positive impact on the economy than spending cuts;
• Prioritization – making careful decisions based on goals and effectiveness when budgets must be cut; and
• Paying close attention to future impact while fixing today’s problems.

For more information on ways that states can protect the most vulnerable families in their states, while maximizing their return on investment and stimulating their economy visit CSSP’s new policy briefs page, which includes briefs on policy topics ranging from effective government to improving grade level reading.

The 2009 Poverty Numbers

On Thursday the Census Bureau released the 2009 data on poverty and income. It was disheartening, though not a surprise, to see that the poverty rate in the United States rose in 2009 while median income fell. Not surprising in part because from December 2008 to December 2009 unemployment rose from 7.4 percent to 10.0 percent; contributing to the staggering 1.1 percent jump in the poverty rate.

However, even with one of the highest recorded increases in the poverty rate, the numbers were not as bad as some predicted. This is due in part to government safety-net programs. Several initiatives provided cash transfers and kept some Americans from falling below the poverty line. Social Security supported the elderly; whose poverty declined. While unemployment insurance and major transfers made through ARRA supported non-elderly adults. It is also important to note that while substantial stimulus dollars went to support low-income families, those benefit programs provide in-kind assistance and were therefore not captured in the poverty data.

While safety-net programs might have moderated the effects of the recession for some, the severity of the increase in poverty should be taken very seriously by policymakers. At a time when 20.7 percent of American children are living in poverty it is important for policymakers to consider what strategies are working to moderate the impact of the recession on families, and which are not. Whether the program provides in-kind benefits or cash assistance it is critical to evaluate the way that saftey-net programs are helping those in the greatest need in a time of extreme economic hardship.

The poverty numbers also suggested that while the recession is impacting people across the country, it has been experienced in different ways and to differing degrees.

• The poverty rate for those who have only a high school education or less rose by 1.2 percent, while for those with a college degree the increase was significantly less at 0.4 percent.

• Male householders experienced a 3.1 percent increase in poverty, female householders experienced a 1.2 percent increase, and married couples experienced an increase of 0.3 percent.

Understanding how communities are being most effected and why will help policymakers create safety-net programs that will meet family and community needs. The Census Bureau’s proposed supplemental poverty measure will hopefully be a new tool in understanding poverty and lead to improved strategies for serving those most in need. In the meantime, Isabel Sawhill at Brookings suggests strengthening the safety-net for as long as it takes to get the unemployment rate back to a reasonable level. She suggests that this will not only support families but will also aid in the recovery by allowing families to maintain their purchasing power, helping to create jobs.

For more strategies on Family Economic Success.

More from our blog: a primer on poverty measurement and the Census instruments used.

Poverty Reduction in the Short and Long Term

The American Recovery and Reinvestment Act has mitigated some of the effects of the recession by expanding and extending the supports available through food stamps, unemployment benefits, and health insurance, and by providing states with general purpose aid. While federal assistance has helped states support the growing numbers of residents who are unemployed or who are living in poverty, ARRA is due to expire long before the recession stops impacting the labor market and state budgets. The Urban Institute brief, Reducing Poverty and Economic Distress after ARRA: Next Steps for Short-Term Recovery and Long-Term Economic Security, outlines key goals for federal antipoverty policy. Goals include:

• Provide jobs and income support as well as other services to reduce the short-term distress over the next 3-5 years.
• Prepare policy responses that might lessen the next economic downturn.
• Make sensible long-term investments in reducing poverty by extending certain provisions of ARRA and creating additional measures (such as investing in education and post-secondary credential programs aimed at low-income youth).

For more information on Family Economic Success.

While the brief discusses the antipoverty policy goals for the federal government, several of their suggestions are also relevant to state governments. With state budget cuts likely to be even deeper in 2011 than they were this year, it is critical that policy and program level strategies support the families most in need now as well as ensure greater economic security for all families in the future.

For more information on place-based strategies to reduce poverty and economic distress after ARRA. (For other results-based financing posts visit our financing community change blog).

Event: Using ARRA Funds for State Infant/Toddler Initiatives

CLASP and National Women's Law Center are co-hosting an event to discuss how states are using Stimulus funds to increase quality child care for infants and toddlers. The free conference call, moderated by Danielle Ewen of CLASP and Helen Blank of NWLC, will be held on Tuesday, May 18 at 2:00 p.m. EST.

The call will feature the following presenters:

• Evelyn Efinger, Infant Toddler Coordinator, Early Care & Learning Council, New York
• Debi Mathias, Director of Bureau of Early Learning Services at the Office of Child Development and Early Learning, Departments of Education and Public Welfare, Pennsylvania
• Wenda Singer, Program Consultant at the Office of Early Childhood Development, Department of Social Services, Virginia
• Karen Schulman, Senior Policy Analyst, National Women’s Law Center

The Recovery Act provided $2 billion for the Child Care and Development Block Grant, $93.6 million of which was set aside for early care. This event provides an opportunity to learn from states’ strategies for utilizing this funding—from increased training and education for child care providers to the establishment of infant/toddler resource centers in the community—to improve quality care for young children.

Register for “Using ARRA Funds for State Infant/Toddler Initiatives” here.

For more information about states’ use of ARRA funds for early care, see our recent post and “Child Care Development Block Grant Helps States Expand Child Care Efforts” by Financing Community Change.

For policies to increase early care and education.

FRAC Reports SNAP Participation Grows to 39.4 Million

The Food Research and Action Center (FRAC) published a report this month on the growing participation rates in the Supplemental Nutrition Assistance Program (SNAP) (commonly referred to as Food Stamps). Participation in SNAP has grown to record levels with an estimated one in eight Americans receiving SNAP/Food Stamps. Even though participation in SNAP has grown over the last year in every region – FRAC estimates that one in three eligible people are not receiving SNAP benefits.

Through the American Recovery and Reinvestment Act of 2009 (ARRA), SNAP benefits increased by 19 percent, eligibility rules were eased for unemployed adults without children, and additional funding was provided to states for program administration. The benefit increase ($80 more per month for a household of four) has provided greater support to families as well as positively impacted the economy. FRAC estimates that when federal SNAP/Food Stamps dollars are brought into families and communities, each dollar produces nearly two dollars in economic activity.

State policymakers should take a look at FRAC’s state by state analysis of program participation.

For policies to Enhance Food Assistance.

The Presidents’ Budget Proposal: Asset Building

The President’s FY11 budget proposal includes several components that contribute to family economic success, including provisions that help low and middle-income families increase their retirement savings. Approximately half of American workers do not have an employment sponsored retirement plan. The President’s budget includes an Automatic Workplace Pension Plan requiring businesses who do not currently offer retirement plans to enroll their employees in a direct-deposit IRA account. Employees are welcome to opt-out of enrollment but the plan provides expanded opportunity for workers to begin building assets for retirement if they choose. The budget proposal also includes provision to streamline automatic enrolment. Automatic enrollment in 401k retirement plans boosts enrollment significantly, and has been particularly effective in increasing the participation of low-income workers.

In connection to the automatic IRA proposal, the budget also includes provisions to assist small businesses in creating retirement plans for their employees. The White House proposes doubling the Small Employer Pension Plan Startup Credit from $500 a year (for up to three years) to $1000 a year. This provision is meant to help small businesses with the expense of starting and administering a new retirement plan. State policymakers should consider promoting these new asset building efforts as a part of their fiscal recovery and economic development efforts.

For more information on funding proposals that could make changes on the local level see CSSP’s Financing Community Change Blog Post, Financing Community Change through the President’s FY 2011 Budget.

Policies to support Family Economic Success

Looking at Spending Disparities and Outcomes

The Rockefeller Institute issued a paper recently called "Spending Is Up, and So Are Interstate Disparities in States’ K-12 Education Revenues". The authors look at how the stimulus funding and the economic downturn could exacerbate disparities in education across and within states. The paper's emphasis is that states that have historically spent less on education also have higher child poverty rates and thus higher levels of educational need. Due to the economy and in spite of the stimulus funding, these lower-spending states are continuing to devote relatively fewer resources to education. The authors recommend that:

There are ways, however, to make the relationship between funding and need more transparent to policymakers. Some states and large districts have developed systems that reflect the differential costs of educating students with different needs.[That] help them better understand the relationship between their funding decisions and educational need. Then they could make an informed choice as to whether to distribute funding using a traditional population-based formula ... or using a formula that is weighted to reflect student need.

While this information is important to policymakers, what may be even more significant is the relationship between spending and child outcomes. For too long policymakers have been asked to look only at need and not outcomes. But an article in the journal Analyses of Social Issues and Public Policy makes the case for policymakers and quantifies the correlation between policy (in this case spending) and child well being. The authors of "Are Public Expenditures Associated with Better Child Outcomes in the U.S.? A Comparison across 50 States" found that

states that spend the most on children through social programs and tax credits are also the states that have the healthiest children and the children with the best educational and behavioral outcomes, and whether states that spend the least have the worst child outcomes. ... Education expenditures have particularly strong and positive effects on child outcomes, especially test scores and adolescent behavior.

The Center for the Study of Social Policy provides a framework for looking at policy development based on results, not just need.

A State Policymaker's Guide to Stimulating the Economy through a Two-Generation Approach

New guide from CSSP: The American Recovery and Reinvestment Act, Families and Young Children, A State Policymaker’s Guide to Stimulating the Economy through a Two-Generation Approach. This guide offers ideas and strategies for state governments to maximize... the impact of ARRA for low-skilled parents and to ensure the healthy development of their children. It provides an analysis of the ARRA funding allocations that will create entry-level jobs and ensure access to quality early care and education. For state policies and guidance on using the stimulus funding.

State Stimulus Reports Are In, But We Need to Know More

October 10th was the deadline for states to submit their first stimulus funding reports. While the information will not be available to the public until October 30th on Recovery.gov, it is a good time to look at the goals of the American Recovery and Reinvestment Act and whether it is possible to evaluate progress. The goals were: (1) To preserve and create jobs and promote economic recovery. (2) To assist those most impacted by the recession. (3) To provide investments needed to increase economic efficiency by spurring technological advances in science and health. (4) To invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits. (5) To stabilize State and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases.

There is significant anecdotal evidence that jobs may have been preserved, investments were made in science, health and infrastructure, and that state budgets were helped. But has the stimulus "assisted those most impacted by the recession"?

A new report from the Center for Social Inclusion (CSI) puts into sharp relief the impact of the recession on communities and people of color. Examining data from the Census and the Bureau of Labor Statistics, CSI looks at unemployment, wages, rates of insurance coverage and poverty. In each area people of color are falling farther behind, as shown by the unemployment numbers:

• Unemployment for Black men ages 20-29 has skyrocketed by 14.1% to a devastating 26.5%.


• For young, Latino men unemployment has increased by 8.8% to 14.2%.


• Unemployment among young black women has increased by 8.6% to 20.4%.


• Today, 14.6% of Latina women in that age category are unemployed – an increase of 7.2%
  since the start of the recession.

The report concludes with a clear and specific finding- that stimulus funding and reporting must address communities of color in order to achieve the goals of economic recovery. In the days leading up to October 30th, or when the reports are made public, we may learn more about whether the goal of assisting those most in need is being addressed in a meaningful way. For now, the data suggests state policymakers may need to focus more of their efforts in this area. Watch this space for updates to the policyforresults.org guidance for state policymakers on using the stimulus funding.

Tracking Stimulus Spending

Another new resouce: How Much Stimulus Funding is Going to Your County? ProPublica has compiled nearly all the contracts, grants and loans that the government has reported awarding so far in the stimulus program.

How Are States Really Using Stimulus Money?

Two great new resources are available with 50 state information on Stimulus-funded projects. The Council of State Government's StateRecovery.org has a report on how states are using the Fiscal Stabilization Fund, the most flexible pot available to state governments in the Recovery package. It looks like Public Safety was the big winner across the country. Another great resource comes from the Democratic Policy Council. The Recovery Act: Success Stories in the States provides examples of local success stories that demonstrate the real-life impacts of the Recovery Act. For guidance on using the Stimulus funding effectively.

Stimulus Money for Early Childhood State Advisory Councils

HHS has issued application guidelines and a letter to Governors advising them of funding availability for the development or enhancement of a high-quality, comprehensive system of early childhood development and care that ensures statewide coordination and collaboration among the wide range of early childhood programs and services in the State, including child care, Head Start, IDEA preschool and infants and families programs, and pre-kindergarten programs and services. By August, 2010 the State must prepare and submit an application that includes:

• A statewide strategic report addressing the activities of the Advisory Council.
• A description, for each fiscal year, of how the State will make effective use of funds available to facilitate the development or enhancement of high-quality systems of early childhood education and care designed to improve school preparedness by developing or enhancing programs and activities consistent with the statewide strategic plan.
• A description of the State early learning standards and the State's goals for increasing the number of children entering kindergarten ready to learn.
• Information identifying the agency or joint interagency office, and the individual designated by the Governor to coordinate the activities of the State Advisory Council.
• A description of how the State plans to sustain activities beyond the grant period.

For policies to support kindergarten readiness.

States and the Federal Government Team Up on Job Training

Stateline.org has an interesting new piece on how states are promoting job training as part of their economic recovery efforts.

Instead of sending discouraged workers out to pound the pavement, states are using existing federal and state resources, boosted by $4 billion in stimulus funds, to help prepare workers for the kind of jobs expected to open up when the economy improves.

In addition to stimulus money, the federal Departments of Labor and Education have joined together to promote education grants for the unemployed through a new website called Opportunity.gov and provided an online resource for all state "one stop" employment shops for training, unemployment benefits and assistance with accessing the new education grants. Policies to support job training.

Stimulus Funding Working, At Least in Two States

The Center for Budget and Policy Priorities has a new report on how states are using the stimulus funding. The report includes information from a number of states, but looks closely at Virginia and New York and found that "just a few months after enactment of the American Recovery and Reinvestment Act, federal fiscal assistance for state governments has begun to have its intended impacts. It has enabled states to close their large budget shortfalls with smaller cuts in education, health care, and other important services than would have occurred had the federal government not provided this assistance. This, in turn, has helped preserve many key programs that serve states’ most vulnerable residents. It also has lessened the damage to state economies that comes when states sharply reduce spending in a recession. In short, federal assistance has helped change the state budget equation for the better." For guidance on using the stimulus funding.

How State Policymakers Can Use the Education Stimulus Funding to Support Long Term Goals

The New America Foundation's Education Policy Program released an issue brief, "Building a Solid Foundation: How States and School Districts Can Use Federal Stimulus Funds to Support Proficiency by Third Grade" which recommends that states use the stimulus funds

not only to maintain educational services and jobs during the current economic
downturn but also to institute lasting reforms that will yield ongoing gains in
student learning and help fuel America's long-term economic growth. [The report]
shows one of the most important ways that states and districts can do this is by
investing stimulus funds in PreK-3rd reforms to ensure that all students
establish a solid foundation of math, literacy, and social/emotional skills by
the end of third grade.

For policies and stimulus funding guidance to improve early academic success.

Stimulus Food Stamp Increases Boost State Economies

Stateline.org reports that the stimulus food stamps are starting to be felt in state economies, with 32.5 million people receiving their first bonus in April.

“People who receive these benefits are hard-pressed and will spend any financial aid they receive very quickly,” said Moody’s chief economist Mark Zandi. Every $1 spent on the food assistance program adds $1.73 to local economies because an uptick in food sales creates related jobs and further consumer spending.

For policies to increase food stamp participation.

Mini Grants for Communities to Apply for Stimulus Funding to Support Early Learning and Schools

Ready Kids, Ready Schools 2009 has announced planning grants to support community applications for the American Recovery and Reinvestment Act. These are mini-grants up to $10,000, and the deadline is Friday, May 29, 2009. The purpose is to

prepare an application for an ARRA federal grant that would advance linking the early learning and public school systems to help vulnerable children 0-8 years.

For more information on policies to support early academic success.

Strategies for Policymakers to use the Stimulus to Support Job Training

The Center for Law and Social Policy has issued a new report called “Stimulus to System: Using the ARRA to Serve Disadvantaged Jobseekers” that looks at how states and local jurisdictions can connect low-skilled job seekers with training and placement services. It

explores models and mechanisms for achieving this goal--including community-benefit agreements, job linkage/first source hiring, and goals and standards for job creation and job quality--and for subsequently engaging jobseekers in further skill-building and educational programs.

For more policies and stimulus strategies to support job training.