May 9, 2014

Findings from CEO Poverty Report Support Key CCC Recommendations

Last week New York City’s Center for Economic Opportunity (CEO) released its annual report on the CEO Poverty Measure[1], an alternative to the official federal poverty measure.[2] By taking into account more modern spending patterns as well as geographic variations in the cost of living and by accounting for additional non-cash and post-tax resources as well as non-discretionary spending, the CEO measure provides a more complete picture of poverty in New York City than the official measure alone can provide.

One interesting finding is that the child poverty rate in New York City is lower under the CEO measure than under the official measure: 25.4 percent compared to 30.8 percent respectively. This difference – as we have noted before – is due to the inclusion of non-cash benefits in the CEO’s income calculations, many of which are targeted at families with children (i.e. food stamps, WIC).

Digging a little deeper into the data and the report reveals some other key findings that reinforce several of the recommendations that we advanced in our transition plan and continue to advocate for as we speak with city and state officials:

• Despite an improving labor market, low wages resulted in a growth in the poverty rate even for those who worked full-time. The CEO’s data show that the poverty rate for working-age adults (ages 18 to 64) who were employed full-time rose 0.8 percentage points during the recession years from 2008 to 2010 and continued to rise another 0.9 percentage points after the recession’s end from 2010 to 2012. This trend suggests that simply adding jobs may not be enough to combat poverty. Our transition plan emphasizes creating living wage employment opportunities in emerging industries.
• Income tax credits are an effective way to lift New Yorkers out of poverty. The CEO estimates that tax credits, such as the Earned Income Tax Credit (EITC) and Child Care Tax Credit (CCTC) provided enough extra income to keep nearly 302,000 people out of poverty in 2012. We have long advocated for broader tax relief for poor and working poor New Yorkers through efforts that both deepen tax credits and increase take-up rates.
• The food stamp program has also been effective in keeping New Yorkers out of poverty. Another estimated 302,000 New Yorkers were lifted from poverty in 2012 thanks to benefits provided through the federal Supplemental Nutrition Assistance Program (SNAP or food stamps). Streamlining the eligibility and reauthorization processes for SNAP benefits could help these federal dollars reach even more people, providing important income support for families, as well as boosting economic activity in impoverished neighborhoods.

While there are multiple barriers to well-being facing our city’s children, many of the solutions needed are downright practical. Read our Recommendations to Make New York City a Better Place for Every Child.

Tags
Child Care Tax Credit (CCTC), Earned Income Tax Credit (EITC), Poverty, SNAP/Food Stamps, Economic Security

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