Scholars issue plan to reduce poverty

Stanford scholars and other experts on California's low-income population have unveiled a new initiative – the Equal Opportunity Plan – aimed at dramatically reducing poverty in the state.

David Grusky, the director of the Stanford Center on Poverty and Inequality, said that California needs an aggressive anti-poverty plan to ensure that California has enough high-skill labor for its emerging 21st-century economy.

According to the Census Bureau, Grusky noted, the poverty rate for Californians, 23.4 percent, is the highest in the country under a measure that takes into account noncash transfers (food stamps and tax credits, for example) and the cost of living.

The Equal Opportunity Plan addresses this poverty by identifying the critical periods when low-income children do not have the same opportunities as other children. These periods, Grusky said, are then targeted with home-visiting programs, early childhood and early adult programs that have been shown to be highly effective. The full plan is described in a new report and in the latest issue of Pathways Magazine, a publication of the Stanford Center on Poverty and Inequality.

Causes of poverty

Above all, Grusky said, the Equal Opportunity Plan exploits the best available evidence on the causes of poverty and converts that evidence into a plan that addresses those root causes.

"Whereas the typical stopgap plan treats the eventual symptoms of a broken labor market by relying on cash transfers to poor families, this plan treats the more fundamental causes by ensuring that low-income children have the same access to high-quality training and schooling as the rest of California's children," he said.

The Equal Opportunity Plan also identifies how opportunities are cut off and poverty is generated by unequal chances of incarceration, wage theft and labor market discrimination. By equalizing opportunities every step of the way, Grusky argues, California could become the first state "to go beyond the usual lip-service commitment to equal opportunity."

He said it is difficult to achieve this because low-income children are disadvantaged in many ways. In high-poverty neighborhoods, Grusky noted, children live with constant crime and insecurity, are exposed to high risks of incarceration, lack access to early childhood education, attend low-quality primary and secondary schools, lack information about college and vocational opportunities, and face many types of discrimination in the labor market.

"Because it is impossible to address all disadvantages, the trick is to identify those that are especially consequential and for which especially effective interventions are available," he said.

Grusky added, "But we can do just this. The first War on Poverty was fought largely on hunch, whereas now the science is there to fight a targeted second war that focuses our interventions on what's known to matter."

The Equal Opportunity Plan addresses the inequalities that can be effectively addressed, he said. It starts with home-visiting programs that ensure that all children grow up healthy and ends with college-access, workforce-development and anti-discrimination interventions that are likewise high-payoff.

As with other anti-poverty plans, it also delivers cash benefits to families in need, but the total amount of spending on cash benefits would gradually decline as the labor force is increasingly trained and employable, according to Grusky.

Less poverty, stronger economy

Grusky and his colleagues suggest that California's poverty population will permanently shrink under this initiative because low-income children will have new opportunities to grow, learn and develop work skills.

"By virtue of these opportunities, children from low-income families will no longer be mired in the low-wage sector, not only raising their own wages but reducing wage-lowering competition among the shrinking number of workers who do remain in that sector. The long-term result is less poverty, less social service spending and a stronger economy," he said.