The Herald Bulletin

July 13, 2013

Local agencies help families cope amid financial hardship

More Hoosiers slipping into poverty, according to new study

By Stuart Hirsch
The Herald Bulletin

---- — ANDERSON — The "Great Recession" ended some time in 2009.

But for many Madison County families, economic hardships continue.

And a new study released last week by the Indiana Institute for Working families doesn't give them any reason to cheer.

Although Indiana's overall unemployment rate has been slowly declining over the past several months — it was 8.3 percent in May — the county's rate has generally been running a full percentage point higher. Madison's rate was 9.5 percent.

Of greater concern, according to the "The Status of Working Families in Indiana, 2012," is that poverty is rising because wages in the post-recession economy are significantly less than they were before it began in 2007.

Among the report's findings are that in the last decade poverty in Indiana has increased at a faster rate than in all but five states. From 2000 through 2011, the poverty rate has increased by 58.7 percent.

According to information compiled by STATS Indiana, statewide, the median household income in 2000 was $54,224, and $46,410 in 2011, a decline of 14.4 percent.

Median income in Madison County during that same period started lower and fell further, from $51,846 in 2000 to $41,766 in 2011, a drop of 19.4 percent.

"This situation is really why the United Way created a focus on financial stability," said Nancy Vaughan, president of the United Way of Madison County.

"While you can't change the economy overnight," she said, community organizations like United Way, working in conjunction with the Anderson Impact Center and other groups, can help Madison County job seekers and their families build skills and foster "asset development."

"We're looking at all kinds of ways to help build income," and the target population is low-income working households, she said.

Lafayette Township Trustee Steve Anderson, whose office (like all townships in Indiana), administers poor relief programs, sees the face of poverty and the struggles of the working poor every day.

And he's frustrated.

"They're cutting Medicaid and food stamps when there aren't any jobs out there, which is why the poor are getting poorer and the rich are getting richer," Anderson said. "Most people on food stamps are elderly and kids."

To achieve economic self-sufficiency in Madison County, a wage of $16-per-hour is needed (that's $33,280 annually, assuming a 40-hour work week).

At a wage of $8 per hour, a single mother with one preschool and one school age child with support of federal and state tax credits, SNAP (Supplemental Nutrition Assistance Program), public health insurance, and a child care subsidy is self-sufficiency. As wages increase, benefits start falling off, a phenomenon known as the "cliff effect," Anderson said.

The needs don't go away, however. At $12 per hour, SNAP goes away, a total net annual resource loss of $2,651, according to the report. Between $15 and $15.50 per hour, child care subsidies cease, for a net annual resource lost of $8,454. Between $22 and and $22.50, Hoosier Healthwise benefits cease, for an annual net resource loss of $574.

"The unintended consequence of this design either leads to a disincentive towards economic mobility, or leads to a situation in which the parent or guardian is working harder, but is financially worse off — effectively trapping families into poverty," the report states.

Like Anderson, Dough Linville sees the struggles every day. He's executive director of Dove House, a transitional housing program for needy families.

Often, parents are working two part-time jobs, neither of which pays a living wage. Still, they have to pay rent and buy food, gas, insurance and daycare.

"You start adding that up and pretty quickly you hit a financial wall," he said, adding that one of the programs at Dove House is to help women learn how to manage what money they do have.

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