U.S. GOVERNMENT PUBLISHING OFFICE

33–363 WASHINGTON : 2019

THE GEOGRAPHY OF POVERTY 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HUMAN RESOURCES 

OF THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

FEBRUARY 15, 2017 

Serial No. 115–HR01 

Printed for the use of the Committee on Ways and Means 

( 

ii 

COMMITTEE ON WAYS AND MEANS 

KEVIN BRADY, Texas, Chairman 

SAM JOHNSON, Texas 

DEVIN NUNES, California 

PATRICK J. TIBERI, Ohio 

DAVID G. REICHERT, Washington 

PETER J. ROSKAM, Illinois 

VERN BUCHANAN, Florida 

ADRIAN SMITH, Nebraska 

LYNN JENKINS, Kansas 

ERIK PAULSEN, Minnesota 

KENNY MARCHANT, Texas 

DIANE BLACK, Tennessee 

TOM REED, New York 

MIKE KELLY, Pennsylvania 

JIM RENACCI, Ohio 

PAT MEEHAN, Pennsylvania 

KRISTI NOEM, South Dakota 

GEORGE HOLDING, North Carolina 

JASON SMITH, Missouri 

TOM RICE, South Carolina 

DAVID SCHWEIKERT, Arizona 

JACKIE WALORSKI, Indiana 

CARLOS CURBELO, Florida 

MIKE BISHOP, Michigan 

RICHARD E. NEAL, Massachusetts 

SANDER M. LEVIN, Michigan 

JOHN LEWIS, Georgia 

LLOYD DOGGETT, Texas 

MIKE THOMPSON, California 

JOHN B. LARSON, Connecticut 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 

BILL PASCRELL, JR., New Jersey 

JOSEPH CROWLEY, New York 

DANNY DAVIS, Illinois 

LINDA SA ́ NCHEZ, California 

BRIAN HIGGINS, New York 

TERRI SEWELL, Alabama 

SUZAN DELBENE, Washington 

JUDY CHU, California 

DAVID STEWART, Staff Director 

BRANDON CASEY, Minority Chief Counsel 

SUBCOMMITTEE ON HUMAN RESOURCES 

ADRIAN SMITH, Nebraska, Chairman 

JASON SMITH, Missouri 

JACKIE WALORSKI, Indiana 

CARLOS CURBELO, Florida 

MIKE BISHOP, Michigan 

DAVID G. REICHERT, Washington 

TOM REED, New York 

DANNY DAVIS, Illinois 

LLOYD DOGGETT, Texas 

TERRI SEWELL, Alabama 

JUDY CHU, California 

iii 

C O N T E N T S 

Page 

Advisory of February 15, 2017 announcing the hearing ...................................... 2 

WITNESSES 

Elizabeth Kneebone, Fellow, Metropolitan Policy Program, Brookings Institution ........................................................................................................................ 6 

Mark Partridge, Professor, Swank Chair in Rural-Urban Policy, Department 

of Agricultural, Environmental, and Development Economics, The Ohio 

State University ................................................................................................... 21 

William Leavy, Executive Director, Greater West Town Project, Chicago, IL, 

accompanied by Linda Thomas, Director of Client Services, Greater West 

Town Project, Chicago, IL ................................................................................... 35 

Tammy Slater, CEO, Goodwill Industries of Greater Nebraska ......................... 51 

QUESTIONS FOR THE RECORD 

Question from Congressman Danny Davis of Illinois to William Leavy and 

Linda Thomas ....................................................................................................... 82 

SUBMISSIONS FOR THE RECORD 

Affordable Rental Housing ...................................................................................... 85 

Charles Bruner, Ph.D., statement .......................................................................... 88 

Enterprise Community Partners ............................................................................ 90 

Goodwill Industries International .......................................................................... 93 

(1) 

THE GEOGRAPHY OF POVERTY 

WEDNESDAY, FEBRUARY 15, 2017 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON WAYS AND MEANS, 

SUBCOMMITTEE ON HUMAN RESOURCES, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:08 a.m., in Room 

1100, Longworth House Office Building, Hon. Adrian Smith [chairman of the subcommittee] presiding. 

[The advisory announcing the hearing follows:] 

2 


Insert 33363A.001

(i) 

WAYS AND MEANS 

CHAIRMAN KEVIN BRADY 

Chairman Smith Announces Human Resources Subcommittee 

Hearing on the Geography of Poverty 

House Human Resources Subcommittee Chainuan Adrian Smilh (R-NE) announced today that 

the Subcomminee will hold a hearing entitled "TI1e Geography of Poverty" on Wednesday, 

February 15, at 10:00 AM in room 1100 of the Longworth House Office Building. This 

hearing will examine how the geography of poverty has changed over time; the differences 

between urban, suburban, and rural poverty; and how efforts to address poverty may vary to 

account for geographical differences. 

In view of the limited time to bear witnesses, oral testimony at !his hearing will be from invited 

witnesses only. However, any individual or organization may submit a wrinen statement for 

consideration by the Committee and for inclusion in the printed record of the hearing. 

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: 

Please Note: Any person(s) and/or organization(s) wishing to submit written comments for the 

hearing record must follow !he appropriate link on the hearing page of the Committee website 

and complete the infom1ational forms. From the Committee homepage, 

http://waysandmeans.house.gov, select "Hearings." Select the hearing for which you would like 

to make a submission, and click on the link entitled, "Click here to provide a submission for the 

record." Once you have followed the online instructions, submit all requested information. 

ATTACH your st•bmission as a Word document, in compliance with the formatting requirements 

listed below, by the close of business on Wednesday, March 1, 2017. For questions, or if you 

encounter technical problems, please call (202) 225-3625. 

FORMATTING REQUIREMENTS: 

The Committee relies on electronic submissions for printing the official hearing record. As 

always, submissions will be included in the record according to the discretion of the Committee. 

The Committee will not alter the content of your submission, but we reserve the right to format it 

according to our guidelines. Any submission provided to the Committee by a wimess, any 

materials submitted for the printed record, and any wrinen comments in response to a request for 

written c~mments must conform to !he guidelines listed below. Any submission not in 

compliance with these guidelines will not be printed, but will be maintained in the Committee 

files for review and use by the Committee. 
3 

f 

Chairman SMITH OF NEBRASKA. The subcommittee will come 

to order. 

Welcome to the first hearing of the Human Resources Subcommittee of the 115th Congress. 

We have a good mix of new and returning members on the subcommittee this session, and I am honored to serve as the chairman 

of this important subcommittee. 

I would like to take a moment to introduce the members on our 

side of the dais: Mr. Smith of Missouri; Mrs. Walorski of Indiana, 

a new member of the Ways and Means Committee; Mr. Reichert 

of Washington, a past chair of this subcommittee; Mr. Reed of New 

York; and Mr. Rice of South Carolina. 

On my left, we have the ranking member for the 115th Congress, 

Mr. Davis of Illinois. Mr. Davis, would you care to introduce your 

members of the subcommittee? 

Mr. DAVIS. I would indeed. Let me, first of all, though, thank 

you, Mr. Chairman, for holding this hearing in particular. I certainly look forward to working with you, and I think we are going 

to be a very productive team. 

I am honored to serve as the ranking member of this subcommittee, and I am proud to introduce the following Democratic 

members of the Human Resources Subcommittee: Mr. Lloyd Doggett of Texas, who has been on the committee and is a senior member of the Ways and Means Committee; and, of course, I am fortunate to be working with two members of this committee and two 

new members of the Human Resources Subcommittee, Ms. Terri 

Sewell of Alabama, who represents a vast area that is called rural 

America—as a matter of fact, much of her district has been called 

the Black Belt of the South; and Ms. Judy Chu of California, who 

is not here at the moment but with whom I have had the opportunity to work on issues as well. 


Insert 33363A.002
4 

So, Mr. Chairman, we are all indeed proud to be here, pleased 

to work with you and other members of the committee, and look 

forward to a wonderful time. 

Chairman SMITH OF NEBRASKA. Thank you, and likewise. I 

appreciate the conversations we have already had and I think some 

priorities that are certainly timely, and I appreciate the opportunity to work together. 

It is great to work with all of the members of this subcommittee 

so that we can help more Americans escape poverty and move up 

the economic ladder. 

As we all know, the Ways and Means Committee plays an important role in designing policies to improve the lives of Americans 

across this country. Together, members of this committee work to 

improve our Nation’s healthcare system, modernize our Tax Code 

to make American business more competitive, improve trade so 

U.S. companies can sell goods abroad, and, in the Human Resources Subcommittee, help more families access opportunity to 

move up the economic ladder. This task is more important than 

ever. 

While the total number of individuals living in poverty has fallen 

from its recent peak in 2010, poverty rates and, even more troubling, child poverty rates remain much higher than they were prior 

to the recession. In addition, a larger share of working-age adults 

are in poverty than ever before, as fewer men and women today are 

employed than in the past. 

Today’s hearing represents our first step to address this issue in 

the 115th Congress. Before we can identify ways to foster greater 

opportunities, we have to first understand what the challenges look 

like across the country. That is why the focus of our hearing today 

is on the geography of poverty. 

This felt like the right place to start as I thought about the challenges in my own district, where many locations aren’t just rural 

but also remote, and that of the ranking member’s as potential 

bookends of the same story. People often think of poverty only as 

they see it in cities, not realizing poverty today is more common 

than ever in suburban and rural areas. People also underestimate 

poverty in rural and remote areas, not knowing rates of poverty in 

these areas have for decades been higher than in urban areas. 

Our instinct might be to think rural Nebraska and urban Chicago are so vastly different, they have nothing in common. But 

what we are charged to do in this subcommittee is to find ways for 

individuals and families to succeed. And those challenges are universal, even if they require different solutions. 

Fortunately, the members of this subcommittee bring substantial 

expertise to bear, as together we represent a wide range of constituencies from virtually all four corners of this country. This diversity will be an asset as we explore ways to reduce poverty, as 

I know what works in one area may not always be what works in 

another. It is important we realize and respect the differences between the constituencies we represent, as too often Congress proposes national, one-size-fits-all solutions when local flexibility is 

truly what is needed. 

Clearly, the centerpiece of any poverty-fighting strategy must be 

employment. We must make sure Federal policies support and reVerDate Sep 11 2014 08:23 Mar 07, 2019 Jkt 033363 PO 00000 Frm 00009 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\33363.XXX 33363
5 

ward work and make sure employment pays for those struggling to 

get ahead. 

It is also important we get incentives right so everyone benefits 

when someone moves from welfare to work, from the State agency 

running the program, to the business owner hiring the employee, 

to the individual seeking to improve his or her own life. 

We should also avoid the tendency to focus solely on inputs, like 

dollars spent or people served, and instead ensure we focus on outcomes. By prioritizing results, we can empower local communities 

with the flexibility they need to design solutions which have real 

impact on improving the lives of families and their community. 

I look forward to hearing from our expert panel of witnesses 

today, and I know their insights will lay the groundwork for our 

efforts to help more Americans find jobs, escape poverty, and move 

up the economic ladder. 

I now yield to the distinguished ranking member, Mr. Davis, for 

the purposes of an opening statement. 

Mr. DAVIS. Thank you very much, Mr. Chairman. And before I 

begin, let me just thank you for your altering of protocol to allow 

Ms. Linda Thomas to sit in with her coworker. And she has done 

so much work in this area, and it is just wonderful for her to have 

the opportunity to be here. 

Poverty and lack of opportunity have consequences, not just for 

individuals and their families but also for their communities. Seventy percent of homicides in Chicago occur in just 20 neighborhoods. The poverty rate in these 20 neighborhoods is more than 

twice as high as the poverty rate nationally, and unemployment is 

6 times higher. 

I see firsthand that low-income Chicagoans desperately want 

good jobs with wages that support their families, but these workers 

often lack the education, skills, and training needed to access those 

quality jobs. If they are returning citizens, they face significant 

hurdles to employment and supporting their families. Even for 

those who are qualified, there remain job shortages across dozens 

of industries. 

A new report found that in 2015 about 43 percent of black men 

age 20 to 24 in Chicago’s west-side and south-side neighborhoods 

were neither working nor in school. 

At first glance, the poverty I see in Chicago might look different 

from the struggles Chairman Smith sees at home in rural Nebraska. Although the faces might look different, although the challenges and experiences that brought people down might be different, we have much more in common than we think. 

Wherever you live, the first step out of poverty is a good job. It 

sounds simple, but there are a lot of steps needed to make that 

happen. The research is clear: The first job matters. Good jobs lead 

to other good jobs. 

Workers need basic education and a way to acquire the right 

skills for good jobs, whether that means on-the-job training, a specialized training program, or higher education. They may need an 

employer who is willing to take a chance on someone who doesn’t 

have much experience or has made mistakes in the past. 

6 

They need to be reliable employees, and that means they need 

a way to get to work. If they are parents, they need child care and 

paid leave so they can work and still care for their families. 

The Federal Government has a choice. We can invest in lifting 

up those communities and those families. We can provide the funding for workforce development so that when we measure program 

outcomes the outcomes will be good. We can update the Temporary 

Assistance for Needy Families program and the child support enforcement program to give parents opportunities to get the skills 

and credentials that good jobs require. We can make sure working 

parents have safe, quality child care available during the hours 

they work. 

And we can stop insulting people by suggesting work requirements for programs that offer struggling families food or basic 

health care. Instead, we can acknowledge that parents are trying 

to support their families, but they can’t find jobs or the jobs they 

do find don’t pay. 

We need to do that everywhere in the country, from the city 

streets of Chicago to Chairman Smith’s country roads. 

Thank you, Mr. Chairman. Again, I am honored to serve as the 

ranking member of this subcommittee, and, indeed, we look forward to the continuation of good work. And I yield back. 

Chairman SMITH OF NEBRASKA. Thank you. Thank you, Mr. 

Davis. 

And, without objection, other members’ opening statements will 

be made a part of the record. 

I would like to welcome our witnesses to the table here today. We 

certainly appreciate you sharing your time and expertise and insight as you do share your statements here today. 

First, we have Ms. Elizabeth Kneebone, a Fellow at the Metropolitan Policy Program at the Brookings Institution. 

After Elizabeth, we will have Mr. Mark Partridge, a Professor 

from The Ohio State University. I even said ‘‘The’’ Ohio State University. 

Then we will have Mr. William Leavy, the Executive Director of 

the Greater West Town Project in Chicago, Illinois, accompanied 

later by Linda Thomas, Director of Client Services for the Greater 

West Town Project. 

Thank you for being here. 

Last, but not least, certainly, Ms. Tammy Slater, CEO of Goodwill Industries of Greater Nebraska, where she serves 55 counties 

in Nebraska and operates 8 retail stores, 7 of which are in my district. 

And I am not sure all 55 of your counties are in the 75 counties 

of the Third District, but thank you for being here. 

Thank you all for being here. We are kind of a family here, wanting to know more of your insights and experiences and expertise. 

So, Ms. Kneebone, please. 

STATEMENT OF ELIZABETH KNEEBONE, FELLOW, 

METROPOLITAN POLICY PROGRAM, BROOKINGS INSTITUTION 

Ms. KNEEBONE. Chairman Smith, Ranking Member Davis, and 

members of the subcommittee, thank you so much for the opportunity to testify today. 

7 

This morning, I am going to spend some time giving a brief overview of the changing geography of poverty, including its growth 

into new and different areas. I will talk about some of the factors 

that have led to the shifts we have seen in recent years, some of 

the challenges that have accompanied those trends, and, finally, 

some of the implications for efforts to effectively address poverty 

across different kinds of communities. 

Let’s start with the numbers. The 2000s saw poverty grow rapidly in the U.S., and even with the declines we have seen in recent 

years, by 2015 we still had 43.1 million people living below the 

Federal poverty line, or 13.5 percent of the population. That is almost 6 million more people than before the recession began in 2007 

and 11–1/2 million more people than in 2000. 

When we think about poverty in the United States, we often 

think about it in the urban context or as a rural challenge, because 

that is where it has historically been concentrated, and as poverty 

grew in the 2000s, it continued to grow in those places. But it grew 

at an even faster pace outside of them. 

So, between 2000 and 2015, in big cities and in rural communities the poor population grew by about 20 percent. In smaller 

metropolitan areas, it grew at twice that pace. And the fastest pace 

of growth actually took place in suburbs of our major metropolitan 

areas, which saw their poor population grow by 57 percent. All 

told, suburbs accounted for about half of the total increase in the 

Nation’s poor population over that time period. 

Now, poverty rates remain higher in cities and in rural communities, but today more poor people live in suburbs. In 2015, 16 million people in suburbs lived below the poverty line—3 million more 

than in big cities, that is 6 million more than in smaller metropolitan areas, and 8 million more than in rural America. 

So why does that happen? What caused these historic shifts? 

Well, in some cases, it is because more poor people moved to the 

suburbs for any number of reasons: following job opportunities, 

which continue to suburbanize; shifting trends in where affordable 

housing is located within regions; or just following the amenities 

that the suburbs offered. 

But more so and an even bigger part of this puzzle was actually 

the downward mobility of long-term suburban residents over time. 

Part of that is because of the two economic recessions we saw in 

the 2000s, particularly the severity of the Great Recession. But it 

is not just about downturns; it is also about structural changes in 

the economy that have led to the growing prevalence of low-wage 

work. And that saw the typical household income fall even before 

the Great Recession hit. 

So why does it matter that all of these forces together have 

pushed poverty up and into more and different places? Partly it is 

because the places that have seen poverty grow fastest often were 

not built nor are they now equipped to deal with the levels of need 

which they are seeing today. Many suburbs don’t have the kinds 

of infrastructure, like public transit, or support services, like a robust nonprofit safety net, that cities have been able to evolve and 

develop over decades. 

And overcoming those gaps is challenged by the fact that suburbs 

stretch over a really fragmented jurisdictional map. There are sevVerDate Sep 11 2014 08:23 Mar 07, 2019 Jkt 033363 PO 00000 Frm 00012 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\33363.XXX 33363
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eral jurisdictions, many of them quite small, that make up the suburbs and are just too small on their own and lack the capacity to 

marshal responses at the scale of need that they are seeing today. 

Also, they lack resources, partly because resources have lagged 

this rapid change in the geography of poverty, both in terms of 

philanthropic support and in terms of Federal and government investments in places. Some of that is because of the lack of capacity 

in these places. They are not able to compete to effectively bring 

resources into their communities. Some of it is by design, by the 

way that these funding sources were designed, with a different geography of poverty in mind. 

Clearly, more resources are needed to deal with the scale and 

reach of need that we see today, but even just marshaling and 

more effectively using the limited resources we have will require 

that we get to a more effective scale so we can help more people 

in more places. 

There are communities across the country that are already finding ways to do this. Often it is through collaboration, whether it 

is suburbs coming together to work across suburban jurisdictional 

boundaries, suburbs working with central cities to address shared 

challenges, or suburban communities joining with their rural 

neighbors to work on common issues. 

All of these sorts of strategies and models share a desire and effort to get to that better scale, to use these limited resources more 

effectively and in ways that can help more people in more places. 

But they are fighting an uphill battle to do that in the current context. 

So the way that the Federal Government could be a strong partner here, could align resources more effectively to support these 

types of strategies and help scale up these types of responses would 

be: one, to explicitly incentivize collaborative strategies that cut 

across jurisdictions, that cut across policy silos; that could, number 

two, catalyze regional capacity to try and help overcome some of 

these capacity gaps in these communities through these more regionally scaled entities and efforts; and three, finally, allowing for 

more experimentation and evaluation to show what can work at 

the regional level and across different types of communities to connect more people and places to opportunity. 

Thank you. 

[The prepared statement of Elizabeth Kneebone follows:] 

9 


INSERT 33363A.003

The Changing Geography of U.S. Poverty 

Elizabeth Kneebone 

Fellow, The Brookings Instin•tion Metropolitan Policy Program 

Testimony before the House Ways and Means Committee, 

Subcommittee on Human Resources 

Febmary 15,2017 

Chairman Smith, Ranking Member Davis, and members of the Subcommittee, thank you for the 

invitation to appear before you today. In my testimony, I will provide informatioo on the 

changing geography of poverty in the United States (including the rapid rise of poverty outside 

of urban and mral communities in recent years), key factors that have driven these shifts as well 

as challenges raised by them, and implications for effons to effectively address poverty and 

promote opportLmity across different kinds of communities. 

Wbile these issues have been the subject of my research at the Brookings Institution's 

Metropolitan Policy Program, the views expressed in this testimony are my own. The Brookings 

Institution does not take institutional positions on policy issues. 

Recent Trends 

The number of people living below the federal poveny line in the United States has only recently 

begun to subside from the historic highs reached in the wake of the Great Recession. In 2015, the 

most recent year for wltich we have data, 43. 1 million people (or 13.5 percent of the population) 

were poor. Even after years of a sustained economic expansion, that number remains 5.8 million 

higher than before the recession began in 2007, and I 1.5 million more than in 2000. 

Poveny in the United States has long been associated with large urban centers or mral 

communities, where it has historically been most concentrated. As poverty grew in the 2000s, it 

cominued to climb in d1ose places: Both large cities and rura l counties experienced an uptick in 

their poor populations of roughly 20 percent between 2000 and 2015 (see chan).' But the rapid 

rise of poverty in the 2000s touched a broad swath of communities across tl1e country, moving 

well beyond its historic homes. 

Between 2000 and 20 15, the poor population in smaller metropolitan areas grew at double the 

pace of the urban and rural poor populations, outstripped only by poveny's growth in the 

nation's suburbs. Suburbs in the country's largest metro areas saw the number of residents living 

below the poverty line grow by 57 percent between 2000 and 2015. All together, suburbs 

accounted for nearly half ( 48 percent) of the total national increase in the poor population over 

that time period. 2 

1 For the purposes of this analysis,. "cities" refer to primary ciues in the nation's 100 roost populous metropolitan Slatistical areas 

(MSAs). A primary city is defined as lhe first named city in the offi<:iaJ MSA title and any other city in the MSA name that has n 

population of I 00,000 Of more, which means a region could havt' belwcen one and three prima1y cities. The suburbs are defined 

as the remainder of the region within the MSA but OutSide of the J)l'imary cny or cities. Sm,,/1 metro ''reas comprise all other 

MSAs outside the top 100, and nmr/ areas include all counties lhat nrc not a part of nn MSA. 2 For an analysis of how these geogmphtc trends ltt."'tp to different congressional d1strict.t see: Elizabeth Kneebone. ''Poverty 

Crosses Party Line.'' (Washington; Brookings Institution, 2016) hnns;/fwWYo· brookjpp cdutre~c;arch/ooveny=Cros.~;,.oony. 

linesiML. 
10 


INSERT 33363A.004

Number of people below the federal poverty line in tlte United States, 

by community type, 1970 to 2015 

18,000 

16,000 

14,000 

~ 12,000 

10,000 

j 8,000 

6,000 

4,000 

2.000 

1970 1980 1990 2000 2015 

-suburbs --Cities --smaUMettos • Rural 

Source: Brookings Institution o11a/ysis of decetmiol census <md American Commu11ity Sm.,"Cydota 

These increases pushed the poverty rate up by roughly 3 percentage points in suburbs and small 

metro areas between 2000 and 20 I 5, compared to a 2 percentage-point uptick in both cities and 

rural counties. Even with these increases, poverty rates in urban and ntral areas remained higher 

on average than elsewhere: The 2015 poverty rate was 19.6 percent in large cities, 17.2 percent 

in rural areas, 16 percent in small metro areas, and I 1.2 percent in the suburbs. 

However, the rapid pace of growth in the suburban poor population during the 2000s fueled a 

significant "tipping point" in the geography of the nation's poor. For tbe first time, suburbs 

became home to more poor residents than cities. In 20 l 5, 16 million poor people lived in the 

suburbs, outnumbering the poor population in cities by more than 3 mi Ilion, small metro areas by 

more than 6 million, and rural areas by more than 8 million. 

Given the (literal) space that suburbs occupy, bridging urban and rural America, some of the 

challenges raised by the growth of poverty in the suburbs may find parallels in urban areas (e.g., 

the growing prevalence of distressed neighborhoods) or in rural co•nmunities (e.g., the 

complexities of bringi ng services to a population spread over greater distances), and some may 

be unique (e.g., perceptions of affluence that complicate responses to growing poverty). Because 

poverty in the suburbs, at least at these levels, is a newer phenomenon, much of the remainder of 

this testimony will focus on exploring the recent and rapid rise of suburban poverty. (Note that, 

while much of the research summarized below has largely focused on cities and suburbs within 

the nation's tOO largest metro areas, many of the same drivers, challenges, and implications 

related to growing suburban poverty also apply in the small metro area context.) 

The Broad Reach ojSuburban Poverty 

A key feature of the growth of suburban poverty in the 2000s is that it was not isolated to 

particular regions or parts oftbe country. Almost every major metro area experienced a 

significant increase in the submban poor population between 2000 and 20 I 5, and two-thirds of 

those regions now find the majority of the poor population in the suburbs. Some of the steepest 

upticks occurred in fast-growing metro areas in the Sun Belt and lntennountain West, like the 

Cape Coral (IS! percent), Austin ( 129 percent), Atlanta (126 percent), and Las Vegas (139 

percent) metro areas, each of which saw its suburban poor population more than double. 
11 


INSERT 33363A.005

Many older, historically manufacntring-oriented regions in the Midwest also experienced aboveaverage increases in their suburban poor populations, including metro Detroit (87 percent), 

Chicago (84 percent), and Cleveland (62 percent). While those regions have long been associated 

with the challenges of urban poverty, each now counts more poor residents outside their central 

cities than in them. 

Relatively strong regional economies like the Washington, DC and Seattle metro areas also 

shared in these trends, posting above-average upticks in the number of suburban residents living 

in poverty between 2000 and 2015 (66 and 63 percent, respectively). 

Nor was this trend confined to older, distressed inner-ring suburbs that have a longer history of 

poverty. Poverty also grew in farther out suburbs, in bedroom comnnmities, traditionally more 

affluent communities, and in ex urban communities on the metropolitan fringe, underscoring the 

increasing reach of poverty into a broader array of places.) 

Characteristics of the Urban and Suburban Poor 

The biggest difference between the urban and suburban poor populations in the nation's largest 

metro areas lies in their racial and erlmic makeup. Non-Hispanic whites account for 44 percent of 

the poor population in suburbs, compared to just 24 percent in big cities. That gap largely reflects 

differences in the overall racial and ethnic composition of cities and suburbs, although that has 

been changing over time as people of color, including poor people of color, have suburbanized at 

a faster clip. Still,the poor white population remains the most suburbanized among major racial 

and ethnic groups: 70 percent of poor whites in the nation's largest metro areas live in the 

suburbs compared to 52 percent of poor Asians, 47 percem of poor Hispanics, and 41 percent of 

poor African Americans. 

The suburban poor are also more likely to own their own home than their urban counterparts (36 

versus 20 percent, respectively). Notwithstanding those differences, the urban and suburban poor 

population is quite similar. Most poor families are working fami lies (roughly two-thirds in both 

cities and suburbs). Similar shares of individuals have a disability (roughly 15 percent in both 

cases). The suburban poor skew slightly older- in part because poor seniors are slightly more 

suburbanized on average-but more than a third of the poor in both cities and suburbs are 

children. A striking share of the poor lives in deep poverty (less than half the federal poverty 

line) in both cities (46 percent) and suburbs (44 percent)4 

Growing Concentrations of Poverty 

Differences are less striking across the urban and suburban poor populations as a whole than they 

are across neighborhoods at different levels of poverty, regardless of where they are located. 

Poor neighborhoods tend to cluster disadvantages that create a drag on upward mobility and the 

long-tenn prospects of residents gening out of poverty over time. s 

1 For a detailed discussion of the lYJXS of suburban cornmunit·ics thttt experienced increases in povc11y. see Elizabeth Kneebone 

and Alan Berube, ConfrorttiJtgSuburlxm Po\'fTI)'In Ametiro. (Washington: Brookings lnstirution Press, 2013). ,. Ibid. 

'See, e.g., Ehzabeth Knetbone. Carey Nade-au, and Alan llerube, '"The Re.Emergence ofCo11centrated Poverty: Meuopolitan 

Trtnds in lhe 2000s'' (Washil'l,gton· Brookings ln.stilldion. 2011). 
12 


INSERT 33363A.006

That is especially conceming because, after making gains in the 1990s toward de-concentratil1g 

poverty (i.e., reducing the number of very poor neighborhoods and the share of the poor living in 

them), the 2000s marked a rapid re-emergence of concentrated disadvantage, particularly in the 

post-recession period, that essentially erased earlier progress.6 

The number of extremely poor neighborhoods (census tracts with poverty rates of 40 percent or 

more) in the United States more than doubled between 2000 and 20 I 0-14, as did the share of 

poor residents living in them. While concentrated poverty (i.e., the share of poor residents living 

in extremely poor neighborhoods) historically bas been a largely urban cballenge, the fastest 

growing concentrations of poverty in the 2000s emerged beyond the urban core. Suburbs saw the 

number of poor residents living in distressed neighborhoods grow by 188 percent, ahead of small 

metro areas (172 percent), rural communities ( 103 percent), and cities (80 percent). 

Urban residents remain disproportionately likely to live in areas of concentrated poverty: In 

2010- 14, cities posted a concentrated poverty rate of2S.S percent, compared to 13.7 percem in 

small metro areas, and 7. 1 percent in both suburbs and rural communities. But the pace of 

growth in concentrated disadvantage, and the rapid emergence of high-poverty neighborhoods, 

outside of city centers underscores the significant shifts and expansions the map of poverty in the 

United States has undergone in recent years, and the increasingly shared challenge it represents. 

Drivers 

The growth of poverty in the suburbs reflects a combination of contributing factors that saw both 

low-income individuals and fami lies move to the suburbs and more long-time suburban residents 

fall into poverty over time. These factors include: 

• Growing ami diversifying populations in tlte suburbs. Notwithstanding the recent 

resurgence of big city populations, suburbs have grown at a faster pace overall than cities 

since 2000. As suburbs have continued to add population, they have also increasingly 

captured a more diverse cross section of the nation. Part of that growth and growing 

diversity reflects sllifting immigration patterns, as more immigrants in recent years have 

bypassed cities to move to the suburbs of the nation's largest metro areas. However, as 

Roberto Suro and his colleagues found, while immigrants accounted for 30 percent of 

suburban population growth in the 2000s, they contributed just 17 percent to the growth 

in the poor population in suburbs, meaning native-born Americans largely drove the 

poverty trend. 

7 

Regional housing market trends. The distribution of affordable housing options (often 

detenni ned by a mix of market trends, zoning decisions, and housing policy) also affects 

the geography of d1e poor population over time. For instance, in some regions 

reinvestment in the urban core has translated to climbing housing costs that have led 

some residents to search for affordable options outside the city. In some cases, certain 

suburban communities have become more affordable to lower-iocome households over 

f Eli7.abeth Kneebone and Natalie !Iohnes, "U.S. Concentrated Povetl)' in the Wake of the Great Re<--ession," (Washington: 

Brool<ings lnstitutio!l, 2016) . 

.,. Robetto Suro, J11l Wilson, and Audrey Singer. "Immigration aod Poveny in America's Suburbs, .. (Washington: Brookings 

lnSiinuion. 2011). 

4 
13 


INSERT 33363A.007

time as older, post-war housing stock has aged. The number of ponable Housing Choice 

Vouchers also grew in the suburbs during the 2000s. Kenya Covington and her 

colleagues found that by the end of the decade nearly half of Housing Choice Voucher 

recipients in the nation's largest metro areas lived in suburbs3 In addition, the subprime 

lending boom in the mid-2000s and the foreclosure crisis that followed tilted heavily 

toward the suburbs. In the nation's 100 largest metro areas, nearly three-quaners of the 

subprime loans that were originated between 2004 and 2008 were located in suburban 

communities, as were nearly tbree-quaners of foreclosures that followed the collapse of 

the housing market.9 

The coutiuuetl suburbmtizatiou of j obs. Steven Raphael and Michael Stoll have found 

that poor residents tend to be more suburbanized in regions where employment is more 

decentralized.10 Almost every major metro area saw the balance of employment shift 

away from downtown during the 2000s. By the end of the decade 43 percent of jobs in 

the nation's largest metro areas were located more than LO miles from downtown-nearly 

twice the share of jobs located within three miles of a central business district (23 

percent). The manufacturing, construction, and retail services industries were among the 

most suburbanized, with the majority of jobs in each industry located more than 10 miles 

away from downtown. 11 

• Downturns iu the economy . Both of the recessions that bookended the 2000s led to 

increases in poverty. However, the second, much deeper recession hit suburbs harder than 

previous downmrns, pushing suburban unemployment rates up by margins on par with 

urban increases.' 2 The housing-led nature of the Great Recession helps explain the impact 

on suburbs, as does the geography of the job losses that followed the collapse of the 

housing market. Between 2007 and 20 I 0, manufacmring, construction, and retail 

accounted for 60 percent of job losses in the I 00 largest metro areas, and half of those job 

losses occurred more than 1 0 miles away from downtown. l3 

The prevalence of low-wage work. Although the Great Recession intensified the growth 

ofpoveny in the suburbs, it only accelerated a shift that was already well underway. The 

recovery, even several years on, shows no sign of undoing that shift, in pan because of 

longer-running structural changes in the labor market- including the growing prevalence 

of low-wage work- that will continue to affect suburban communities alongside urban 

and rural America. According io U.S. Bureau of Labor Statistics projections, many ofthe 

occupations expected to generate the most job growth in the next decade will be in the 

service sector, including occupations like personal care aides, home health aides, nursing 

• Kenya Covington, Lance Freeman. and Michael Stoll. '"'lbe Suburbanization of Housing Choice Voucher Recipients;· 

(Washington: Brooking.< lns1i1ution, 2011). 9 Chris Schildt and others. "'The St•bprimc Crisis in St•burbia: Exploring the Links bct,vccn Foreclosures and Suburban Poverty," 

(Federnl Reserve !lank of San Francisco, 2013). 

IO Steven RaJ>hacl and Mith~l Stoll, ''Job Sprawl and the SubW'baniuuion ofPo~ny," (Washington: Orookings Institution, 2010). 11 Eli7.abeth Kneebone, "Job Sprawl Stalls: The Great Recession and Metropolitan Employment Location," (Washington: 

Brookings lrlstitution, 2013). 11 En1.ily Garr, .. 111e landscape of Recession: Unemployment and Safety Net Services Across Urban and SuburOOn America," 

(Washington: llrookings lns1itution, 2011). 

u Kneebone. "Job Sprawl Slalls." 

s 
14 


INSERT 33363A.008

assistants, retails salespersons, and restaurant cooks that offer typical annual earnings 

between $20,000 and $25,000." Just as lower-wage jobs are more likely to locate in 

suburbs than higher-skilled employment, most workers (67 percent) employed in lowerwage occupations (e.g., sales, food preparation aod service, and building and grounds 

cleaning and maintenance) live in thesuburbs.'s 

No one factor alone was responsible for the widespread growth of poverty in the suburbs. While 

the multiple dynamics described above intersect in different ways depending on the community, 

they also underscore the complex array of factors that work together to shape both poverty's 

trajectory and its distribution across places. 

ChaUenges 

The rapidly changing geography of poverty begs the question: is the rise of poverty in the 

suburbs necessarily a bad thing? Popular perceptions of suburbia would suggest that being poor 

in the suburbs affords access to the kind of opportunities- schools, jobs, networks- that provide 

a better platform for poor residents to eventually work their way out of poverty. (Indeed past 

public policies- like the Moving to Opportunity experiment- have been premised on exactly 

that assumption.) 

But the answer to that question is: it depends. America 's suburbs are a diverse collection of 

places that, as the recent increases in concentrated poverty might suggest, do not uniformly offer 

access to such opportunities. And whether affluent, middle class, blue collar, or distressed, or 

whether they fall in the urbanized inner-ring or the more rural exurban fringe, many of the 

suburbs that experienced the steepest upticks in poverty in recent years are now dealing with it at 

levels they were not built, nor are they now equipped, to address. 

Some of the first-order challenges poor families and individuals in the suburbs face relate 

directly to those gaps in infrastrucmre, support systems, and capacity, including: 

Limited tnmsportatio11 optio11s (llu/fewer j obs 11earby. Perhaps not surprisingly, given 

the nature of metropolitan transit systems, suburban residents are less likely to have 

access to public transit than their urban counterparts. When transit options exist in the 

suburbs service is often less frequent and regional corlllectivity tends to be weaker. On 

average, resideots io low-income suburban neighborhoods that have access to transit can 

reach j ust 25 percent of metro area jobs in a 90-minute commute. The share of jobs 

reachable drops to 4 percent if the commute time is reduced to 45 minutes.

16 Part of the 

challenge stems from the fact that many of the traditional hub-and-spoke transit systems 

designed to connect suburbs to the city do not offer the suburb-to-suburb connections that 

have become increasingly important as jobs have continued to decentralize. The average 

poor resident in the nation's largest metro areas saw the number of jobs within a typical 

14 Sec https://wvrw.bls.gov/emw'ep table 104.htm. 

u Jane WilliaolS and Alan Berube ... The Metropolitan Geography of Low·Wage Work." (Washington: Brookings Institution. 

2014). 16 Adie Tomer and others, "Misst..-d Opportunity: Transit and Jobs in MctrOpOiiuan Ameri,'tl..'' (Washing1ou: Brookings lnstilution. 

2011). 

6 
15 


INSERT 33363A.009

commute distance drop by 17 percent over the course of the 2000s. 17 That means that, by 

and large, suburban residents are dependent on owning and maintaining a car-and must 

bear the associated costs-to reach employment opportunities that are often growing in 

other pans of the region. 

Thinner antl patchier nonprofit safety nets. As Scott Allard and Benjamin Roth have 

documented, the suburban nonprofit safety net tends to be stretched thin, with relatively 

fewer providers serving larger catchment areas than in cities. The types of services 

available in suburbs also tend to be patchier than the continuum of services typically 

found in urban centers. That means critical services and wraparound supports that could 

help poor suburban residents weather periods of economic instability or find and maintain 

employment may be harder to access or missing. For instance, among the large suburban 

municipalities Allard and Roth studied, more than half lacked a food assistance provider, 

61 percent had no registered substance abuse service providers, and 80 percent lacked a 

registered employment services provider. 18 

Limited capacity tm1ong loctlf gm•ernments. Compared to the nation's larger cities, 

suburban governments often have fewer resources and less institutional capacity and 

expertise to deal with rising need. The resource and capacity gap is particularly 

pronounced in smaller suburban communities and those that have seen their overall 

population counts stagnate or decline, leaving a diminished tax base even as need has 

continued to grow. 

A numberofadditiooal factors make it difficult to bridge the gaps outlined above to effectively 

address the geographic scale and reach of poverty today, including: 

• Jurisdictional fragmentation. The suburbs in any given metro area comprise multiple 

jurisdictions. For example, Allard and Roth count more than 600 cities, townships, and 

village governments in the 13 counties that make up Chicago's suburban ring. 19 What is 

more,jurisdictions often overlap in complicated ways- municipalities span more than 

one county, or school districts intersect with multiple municipalities or pans of both 

incorporated and unincorporated areas. Such a complicated tapestry of jurisdictions, 

many of which are relatively small, means individual jurisdiction often struggle to mount 

effective responses to growing need. At the same time, rather than marshaling resources 

at the scale needed to address shared challenges, communities often find themselves 

compelled to compete against each other for limited resources. 

Lagging philanthropic resources. Sarah Reckhow and Margaret Weir's research has 

found that, even in regions where the suburban poor population now oumumbers the 

urban poor, philanthropic resources continue to disproportionately flow to urban centers. 

Some of the lag stems from the fact that local community foundations are more likely to 

17 F. Iizabeth Kneebone and Natalie f lolmes, ''The Growing Distance Between People and Jobs iJl Metropolitan America;• 

(Washington: Brookings tnstitutiun. 2015). 

"Srott W. Atlnrd and tk njamin Roth, "Strained Suburbs: The Social SCfVice Cl>allcnges of Rising Suburoan Povcny," ashingto ~ UtOOkings Institution, 2010) 10 1bid. 
16 


INSERT 33363A.010

be located in large cities, while suburban commw1ity foundations tend to be relatively 

newer and smaller in scale and capacity. And some of the imbalance reflects the weaker 

nonprofit capacity in suburbs that can make it harder for funders to find potential 

grantees. Yet, Reckhow and Weir also found that funders dedicated relatively little 

investment in the 2000s to building capacity in suburban communities, suggesting that, 

absent a change in funding priorities, it may prove difficult to break the self-reinforcing 

capacity/funding gap. 20 

• A lack of responsil>eness in fetleral programs designeil witlt a diff erent geograp hy of 

poverty in mimi. Forthcoming research from Brookings shows that federal anti-poverty 

funding streams often exhibit a similar geographic lag, or disproportionately urban tilt, as 

philanthropic dollars. Some of that tilt is an artefact of the design of place-based antipoverty programs, many of which were created with the express purpose of serving 

distressed urban neighborhoods or rural communities and do not necessarily or naturally 

extend to encompass suburbs. For instance, program formula or eligibility criteria that 

prioritize poverty rates (e.g., the process for desil,'Ilating Medically Underserved Areas) 

may miss struggling suburbs with larger poor populations that spread over greater 

distances. 

Even many anti-poverty or opportunity-oriented programs typically thought of as 

" people-based" are place-based in practice because they depend on "bricks and mortar" 

delivety models. Think of subsidized cbildcare or job training programs. The funds for 

these types of programs often are allocated in ways that favor denser, urban settings with 

higher poverty rates. The Jack of nonprofit and local government capacity in many 

suburban communities can mean that many eligible suburban residents end up missing 

out on important benefits because they are not available in or reasonably near their 

conununity. 

Outdated perception.5. Rapidly growing poverty in the suburbs can often feel " hidden." 

Outdated understandings of where poverty is and who it affects shapes an array of 

important factors-including the charitable giving of individuals; the priorities of 

philanthropy, service delivety, and policy design; and the political will (or lack thereof) 

to address it- and can hamper efforts to respond effectively to the shifting geography of 

poverty. 

Responses 

As more places deal with poverty at levels not seen before, particularly suburbs and smaller 

metropolitan areas where its presence may be newer, it is unrealistic to expect these communities 

to replicate from whole cloth everything cities or rural communities have done over multiple 

decades to address poverty. Not only would that take too long given the pressing need, there 

simply are not enough public or private resources to do so (and even if there were, creating 

duplicative services and systems in every community would not be an efficient use of them). Nor 

is the recognition of poverty's broader reach today meant to trigger an "us-versus-them," zero-

:o Sarah Rcx:khow and Margaret Weir, .. Building a Strougcr Regional Safety Net: Philru1thropy"s Role;' (Washington: Brookings 

Institution, 2011 ). 

8 
17 


INSERT 33363A.011

sum resource competition with urban and rural communities that have long struggled with 

poverty and continue to do so. Instead, today's geography of poverty calls for more crosscutting 

and responsive approaches that work at a more effective scale to address poverty in the context 

of place. 

Examples of what these approaches could look like already exist in communities across the 

coumry, having emerged from local and regional innovation and leadership. In some cases, 

organizations that already operate at a larger geographic and programmatic scale are taking the 

lead. With their ability to work across different types of communities and issue areas and weave 

together a diverse range of funding sources, these entities-whether high-perfomJing 

multifaceted social service providers like Neighborhood Centers in metropolitan Houston or 

high-capacity community developmellt financial institutions like The Reinvestment Fund on the 

East Coast or IFF in the Midwest-can often leverage their scale and range of expertise to fill 

capacity gaps in underserved communities, whether urban, suburban, or rural. 

Beyond these types of entities, many communities across the country are finding ways to achieve 

scale through collaboration, which can take several forms. These collaborative models may bring 

together: 

• Neighboring suburbs. For instance, the West Cook County Housing Collaborative 

emerged in Chicago's suburbs in the wake of the foreclosure crisis. Rather than compete 

against each other for limited funds to address shared challenges around housing blight 

and distress, five jurisdictions- Bellwood, Berwyn, Forest Park, Maywood, and Oak 

Park-came together to collectively apply for the Neighborhood Stabilization Program. 

Recognizing the efficiencies and benefits of coordinating as a sub-region after 

successfully attracting funds, the collaborative coOlinues to work together on housing 

Strategies to upgrade distressed properties and foster livable communities that offer 

access to transportation options and other amenities. 

Urbtm11ntl suburb11n jurisdictions. In South King County, where much of the Seattle 

region's poverty is concentrated, school districts from six suburbs- Auburn, Federal 

Way, Highline, Kent, Renton, and Tukwila-have partnered with schools from the south 

side of the Seattle Public School District as pan of the Road Map Project. A Race to the 

Top grantee, the Road Map Project is a collective impact cradle-to-career initiative that 

has set measurable benchmarks and brought together a diverse range of stakeholders to 

improve educational outcomes and close achievement gaps for low-income and minority 

studems. 

• S nburb11n mul mntl communities. In the Kansas City region, Affordable Care Act funds 

enabled the Health Partnership Clinic in suburban Johnson County to become a federally 

qualified health center. The funds also allowed the Clinic to scale up its operations in the 

county and, through a partnership with the Elizabeth Layton Center (a mental health 

provider that serves Miami and rural Franklin Counties), expand the number of lowincome clients receiving care across a broader swath of communities. 

9 
18 


INSERT 33363A.012

Regardless of the mix of entities or jurisdictions, effective collaborative models tend to have a 

"quarterback" or "backbone" entity that provides the staff capacity and expertise to organize, 

maintain, and implement on the collaborative goals. 

Bm d1ese innovators and quarterbacks face a number of challenges as they try to make the often 

fragmented and inflexible anti-poverty policy and funding landscape work in new ways for a 

broader geography of need. Difficulties in standing up these models can include managing 

burdensome red rape and the increased admin istrative strain of trying to work across multiple 

programs that lack alignment in their reponing requirements; pushing up against administrative 

practices or rules that frustrate efforts to collaborate across jurisdictions; and confronting a lack 

of dedicated support for quarterback capacity building and support. 

If federa l policymakers adopted a few common principles when making decisions around antipoverty/pro-opportunity policies, and especially those that are targeted to or delivered in places, 

it could help better align resources and accelerate the adoption of more effectively scaled 

solutions that work across different kinds of communities to connect residents to economic 

opportunity. Federal policy could: 

Explicitly encour11ge colloborotive opproachesthtlt cut across juristfictional bo,mtft~ries 

flllll policy silos. By offering incentives (e.g., through the awarding of points in the 

application process), federal programs could reward communities already working 

collaboratively and encourage more jurisdictions to tmdertake cooperative strategies. In 

addition, c larifying where current funding streams can already support collaboration, and 

removing any administrative ban·iers that preclude collaboration (in practice if not on 

paper), would also help clear the way for these types of initiatives. 

Catalyze regio11al capacity. By making funds available to build and support the capacity 

of entities or organizations that serve as collaborative quarterbacks, federal investments 

could help advance action-oriented collaboration and close some of the gaps in capacity 

that hinder the ability of individual jurisdictions to address growing need. 

Allow for experimentation 11ntl evlllulltion of opportmlity-orientetl region11/ strlltegies. 

Providing opportunities for high-performing, regionally-sca led organizations and crossjurisdictional collaboratives to experiment- whether through waivers or demonstration 

projects- and evaluate new models could accelerate learning around what strategies 

work best to leverage limited resources in ways that promote access to opportunity and 

upward mobiliry across the diverse array of communities now confronting the shared 

challenges of poverty. 

10 
19 


INSERT 33363A.013

Committee on Ways and Means 

Witness Disclosure Requirement- "Truth in Testimony" 

Required by House Rule XI, Clause 2(g) 

Your Name: Elizabeth Kneebone 

I. Arc you testifying on behalf of a Federal, State, or Local Government entity? 

a. Name of cntity(ies). 

b. Briefly describe the capacity in which you represent this entity. 

2. Are you testil)'ing on behalf of any non-governmental entity(ies)'/ 

a. Name of entity(ies): The Brookings Institution 

b. Briefly describe the capacity in which you represent this entity. 

I am a Fellow in the Metropolitan Policy Program at The Brookings Institution. 

However, as noted below, I am presenting testimony representing my personal views. 

As an independent think tank, the Brookings Institution does not take institutional 

positions on any issue. 

Yes 

0 

Yes 

0 

3. Please list any Federal grants or contractS (including subgrants or subcontractS) which you 

No 

X 

No 

X 

have received during the current fiscal year or either of the two previous fiscal years that arc 

related to the subject matter of the hearing: 

None 

4. Please list any grants, contracts, or paymentS originating from foreign governments which you 

have received during the current calendar year or either of the two previous calendar years that 

arc related to the subject matter of the hearing: 

None 

5. Please list any offices or elected positions you hold. 

None 

6. Does the entity(ies) you represent, other than yourself, have parent organizations, 

subsidiaries, or pannerships you are not representing'/ Yes No 

0 X 
20 

f 


INSERT 33363A.014

7. Please list any Federal grants or contracts (including subgrants or subcontracts) which were received 

by the entity(ies) you represent during the current fiscal year or either of the two previous fiscal years, 

which exceed I 0 percent of entity(ies) revenues in the year received. Include the source and amount of 

each gram or contract. Auach a second page if necessary. 

Consistent with the Brookings Institution 's commitment to independence (which includes not 

taking Institutional positions on issues), I am hereby informing the Committee that my testimony 

represents my personal views and docs not reflect the views of Brookings, its other scholars, 

employees, officers, and/or trustees. 

In further response, with consideration to the fact that I am testifying on my personal views, I am 

providing a link to reports that outline Brookings's donors, including any responsive Federal grants 

or contracts (including subgrants and subcontracts), and/or agreements or payments originating 

with a foreign government for the relevant time period. These Federal and/or foreign grants or 

payments were for independent research and analysis related to a number of subject mailers, 

including a portion of that may be related to the subject mauer of the hearing. Brookings will 

update these reports twice annually. 

http:l/www .brookings.edu/CongressionaiT estimonyDisclosure 

Please also note that Brookings may have ongoing agreements with a portion of the donors 

disclosed above, which could include future payments to Brookings. Upon request, Brookings will 

provide responsive information regarding ongoing agreements with any donors responsive to this 

disclosure. 

Finally, in the event that you would like additional information related to Brookings's donors, 

please review Brookings's Annual Reports. 

https:l/www.brookings.edu/about-uslannual-report! 

8. Please list any grants, contracts, or payments originating from foreign governments which were 

received by the entity(ies) you represent during the current fiscal year or either of the two previous 

fiscal years related to the subject mauer of the hearing. Include the source and amount of each grant or 

contract. Attach a second page if necessary. 

Please see my response to question 7. 
21 

Chairman SMITH OF NEBRASKA. Thank you, Ms. Kneebone. 

And I didn’t mention earlier, though, that oral statements are 

limited to 5 minutes. I appreciate your cooperation there. And, certainly, all of your written statements will be included in the record. 

So thank you, Ms. Kneebone. Mr. Partridge, you may begin. 

STATEMENT OF MARK PARTRIDGE, PROFESSOR, SWANK 

CHAIR IN RURAL-URBAN POLICY, DEPARTMENT OF AGRICULTURAL, ENVIRONMENTAL, AND DEVELOPMENT ECONOMICS, THE OHIO STATE UNIVERSITY 

Mr. PARTRIDGE. Thank you, Chairman Smith, Ranking Member Davis, and other members. I am Mark Partridge. My views reflect my research and not those of The Ohio State University. 

Today, I will discuss the diversity of rural poverty in rural America 

and describe ways to reduce poverty and its harmful effects. 

Much of rural America struggles from low commodity prices and 

fierce foreign competition, yet portrayals of the death of rural 

America are misleading. Dating back to 1970s, net migration in 

and out of rural America has been about zero with urban America. 

In reality, there are three rural Americas. It is very diverse: one, 

fast-growing, high-amenity regions near lakes, oceans, and mountains; two, metro-adjacent rural communities with access to urban 

jobs and services; and, three, remote or extractive-based communities. 

Rural America’s industrial structure is becoming closer to urban 

America. So can we show Figure 1? 

For example, Figure 1 shows the shift from the farm economy. 

From 1969 to 2015, the rural farm employment share declined from 

15 to 6 percent. 

Rural poverty rates are greater than urban rates. 2014 urban 

and poverty rates were respectively 15 and 18 percent. But rural 

poverty receives relatively little attention. One reason is distance 

from media centers. Another is that it is hidden and rarely concentrated in poor neighborhoods. 

Poverty greatly declined from 1959 to 1973. Poverty, though, is 

very geographically persistent. 

Next figures. 

Figures 4 and 6 from my written testimony show the 1979 and 

2015 county poverty rates for the lower 48 States, and the maps 

look very similar is my point. High-poverty clusters exist in central 

Appalachia, the Black Belt, Mississippi Delta, Rio Grande, and 

Western Native American reservations. 

Children are disproportionately in poverty. One-fourth of rural 

children and over one-fifth of urban children are afflicted. Fewer 

opportunities for poor children perpetuate an intergenerational 

poverty cycle. 

Rural policy won’t succeed by the next election or save every 

struggling town, yet two broad approaches are available. First are 

people-based policies that directly support the poor, including education and training. The second is place-based policies in which 

poor locales receive more aid. Examples include infrastructure and 

firm attraction. 

But promoting prosperous rural communities requires building 

from within. Communities possess many entrepreneurial and 

22 

human resources. Research finds the fastest growing U.S. firms 

exist everywhere, from small towns to large cities. 

Also, higher shares of small businesses and self-employment support faster future growth. Self-employment and other small-business multipliers are double those of regular employment. There are 

many reasons. Small businesses buy more inputs locally, more profits remain local, and small-business development promotes a virtual cycle of promoting even more business formation. 

Small businesses can be fostered by reducing regulatory compliance costs. Another is improve small-firm financing. Small-business 

programs should be expanded through community colleges and 

State extension programs. 

The best predictor of future regional growth is the initial level 

of education. Yet rural America is less educated. Young talented 

adults from the countryside have long been captivated by bright 

city lights, but rural communities possess many charms—quiet, 

safe streets, sense of community and same lifestyles. Once former 

rural residents marry and have children, rural life becomes attractive. Thus, attraction efforts should be on enticing families in 30s 

and 40s back to rural communities. 

Rural communities can compete by promoting safety, recreation, 

and a clean environment. Yet good public schools are paramount, 

not only for the children, but the parents that are attracted by 

quality schools are much coveted. 

Deficient rural public services harm the poor. Fortunately, there 

are low-cost ways to improve service delivery. Governments can 

provide seed funding for rural counties to share personnel and resources, for example. To build capacity, Congress should fully fund 

Federal-State regional development organizations and create new 

ones—for example, the Appalachian Regional Commission, ARC. 

Yet poor funding hampers the ARC’s efforts. Still, the ARC has 

accomplished much with modest resources. It provides bridge loans 

and seed grants for infrastructure and other programs, but it mainly brokers regional collaborations that cannot be done by one poor 

community. 

Other policies should be expanded regardless of residents. For 

one, the Earned Income Tax Credit provides employment incentives. Early childhood education is also valuable, as is workforce 

training, access to transportation, mental health provision, and 

child care. They should be tailored to account for world differences. 

Accessibility is problematic, and services are stretched as many 

communities are struggling economically and are afflicted by drug 

crises. 

In sum, with long, steady, patient effort, rural poverty can be 

greatly reduced, producing tremendous benefits for families, communities, and the American economy. 

Thank you. 

[The prepared statement of Mr. Partridge follows:] 

23 


INSERT 33363A.015

0 THE OHIO STATE UNIVERSITY 

February 15, 2017 

College of Food. Agricunural, and Environmenlal Sciences 

Department of Ag ~uttu al, Environmental, 

and D•v•lopment Econom1es 

Mark Partridge Swank Chair In Rur~ ~Urbln Polley 

336 Agricultural Adminl$1tahon Bulldlng 

2120 Fylfo Road 

Columbus, OH 43210 

814-688-'907 Phone 

partridge.27@osu.edu 

Testimony of Mark Partridge, Ph.D. Swank Chair in Ru ral-Urban Policy, 

The Ohio State University. 

Before the House Ways and Means Committee, 

Subcommittee on Human Resources: 

Tile Geography of Rural America// Poverty 

Good morning Chainnan Smith, Ranking Member Davis and other subcommittee members. My 

name is Mark Panridge and I am the Swank Chair of Rural-Urban Policy at The Ohio State 

University. Thank you for the opponunity to discuss poveny reduction and economic development 

in rural America. Before I begin, I note that my views are based on my long-time research on this 

topic and do not renectthe views of The Ohio State University. 

Today, I will discuss the characteristics of rural poveny and then I will describe some ways to 

reduce its adverse effects. Though I do not have sufficient time to present supponing evidence, I 

stan by noting that there is significant research that shows that poveny has high socioeconomic 

costs to the economy. govemment~ and its citizens.' My aim is to dispel some simplistic rural 

stereotypes that are held by many people, especially urban residents who are less f.'lllliliar with 

rural America. Before doing so, I will brieny describe rural America's diversity. In my discussion, 

I will use the official federal metropolitan!nonmetropolitan area definition to identify urban and 

rural, meaning that I am using a labor market definition of rural. 

Much of rural America is struggling today due to a downturn in the commodity super cycle that 

has hampered mining, energy, and agriculture. This is exacerbated by the fierce foreign 

competition that has faced lower-wage ntral manufacl\lrers for the last20 years. All in all, given 

rural An>erica's disproportionate reliance on products traded internationally, today's relatively 

bigh value or the u.S. dollar has litnher eroded the competitiveness or these rural businesses. 

Indeed. it is not surprising that President Trump took advantage given this economic angst in rural 

America last November. Yet, ponrayals oftbe "death" of rural America are misleading. Dating 

back to the 1970s, net-domestic migration from rural to urban America is about zero-indicating 

that the reponed demise is greatly exaggerated. In reality, rural America is very heterogeneous, 

much like the vast diversity of American cities. However, common features of rural Americans are 

their incredible pride in their own lives, and the strong value they place on their communities. 

I. RURAL AMERICA IS DIVERSE 

la. Three Rural Americas. Rural America is very diverse and is comprised of three very 

different components. The ftrst includes high-amenity regions near takes, oceans, mountains, etc. that have been growing rapidly since the 1970s. For example, numerous Mountain-West 

communities have transfonned themselves from extractive miningllogging economies to 

'Partridge, Mali< D. and DanS. Rickman. (2000) The Goography of American Po>-erty: Is there a Role for Place-Based Policies?, Kalamazoo, Ml: W.E. lfpjohn lnslltutc for 'Employment Research. 
24 


INSERT 33363A.016

communities that rely on their natural beauty or climate for their livelihood. The second is metroadjacent rural communities that provide commuting access to urban jobs and services for rural 

residents and provide access to rural markets and recreation for urban residents. These areas have 

also grown while mostly maintaining their auractive rural lifestyle. The third rural region is the 

remote or extractive-based rural communities that depend on agriculture, mining, and forestry. 

These communities struggle with labor-saving teclmological change that means fewer workers are 

needed in the production of their base-industry products. Remoteness from urban markets and 

services further disadvantages these conmtunities. Finally, these remote rural areas are vulnerable 

to commodity-price super cycles that lead to a lack of economic stability and diversity, deterring 

the fonnation of small businesses.2 

I b. Changi ng structure of ru ral economies. Local rural economies were autonomous islands up 

through World War II. Since then, labor-saving technological change in the primary goods sector 

has freed up labor. Much of it relocated to cities, especially before 1970. Improvements in roads 

and autos greatly expanded rural-urban commuting, changing the economic base of many rural 

communities. The expansion of rural-urban commuting and other technological changes led to the 

organic creation of large rural-urban regions centered on their largest urban cities. The wellbeing 

of these large regions increasingly hinges on the prosperity of their urban economies. 

The industrial structure of rural America has shilled away from agriculture and mining, becoming 

closer to that of urban America, though urban areas still take on different economic functions. The 

US Bureau of Economic Analysis (BEA) calculates the number of fann jobs (including fann 

proprietors) based on whether the household has even minimal fam1 income, which generally 

overstates farming's share of the economy due to the large ownber of casual/lifestyle farmers who 

primarily work elsewhere. The US Bureau of Labor Statistics (BLS) also calculates the share of 

workers (including self-employed) in agriculture, but only includes individuals for whom 

agriculture is their primary job. The BLS measure is more accurate. 

Figure I, which shows reallocation away from the fann economy since 1969, contradicts the 

stereotype of ntral America as dependent entirely on traditional industries, such as agriculture. It 

reports the SEA share of full- and part-time jobs in the US, metro, and non metro America, as well 

as the more accurate SLS figures for the entire nation for comparison. Looking at the SEA data, 

the rural nonmetropolitan fann share declined from 15% to 6%. The SLS (CPS) national 

employment share, in which agriculture is the primary job, runs about the same as the 

corresponding BEA national share. For mining, another traditional mainstay of rural America, the 

share of total employmem bounced around 2% to 3% over the 1969-2015 period (not shown). The 

point is that rural economies are much more diverse than in the past. Efforts to jump-start rural 

economies also need to be broad based. 

"" .... 

"" ,.,. 

.,. 

"' 

Figure I 

Percentage of Jobs in Farming: 1969-2015 

: ==:::-::: 

Hg§iJ!!!!HHH!i~i~~~~ 

~~ .. ~~MtcrOpoliUol'l.-oUS F~ PnrnvtJob(CPS) -\IS 

~ F•,.... s.hwt of.oc11l (lrfloyw• lot t.w.q,oblal\. N<M'I·M«<<fllOMn. Mil US ~o(fkoclomlc AMI)'Ift: Tocal Fuii·T.,. and l'wi-TM!It 

F..mplo)_.CA2S(I969 2000)C~N(2001 lOIS) FallMIIblhtwu.kcr"t,snn-ryP.,u •*rc'o('*lt~~t~:lll! CM'nllt~Skii'UI\It;l,. 

~otLabOfStatuon. n'*~' 

2

Uetz. Michael, Michael Farren, linda Lob.ao, and Mark 1). Patlridge. (2015) ... Coal Mining. Economic l)evelopn-.e1U, 

and 1he Na1ural Res.ourccs Curse.'' Energy Ec(mqm;cs. (50), IOS-116. 

2 
25 


INSERT 33363A.017

2. THE GEOGRAPHY OF AMERICAN RURAL POVERTY 

2a. Measurement. I use the official poverty definition from the U.S. Census Bureau. The poverty 

income thresholds are based on family size and are annually adjusted for inflation. For example in 

2016, the poverty threshold for a single-parent family with two children was $19,337, and the 

threshold for a family of four with rwo children was $24,339.

3 Many question whether the official 

guidelines reflect a ''Lnte" poverty threshold due to "in-kind" benefits such as Medicaid not being 

counted. Regardless of the value of perfect poverty rate measures, they are highly correlated with 

the officia l figures, and I cannot imagine anyone would argue that the official thresholds imply a 

tolerable standard of living. 

Note tl1at official poverty thresholds are not adjusted for local cost of living. It is regularly stated 

that the official thresholds overstate rural poveny, or understate urban poverty, because of higher 

urban cost of living-particularly for housing. While it's tnte that urban housing is more 

expensive, this argument overlooks the fact that mral residents have to travel greater distances for 

groceries, public services, schools, daycare, etc. (and that rural housing is often substandard). 

Also, housing prices capitalize all site-specific amenities including access to jobs, public services, 

private services, and other features.• In other words, part of the reason why rural housing tends to 

be less expensive is because its va lue is lowered by its remoteness from services: the costs 

associated with having to travel relatively long distances to work, school, or the grocery store 

make up for the lower cost for the housing itself. Hence, much of the low level of housing costs 

in rural areas (or the high cost in urban areas) is due to these disadvalllages faced by ntral 

residents. What this means is that adjusting for "cost of li ving," such as in the Census Bureau's 

Supplemental Poverty Measure, would arbitrarily ham1 poor rural residents because they would be 

directly penalized for the "d istance penalties" in their daily lives, and then a lso indirectly 

penalized by over-adjusting ntral cost-of-living due to these house-price capitalizing effects. 

2b. Rural versus urban pove rty. Figure 2 shows that measured rural poverty rates have been 

greater than urban poverty rates since they were ftrst calculated for 1959. The gap was very large 

initially, steadily narrowing until the mid- 1970s, after which tl.1e gap bas been much more stable. 

The gap was 3 percentage points in 2014 with urban and rural poverty being respectively 15.1% 

and 18.1%. Importantly, note that this gap has artificially fallen as exurban and more populous 

nonmetropolitan counties have been reclassified as metro. Likewise, using the definition of 

extreme poverty in which households fall below one-half the poverty-income threshold, 2014 rural 

deep poverty was about 8%, compared to 7% in urban areas. 

Rural r~v is ltitftfeu from view. Despite having higher official poverty rates, ntral poverty 

receives much less public attention than urban poverty-more so than simple d ifferences in 

population would suggest. There are several reasons, including the fact that rural areas are far 

from urban and coastal media centers. Another key reason is that rural poverty is hidden, often out 

of view of those traveling through rural areas, and it is rarely concentrated in "poor 

neighborhoods" the way it often is in cities. lo other words, "out of sight, out of miod." 

JU.S. Census Dureau. hup:J/www.ccnsus.gov/datw'tttbles/timc·scries/dcmo/inoome·poverty/hislorical·pOver1y·thres.holds.hunl 4

Pill'tridgc. Mark D., DanS. Rickman, Kamat Ali and M. Rose OJrert. (2009) .. Agglomeration Spillovers and Wage 

:.md Housing Cost Gradients Ac-ross the Urban Uicrarchy." Journal of lmcnrotionaf Economics 18 (I): 126· 140. 
26 


INSERT 33363A.018

Figure 2:5 

Poverty rates by metrolnonmetro res•dence, 1959·2014 

Peroentpoot 

35 

25 

20 

15 

10 

0~~------~----~~--~----~~~ 1959 1~ 19$9 1974 1979 1984 1989 1994 1999 200ol 2009 2014 

Note: Metro s&atus of some counties changed in 1984, 1994, 2004, and 2014. 

Source: Calo.Jlated by USOA. Economte RKearch Servioe using dala from the U.S. Census Bureau's Current Population Swvey (CPS) 1960-2013 and annual American Commt.rily 

Survey (ACS)~mates for 20()9..14. 

·cPS pcwerty status Is based on family income In prior year MCS ACS pcweny status is based on fa · Income In the 5112 months. 

2c. Rural poverty is geog.-aphically very persistent. Figures 3 to 6 respectively show the 1959, 

1979, 1999, and 2015 poverty rates for counties in the lower 48 states and DC. On lhe positive 

side are the dramatic declines in poverty from 1959 to 1979, as poverty rates fell , especially in the 

South, during the 1960s War on Poverty. Yet, a key feature in the geography of poverty is its 

persistence. Dating back to 1959 and probably well before then, high-poverty clusters bave existed 

in central Appalachia, the Black (or Cotton) Belt, the Mississippi Delta, the Rio Grande, and 

Native American reserva tions across lhe west. These long-lasting poverty clusters can be 

predominantly white, black, Hispanic, and Native American, illustrating that poverty has liule 

racial bias. Another feature of not just rural poverty clusters, but also poverty in general, is that it 

is disproportionately composed of children, with one-fourth of rural children and more than onelifih of llrban children living in poverty. 

6 The lack of resources and opportunities for poor children 

helps perpetuate an intergenerational cycle of poverty. 

3131 · •0.00 

............ 

->52.f1 

Figure 3 

1959 Poverty Rate United States 

5

USDA Economic Research S<.'l'Vice: Oo\mloadcd from: https://www.crs.usdagov/topicslrural·cconomy-populatioM-ural-poverty-

"'ell-beinglpo\'Cf1)'oOVetview.aspx. 6Jbid. 

4 
27 


INSERT 33363A.019

16.1)1•11 76 

• •an-22..&1 ...... 

160ol·1178 

- 1877 -ntJ 

-"nc2 

tlCW· 1UI 

-Ja.n•n61 

. ,.2282 

Figure 4 

1979 Poverty Rate United States 

Figure 5 

1999 Poverty Rate United States 

Figure 6 

20 IS Poverty Rate United States 

5 
28 


INSERT 33363A.020

figure 7 

Change in Poverty Rates: 1999-2015 

.... • •toU .lllcr..-dby ........ $,$,.,~polfltf 

Souroo. 1999 Po.,.ctty Rate: 2000 CO)sus. PO\ -my Status in. 1999 (NP087B): 201S PM't.'tty Rate; 

U.S. Cenws Amc::m.an Comn.,..lty 5\•n~y. Povcr1y Stt.M in ilie Past 12 Mooths (S 170 1) 

Though J discuss policy later, some "good news" about rural high-poverty clusters is that job 

growth has disproportionately large effects ln reducing poverty compared to the rest of rural and 

urban America.' If there were no poverty response to job growth, that would suggest that potential 

workers who are in poverty are either not interested in work or lack sufficient skills to take work. 

Hence, poor people want to work' Effective place-based job growth can reduce poverty, even in 

remote poverty clusters, though this needs to be weighed against the costs of creating jobs. 

Low-poverty rate clusters can be found in the Northern Great Plains, upper Midwest, and 

Northeast. There are many governance, demographic and industry structural reasons for these 

regions' historic success in maintaining low poverty, but that is another topic. 

Figure 7 shows the change in poverty rates from 1999 to 2015. Overall, while the official U.S. 

Census Bureau poverty rate rose from 11.9% to 13.5%, there is significant heterogeneity across 

the US. The first pallern is the significant increases in areas with high shares of manufacturing 

such as in the Great Lakes states and in the South- both with high shares of rural manufacturing. 

However, there were declines in poverty rates in the Great Plains and the Northeast. Reasons for 

the decline in the Great Plains include the major super-commodity cycle that favored that region, 

though clear reasons for the decline in the Northeast are harder to identify. 

3. Enhancing Economic Development & Reducing Rural Poverty 

Enhancing rural economic development requires significant patience, and strategies need to be 

realistic. Even good policy aimed at stimulating rural economies will not succeed by the next 

election, and there is no way to "save" every struggling rural corunumity if economic forces say 

otherwise. However, there are some things that can enhance rural economic development and 

reduce poverty. There are two approachess to help poor families. First, there are people-based 

policies that directly support poor people with lillie leakage to the wealthy or community elites. 

Examples include education, training, and grants to help households relocate to where there are 

more job opportunities. The second is place-based policies in which places with a high share of 

poor people receive significant aid. Exampl es include infrastructure development, targeted 

7Partridge. M.D. nod D.S. Rickman. (2007) .. Persistent Pockets of Extreme American Poverty and Job Gr0\\1h: Is 

tbcrc a Plaet: Based Policy Role'?" .Journal of Agn·cultural and ~'Qllrce Economics. 32: 201 -224. 

6 
29 


INSERT 33363A.021

industry attraction, and policies aimed at the specific place. While both types of policies have their 

limitations, I believe both are needed to reduce poverty. Therefore, I will describe both, starting 

with people-based policies first, and then shifiing to place-based policies that aim to lifi all boats 

with the rising tide. Please note that this is somewhat simplistic, and that people-based and placebased policies should be evaluated on a continuum and not as an either/or proposition. 

3.1 Building strong rural economies requires " building f•·om within." 

The stereotype that rural means "declining" is misleading and incorrect. There are hundreds and 

hundreds of prosperous rurol communities. Yet, traditional rural mainstays such as farming, 

mining, and manufacturing have all struggled in recent years. In rebuilding and reinvigorating 

rural economies, there are two prominentmindsets that are counterproductive. The first is trying to 

bring back the "good ol' days. " Examples include Great Plains fann communities scheming to 

bring back tl1e fami ly farm economy of 1950, or Midwestem manufacturing communities that 

wish to bring back thousands of jobs that existed before productivity and intematiooaltrade 

eliminated them, or northem logging communities hoping to bring back large-scale logging and 

milling before mechani7.ation rendered many of those jobs obsolete. The second counterproductive 

mindset is the notion that struggling rural communities need to lind an outsider who will save their 

community by opening a large plant or new business. The "outsider will save us" mentality asserts 

that if the community is ''nice" and provides massive tax subsidies to these potential entrants, all 

of the communities' problems will be solved. This strategy overlooks that outsiders will not come 

unless they are granted many regulatory and tax concessions. It also overlooks that once they are 

established in the community, they ofien extort more tax concessions, move onto the next 

"victim," or even move offshore. Outside linus are typically in agriculture, mining, and 

manufacturing, which further exacerbates the lack of economic diversity that plagues some 

conllllunities witl1 a boom-bust cycle 1at does not foster long-tenn private investment. 

Rural communities have many entrepreneurial and human capital resources right in their midst, 

with the most important being small business development and entrepreneurship. There is a long 

research tradition that supports the notion that having higher shares of small businesses and selfemployment is consistent with faster fiaure growth,

8 especially in lagging regions such as central 

Appalachia9 Self-employment is associated with employment multipliers (or spillovers) that are 

over twice the size of comparable multipliers for regular wage and salary employmem at existing 

flrms.

10 There are many reasons for this: small businesses buy more of their inputs locally, more 

of their profits remain local, and small business development supports a virtuous entrepreneurial 

cycle that supports even more business fonnation.

1

'-'2 Indeed, research into the locations of the 

fastest growing US firms finds that these firms can be found in what may seem to be mundane or 

mature industries such as agriculture and that these fonns may exist in any setting from very sparse 

mralto very large cities, showing that they are not at all precluded from rural areas.

13 And 

stronger local economies mean that expanding employers will have to reach down and hire more 

disadvantaged workers as labor pools shrink. 

aGoet~ S. J., Fleming, 0 . A., & Rupasing.ha, A. (2012). "The ecooomic imJ)aciS of self-employment." Jou,.naf of 

Agricultural tmd Applied Ecot~omics, 44(0:l). 3lS<"S2 I. ,Stephens, Heather. Mntk D. Panridge, and Alessandro Faggian. (2013) .. Jnnovation, entrepreneurship and economic 

f{?'\1h in lagging regio1lS ... Joumal o[Regi01wl Scie11ce. 

An employment muJtiplier for self-employmeJlt is defined as how many totalnes jobs would be created if one seJr. 

employed job is creah..-d-c.g., n multiplier of2.S would 5uggc:,t tbat on nel, one new self-employed job creates 

addition.;\1 1.5 jOb$ elsewhere through S)Jillovcr effects. 11Rupasingha. A., & Goc ~. S. J. (20 13). Self-employment and locnl economic:: pcrfom~a ce: Evidence from US 

cot•otic::s. Papers i11 Regio11ol Science, 92(1), 141 ·161. 

•2-rsvetkova, l)anridge, and Betz (fo•1hcoming) op cit 13Li, Min,gh.ao. Stephan J. Goetz, Matk D. Partl'idgc. and David A. Fleming. (2016) "COlt1Hy Location Determinants of 

the 1NC5000s." E,trepreneurship & Regio,al Dt!\'elopment. 28:97-125. 

7 
30 


INSERT 33363A.022

At the margin, economic developmenl dollars spenl on small business creation have very high 

returns, especially given that small and new businesses disproportionately create net new jobs. 

This is especially so in rural America because small businesses compose a disproportionate share 

of rural employment. Federal, state and local efforts can encourage small business fonuation in 

many ways. Of course, any efforts to reduce regulatory compliance costs for small businesses 

would be welcome, as their owners' most scarce resource is time. Other efforts are needed 

including more aggressive atLempts by the Small Business Administration, the U.S. Department of 

Agriculture Rural Development, and other agencies to back loan guarantees for large pools of 

small business loans. These may individually be high-risk, but when aggregated and diversified, 

they are much lower risk. Efforts to help "train" potential small business owners should be 

expanded through community colleges and state extension services. These attempts should focus 

on basic management skills and help in identifying markets. 

3b. Brain Drain, Quality of Life, and Enticing Former Rural Residents 

Regional and urban economists find that the most robust predictor of future regional economic 

growth is its initial level of average educational attainment It is not surprising that places !hat 

have a high shareof "smart" people will have a lot of good things happening. Yet, rural America 

has lower average levels of educational attainment. Much of this is simply due to an industrial and 

occupational stmcture that favors the location of high human-capital finus in large cities- picture 

investment banking or imellectual property attomeys. Another reason is that young talented adults 

from the countrySide have for centuries been captivated by the bright lights of the big city and the 

ensuing opportunities that await. For this reason, any effons to stem the !low of young adults from 

the country to the city will likely be ineffective. 

To be sure, there are charms that are mainly accessible in rural areas: safe streets, quiet, sense of 

community and knowing all of your neighbors, and a saner lifestyle. For these reasons, once the 

former mral residents "sow their oats," marry, and have children, rural communities become 

attractive again. Thus, rural attraction efforts should be centered on anracting families in their 30s 

and 40s. This cohort has both tl1e experience and skill.s !hat would boost rural economies while 

deepening their rural roots as they raise their families. 

Rural communities need to be realistic in how to anract young families. They cannot compete on 

economic opport1mities (though tbey can narrow the gap), buttbey can compete in lhei.r unique 

quality of life in promoting good schools, nice parks/recreation, and a clean environment. lndeed, 

having high-quality local schools is paramount. Not only do they help train tbe next generation, 

but the kind of parents that are anracted by quality schools are the type of people rural 

commtmities covet. Likewise, these people are also more likely to place a higher value on a clean 

healthy environment, suggesting that environmental stewardship is another important economic 

development strategy. 

3c. Improving governance and building rural capacity for development. 

A key disadvantage for the rural poor is the lack of access to public services. One reason for this is 

that small rural communities lack the size and capacity to provide a wide range of government 

services. Specialized jobs such as economic development counselors, environmental/health 

inspectors, and mental health and drug abuse specialists can be too expensive for many rural 

communities. Likewise, individual ntral communities lack the resources to provide broad-sca.le 

training programs because they lack scale. 

The absence of good rural public services especially harms the rural poor. Fommately, there are 

several low-cost ways to improve the quality of support services in mral communities. First, the 

8 
31 


INSERT 33363A.023

federal and slate governments can faci litate and provide seed funding to start programs for rural 

counties to share personnel and resources such as for economic development, etc. For example, 

one specialist could serve (say) three different counties to provide mental health services by 

rotating across the counties. Not only would this fulfill the goal of capacity building, but it would 

also start pushing rural cowl!ies to collaborate with their neighbors in tenns of policy and 

programs. State university extension services and local conmmnity colleges could further facilitate 

this role as they already have the organization and mission for such efforts. 

To further facilitate capacity building, Congress should fully fund the federal-state regional 

development organizations and create new ones so that the entire country is covered. The 

Appalachian Regional Commission (ARC), formed in I 965, is a good example. Others currently 

include the Delta Regional Authority, Denali Commission, Northern Border Regional 

Commission, Northern Great Plains Regional Commission and the Southeast Crescent Regional 

Commission. These organizations cannot be expected to carry out their mission if they are 

insufficiently funded or not funded at all. Even the ARC, with a federal allocation of$90 million 

in FY 2015 and $146 in FY 20 16 (with some temporary expenditures from the Obama 

Administration), is limited in what it can do for its over 25 million residents spread across 13 

states. 14 Still, the ARC is a fantastic example of what a regional organization with modest 

resources can accomplish. The ARC provides bridge loans and seed grants for infrastructure and 

programs including workforce training that would not be available otherwise. Yet, the ARC's 

main role is as a broker that can foster regional collaborations of businesses, communities, 

counties, nonprofits, local development districts, and various state and federal agencies. With 

ARC leading the brokering efforts, resource-scarce distressed regiotlS can undertake programs that 

would otherwise be impossible. And the ARC provides small funding matches to ensure that 

projects can be implemented. 

A final feature of tl1ese federal-state regional conm1issions is that they can initiate multi-county 

regional development districts (the ARC refers to them as local development districts). These 

districts are composed of functional economic regions that can help facilitate cooperation and 

collaboration between neighboring communities. In particular, since functional economic areas are 

predominantly centered around urban areas, it allows rural communities to work with their urban 

neighbors, which is particularly important given that urban-led growth is typically more 

sustainable because oftl1e economic advantages possessed by cities. 

3d.Geographically (Space) neutral policies 

Regardless of urban or rural residence, there are successful policies that should be expanded such 

as the earned income tax credit (EITC). Originally envisioned by conservative Nobel Prize 

winning economist Milton Friedman, the EITC is a favorite poverty-reduction strategy of 

economists on the leO and right. The EJTC provides incentives for disadvantaged workers to find 

employment and the additional income further helps lift their households out of poveny_ts 

Early childhood education is another valuable tool that would reduce intergenerational inequality 

and poveny.t6 Early childhood education has very high rates of return, significantly higher than 

most public or private investments. In rural areas with a lack of access to quality educational 

programs, such efforts could be critical in reducing future intergenerational poverty and can be a 

"see the FY20 t 7 ARC Performance Budget at: 

hllps:l/www.arc.gov/imagcs/ncwsroom/puhlications/fy20 I 7budgct/FY20 t 7 PcrfommnccBudgetFcb20 I 6.pdf 

'

5

Grogger, J. (2003) "'111e Effects of Time Limits, the EITC, and Other Policy Changes on Welfare Use, Work, and 

Income among Female-Head Families," RevitMofF:coll. a11d Stat. (I t4): 394-408. 16nanik. Timothy J. 2011./m:esting in Kids: e·a,.~v Childluxxl Programs and /.,oclll £ccmomic Dm:e/opmtmt. 

Kalamazoo. Ml: W.E. Upjohn Institute for Employment Rese-arch. 

9 
32 


INSERT 33363A.024

useful economic development tool that builds future work forces while attracting parents who want 

good education for their children. 

Workforce training, access to transportation, mental health provision, and childcare are other key 

components of poverty reduction, regardless of location. Yet, they need to be geographically 

targeted to renect the realities of their re,spective environments. For example, mral workforce 

training needs to reOect the differing mix of jobs in nora] communities. Some examples of training 

efforts include community college degrees and certificates for those who can successfully remain 

in their rural community. However, given the importance of rural-urban migration and rural-urban 

commuting, this training needs to be delivered in a way that opens opportunities to place mral 

workers in higher-paying urban labor markets. In addition, teaching job hunting skills in urban 

environments can serve disadvantaged rural workers well. 

High-quality accessible rural childcare with hours of service that renect the realities of modern 

rural workplaces is rare, making it even more challenging for disadvantaged mral parents to enter 

the workforce or to take the best employment opportunities. The same featu.res describe mral 

healthcare and rural mental healthcare. Accessibility can be problematic, and in many states, 

health insurance coverage is far from ensured for the low-income working class. These services 

are further stretched as many rural communities have struggled economically and have been 

affiicted with various drug crises. One useful test will be to appraise whether states that expanded 

Medicaid also experienced greater labor force participation as key heahhcare barriers were 

reduced. Nonetheless, small investments in healthcare and mental heahh can pay great dividends 

that keep stnoggling families intact and fu lly cont.ributing to their communities. 

4. Summary and Discussion 

Rural America is very diverse with a mixture of prosperous regions in commuting distances of 

cities and in high-amenity areas. Yet, there are lagging rural regions that are not as prosperous due 

to their remoteness or dependence on commodities. Despite public perceptions, oflicial rural 

poveny rates are higher tban in urban areas, whereas poor rural households stnoggle with a host of 

barriers related to their remoteness including a lack of necessary public services and weaker 

employment opportunities. Rural poverty is also persistent over time and clusters in high-poverty 

regions. 

To reduce rura l poverty, a combination of direct "people-based'' and "place-based" policies is 

needed. First, under the genera.! notion that a "rising tide lifts all boats," several approaches to 

improve rural economies as a whole should be undertaken. These include supporting more rural 

entrepreneurship, attracting families in their 30s and 40s to enjoy rurallifesty.les, supponing 

regional collaboration, and implementing modestly-funded federal-state development 

organizations such as the ARC. Funher, direct supports specifically for poor nora! residents should 

also be expanded. These include the EITC, mental health care, t.ransportation, job t.raining, and 

early childhood education, though for the Iauer th.ree, a c lear rural-targeting needs to be employed 

to account for the sparse population and the long distances involved. With long-term, steady, 

patient effort, nora] poverty can be greatly reduced, producing tremendous benefits to families, 

communities, and an American economy where more people are working and contributing. 

Thank you. 

10 
33 


INSERT 33363A.025

Committee on Ways and Means 

Witness Disclosure Requirement- "Truth in Testimony• 

Required by House Rule XI, Clause 2(g) 

Your Name: Mark Partridge 

I. Are you testifying on behalf of a Federal. State, or l.ocal Government entity? 

a. Name or entity(ies). 

b. Brieny describe the capacity in which you represent this entity. 

I am Professor at The Ohio State University. I am presenting views based on my research 

and I do not represent Ohio State University in any official capacity. 

2. Arc you testifying on behalf of any non-governmental entity(ics)? 

a. Name or ntity(ic.~). 

b. Briefly de>cribe the capacity in which you represem this entity. 

[j 

[j 

3. Please I ist any Federal grants or contracts (including sub grants or subcontracts) which you have 

recei,•ed during the cun·ent fiscal year or either of the two previous fiscal years that are related to the 

subject maucr of the hearing: 

No 

C:J 

No 

C:J 

. .. Maximiting the Gains of Old and New Energy Development for America's Rural Communities ... USDA 

Agriculture Food Rc.~arch Initiative. $499.976.2014-2017. USDA AFRI grant #1 1400612. 

4. Please list any grants. contracts, or payments originating from foreign governments which you have 

received during the current calendar year or either of the two previous calendar years that are related to 

the subject mauer of the hearing: N.A. 

5. Please list any office.~ or elected positions you hold. 

President-elect Regional Science Association International. 

6. Does the cmi y(ic.~) you reprc.sent, other than yourself, have parent organizations, 

subsidiaries. or partnerships you are not represeming? a~ No 

C:J 
34 

f 


INSERT 33363A.026

7. Please list any Federal grams or contracts (including sub grams or subcontracts) which were received 

by the entity(ies) you represent during the current fiscal year or either of the two previous fiscal years. 

which exceed 10 percent of entity(ies) revenues in the year received. nclud~ the source and amount of 

each grant or contract. Anach a second page if necessary. 

NA 

8. Please list any grams. contracts. or payments originating from foreign governments which were 

received by the entity(ies) you represent during the current Ciscal year or either of the two previous fiscal 

years related to the subject maner of the hearing. Include the source and amount of each gram or 

contract. Auach a second page if necessary. 

NA 
35 

Chairman SMITH OF NEBRASKA. Thank you, Mr. Partridge. 

Mr. Leavy, you may begin. 

STATEMENT OF WILLIAM LEAVY, EXECUTIVE DIRECTOR, 

GREATER WEST TOWN PROJECT, CHICAGO, ILLINOIS; ACCOMPANIED BY LINDA THOMAS, DIRECTOR OF CLIENT 

SERVICES, GREATER WEST TOWN PROJECT, CHICAGO, ILLINOIS 

Mr. LEAVY. Thank you. My name is Bill Leavy. I am the executive director and founder of the Greater West Town Community 

Development Project on Chicago’s west side. 

My agency is very honored to have been asked by Chairman 

Smith and especially Congressman Davis to testify today to deepen 

public understanding of the extent and impact of poverty in urban 

communities and to share our experience using community-based 

job training to combat poverty at the individual and community 

level. 

Our experience has shown us that intensive occupational skills 

training in partnership with local industry is a highly effective way 

to get people into quality career-track jobs and help them lift themselves out of poverty. 

I am very honored to be with Linda Thomas here today, our director of client services. She is here to answer specific questions 

you have about our program and the challenges we face. 

Greater West Town is a community-based economic development 

initiative dedicated to expanding education and economic opportunity for the low-income, primarily minority community residents 

of the greater west side of Chicago. 

We achieve that mission by providing comprehensive workforce 

development and educational services through a model communitybusiness partnership strategy that links the employment and training needs of neighborhood job seekers to local economic development efforts and the workforce needs of area companies. 

Greater West Town services include occupational skills training 

in the high-growth industries of woodworking and shipping and receiving, job placement support services, and, very importantly, an 

alternative high school for youth that have dropped out in our community. 

Greater West Town’s programs are focused also to help meet the 

needs of local employers for the skilled and motivated workers they 

need to stay and grow in the area while competing successfully in 

the global marketplace. 

Greater West Town’s target populations include ex-offenders, 

welfare-eligible single parents, homeless, dislocated workers, high 

school dropouts, and teen parents. More than 1,800 graduates of 

the woodworking and shipping and receiving programs have been 

placed in jobs with area companies. 

Our targeted community areas have historically been—I am 

going skip this because Danny has covered the poverty in our 

neighborhood so well. Danny, I couldn’t do it any more or any better. 

I think my only point that I would like make is that there are 

major racial barriers in the labor market, and we need to admit 

them and deal with then. Unemployment rates for black men are 

36 

disproportionally high. In Chicago, black men are twice as likely to 

be unemployed as Latinos and three times as likely to be unemployed as whites. So it might be controversial for you guys, but it 

is there. If you look at the numbers, it is jumping off the page at 

us. 

And, of course, a major barrier to finding jobs in our community—so many ex-offenders come back into our community. Our 

communities are disproportionately receiving ex-offenders as they 

leave prison. And, of course, our high-school dropout crisis is a 

huge, huge problem and barrier to economic opportunity. Our 

neighborhood high schools have reported dropout rates of up to 50 

percent. 

Our occupational skills training is a proven and highly effective 

model that provides employment opportunities to high-need populations. The program is designed and operated in collaboration with 

local employer partners. Our employment strategy, training strategy combines a bridge program with basic skills remediation, and 

that leads to a hard skills program, an occupational certificate program. And it is by getting folks into that occupational certificate 

program that we get them access to higher-skilled, higher-paid 

jobs. 

Greater West Town meets employer needs by providing trained, 

dependable, motivated workers. And we give employers special 

value-added labor force development services that the companies 

cannot provide or undertake on their own. Many local firms credit 

our programs for their manufacturing success and cite it as an important factor in their decision to remain in Chicago and expand 

operations. 

We continually upgrade our instruction with input from our business partners to ensure industry relevance and to make smart investments in cutting-edge technologies and training. 

Our commitment to support our program participants that ensure their success means that we continually assess participants’ 

needs and provide responses in a timely manner. Recently, Greater 

West Town has expanded its focus on networking with other community-based agencies to help provide for fundamental needs such 

as child care, housing, transportation, and food security. 

Greater West Town’s services are in more demand than ever, but 

resources to support our work are shrinking. 

And I think I am out of time. Thank you. 

[The prepared statement of Mr. Leavy follows:] 

37 


INSERT 33363A.027

THE GREATER WEST TOWN COMMUNITY DEVELOPMENT PROJECT 

Testimony before 

The House Ways and Means Subcommittee on Human Resources 

February 15, 2017 

For more information contact: 

William J. Leavy 

Executive Director 

500 N. Sacramento Blvd. 

Chicago, IL 60612 

(312) 432-9595 

Email: wjleavy@gwtp.edu 

Website: www.gwtp.edu 
38 


INSERT 33363A.028

GWTP 12/15/17 Ways & Means Human Resources Subc Testimony-Wll as of 9:30pm, 02.12.17 

Good Morning, 

My name is Bill Leavy, I am the Executive Director and Fatmder of the Greater West Town 

Community Development Project on Cbicago's West side. 

My Agency is honored to have been asked by Chairman Smith and Congressman Davis to testify 

today, to help deepen public understanding of the extent and impact of poverty in urban 

communities, and to share our experience in using community-based job training to combat 

poverty at the individual and community level. We would like to share with you our experience 

that has shown us that intensive, occupational job skills training is a highly effective way to get 

people into quality career track jobs and help them lift themselves out of poverty. 

Linda Thomas, our Director of Client Services, is here with me to help me answer any specific 

questions you may have about the challenges our program participants face. 

Li nda brings over 20 years of direct frontline experience in service delivery tO our discussion. 

0RCANIZATIO;-. HISTORY ANOACCO\IPLISH,\1ENTS 

Greater West Town Community Development Project (GWTP) is a community-based economic 

development initiative dedicated to expanding educational and economic opportunity for the 

low-income, primarily minority community residents of Chicago's Grea1er West Side. GWTP 

achieves this mission by providing comprehensive workforce development and educational 

services through our model Community-Business Partnership strategy that links the employment 

and training needs of neighborhood job seekers to local economic development effortS and area 

businesses' workforce needs. GWTP's array of services include: Occupational Skills Training in 

the high growth industries of Woodworking and Shipping and Receiving, career planning, job 

placement, supportive services, on-the-job training, alternative education, youth mentoring, and 

career development. GWTP served more than 3,800 community residents last program year. 

GWTP's programs are also focused to meet loca l employers' urgent needs for the skilled and 

motivated workers they need, to stay and grow in the area while competing successfully in the 

global marketplace. GWTP's programs help to ensure the long-tenn stability and growth of 

community businesses as a primary source of employment for neighborhood residents. 

1 
39 


INSERT 33363A.029

GWTP 12/15/17 Ways & Means Human Resources Subc Testimony-WJL as of 9:30pm, 02.12.17 

Since its founding in 1989, GWTP has established a consistently high level of performance in a 

broad rangeofpublicly-fundedjob training and education programs serving the needs of the 

economically disadvantaged residents of the community. GWTP's target populations include exoffenders, welfare-eligible single parents, the homeless and near homeless, dislocated workers, 

high school dropouts, and teen parems. Since 1989, more than8,800 low-income community 

residents and dislocated workers have been ttained, provided support services, and placed in 

jobs. GWTP has disttibuted over $1 ,200,000 in federal grants to local businesses to support the 

hiring and training of neighborhood workers. More than 4,400 high school age students have 

received alternative education, job training, job placement, youth mentoring, career planning 

assistance, and dropout prevention services. More than I ,800 graduates oftbe Woodworking and 

Shipping and Receiving Training Programs have been placed in jobs with local companies. 

THE GRIP OF POVERTY ON CHICAGO'S WEST SIDE 

GWTP's targeted community areas of Humboldt Park, Austin, East and West Garfield Park and 

No1th Lawndale have been historically low-income, and now continue to suffer from the longterm consequences of the recent economic downturn, including ongoing and increasing problems 

with poverty, inequality, and barriers to education and opportunity. When the national economy 

contracted, the vulnerable, underprivileged communities, families, and individuals served by 

GWTP were disproportionately adversely affected. The 2009 American Community Survey 

(ACS) found a 20% decrease in median household income in GWTP's service area during the 

recem recession. 

The 2014 US Census Bureau American Community Survey (ACS) results substantiate the severe 

economic depression experienced in our service area and the economic disparities that exist in 

Chicago. In our service area, approximately 40% of residents live in poverty, a rate that's 81% 

bigber than the city-wide average and three-times the national rate. Tbe median income of tbe 

communities we serve is only $26,583, which is 6 1% below the city-wide average, and less than 

half of the national average ($56,516) as reported by the US Census Bureau. The unemployment 

rate is 18.6%, which is approximately 42% higher than the city-wide rate and four times the 

2 
40 


INSERT 33363A.030

GWTP 12/15/17 Ways & Means Human Resources Subc Testimony-WJL as of 9:30pm, 02.12.17 

national average. Only II% of area residents graduated from college, compared to 34% citywide, 

and 39% nationally. 

The economic and educational difficulties experienced by the low-income population that we 

serve are most extreme for African American men. Despite an overall economic recovery in 

recent years, the percentage of unemployed, work-eligible (aged 16-64 years) African American 

men in Chicago is still disproportionately high. In December 2012, the Bureau of Labor 

Statistics' reported that the Lmemployment rate for black men had increased 57%, from 2 1% in 

2009 to over 33% in 201!. The Bureau of Labor Statistics reported in October 2013 that 

unemployment for Black men in Clticago stood at 24.5%, well over twice the rate for Latino men 

(I I .I%); and three times the rate for White men (7.8%). Recent data from the U.S. Census 

Bureau shows that unemployment for all African Americans in Chicago stands at24.2%, nearly 

twice the rate for LatiJlOS (12.8%); and roughly three times the rate for Whites (7.8%) (U.S. 

Census Bureau, 20 I 0-2014 American Community Survey 5-Year Estimates). 

Ex-offender stams also constrains the educational and economic opportunities available to those 

whom we serve. This population faces significant barriers to accessing job training and 

employment. There is a higb concentration of formerly incarcerated individuals in our targeted 

service communities. A 2014 analysis conducted by DePaul University and WMAQ/NBC shows 

that, of the approximately 12,000 fom1er inmates who returned to Chicago in a recent 12-month 

period, 47% returned to communities that we serve. Despite the widespread and persistent 

barriers to employment faced by the formerly incarcerated, our strong employer-partner 

relationships have enabled us 10 succeed in placing over 95% of our ex-offender graduates in 

quality career-track jobs. 

Another major barrier to quality, career-track employment is a lack of educational attainment or 

a high school diploma. Without a high school diploma, the barriers to living-wage employment 

mount exponentially. Conservative estimates based on Chicago Public Schools (CPS) Office of 

Accountability graduation cohort sn1dies suggest that in the past I 0 years, over 140,000 students 

dropped out of CPS high schools without graduating. Neighborhood high schools in Greater 
41 


INSERT 33363A.031

GWTP 12/15/17 Ways & Means Human Resources Sube Testimony - WJlas of 9:30pm, 02.12.17 

West Town Project's service area have reported 4-year dropout rates of up to 50%. The 

economic impacts of dropping out are crippling to GWTP's communities. 

EFFECTIVELY RESPONDING TO COMMUNITY NEEDS 

G WTP strategically responds to issues of poverty, unemployment, and lack of educational 

attainment with job training programs that provide access to higher skilled, career tracked jobs 

that lead out of proverty. GWTP's Occupational Skills Training Program is a proven, highlyeffective model that provides employment opportnnities to high-need populations. The 

curriculwn is desib'lled and operated in collaboration with high-growth industry EmployerPartners' support. GWTP's educational remediation, technical training, and supportive services 

help adults with low basic skills bridge their skills gaps and gain the basic math and reading 

competencies that they need to successfully complete hard-skills technical training and eam 

Occupational Certificates. This enables them to access the higher-skilled job opportunities that 

lead to ecooomjc self-sufficiency and the improvement of the quality of life for their famil ies and 

communities. At the same time, the Program also contributes to the long-term economic vitality 

of Chicago's neighborhoods and businesses by helping local employers hire the skilled workers 

they need to remain and !,>TOW in the area. 

While political leaders often focus attention on the middle class, GWTP has remained committed 

to the historically marginalized people and families with extremely limited access to quality 

educational and economic opportunities. In recent years, during an era of record high 

unemployment, GWTP cominues to successfully place over 85% of high-need participants in 

quality, career-track employment. 

GWTP is an essential pathway of opportunity for the community's lesser-skilled and non-high 

school completers: During the 20 15-20 16 program year, 57% of program participants had neither 

a high school diploma nor had they earned their GED. While overall, program participants made 

an average 2.96 grade levels gain in reading and 2.26 grade levels gain in math; the panicipants 

without aGED or diploma consistently gained more than three grade levels in both reading and 

math. 

4 
42 


INSERT 33363A.032

GWTP 12/15/17 Ways & Means Human Resources SubcTestimony-WJlas of 9:30pm, 02.12.17 

Our Occupational Skills Training program also provides tangible solutions to one of Chicago's 

greatest challenges, the disproportionate resettlement of formerly incarcerated persons in 

already-struggling low-income communities. In the 2015-2016 program year, when 24% of 

GWTP's Occupational Skills Training graduates were ex-offenders, Greater West Town placed 

over 95% of those ex-offender graduates in full-time employment. Regular program follow-up 

analyses have shown that less than 3% ofGWTP program participants have been re-incarcerated 

following graduation, compared to a 47% recidivism rate in lllinois. 

T HE COM"IUNITY-BUSINESS PARTNERSHIP JOB TRAINING STRATEGY 

GWTP's Occupational Training Program increases employment oppornmities for community 

residentS through job-specific skills training in the high-growth sectors of Wood Products and 

Solid Surface Manufacturing (WPSSM) and Shipping and Receiving (SR) in partnership with 

local companies. GWTP's Vocational Training Program meets employers' needs by providing 

trained, dependable and motivated workers to area companies and specialized value-added labor 

force development that companies cannot undertake on their own. Local Manufacturing and 

Shipping and Receiving firms--such as Independent Publishers Group, Closet Works, Albany 

Steel and Brass, Wesling Products, and Troscan--credit GWTP's Program for their 

manufacturing success; others cite it as an important factor in their decisions to remain in the 

Chicago area and expaud operations. Demand for program graduates remains stroog as GWTP 

continually adapts to employers' needs and the new technologies and emerging markets in these 

sectors. Our training programs consistently place 90% of graduates in quality full time jobs. 

Program participants train for a cluster of related positions that require job-specific technical 

skills and offer excellent opportunities for career growth. WPSSM 3Lld SR graduates receive 

industry-recognized Occupational Skills Certificates approved by the Illinois Board of Higher 

Educatiou and recognized nationally by tbe Accrediting Commission of Career Scbools and 

Colleges. SR Program graduates also receive Forklift and OSHA-approved Safety 

Certifications. SR graduates are placed in living-wage, quality career-track positions including: 

Shipping and Receiving Traffic Clerk, Logistic Coordinator, Industrial Tmck and Tractor 

Operator, and Customer Service Representative. WPSSM graduates are placed in well-paying 

5 
43 


INSERT 33363A.033

GWTP 12/15/17 Ways & Means Human Resources Subc Testimony-WJL as of 9:30pm, 02.12.17 

quality career-track positions including: Cabinetmakers/Bench Carpenters, Woodworking 

Machine Setters and Operators, and Computer Controlled Machine Tool Operators. 

GWTP's Occupational Program operates from our "Community Career Training and Economic 

Development Center" at500 N. Sacramento, which opened in the Fall of20 10 and provides 

critical infrastructure for the Pwgram. Trainees get hands-on, practical experience in GWTP's 

34,000 sq ft, fully-equ ipped, high-tech warehousing and manufacn1ring shops, advanced wood 

shop and warehouse training space; and classroom and computer lab space. 

Each sectoral training program provides up to 700 hours of classroom-based and hands-on 

instmction, including comprehensive vocationally-contexttJalized basic skills instruction as well 

as business writing, business math, and computer skills. With input from Employer Steering 

Committees, GWTP has developed rich curricula for both WPSSM and SR. In addition to 

technical and bard-skills training, the Program includes job placement and support and followup services for trainees' long-term career development. All training components are taught inhouse and integrated uno a comprehensive curriculum that also includes Work Maturity Skills. 

GWTP continually upgrades instruction with input from its business partners to ensure industry 

relevance of the curricula and smart investment in cutting-edge technologies and training 

methods. GWTP tailors its curricula to address employer-identified skills gaps and their 

changing workforce needs. When GWTP's employer partners identified the need for a 

standardized assessment of employees' industry-specific knowledge and skills competencies, 

GWTP joined with the Woodwork Career Alliance of North America (WCA) to implement their 

"Woodwork Passport," a national credential program that provides validation for in-shop tool 

operation level proficiencies. When SR employer-partners identified a need for employees 

trained in the emerging warehousing and logistics technology of radio-frequency identification 

(RFTD), GWTP adopted the "ASAP Passport" system due to its use by corporations across the 

nation. Today SR participants receive comprehensive training on the system, including the use of 

the hand-held mobile data collection units, barcode labeling system, data management software, 

RFID tags, and reporting fundamentals. 

6 
44 


INSERT 33363A.034

GWTP 12/15/17 Ways & Means Human Resources Subc Testimony - WJlas of 9:30pm, 02.12.17 

GWTP's Occupational Training Program provides participants who previously faced multiple 

barriers to employment and a weak attachment to the labor force with the job-specific skills that 

employers need, the wrap-around support services to support their job search and workplace 

success, and lifelong learning competencies enabling them to move from job to job on a wellp lanned career path. 

KEYS TO SUCCESS: JOB PLACEMENT, 

SUPPORT SERVICES, LONG-TERM FOLLOW-UP 

Greater West Town provides comprehensive job placement services to all program graduates. 

These placement strategies draw on GWTP's highly successful job placement experience and 

include long-term retention support, post-placement and re-placement services, and career 

development support. To ensure that our graduates succeed in the workplace and maximize their 

chances to become economically self-sufficient, GWTP actively tracks and supports our 

graduates for I 2 months after placement. 

GWTP responds to the specific needs and barriers that low-income, unemployed job seekers 

in our communities face, through robust collaborative working relationships with other 

conununity service agencies and through our internal program design. For example, GWTP 

addresses the needs of ex-offenders and those who did not complete high school by adapting 

its pre-employment preparation module to specifically prepare participants for real-world 

employment cha llenges. GWTP provides them with tools and language for addressing 

employer concerns about their ex-offender status and limited educational backgrounds. ln its 

partnerships and networking with specialized social service agencies, Greater West Town 

finds supporti ve services for ex-offender participants 10 provide participants with additional 

access to legal records and expungement services. 

Tbe commitment 10 support our program participants to ensure their success in completing 

training and being placed in a job means that we continually assess participants' needs as 

they change, and try to provide the most important and timely assistance. So, in light of the 

growing needs of our unemployed disadvantaged participants, G WTP has expanded its focus 

on networking with otber community-based service agencies to help provide resources for 

7 
45 


INSERT 33363A.035

GWTP 12/15/17 Ways & Means Human Resources Sub<: Testimony-WJL as of 9:30pm, 02.12.17 

fundamemal needs such as child care, housing, transportation, health care and food security. 

Given the rising rate ofhomelessness among our program participants in recent years and 

their increasing need for stable housing, GWTP has expanded our partnerships and 

coordination with service providers focusing on homelessness, and with the City of 

Chicago's Department of Family Support Services. GWTP is increasingly working with 

these partners to identify short-tern1, mid- and long-tenn housing alternatives for our clients. 

To address our participants' healthcare challenges, GWTP has adopted a pro-active stance to 

help provide health and well ness education for trainees. ln 2015, GWTP collaborated with 

the Chicago Citywide Literacy Coalition, Loyola University-Chicago, and our largest 

community foundation, the Chicago Commw1ity Trust, to carry out an empowennent-based 

"Heald1 Literacy" Project The project helped to educate our workforce program participants 

about preventative healthcare, wellness strategies, and healthy choices leading to prevention 

of health problems. 

The follow ing stories illusrrate the effectiveness of our job training programs, helping highly 

barriered job seekers develop skills, find employment and succeed on the job. Alfredo Moreno, 

a graduate of the Shipping and Receiving Training Program (SRTP), is a single parent of two 

young children. Alfredo, ex-offender on parole, is also a basic skills deficient non-native English 

speaker with only a gramJllar school education. His work history bad been limited to short stints 

of temporary employment through staffing agencies and also seasonal work as a mover. He bad 

no real j ob prospects in sight to support his children. He was looking for training that would 

allow him to acquire the skill sets needed to obtain career path employment. Upon entering the 

program be demonstrated the hard work, enthusiasm, and willingness to succeed needed in 

today's job market. Working with GWTP's job placement specialist he was able to interview at a 

local manufacturer of food ingredients. He was placed in employment less than two weeks after 

completing training. He 's has been employed for over eight months, and is currently making 

$ 14 per hour. Alfredo also made a dramatic improvement in his basic skills, raising his math and 

reading over three grade levels each. 

Jason Adams, a graduate of the Woodworkers Training Program is a single father with two 

children. For many years he had maintained a transient Lifestyle, working for brief periods in 

New York and Kentucky before returning to Chicago over three years ago. Short tenn jobs as a 

8 
46 


INSERT 33363A.036

GWTP 12/15/17 Ways & Means Human Resources Subc Testimony - WJL as of 9:30pm, 02.12.17 

laborer and a camp counselor ended abruptly, and he had been unemployed for over two years 

when he was accepted into the WWTP. GWTP provided him with the technical skills he 

needed to get a career track job. Working with GWTP'sjob placement specialist he was 

iJlterviewed at a local woodworking manufacturer of high-end restauram furn iture. He 

completed training on a Thursday and began work the following Monday at the company 

where he has been employed for over seven months earning $ 12 per hour. 

Jean Dorey, a single parent of a seven year old, exemplifies how detennination with the right 

suppons is a proven recipe for employment success. Despite diligent job searches, a decades old 

felony conviction proved to be a significant barrier to fi nding stable, long-tenn employment. 

After years of shon-terrn assignments with multiple companies, Jean was laid off before 

enrolling in GWTP's Wood Products Manufacturing Training Program. During training, Jean 

worked hard to learn the skills of fine furniture making. Jean found his calling on the woodsbop 

floor. With goal-focused determination, and with the ongoing support of his teachers and case 

manager, Jean graduated and was hired by Great Lakes Architectural Mill works, a shop 

specializing in high-end furniture, located in Chicago's Kinzie Industrial Corridor. Now Jean is 

earning $ 15.50 an hour and worki ng every day with a high degree of job satisfaction. 

CHALLENGES TO MEETING THE WORKFORCE DEVELOPMENT A:-.ID 

JOB TRAINING NEEDS OF OUR COMMUNITIES 

Greater West Town's services are in greater demand than ever, but resources to support our 

work are shrinking, rather than increasing. GWTP faces serious challenges other than 

funding levels, some of which are real-life symptoms of persistent and chronic poverty in our 

communities. Some of the challenges arise from a long history of inadequate public and 

private investment in our communities. And other challenges arise from well-meaning but 

flawed public policies, and the need for determined and consistent commitments by 

government at all levels to alleviate poverty. Today we are understandably concerned about 

the setbacks of the middle class, so elected officials' focus and public statements tend to 

emphasize helping those of moderate income. Sadly, as a nation, we are not as focused on 

fighting poverty for the neediest people, fami lies, and communities in our country. We need 

9 
47 


INSERT 33363A.037

GWTP 12/15/17 Ways & Means Human Resouroes Subc Testimony - WJl as of 9:30pm, 02.12.17 

to work together to develop a thoughtful, strategic robust strategy and policy to lift our most 

vulnerable people out of poverty, and build support for the ftmding commitments to support 

such a policy. Unless we can come together to do those thi ngs, we are nibbling around the 

edges of the problem of multi-generational poverty and not facing up to alleviating tbe costly 

and far-reaching consequences it has for our communities and our nation. 

The population from which GWTP recruits is participants has persistent, and in some cases, 

worsening challenges and barriers to employment and training. Since the Great Recession, 

we have documented the following: 

A troubling upward ttend in the number of program applicants and participants 

experiencing homelessness. In 2014-2015, more than 22% ofGWTP vocational program 

participants experienced hornelessness during tra ining, double the number of participants 

in previous years. In Chicago's communities of color - as in other communities across 

America - the negative effects of the mortgage foreclosure crisis are still reverberating 

for families who lost their homes and the stability that home ownership or stable 

landlords provide. 

• An increase in the percentage of our program applicants and participants who haven't 

completed their secondary education. ln the past 2 years, that percentage has grown fTom 

less than a third, to 57% of all our Occupational Training Program participants now lack 

a high school diploma or a GED. 

• As the economy has gradually improved, those with the greatest need for skills training 

and career path employment opportunities are being left behind. Higher-skilled, more 

job-ready residents have been able to re-enter the workforce. But those with the greatest 

barriers to employment remain marginalized. While our participants have become even 

more challenged and high-risk, federal and state resources to support in-depth, industry 

relevant ski Us training and intensive supportive services have dwindled. 

• Inadequate access to affordable health care continues to be a serious issue for the 

populations that GWTP serves. These communities suffer from high rates of chronic, 

preventable diseases. These health-related issues often negatively impact participants' 

ability to complete occupational training, pass initial pre-employment health screenings 

by prospective employers, or to be consistent employees once hired. 

10 
48 


INSERT 33363A.038

GWTP 12/15/17 Ways & Means Human Resources Subc Testimony-WJL as of9:30 pm, 02.12.17 

On the policy and programmatic level: Greater West Town has been engaged in workforce 

development and administered federal, state, and local workforce development grants over three 

decades. 

Greater West Town bas provided effective job training and placement services under a number 

of federal workforce development programs: The Job Training Partnership Act (JTPA), the 

Workforce Investtneot Act (WIA), Welfare-to-Work, the American Recovery & Reinvestment 

Act (ARRA), the Social Service Block Grant, and the Workforce Innovation and Opportunity 

Act (WIOA). Each of these federal laws, intended by Congress to address the pressing national 

concerns about poverty, unemployment and workforce development, have changed the "rules of 

the game". However, with each new authorization, allowable "unit costs''-what can be spent to 

train and place people in jobs - have become increasingly limited and unsupportive of the proven 

successful strategies for helping highly- barriered unemployed people get on a pathway out of 

poverty. There appears to be a trend of less and less emphasis on training and placing the most 

disadvantaged job seekers, and less and less support for the basic skills remediation and intensive 

support services that poor people need to succeed long-term in Occupational Skills Training and 

job retention in career path employment. 

We all want to lift our fellow Americans out of poverty. But sadly, our laws and regulations have 

tended to create a "Triage" approach that leaves millions of Americans behind - in both our 

urban and rural communities. The "Triage" approach focuses on investing in those deemed 

mostly likely succeed. 

Meanwhile, we are not investing enough in people who are regarded as high risk, the very people 

with the greatest likelihood of being mired in multi-generational poverry precisely because they 

face the toughest challenges and barriers to joining the workforce, building a career, and earning 

a family-supporting wage. Let's work together to strike a better and more fair balance in our 

workforce development policies and programs. Greater West Town has shown that there are 

effective, common-sense, and community building strategies tO train and place people with great 

challenges into career pathway employment, by pannering with the very businesses in our 

11 
49 


INSERT 33363A.039

GWTP 12/15/17 Ways & Means Human Resources Subc Testimony-WJL as of 9:30pm, 02.12.17 

communities who need a skilled, well-trained, and motivated workforce. We hope you will 

support our efforts. 

12 
50 

f 


INSERT 33363A.040

Committee on Ways and Means 

Witness Disclosure Requirement - •Truth in Testimony" 

Required by House Rule XI, Clause 2(g) 

Your Name: William J. Leavy- Greater West Town Community Development Project 

I. Arc you testifying on behalf of a Federal, State, or Local Government entity? Yes 

a. Name of entity(ics). 0 

b. Briefly describe the capacity in which you represent this entity. 

2. Arc you testifying on behalf of any non-governmental cntity(ics)? Yes 

a. Name of cntity(ics). ~ 

Greater West Town Community Development Project 

b. Briefly describe the capacity in which you represent this entity. 

I am the Executive Director, Founder and Board Vice-President 

3. Please list any Federal grants or contracts (including subgrants or subcontractS) which you 

No 

~ 

No 

0 

have received during tbe current fiscal year or either of the two previous fiscal years that are 

related to the subject matter of the hc.1ring: See Attachment A 

4. Please list any grants, contracts, or payments originating from foreign governments which you have 

received during the current calendar year or either of the two previous calendar years that arc related to 

the subject mauer of the hearing: None 

5. Please list any offices or elected positions you hold. None 

6. Docs the cntity(ics) you represent, other than yourself, have parent organizations, 

subsidiaries, or pannerships you arc not representing? Yes No 

0 ~ 

7. Please list any Federal grants or contracts (including subgrants or subcontracts) which were received 

by 1c entity(ics) you represent during the current fiscal year or either of the two previous fiscal years, 

which exceed I 0 pcrccm of cntity(ics) revenues in the year received. Include the source and amount of 

each grant or contract. Attach a second page if necessary. 

Over the past 3 years, there has been only one gmnt that exceetletl the 10% threshold, which is the 

Reinteg ration of £~-Offenders G'rant in fiscal year 2015. Please see Attachme/11 A 

8. Please list any &rrants, contracts, or payments originating from forcibrn governments which were 

received by the entity(ies) you represent during the current fiscal year or either of the two previous 

fiscal 

years related to the subject matter of the bearing. Include the source and amount of each grant or 

contract. Attach a second page if necessary. None 
51 

Chairman SMITH OF NEBRASKA. All right. Thank you, Mr. 

Leavy. 

Ms. Slater. 

STATEMENT OF TAMARA SLATER, CHIEF EXECUTIVE 

OFFICER, GOODWILL INDUSTRIES OF GREATER NEBRASKA 

Ms. SLATER. Good morning. Thank you for the invitation to testify on the challenges and opportunities of serving people in rural 

Nebraska impacted by poverty. 

My name is Tammy Slater, and I live in Doniphan, Nebraska, a 

town of 850-plus people. I am the chief executive officer of Goodwill 

Industries of Greater Nebraska, located in the third-largest city of 

Nebraska, Grand Island, with a population of 50,000. We are 1 of 

157 autonomous Goodwill organizations in the United States and 

1 of 4 Goodwills serving Nebraska. Last year, all Goodwills collectively connected 312,000 people with employment in the United 

States and Canada. 

Each local Goodwill organization has an assigned territory that 

provides services with our geographic area in response to the community’s needs. Goodwill Industries of Greater Nebraska services 

promote independence and access to the community, help people 

become successfully employed, support goals of wellness and recovery, facilitate group classes to teach responsible behavior, and provide safe and affordable housing. 

Our Goodwill mission is to serve Nebraskans experiencing intellectual or developmental disabilities, severe and persistent mental 

illness, substance abuse disorder, behavioral health challenges, and 

acquired brain injury. Each year, we serve more than 1,600 people 

in central and western Nebraska with an array of services. We help 

people earn jobs and advance their careers with specialized services 

to meet their needs. 

Our service territory, as Chairman Smith referenced, includes 55 

counties and is about 54,000 square miles. Of the counties we 

serve, 30 percent have a population of 3,000 or fewer. 

The challenges of poverty, as we all know, from lack of stable 

housing, adequate nutrition, effective health care, reliable transportation, quality child care, appropriate education, and job training, are common to both rural and urban areas. How we respond 

to these challenges may be different because we do have sparse 

population, limited local resources, and scarce employment opportunities. 

Education and job opportunities are scarce, as I said, for people 

in rural Nebraska, which is a major roadblock to lifting people out 

of poverty. In 2015, rural employment was still below pre-recession 

rates, and earnings are generally lower in rural areas than those 

in urban. 

Many of the individuals that we serve require comprehensive 

services. So partnerships with State and local agencies are important to address the complex needs of people living in rural Nebraska. Community partnerships, such as our public schools, 

United Ways, areas churches, local Salvation Army posts, help us 

to build a network in order to help. Government partners in health 

and human services, like corrections, voc rehab, and Social SecuVerDate Sep 11 2014 08:23 Mar 07, 2019 Jkt 033363 PO 00000 Frm 00056 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\33363.XXX 33363
52 

rity, among others, help people living in rural communities get and 

keep their life on track. 

Though partnerships are crucial to success, it is tougher in rural 

areas because there are fewer community organizations, and we 

struggle to continue services due to the long distance between communities, which are expensive to maintain. 

We at Goodwill are grateful for our social enterprise that create 

jobs and help fund services. Our team members work to understand our neighbors in the communities we serve and how we 

equip them to overcome poverty. 

One of those neighbors is Peter. When Peter was referred from 

Nebraska Vocational Rehab to Goodwill, which that is where we 

get our referrals, he was unemployed, he was diagnosed with bipolar disorder, adjustment disorder with anxiety and depression, a 

narcissistic personality disorder, and receiving Social Security. 

Peter was also on probation for a felony, and his employment retention was beyond poor. 

Peter was able to access an array of services from our Goodwill, 

including comprehensive benefits planning, behavioral health day 

services, and our behavioral health employment program. 

Together with Peter, the team working to support him, including 

Goodwill staff, the local probation, his counselor at Nebraska VR, 

and his family members, he has had a great result. He has been 

employed for over 1 year, continues to work with our behavioral 

health and benefits planning. Peter is just one example of the complexity of those we serve every day. 

I thank you for this opportunity to share our experience. We appreciate the subcommittee’s interest in hearing from the field and 

are very happy to serve as a resource. Thank you. 

[The prepared statement of Ms. Slater follows:] 

53 


INSERT 33363A.041

Goodwill Industries of Greater Nebraska, Inc. 

Written testimony of 

Tamara L. Slater 

Chief Executive Officer 

Goodwill Industries of Greater Nebraska, Inc. 

1804 S. Eddy St., Grand Island, Nebraska 68802 

Prepared for 

Committee on Ways and Means 

U.S. House of Representatives 

Washington, DC 20515 

Subcommittee on Human Resources 

Hearing on 

The Geography of Poverty 

February 15, 2017 
54 


INSERT 33363A.042

Introduction 

Good Morning to each of you. 

Thank you for the invitation to testify on the challenges and opportunities of serving people 

who live in rural communities impacted by poverty. My name is Tammy Slater, and I live in 

Doniphan, Nebraska, a town of 8SO·plus people. I am the Chief Executive Officer of Goodwill 

Industries of Greater Nebraska Inc., located in the third largest city of Nebraska, Grand Island, 

with a population of 50,000. We are one of 163 autonomous Goodwill• organizations in the 

United States and Canada and one of four serving the state of Nebraska. We are a member of 

Goodwill Industries International, which provides support for each autonomous local Goodwill 

organization. Last year, local Goodwill organizations connected 312,000 people with 

employment in the United States and Canada. Altogether, local Goodwill organizations 

provided career and financial services to more than 37 million people last year, including 2 

million people who engaged face·to·face with Goodwill team members and 35 million who 

used Goodwill mobile and online learning to improve their skills or access virtual coaching and 

counseling services. 

Local Goodwill organizations have an assigned territory, and we focus services within our 

geographic area in response to our communities' needs. Goodwill Industries of Greater 

Nebraska's services promote independence and access to the community, help people become 

successfully employed, support goals of wellness and recovery, facilitate group classes to teach 

responsible behavior and provide safe and affordable housing. Many people benefit from 

multiple programs. Our Goodwill serves Nebraskans experiencing intellectual or developmental 

disabilities, severe and persistent mental illnesses, substance use disorders, behavioral health 

challenges or acquired brain injuries. Each year, we help more than 1,600 people in central and 

western Nebraska earn jobs and advance their careers by providing specialized services to meet 

their needs. This includes helping people stabilize their housing with services for people 

transitioning from homelessness. Each person benefits from case management and an 

individualized plan for the services they need to achieve success. 
55 


INSERT 33363A.043

Our service t erritory includes individuals and families across an area that encompasses 55 

count ies and is around 54,000 square miles. To give you an idea of what this means, we have 

what we call the tri-cit ies in our territory- our home community of Grand Island with a 

population of about 50,000 people; t he city of Kearney with about 30,000; and Hastings with 

about 25,000. Almost 90 percent of the cities in Nebraska have fewer than 3,000 people, a 

characteristic that is common in our area of the country. So, when we refer to a city, we're not 

talking about anything like Chicago or Washington, D.C. Many of the 55 counties we serve have 

only 100 or so resident s. 

Challenges to serving rural residents who live in poverty 

The challenges of poverty- stable housing, adequate nutrition, effective healthcare, reliable 

transportation, quality childcare, appropriate education and job training- are common to both 

rural and urban areas. How we respond to challenges in rural areas may differ due t o our sparse 

population, limited local resources and scarce employment opportunities. 

Distance and Transportation 

In the past decade or so, rural areas have become enticing for families struggling t o make ends 

meet; it is enticing yet deceptive to move to a lower-cost area. Now t hese families have 

relocated to rural areas with few employment options, increased distance to medical care and 

no public transportation. As the cost of living has risen in our Tri-City areas, rural communities 

have drawn in struggling families but have not provided a more stable environment t hat would 

allow these families to move out of poverty towards self-sufficiency. Service providers like our 

Goodwill may never have a location in a county with 1,000 people or less. Most residents are 

probably going to a "larger community"- a suburban or urban area-to access basic necessities 

like shopping, job training and medical care. Though t here are far fewer options, opportunities 

and services available, Broken Bow, Nebraska is considered an urban area by census definition. 

With a population of about 3,500, Broken Bow has much more in common with rural areas in 

terms of the challenges residents have getting what they need to get ahead and t he ways we 

connect to serve residents and the community. Even helping residents become aware of 
56 


INSERT 33363A.044

services presents a challenge when there is not a community center where information can be 

shared effectively. 

In our area, people often live far apart-sometimes more than twenty miles between houses. 

Distance, limited or unreliable transportation and the unpredictable Nebraska winter often 

make getting to work, training or services impossible. Goodwill of Greater Nebraska has service 

locations in seven cities and towns. We reach out to individuals and families in surrounding 

communities and provide transportation for some rural residents. Though connecting people 

who live 20 or 30 miles from Goodwill locations with services is both expensive and challenging, 

we believe it is critical to serve these less-populated areas. We may be their only opportunity to 

stay connected to people and resources in the community. The lack of job opportunities in rural 

Nebraska is more than a speed bump; it is a roadblock to lifting people out of poverty. 

Lack of Education 

Education and job opportunities are scarce for people in rural areas. In 2015, rural employment 

was still below the pre-recession rates, and earnings are generally lower in rural areas than 

those in urban areas (American Community Survey, http://www.census.gov/topics/incomepoverty/poverty/guidance/data·sources/acs-vs-cps.html). In our territory, one in ten adults 

doesn't have a high school diploma, and three in ten has only a high school diploma. Another 

one in four has only some college with no degree. So- my neighbor's prospects are not good, 

and they aren't getting better fast. The growth rate of young adults (age 25-34) with bachelor's 

degrees is slower in rural areas than in urban areas (USDA, Economic Research Service using 

data from U.S. Census Bureau's 2000 Census and 2013 American Community Survey, 

https://www.ers.usda.gov/topics/rural-economy·population/employment·education/ruraleducation/). Our state, like many, relies on one or two industries to employ those who manage 

to complete a degree. Although financial services jobs are numerous in Nebraska's larger urban 

areas, most of the state's employment in other areas is connected to industries that are slowing 

down, like agriculture. 
57 


INSERT 33363A.045

Funding Constraints 

We want to serve everyone in need in our communities, especially those with high needs. 

While poverty is painful for all, we know African American, Hispanic and American Indian 

communities in our area have two to four t imes higher rates of poverty than caucasians. 

Many of the families we serve have complex needs and require comprehensive services to help 

them stabilize, keep a place to live, be safe and have what they need. Goodwill cannot do our 

work alone. Partnerships with state and local agencies are important to address the complex 

needs of people living in rural Nebraska; community partners such as public schools, United 

Way, area churches and Salvation Army help us build a support network. Partnerships with the 

Nebraska Depart ment of Healt h and Human Services, Administrative Office of Probation, 

Nebraska Vocational Rehabilitation, Region II Human Services, Region 3 Behavioral Health 

Services and the Social Security Administration help people living in rural communities get and 

keep their lives on track. 

The reality is t hat funding and reimbursement for services has changed. Administrative 

requirements like reporting, documentation and bi lling are more complex today than in the 

past. Being a good steward of government funding is essential to ensuring people who need 

services get them in a professional, compassionate and meaningful way. 

Though partnerships are crucial to success, it is tough in rural areas because there are not many 

community organizations; those of us who work in social service organizations often struggle to 

sust ain funding and continue services due to the long distances between communities. We at 

Goodwill are grateful for our social enterprise model that creates jobs and helps fund the 

services we provide, especially in a time when federal and state budget s are tight. 

Economic Development 

Also, we need economic development to creat e more jobs in our communities. We rural 

Nebraskans are hard-working people; we want good work that helps us support our families 

wit h a paycheck. My own husband was part of a shut down for five weeks at t he end of this 

past year because of a business slow down; fortunately I have a job, so we are okay. Not all my 
58 


INSERT 33363A.046

neighbors are as fortunate. 

Self-Reliant Communities 

One of the most difficult barriers to overcome is the stigma of seeking help. Rural Nebraskans, 

like many Americans, regardless of their age, race, ethnicity or family situation, are proud of 

their work ethic and have a strong sense of self-reliance. Whether there is a need for mental 

health services or someone lost a job and needs a new career path, asking for help somehow 

feels shameful. Our strategy as an organization is to be visible, available and aware of what our 

neighbors are facing. Neighbor-to-neighbor word-of-mouth "advertising" is often the best way 

to connect people with our services to help them move toward self-sufficiency. 

Solutions 

Our Goodwill is committed to connecting individuals and families in our rural communities with 

opportunities, and we are not the only Goodwill doing this. local Goodwill organizations across 

the country share ideas, innovations, effective practices and lessons learned so we can all 

better serve people who live in rural areas. Most of the 157 autonomous local Goodwill 

organizations in all SO states include rural areas. In 2014, Goodwill Industries of Southwest 

Florida, for example, launched an ADA-compliant modified Winnebago Adventurer recreational 

vehicle that travels through rural areas twice per week, partnering with local organizations so 

people can have a place close to home for financial literacy services, health screenings, 

employment services and help with education financial aid (FAFSA) applications, access 

computer workstations, internet access and professional support. The Mobile Job-Link includes 

partners from health, financial and education organizations 

(https://www.goodwillswfl.org/mobil joblink/). 

In Peoria, Illinois, Goodwill Industries of Central illinois established computer labs in two rural 

areas within their territory when they learned from employers that the most common skills 

missing from local job seekers were Microsoft Word and Excel fluency along with other 

computer skills. The labs are open full time; at certain times of day, anyone is welcome to use 

the computers to practice skills and work on tasks related to job searching with the assistance 
59 


INSERT 33363A.047

of Goodwill staff. The lab also offers a regularly scheduled computer skills class in several-week 

sessions. Attendees have shown an increase in skills of greater than 50% after completion and 

have earned jobs with 16 area employers. Particularly in rural areas, employees spend a 

significant amount of money just to get to work; a 20· or 30-mile commute to and from work is 

a reality, and without public transportation can be onerous. The employer relationship is vital in 

these areas. After reaching out to job seekers and employers, CEO Don Johnson of Goodwill of 

Central Illinois offers these key takeaways: 

• While the initial goal may be employment, it is just as important to equip people with 

the skills that will keep them employed and allow them to move up the career ladder. 

Therefore, Goodwill must provide job readiness skills training in addition to technical 

skills. 

• Very few organizations offer workforce development programs in rural areas since it is 

difficult for people to find good-paying jobs without the skills employers need, which is 

why it is crucial to create relationships on both sides- with job seekers and employersso that we can educate people in the skills employers need. 

The most effective way we can meet the needs of our rural neighbors is through partnerships 

that include businesses, non profits, community-based organizations, places of faith and state 

and local agencies. When we connect with local organizations, we learn to appreciate the 

community's assets, earn community trust, gain an understanding of people's needs and help 

neighbors plan and implement education and career paths that work. In Nebraska's combined 

state plan to implement the Workforce Innovation and Opportunity Act (WIOA), Temporary 

Assistance for Needy Families (TANF) and workforce agencies partner to help people find jobs 

and enhance their career options. When productive education and skill-building opportunities 

that lead to career advancement can be used toward meeting TANF requirements, these 

relationships help ensure that people with barriers to work can connect with the state 

workforce development system and organizations like Goodwill that equip resident s with 

career guidance, education, training and skills to help them earn jobs and advance careers. 
60 


INSERT 33363A.048

To establish relevant services in rural (or urban or suburban) communities, each autonomous 

local Goodwill organization must understand the community's assets and needs and how the 

Goodwill can financially support service delivery. Having Goodwill in a community creates a 

ripple effect and contributes to economic stability and community development when services 

are sustainable. We must have well-trained team members who are familiar with both the 

workforce development syst em and rural communities, people in whom both our organization 

and community members can have confidence. We are hiring someone who can provide a 

service, whether that's helping people living with a severe or persistent mental illness 

or subst ance use disorder recover, supporting a person living with an int ellectual disability learn 

daily activities or develop relationships with employers, or supporting a job seeker with a 

felony. Whatever the specific job task, it is necessary for the employee to be able to navigate an 

information system. When employees aren't able to both perform their human or social service 

role and navigate the information system, it can be problematic. To combat this, we invest in 

training and education to ready our staff. 

Our team members work to understand our neighbors in the communities we serve and how 

we can equip them to overcome poverty. One of those neighbors is Peter. When Peter was 

referred from Nebraska Vocational Rehabilitation to Goodwill, he faced a number of barriers, 

and his circumstances were complex. He was unemployed and receiving Social Security benefits 

after being diagnosed with bi-polar disorder, adjustment disorder with anxiety and depression 

and narcissistic personality disorder. While he was enrolled in Central Community College, he 

was failing; he did not understand or comprehend the curriculum in spite of receiving support 

from tutors. His special education counselor encouraged him to seek additional help and return 

to school in the future. Pet er was also on probation for felony assault on an officer, and his 

longest employment retention was only two months. It is easy to understand why Peter was 

pessimistic about his future. Thankfully, Peter was able to access an array of services from 

Goodwill such as: 

Comprehensive benefits planning-helping Peter understand his social security 

benefits and get his Medicaid reinstated. Health insurance is very important to 
61 


INSERT 33363A.049

maintaining both physical and mental health. Our benefits coordinator coordinated with 

the Social Security Administration on behalf on Peter when wages were earned. 

Behavioral health day services - programming to assist Peter to learn and understand 

his mental health diagnosis, communicate, problem solve, manage triggers and stress, 

relate to others and make friends, increase confidence and recognize the strengths, 

talents and gifts he can offer to the world around him. 

Behavioral health employment program - supporting Peter throughout the job search 

and job securement process, applications, interviewing, advocacy, clothing, budgeting 

and on-the-job supports. 

These team meetings involved Goodwill employees from our Behavioral Health Services and 

Employment and Career Services, the local probation office, the special education counselor at 

Central Community College, Nebraska VR and Peter's family members. This team worked 

together to support Peter with great results. Peter has been employed for over a year. He 

continues to work with Goodwill's Behavioral Health Employment Program and Benefits 

Planning Program and successfully completed probation. While he decided to not enroll in 

college at this time, he has made tremendous progress and continues to work successfully. 

Conclusion 

Serving rural residents impacted by poverty is an opportunity and a chal lenge. While many of 

the challenges are similar for urban and rural areas facing poverty, the solutions can be 

significantly different. Autonomous local Goodwill organizations have found success when we 

identify community assets, evaluate community needs and customize solutions accordingly. 

Skilled team members with partner coalitions including local, state and community-based 

organizations and agencies use these community asset mapping and needs assessments to 

focus on essential actions that can help reduce poverty in Nebraska and other rural areas across 

the country. And, in order to successfully move people out of poverty, we need more people 

equipped with the necessary skills and more job opportunities. 
62 


INSERT 33363A.050

Thank you for the opportunity to share our experiences in the vast rural expanses of Nebraska. 

We appreciate the Subcommittee's interest in hearing from the field and are happy to serve as 

a resource as we commit together to providing services that lift individuals and families who 

live in rural areas out of poverty. 
63 


INSERT 33363A.051

Com millet> on Ways and !\leans 

Witness Disclosure Requirement - ··TrUih in Testimony .. 

Required by House Rule XI. Clause 2(g) 

Your Name: Tamara L. Slater 

I. Are you testifying on behalf of a Federal, State, or Local Government entity? Yes No 

a. Name of entit)(ies). 0 X 

0 

b. Briefly describe the capacity in which you represent this entity. 

2. Are you testifying on behalf of any non-governmental entity(ies)? Yes No 

a. Name of entity(ies). X 0 

Goodwill Industries of Greater NE .. Inc 0 

b. Briefly describe the capacity in which you represent this entity. 

Chief Executive Officer 

3. Please list any Federal grants or contracts (including subgrants or subcontracts) which you have 

received during the current fiscal year or either of the l'\'0 previous fiscal years that arc related to the 

subject manerofthe hearing: 

Attached 

4. Please list any grants. contracts. or payments originating from foreign governments which you have 

received during the current calendar )Car or either of the two previous calendar years that are related to 

the subject matter of the hearing: 

NONE 

5. Please list any offices or elected positions you hold. 

NONE 

6. Does the entity(ies) you represent. other than yourself, have parent organizations. 

subsidiaries, or partnerships you are not representing? Yes No 

Goodwill Industries International. Lnc. A 0 

7. Please list any Federal grants or contracts (including subgrants or subcontracts) which "ere received 

by the entity(ies) you represent during the current fiscal year or either of the l'\VO previous fiscal years. 

which exceed 10 percent ofentity(ies) revenues in the year received. Include the source and amount of 

each grant or contract. Attach a second page if necessary. 

Attached 

8. Please list any grants. contracts. or pa)lllCntS originating from foreign govemments which "ere 

received by the entity(ies) you represent during the current fiscal year or either of the t"O previous fiscal 

)ears related to the subject matter of the hearing. Include the source and amount of each grant or 

contract. Attach a second page ifnecessaf). NONE 
f 


INSERT 33363A.052

udit and Major Program Determination 

Wori<.sheet 

Direct Federal Funds 

 of Agency or 

~'''"''" --..-.. ...... -~·-· ' '""' ,, ...... ""'"'' ' ,_,, ...... ,,,_ ............. , ,.. ......... _ -···--··"'- Slodc Grants for Cornrru-oty Mental 

HHS 93.958 HeiiiUl SetviCl!S 

~3 $ 89,843 

Projec1 for AssistanCe in transi:lon for 

HHS 93.15 Homelessness Region 3 $ 11333 

Rural Health care seMces Outreach, 

HHS 93.912 rural Health Netowrlc Development and Small Health care provider QJallty 

I I Program ReQion3 .$ 1163 

HUO 1<4

Supported Housing for Persors w.th 

--~~~.LL-----~1~?9 .181 OlsabllttJeS - Secbon 811 

--~ GNIH ~-------ii~~ 

nt ol Transoortation Section 5310- Proiect NOOR $ 39760 

USDA 10.558 Olild and AdiJit ca.-e Food program ............. -... -... ------- _L_ ______ ~2.~2. 

Cornrnodl!les ! $ 2,425 

Subcontract awards of Federal and State 

D

ollars 

ational Rehab $ 599 609 

OHHS $ <4 030 241 

Region 3 $ 96<4 264 

Region 2 $ 260045 

Jrity Admirnstration I s 19 687 

3( All Foods $ 6,327,8ll 
65 

Chairman SMITH OF NEBRASKA. Thank you, Ms. Slater. 

Thank you very much to all of our witnesses, again, for sharing 

your expertise and this perspective that I hope we can all share. 

And we are going to go down the line here with the question-andanswer and just describe our districts a little bit. 

Obviously, I mentioned earlier that, you know, we have rural 

parts of America and remote parts. And, obviously, if someone has 

a commute in the city for various reasons, there can be significant 

commutes in rural and remote America as well. Sometimes I describe parts of my district in terms of the distance from a Walmart, 

maybe even a McDonald’s, and it runs in the hours. And so it can 

be very different. 

And yet, when it boils down to it, many of the needs are similar 

to even that of the inner city. And, of course, sometimes the commute times of city life would have something that no one in rural 

America would want to tolerate. But I think that hopefully we will 

see programs, though, with flexibility and the intent to help people 

in a very authentic way. 

But, Ms. Slater, again, thanks for being here and certainly describing the district and your work and sharing some of the stories 

that you did and certainly some of the clients you serve. And it can 

be obviously challenging to address poverty and the economic needs 

of the many communities across our district because of distances 

even from organizations like yours, even though you are pretty well 

spread out across the district. 

Although our unemployment rate is lower and high school graduation is higher than in many States, I know there are still many 

people struggling to find work and make ends meet. I especially appreciate the story you tell about Peter in your testimony and how, 

by coordinating services and helping him set goals, he has been 

able to overcome some of the difficulties he has faced and now has 

been employed for over a year. 

At the Federal level, we are thinking about ways to provide more 

flexibility, coupled with strong accountability, to make sure that 

your organization and those like it can customize services and benefits so you can help more people like Peter succeed in the workforce. 

As we think about our efforts, what should we make sure you are 

able to do or do more of for you to be successful as an organization? 

What are some of the key factors in what you do which helped 

Peter be successful, find a job, and stay employed? 

Ms. Slater. 

Ms. SLATER. Chairman Smith, when I think about that question, the most important thing is it is not just one service. When 

I talked about the variety of services that we offer at Goodwill, getting a job, yes, is the main focus because we all know that a job 

gives us purpose in life, but it is the whole package. 

Again, someone has to, first of all, be able to understand and 

know what their barriers are and how can we help them. If I think 

about Peter, with a mental illness, again, being able to have people 

understand that illness and how do they now learn to cope with 

that disease, whatever that may be. 

Then, once they understand that, what also is important is giving them structure to their life. Because, again, now that they have 

66 

this barrier or a mental illness to deal with, the structure of how 

to cope with that, how important medication is. 

But then, also, how do we then teach them possibly new skills 

or for them to understand what their skill set or abilities are, and 

how do we help them understand that to then match them with a 

proper job. 

Then the other challenge becomes partnering with employers, because we all know, you hear it across the United States every day, 

it is tough to find employees. But, again, if we are then bringing 

someone forward as a potential employee, what is their openness 

to work with someone that may have some special needs or a mental illness or other barriers that make it possibly more difficult for 

them? 

It has to be collaboration. I hope that was strong in my message. 

It is not just one of any of us. It is all of us coming together and 

making sure we understand what each of us bring to the table. 

So, Chairman Smith, the first answer would be flexibility to be 

able to reach out to the proper services that will meet that individual’s needs. 

Chairman SMITH OF NEBRASKA. Okay. Thank you. 

Ms. Kneebone, would you be able to reflect on this at all, given 

your insight? 

Ms. KNEEBONE. Just to echo what Ms. Slater said, with the 

flexibility being key, especially as you see some of the more effective models being ones that are able to bring multiple programs together, multiple partners to the table. That also often brings with 

it a big administrative burden, a lot of red tape, that puts a strain 

on the providers and takes resources from the actual mission. 

So I think the ability to allow for more experimentation and figure out how, with accountability, we can allow for more flexible 

strategies that work over different kinds of communities, that 

would be key. 

Chairman SMITH OF NEBRASKA. All right, and very well. 

Thank you. 

I now recognize our distinguished ranking member, Mr. Davis, 

for questions he might have. 

Mr. DAVIS. Thank you very much, Mr. Chairman. 

And I thank all of you who have come to share with us this 

morning. 

Each one of you talked about a lack of local resources for addressing some of the key challenges of poverty—skill-building, supports like child care, health care, transportation, and housing. 

Could targeted Federal investment make a real difference in the 

kind of communities you have studied? 

Perhaps, Ms. Slater, I will start with you. 

Ms. SLATER. Yes, I believe so, because, again, the Federal support directs how it trickles down to the State and the region. So, 

again, it is back to the flexibility and really acknowledging the lack 

of services in some of the areas. 

Mr. DAVIS. Mr. Leavy. 

Mr. LEAVY. Danny, I think, for us, we have been through a lot 

of iterations of different job training programs. We even been 

around since CETA, practically, you know—Job Training Partnership Act, Welfare to Work Act, the American Recovery Act. But the 

67 

point is that most of these programs don’t really allow you to do 

the intensive kind of training we actually do. 

We may have to cobble together resources from a whole bunch 

of places to get enough money to get the basic skills remediation, 

to get the work maturity training and this very expensive occupational skills training, where our shop—you have been there. I 

mean, this is an expensive operation, but it gets people real skills, 

and people can really get quality jobs and get a foothold on the career ladder. It is an investment that is not being made and needs 

to be made. 

So, again, in the old days, the Job Training Partnership Act used 

to train tons of African American men in Chicago for jobs in the 

city. That was almost all wiped out when we went to a voucherbased system with WIA. 

So, again, we need to put some of the money in job training that 

we used to have during CETA days, and we used to make a real, 

real commitment to skills training and lifting people out of poverty. 

It can be done. I mean, we are a model. It can be done, and Linda 

and I do it. But we need much, much, much more consistent resource and commitment to comprehensive training and getting industry—I am talking too much. Okay, I will be quiet. 

Mr. DAVIS. Mr. Partridge. 

Mr. PARTRIDGE. Thank you. Thank you, Mr. Davis. 

I mean, I think the answer is yes, and I think they described it 

well. 

One of the things, though, I want to point out is, especially in 

rural communities but even in urban communities, there are these 

scattered programs and, you know, duplicate services and all sorts 

of issues. And so that was one of the reasons why in my testimony 

I discussed expanding regional, State, Federal development organizations, like the Appalachian Regional Commission. They exist on 

paper like in Ms. Sewell’s district, but it doesn’t have any—I don’t 

think there are any resources. 

And so what they would do is, they have—like, the Appalachian 

Regional Commission only has a $100 million to $150 million budget; however, they are fantastic at being the broker who leads the 

efforts that brings everything to the table to help with the collaboration that the previous two spoke about that is needed for this. 

So I think that would be one of the ways that a relatively small 

amount of money could have a lot of payoff. 

Mr. DAVIS. Thank you. 

Ms. Kneebone. 

Ms. KNEEBONE. I think that point really speaks to addressing 

the capacity issue, because targeted Federal investment absolutely 

could make a big difference in these places, especially if it embraces these more wholistic, crosscutting strategies that recognize 

the complexities that are facing poor people in poor communities. 

But if we want that funding to be able to reach into some of 

these communities we are talking about, in places where poverty 

has grown rapidly more recently, we have to overcome that capacity gap. And having these quarterback-type institutions that can 

play that role and more effectively marshal all those resources is 

a critical step. 

68 

So any sort of funding, I think, should explicitly recognize and 

target resources to that type of backbone capacity-building and that 

sort of entity. 

Mr. DAVIS. Thank you. 

And quickly, Mr. Leavy, I have always been intrigued by your 

ability to work directly with local employers, where you know that 

you are training people for what they need. How did you accomplish that? 

Mr. LEAVY. Without going into a lot of history, I mean, we understood that race was a big variable. On the old west side of Chicago, where my dad worked—and he worked at a manufacturing 

company and he lived in the neighborhood, took the bus, blah, 

blah, 

blah. When that neighborhood changed to African American, 

those local companies had extreme difficulty in absorbing and 

training the local workforce, and we can see it 20 years later. 

So we went to partner with the Industrial Council of Nearwest 

Chicago, and these are our local employers. Let’s work together, 

let’s create a program that is going to open the doors for our community residents, brown and black, and is going to get you the 

workers you need. And we actually sat down and planned the 

bloody thing with our neighborhood small businesses in woodworking and shipping and receiving with the help of the Industrial 

Council. 

The key to that was the employers have some sense of ownership 

and involvement. And employers got to meet our community people 

during training. They got to see their dedication. They got to see 

the quality of our people. And racial stereotypes were overcome, attitudes for ex-offenders were overcome. 

And they were setting the standards for training, so they owned 

it. It is way more than just, you know, I have a company that I 

am going to take a job order from and steal. No. These guys are 

involved and they own the program design and they owned its success. And you probably heard from them. We got our funding cut, 

and these employers, they went to the mat for us. So they own this 

thing. 

And they are 99 percent white small-business owners from the 

industrial corridor. And it is great when our participants go on a 

field trip, a tour to a local company; they go in and look at whatever the company is, and they see, oh, there is my neighbor working. So they get the confidence that these guys are giving our people, black people, a fair shake and some opportunity. And, conversely, the small-business owner sees the hard work, the diligence 

of our trainees. 

And, of course, the credibility of our staff and the training institution itself kind of brings the community and business together. 

These guys have been doing this for 25 years, and—— 

Chairman SMITH OF NEBRASKA. Great. 

Mr. LEAVY [continuing]. They have got quite a reputation in the 

employer community. 

Chairman SMITH OF NEBRASKA. Very good. Thank you. 

Thank you for your answers there. 

Now we will go to Mr. Smith of Missouri. 

69 

Mr. SMITH OF MISSOURI. Thank you, Chairman Smith. It is 

an honor to serve on your committee. And I like the ring of ‘‘Chairman Smith,’’ by the way. 

I want to thank the panel for being here today. In fact, these 

issues are extremely important. I have spoken with the chairman 

and the members of this committee of my personal background and 

interest in poverty. I grew up in a very working-class family. And 

I represent an area in southeast, south-central Missouri which is 

part of the Mississippi Delta, and we have some very interesting 

dynamics of our own that we deal with. 

It is the largest congressional district in the State of Missouri, 

just under 30 counties. It is roughly 20,000 square miles, so it is 

very rural. Our largest populated community is a town of 38,000 

people, Cape Girardeau, Missouri. 

And I want to give you some interesting statistics about our congressional district. According to the Economic Innovation Group, I 

represent the 14th most economically distressed congressional district in the country, out of 436—14 out of 436, which is absolutely 

not good. It is also one of the most conservative congressional districts in the country. 

The Economic Innovation Group report on distressed communities estimates that 49 percent of adults in my district are not in 

the labor force, and the poverty rate is 20 percent. These numbers 

are not much different than the city of St. Louis. In St. Louis, 42 

percent of adults are not in the labor force, and the poverty rate 

stands around 22 percent. So we have more people out of the workforce in our district than the city of St. Louis. 

And that is much different, though—Ms. Kneebone, according to 

your testimony, I think these are interesting facts for the State of 

Missouri. The picture is really different in the suburbs of St. Louis. 

Just 6 miles from the city of St. Louis, it is 36 percent adults who 

aren’t working, and the poverty rate is only 6 percent. The city of 

St. Louis, the poverty rate is 22 percent. In my rural congressional 

district, it is 20 percent. 

All that, in my opinion, says that rural southeast and south-central Missouri experiences poverty in similar numbers to the city of 

St. Louis, and both are far worse than the suburbs of St. Louis, 

which the poverty rate is 6 percent. 

We know that employment is the single largest determining indicator of poverty, but we continued to see factories close for the last 

several years. In many cases, we see our good-paying factory jobs 

go overseas because of economic hardships and burdensome regulations. These factories can’t keep their doors open, and that means 

that we are losing good jobs. 

We had one employer in Butler County, Missouri, in my first 

year in office that cited that the reason that they were shutting 

down their doors and eliminating roughly 500 jobs was because of 

unnecessary and burdensome regulations that they couldn’t comply 

with and was moving to Mexico. This is a real problem and something that has to be changed. 

When nearly half of adults in my district aren’t working and are 

out of the labor force entirely, our communities are deeply in trouble. 

70 

Mr. Partridge, with many rural areas declining in population, 

who is staying behind? Are these areas becoming wealthier as 

those who remain have good jobs and choose to stay, or are they 

becoming poorer as those without means are unable to leave? 

Mr. PARTRIDGE. Thank you, Mr. Smith. 

I think the answer to that question is it depends. Because if we 

are talking about a rural district—very, very, very rural districts 

where people left, what is left behind is often relatively wealthy 

farmers that are very big. So, in that sense—then you have other 

districts where you have brain drain, where the talented people 

leave, and that leaves behind a workforce that is less educated and 

it is just going to be less dynamic. There is going to be less business formation and so forth. 

So it really depends on the setting. There is just a lot of diversity. 

Mr. SMITH OF MISSOURI. So just a lot of barometers and 

issues. 

You have been doing a lot to improve the economies of rural 

areas. Could you give us some examples of what maybe you have 

done for people in their 30s and 40s to help grow the economy in 

rural areas? 

Mr. PARTRIDGE. Well, what I have done is I have tried to point 

out that when people—especially in the last 15 years, there has 

been a lot of emphasis on attracting young people with really cool 

downtowns and so forth, and rural communities can’t compete on 

that. They are just not going to do very well on that basis. 

However, they can compete on being family-friendly and having 

a really nice environment and lifestyle for certain people. So, in 

that sense, people in their 30s and 40s are no longer looking for 

cool bars; they are looking for a place to send their kids and be 

safe. That is where rural communities can thrive. 

Mr. SMITH OF MISSOURI. Thank you, Mr. Chairman. 

Chairman SMITH OF NEBRASKA. Thank you. 

And next we have—yes, Ms. Sewell. Sorry. Go ahead. 

Ms. SEWELL. Thank you, Mr. Chairman. 

And thank you, panelists. This is the first subcommittee hearing 

as a new member of Ways and Means that I get to participate in. 

And I have to tell you that I am very excited, Chairman Smith and 

Ranking Member Davis, about the opportunity to be on this subcommittee. 

My district is the Seventh Congressional District of Alabama. I 

grew up in this district. It is a district that includes the city of Birmingham, which is the largest city in the State of Alabama, but it 

also includes Selma, Alabama, which is my hometown, and many 

rural communities around Selma. The median income for a family 

of four in my district is $34,000, and 22 percent of the families in 

my district live in poverty. 

It is affectionately called the Black Belt of Alabama because of 

the very rich soil. That used to be very agrarian and agricultural. 

It is where a lot of the Cotton Belt of Alabama, back in the day, 

used to exist. Now it is filled with a lot of rural communities that 

are struggling. 

I often say that what we lack in the Seventh Congressional District in terms of economic prosperity we more than make up for in 

71 

heart, in fight, in spirit. What we need are better opportunities, 

more resources, a hand up, not a handout. 

Having said that, I was very intrigued by what you were talking 

about, Mr. Partridge, in terms of regional collaboration. The Appalachian Regional Commission, which you cited, has done some 

great work across the 13 States that it encompasses, with relatively limited resources when you think about the fact that they 

have to deal with 13 States. 

In fact, my district doesn’t get a lot of resources from the ARC. 

Many of the collaborative regional resources that we receive come 

from the Delta Regional Authority, which has a very limited budget. It is one-tenth of what ARC is. Yet it is literally the lifeline for 

so many of the communities I represent. 

Can you talk a little bit about the regional collaboration and 

what we can do as lawmakers that are not in the position of providing appropriating dollars but, rather, authorization of different 

social net programs that can be effective in reaching communities 

like so many of us represent? 

Mr. PARTRIDGE. Thank you, Ms. Sewell. I think you really described a lot of the issues well. 

So when you get down into central southern rural Alabama, you 

have a lot of counties. They lack resources. There are many disparate Federal—you know, Economic Development Administration, 

USDA Rural Development, Department of Labor workforce training, and so on—all these disparate groups. And these counties just 

lack things like even an economic development coordinator or one 

without a lot of training who knows how to write these very complex grants. 

And so that is one of the key things that ARC has done, is it is 

a Federal-State, so it is flexible, it isn’t one-size-fits-all, but they 

are really kind of a leader. And they have, like, how to do grantwriting, to bringing all these disparate counties together to work 

collaboratively, because if you get jobs in one county, people commute and take them, it helps the whole region. 

So, in that sense, what I view these organizations as doing is 

they are the broker. They are the ones who can bring everybody 

to the table with relatively modest resources. 

Ms. SEWELL. What do you suggest we would do on the authorization side when it comes to workforce development? 

I would like to get you, Mr. Leavy, involved as well. You know, 

one of my passions is workforce development, because here is what 

I know for a fact. So many of the folks that I represent want better 

opportunities. They want jobs. The problem is finding those jobs. 

In rural America, a lot of those manufacturing opportunities have 

really dried up. And so, when you finally do get an opportunity, 

people haven’t worked in those manufacturing jobs for generations. 

My biggest example is Wilcox County, which is the poorest county in the State of Alabama. It is in my district. And we got—I am 

the only Democrat in Alabama, but I have very good working relationships with my Republican colleagues. And we were able to convince the Governor to give us a $150 million manufacturing opportunity in the poorest part of my district. It is a copper manufacturing facility. Here is the problem: We are now busing in people 

from other communities, Tuscaloosa, to come and take these jobs, 

72 

because we have had generations of people who haven’t had an opportunity to work. 

Now, given this great opportunity, how do we bring folks up to 

speed when it comes to workforce development? 

Mr. LEAVY. Okay. I will take a shot at that. 

What happens is, when people are out of the workforce for a long 

time, they don’t trust the employers, they don’t trust the system, 

they are kind of hanging back, they are not willing to make the effort, because they are afraid to fail. So you have to get them started in baby steps, and you have to have institutions that can engage 

them credibly. 

And if they are engaged and if they believe in the training institutions and they start putting forth the effort, then you can see 

these folks can learn just like anybody else can learn. 

Okay. So it is a—we call it work ethics, okay? And we train for 

it on the shop floor every day. I mean, Linda’s shop is a workplace, 

and you have to come on time, and you have to respect your fellow 

workers, and you have to follow the boss’s instruction. So you get 

work ethics training every day on the job. And that is an essential 

part of getting people to understand that this can work for them, 

okay, and getting used to the workplace disciplines. 

So you have the workplace disciplines; you have basic skills remediation. And then people say, oh, hey, if you pass this, if you do 

that, you are going to get to run that machine, you are going to 

drive that forklift. People can see progress, okay? And these folks 

can learn it. They need to get motivated and believe it is possible 

for them. 

Ms. SEWELL. Chairman Smith, thank you so much for allowing 

him to answer that question. 

I think it just goes to the need that we can try to explore in this 

committee, workforce development strategies that will work across 

the board for people dealing with poverty issues in suburbia, in 

urban, and in rural. 

Thank you, sir. 

Chairman SMITH. Right. That is absolutely—and, certainly, for 

the answers to the questions, that is very relevant. 

Mrs. Walorski? 

Mrs. WALORSKI. Thank you, Mr. Chairman. And, again, thank 

you for holding this important hearing. I am absolutely passionate 

about this issue. 

And I am so glad each of you are here. My district is northern 

Indiana, and so we are 2 hours from Chicago and have, in the past, 

on some other committees I have been on, looked at best practices 

and places and things that are happening in Chicago that really 

are, I think, a standard right now of where we are looking. 

I want to give a shout-out to our Goodwill in Indiana, the Goodwill Industries, and what they have done in our district, our State, 

as they have been able to, you know, hone in on this issue of collaboration, which I want to come back to, Ms. Slater, in a second 

and talk about that. 

I think it is incredible that all of your research, all of your findings, and other experts that we have had speak to Congress over 

the last couple of years—it is so apparent to me that all the work 

that we are doing—when we look at traditional approaches from 

73 

government, which has been increase funding, increase funding, increase funding, and when you start looking at the numbers of people in poverty, where they are coming from, where they are moving 

from, it just becomes so important, in my mind, to do the kinds of 

things you are talking about, which is connecting people to this 

equation. 

It still takes people on the front lines to coordinate. It takes people on the front lines to be able to honor human dignity and to 

make sure that we are looking at all the seeds of the problem and 

we are actually doing something to make sure that there is an economic ladder out of poverty in this country, the greatest country 

on the face of the Earth. 

And I am so convinced that the solutions to our very problems 

are right here within the kinds of research that you have all done 

and the kind of things that you have moved along, that we are 

moving the dignity of people along as well, that, you know, we are 

equipping a nation. We are doing it, using each other in collaboration. 

And I think, Ms. Slater, to your point, my district is very much 

a case study like what you are talking about in Nebraska. I am 2 

hours from Chicago. We are urban; we are rural. We have all the 

same kind of makeup that, you know, a lot of these small rural 

areas are. 

I am terrified that if we don’t come together and fix this in a bipartisan way that rural America will not recover and that we are 

going to be groping for bigger issues later if we don’t come together 

and solve this now. 

But I am so convinced about this issue of collaboration. And I am 

working on a bill right now as we approach TANF. 

Can you just talk about some of the best practices that you have 

used in your community to collaborate on the front line and why 

that is going to be important as we look at, you know, tangible assistance to needy families in the real quick future here? 

Ms. SLATER. Sure. Thank you very much. 

Truly, the thing that comes to mind that you just summarized 

is it is about people. It is about people working together that are 

there to actually serve the people we are seeing every day. 

And so, truly, it becomes—and I think it is one of the advantages, maybe, of the rural community, is we know each other. It 

is asking for help. It is actually acknowledging what your core is 

and what cores come from other agencies. 

The other thing that I think is a plus in the rural community, 

but not unique, is the fact that if there is an individual with a barrier in a small community, everybody in town knows that. They 

talk about it. They know Tammy at Goodwill, and they will call 

and see if we can be of assistance. 

But it is really about the whole relationship and trying not to 

make it the competition that sometimes it becomes but what are 

we really good at. And that is one of our best practices, is we have 

a lot of diverse programs, but at the end of the day, what are we 

the best at. So if something else comes along, we have learned to 

say ‘‘no’’ and to extend a hand and offer something that we may 

know about to someone else. 

Mrs. WALORSKI. That is incredible. 

74 

Ms. SLATER. Because you cannot be good at everything. 

Mrs. WALORSKI. Absolutely. And that is a great point. 

I just have a question for all of you in this last minute here. One 

of the things in my community that is a plus, both on the rural and 

the urban side, is the benevolence of my community and the private dollars in regional coordination that are beginning to flow into 

our own community from our own people—private dollars, community foundations that are really understanding this. 

I guess, Mr. Partridge, let me just address that to you; it is your 

research. Do you see that emerging now in this country, where we 

are looking at partnerships, even financially, so it is not just a one 

look at a government but we are looking at resources inside our 

communities as well? 

Mr. PARTRIDGE. I think you exactly described it right, in the 

sense that, you know, a lot of this has been promoted—you know, 

attempts for collaboration have been promoted by just things 

haven’t been working. And a lot of it is that problems are a lot bigger than what one community can handle. 

However, at the community level, as you suggested, I mean, the 

best way is to—every community has great resources. They have 

entrepreneurship that is untapped. They have human resources 

that is untapped. And as I noted in my testimony, you know, just 

the multiplier effects of new jobs created, spillovers from smallbusiness creation and local entrepreneurship are just rather remarkable. 

And so, in that sense, building from within is, I think, the best 

strategy, and the kind of collaboration you are talking about is the 

way to go. 

Mrs. WALORSKI. Thank you. 

And thank you, Mr. Chairman, for your indulgence. Chairman 

SMITH. Thank you. 

And next we have Mr. Reichert. 

Mr. REICHERT. Thank you, Mr. Chairman. 

Thank you all for the hard work that you do. And it sort of seems 

removed just a little bit, as we are in this formal setting, from the 

reality of the topic that we are discussing, doesn’t it? I always sort 

of get overwhelmed by that thought. 

But I was thinking back to one of the first hearings that I had 

when I was chairman and working with Mr. Davis as the ranking 

member, and I shared my story. There are a lot of stories here, and 

you have a lot of stories, a lot of stories out there in the audience 

today, too, listening. And as I shared my story, after the hearing 

Mr. Davis said to me, ‘‘You know, you and I could have grown up 

in the same neighborhood.’’ And sometimes we forget that we all 

come from different places, we all come from areas in our life 

where we struggle. 

And Sandra Collins was one of those people from the Goodwill 

Industries organization in the Seattle area. She testified not too 

long ago when I was the chairman of this subcommittee. What a 

success story for Sandra. Sandra was homeless. She had two teenage daughters and was addicted to meth. She had a criminal background. She had no high school diploma, did not have a driver’s license when she first connected with the Goodwill. 

75 

But, as she was giving her testimony, she got news that she was 

just about to be promoted to supervisor. So Sandra is still working 

at the Goodwill in the Seattle area and is now the manager. So we 

are proud of her and proud of the work that Goodwill Industries 

does all across the country, and we need every one of your efforts. 

So Ms. Sewell was concerned about people coming in to populated areas and taking jobs, and I am concerned about some of the 

rural areas having the opportunity to come into those areas and 

get jobs. But we have to balance that, I know. 

And I wanted to ask Mr. Partridge, are there any programs 

that—you know, because sometimes people have to make those decisions to relocate to find a job. What are we looking at as far as 

programs to help people relocate, not necessarily to take all the 

jobs but to participate in the workforce? 

Mr. PARTRIDGE. Well, thank you for the question, Mr. Reichert. 

I think you really hit upon—one really important issue is that, 

in the past, the key way that Americans did economic opportunity, 

reached it, was by migration. We were probably the most mobile 

society in the world for generations. And in the last generation, 

that has really changed. Young Americans are much less mobile 

than before. 

So one of the ways that poverty can be reduced is taking people 

from places that there are a lack of opportunities and moving them 

to places where there are opportunities. And one of the problems 

is they are relatively poor, they lack resources for that. They don’t 

have a network, you know, to find a job. Their skills might have 

been okay for where they are at, but they are not necessarily good 

in an urban environment. 

So I would encourage efforts to, at least on a pilot basis, to try 

to look at helping migration of workers to where there are more opportunities. However, it is just a little bit more complex than saying, ‘‘Here is some money, go move,’’ because of these other issues 

about the lack of job networks and the lack of training for the kind 

of jobs that would exist in urban areas. 

Mr. REICHERT. Great. Thank you. 

Mr. Leavy, I wanted to touch on one of your comments as you 

rolled off the statics about unemployment between Black men, Hispanics, and Caucasians. And I was reading your statement, and 

you used the word ‘‘controversial’’ in your comments, but it is not 

used in your statement. And I don’t see anything controversial 

about it. I just wanted to point that out. Because people are people, 

in my opinion, and we are here to help. 

So let me just further state very quickly that I think it is sad 

that the 50-percent dropout rate—I mean, that is just an unacceptable number, and I think that is one of the things we have to address. 

I am an old cop, 33 years on the streets in King County. I worked 

with people on the street in drug addiction, alcohol, homeless, all 

the time. One of the things we need to do—and I am very high on 

prevention. What do we need to do to get these young people to 

graduate so they don’t start already behind the curve? 

Mr. LEAVY. Well, we have actually—we started an alternative 

high school for dropouts in Chicago because the dropout rates were 

so severe—— 

76 

Mr. REICHERT. But it is still 50 percent. We need to do a lot 

more. 

Mr. LEAVY. They have been—it has been—it has been—I use 

the term, schools had and are still reporting, neighborhood schools 

had and are still reporting the dropout rate in Chicago has improved a little bit. Okay? I will give you that. And there has been 

a lot of intervention on dropouts and special programs for dropouts, 

some of which reasonably work in the city. 

So we are a lot better on the dropout front than we were 10 

years ago. And we did a lot of research on that and got some bills 

passed with Senator del Valle at the State level to deal with the 

re-enrollment of dropouts. So there is a commission in Illinois for 

the re-enrollment of dropouts, and we got the issue in the public 

attention, and so we have made some serious progress. 

There are still tons of at-risk kids. And we run an alternative 

school in the heart of the west side, and our kids are pretty alienated sometimes and pretty tough. And putting together, again, the 

programs that can engage them and discipline them and challenge 

them is a hell of a lot—— 

Mr. REICHERT. I would like to engage further with him at a 

later time, Mr. Chairman. My time has expired. I yield back. 

Chairman SMITH. Thank you. 

Ms. Chu. 

Ms. CHU. Thank you, Chairman Smith. 

I represent a very urban/suburban district in Los Angeles County, which has 10 million people. And, Mr. Leavy, the work that you 

do is in an area that is very similar to this. 

In L.A. County, we have a very, very large homeless population. 

In fact, the most recent count revealed that there are approximately 43,000 homeless individuals living in shelters or in the 

streets. 

Now, you have done a lot of work with similar urban/suburban 

populations in Chicago. How could Federal antipoverty programs 

best assist homeless populations in places like L.A. County and 

Chicago? 

Mr. LEAVY. I am trying to get Linda to talk. She is the expert 

in—she provides all the intensive support services to the very highneed folks. And we have, what did we say, 22 percent homeless and 

near-homeless in the training program. 

So tell them a little bit about the transitional work and how it 

helps the homeless. 

Ms. THOMAS. So we, through our city dollars, have come across 

what we call transitional jobs training funding, where we can work 

with our clients to provide additional services. We try to help our 

customers become self-sufficient and to be able to attend training 

without worry. 

And so we are able to create jobs within the program and give 

them a weekly stipend to support them with their needs. We are 

able to address their ability to secure housing and their ability to 

get to training and their ability to have clothing and doctors appointments so that they will have a positive outcome through our 

transitional jobs training funding. 

77 

Ms. CHU. So, for this homeless population, what elements of 

what you have talked about are the most important? For instance, 

how important is accessibility to quality housing? 

Ms. THOMAS. For the homeless population, if I don’t have secure housing, I will not do well in the job. Before I can take on employment, I have to make sure I have secure housing, I have to 

make sure that I have transportation to get to that job every day. 

So, when they are in the training program, we are going to immediately on day one start to look at those resources that are out 

there to make sure this person will have secure housing. Because 

we have a lot of people, they are homeless with a roof, so they are 

going to a cousin’s house today, they are staying with a friend tomorrow. 

And so we are going to work with an agency that is going to help 

them move into housing where it is secure, so when I start my new 

job, I can go to work not worrying about where am I going to live 

tomorrow or will I get back to the shelter in time to get a bed. 

So those are the ways that we work strongly to help out with the 

homelessness, for housing. 

Ms. CHU. Yeah. 

And, in fact, to follow up, in L.A. County, we have higher-income 

neighborhoods located right next to low-income and poor neighborhoods. And, in fact, poverty is found in pockets and separated, oftentimes, just simply by a neighborhood. 

So how did we get into this situation, and how can we reduce 

this inequality between the neighborhoods that are located right 

next to each other? 

Mr. LEAVY. Wow. You know, Danny knows, you know, you have 

the west side, Austin, and then you have Oak Park, and you have 

a serious dividing line. Oak Park is a pretty liberal, progressive 

place. They have PADS programs, and they try to keep themselves 

accessible to the low-income folks in the city. And, you know, I am 

not sure how you integrate across those barriers. It is a voluntary 

thing in Oak Park. I live in Oak Park, and they are just very progressive folks out there. 

In terms of your question, you know, how do you create cooperation across community boundaries, neighborhood boundaries, I 

mean, Chicago is extremely racially segregated. And you have 

neighborhoods on the south and west side that, you know, folks on 

the north side will not go in. And you have pockets of wealth and 

affluence on the north side. 

And you need community development—most of our development 

resources traditionally are—I talk about in my longer thing. You 

talk about triage. You are putting resources for those most likely 

to succeed. You are not making the investments in the high-risk 

areas, in the high-poverty areas where you have multigenerational 

poverty. I mean, everybody wants to pick a winner, and everybody 

is afraid to waste money on what might be a loser. 

And, again, this is an attitude that, you know, we see in job 

training, we see in education, we see across the board—we see in 

housing and urban development sometimes. So this triage attitude 

is something that we really have to get our head around and fight 

against. 

78 

What is happening in our training program—because the labor 

markets are improving and some people are moving ahead and 

some people are getting jobs, but those left behind are really desperate, are really sinking. Okay? That is the problem. We are separating more. 

You talk about income inequality. We talk about it, you know, on 

the cosmic scale when Bill Gates and those guys have all the 

money, but it also happens in our communities. We are segregating 

the rich and the poor even more, and we need to figure out how 

to fix that. Clearly, jobs are part of that, and people investing in 

jobs for low-income people is clearly a part of that solution. But, 

again, I think there are more economic development issues involved here than I am prepared to mouth off about right now. 

Ms. CHU. Thank you. 

Chairman SMITH. Right. Thank you. 

Mr. Rice. 

Mr. RICE. Thank you, Mr. Chairman. 

Interesting hearing. It seems to me that the way you deal with 

poverty is you have to do what you can to make sure people have 

opportunity on the one hand, and then on the other hand you have 

to do what you can to make sure they take advantage of that opportunity. And it seems like, mostly, today, we are talking about 

the second part of that equation, trying to get people to take advantage of opportunities that they have. 

My district, I got seven counties in South Carolina. I have Myrtle 

Beach, a big popular tourist destination, and employment rates are 

pretty low there. But if you go inland, I have 3 of the top 10 poorest counties in the State. They were very agrarian and textiles, tobacco and textiles. So you can guess what has happened to them 

in the last 40 years, right? Agriculture doesn’t employ as many 

people, and certainly not tobacco. Tobacco is a fraction of what it 

used to be. And textiles, those jobs are all gone. There are a lot of 

empty factories in Marion County, South Carolina. 

So, on the one hand, you know, the first part of the equation, trying to do what you can to make sure people have opportunity—and 

we haven’t talked much about that today. But things like tax reform, regulatory reform that Jason Smith was talking about earlier 

is so important and a lot of the reasons why a lot of these companies that used to be in Marion County have left. And I put that 

on Washington, D.C. 

And that is why I am so very happy that this committee is now 

working on tax reform and the House is working on regulatory reform, because I think the first part of that equation—I mean, you 

can train people all you want to, but if there are no jobs available 

when they get out, it doesn’t help very much, does it, Mr. Leavy? 

So, I mean, you have to get them—— 

Mr. LEAVY. Believe it or not, a trained workforce can be an incentive for a company to come into an area—— 

Mr. RICE. That is true. That is another part of it. 

You know, there is a program in the Florence-Darlington Technical College; they have a program for computerized digital machining. And they can take 80 kids a year, and it is a 2-year program. And they have two problems: One, they can’t get 50 kids a 

year to sign up for it; and, two, if they do get them to sign up for 

79 

it, most of them don’t finish. They get through 1 year. Well, the 

reason they don’t finish is because the companies are so hungry for 

these kids that they hire them before they finish their program. So, 

in other words, we have this opportunity, but we can’t get people 

to take advantage of the opportunity. 

And I believe most people would rather work than be on government programs. I think if you rely on the government to provide 

for your livelihood, you will always live in poverty. I think the government is incapable of providing for you. But we have 80 different 

means-tested government programs, many of which are designed to 

help people to move to work, to move to take care of—and they are 

not working for a large number of people. 

There are still significant numbers of people who would rather 

be on government programs than actually go out and take that 

computerized digital machining class and go to work and make 

$60,000 a year. 

How do you fix that, Mr. Leavy? 

Mr. LEAVY. Well, I mean, we deal with it every day. Opportunity plus effort equals success, okay? People have to make the effort to take advantage of the opportunities presented to them. And 

do they see and believe and is the opportunity real for them? Their 

perceptions are a lot. And I live in this every day. 

In Linda’s programs, she is able to get and engage and discipline 

her people, and the people are enthusiastic, and she has credibility 

and trust, and the people march through the program and they go 

out in the labor market and they do well. Okay. And my high 

school used to be that way, but it is not so much anymore. In our 

high school, West Side Academy, we are having an issue of student 

engagement and motivation—— 

Mr. RICE. Okay. I need you to wind down, because I want to ask 

somebody else too. 

Mr. LEAVY. What? 

Mr. RICE. I want to ask somebody else too, so wind up, if you 

can. 

Mr. LEAVY. I will tell you about the West Side Academy some 

other day. But, you know, it is a question of credibility and trust, 

and are they perceiving this thing as really working, are they believing in it. And if they believe in the leadership of that school, 

that school can discipline them, can draw them out, can challenge 

them. Okay? And they will see it as a benefit to them in their lives. 

They have to have credibility with those kids, and you can get 

them to do what they need to do. 

Mr. RICE. Mr. Partridge, how do you get them to take advantage 

of the opportunity? 

Mr. PARTRIDGE. Thank you. 

One of the things that I have always thought about poverty is 

that not only do we have to train workers in places where there 

is a lot of high poverty, there has to be also the opportunity so the 

person has the incentive to go for 2 years through a training program so they can get a job. And so, in that sense, it is a chicken/ 

egg problem that, you know, there have to be jobs to have incentives for people to get the training so they could actually get a job. 

So you are absolutely right. It is a chicken/egg issue. 

80 

And one of the things that you raised is the general macroeconomic environment has not been very favorable for the lower 

half of the income distribution. And, you know, any efforts there— 

manufacturing was an old mainstay for that group. And any efforts 

there to build up that part of the economy, I think, would have 

very large positive effects. 

Mr. RICE. Thank you, Mr. Chairman. 

Chairman SMITH. Thank you, Mr. Rice. 

Mr. Curbelo. 

Mr. CURBELO. Mr. Chairman, thank you very much for holding 

this hearing. 

I think you always hear politicians talk about the middle class, 

and, indeed, the middle class is important. It is the engine of the 

American economy. But that is also where most of the votes happen to be. In poor communities, there aren’t as many votes. Yet we 

are here because you care about this issue, Mr. Chairman, we care 

about this issue, and certainly our witnesses do. 

So I thank you all for coming. 

Ms. Kneebone, I want to talk to you about suburban poverty. I 

represent a largely suburban district. And you discussed the migration of poverty from the urban cores out into the suburbs, and of 

course this is a major concern for me. 

I think one of the aggravators or the factors that contribute to 

this phenomenon is the lack of transportation out in the suburbs. 

Most urban cores have fairly sophisticated public transportation 

grids, but as low-income individuals move from the urban cores out 

to the suburbs, does that lack of access to public transportation aggravate their circumstances? 

Ms. KNEEBONE. That is a real challenge for suburban communities across the country, particularly for the poor residents, because as both jobs have shifted away from downtown and poverty 

has grown more in suburbs, those aren’t often happening in the 

same places. So the distance between where jobs are located and 

where poor people can afford to live has grown. And we have seen 

the number of nearby jobs for poor residents fall across the country 

in urban, suburban, and rural communities. 

So the fact that suburbs often don’t have public transit systems 

or, when they do, they are not connected suburb to suburb where 

a lot of these job opportunities are growing does exacerbate that 

mismatch. It makes it much harder to connect to those employment 

opportunities that can give them a path out of poverty and also 

makes it more incumbent on them to own a car and have to deal 

with the high costs of maintaining a reliable car that would actually be able to get them to where the job opportunities are. 

Mr. CURBELO. So, given that infrastructure investment is a priority for the new administration and for many of us here in Congress, you think there is an opportunity to use some of that poverty 

data to more effectively make these investments. 

Ms. KNEEBONE. Yes, absolutely, both in terms of how we think 

about where to make transportation investments, in terms of roads 

versus transit options, you know, where those dollars go, how they 

are deployed, but also in terms of thinking about where housing is 

around those networks, where we can take advantage of density 

81 

around those transit hubs to increase access to opportunity both 

through affordable housing and through transportation. 

Mr. CURBELO. Thank you. 

Dr. Partridge, I should get you on the record about the great 

theft of 2003, when The Ohio State University robbed the University of Miami of a college football championship. 

By the way, Mr. Chairman, the year before, we defeated Nebraska in Pasadena. But let’s set that aside, because there is very 

little time. 

I do want to ask you about education. And we have built this 

idea in our society that every young person has to go get a 4-year 

degree at a traditional university like The Ohio State University, 

like the University of Miami. And, in many ways, our Tax Code 

supports that idea. 

Do you think that the lack of an acknowledgement of the diverse 

paths that there are to success, to getting educated, to acquiring 

the skills needed to obtain a quality job, that the lack of recognition is aggravating poverty in a lot of communities? 

Mr. PARTRIDGE. Thank you for the question. 

In some cases, yes, that there is a segment of the high school 

population that just is unaware of the opportunities. And you are 

right, many high school curriculums look like a pre-college training 

program, and so there are fewer of those opportunities. 

I think, you know, besides curriculum reform and providing better information to students—that is one of the things that the 

economists found. If you give the students information, they will 

make better decisions. Besides that, one of the areas I think is just 

fantastic in terms of investment and in terms of the role they play 

in communities and broader communities is community colleges 

and technical colleges. They are on the ground doing the workforce 

training, but, even beyond that, they have more of a regional footprint that brings people together in a collaborative process. 

So, in that sense, investment in technical colleges and community colleges would have a large payoff for the population that we 

are talking about. 

Mr. CURBELO. Okay. Thank you very much. 

I will yield back the balance of my time. 

Chairman SMITH. Thank you. 

Again, thank you to all of our members here today and certainly 

to our witnesses. Your expertise is valuable, and we could probably 

extend this for a few more hours just in discussion. With that being 

said, though, you will have the opportunity to extend your remarks 

for the record. The record will be held open for 2 weeks. And so, 

if you wish to respond in more depth to some of these questions, 

you will have the opportunity to do so. 

And, with that, I say thanks again, and the committee stands adjourned. 

[Whereupon, at 11:36 a.m., the subcommittee was adjourned.] 

[Questions for the Record follows:] 

82 


INSERT 33363A.053

Questions for the Record for Mr. William Leavy and Ms. Linda Thomas, Greater West Town Project, 

from Congressman Danny Davis 

1. My congressional district is home to a substantial port/an of Illinois' returning citizens, and 

helping them succeed and support their families is a high priority for me. 

o. Has your training program been successful in helping ex-offenders get into career-track 

jobs? 

Greater West Town Community Development Project (GWTP) strategically responds to issues of 

poverty, unemployment, and lack of educational attainment with programs that successfully provide 

access to economic opportunities for the multi-barriered, disadvantaged residents of GWTP's 

communities, including ex-offenders. GWTP's Occupational Skills Training and Placement program has 

been very successful in training and helping ex-offenders enter career-track employment. In 2015· 

2016, nearly a quarter of our vocational training participants were ex-offenders. Despite the widespread 

and persistent barriers to employment faced by the formerly incarcerated, GWTP has succeeded in 

placing over 95% of our ex-offender graduates in quality career-track jobs. In the 2014-2015 program 

years, when nearly one third of GWTP's Occupational Skills Training graduates were ex-offenders, GWTP 

placed over 92% of ex-offender graduates in full-time employment. Regular program follow-up analyses 

have shown that less than 3% of GWTP program participants have been re-incarcerated following 

graduation, compared to a 47% recidivism rate in Illinois. 

This consistently high success rate of placing ex-offenders in career-track employment can be attributed 

to GWTP's high-quality educational remediation, technical training, and supportive services, and also to 

the strong and longstanding employer-partner relationships forged and fostered through the agency's 

unique Community-Business Partnership model. 

Ex-offender status constrains the educational and economic opportunities available to those served by 

GWTP. This population faces significant barriers to accessing basic skills remediation services and other 

educational opportunities, as well as to job training and employment. A 2014 analysis conducted by 

DePaul University and WMAQ/NBC shows that, of the approximately 12,000 former inmates who 

returned to Chicago in a recent 12-month period, 47% returned to communities that we serve. 

b. How do you identify employers willing to give people a second chance, ond build trust 

with employers over time? 

Greater West Town's collaborative, longstanding Community-Business Partnership model is a key 

strategy for providing comprehensive employment services to underserved community residents, 

and advances an essential goal: Providing critical support for community economic development by 

fulfilling the labor force needs of local businesses, thereby encouraging the retention and growth of 

the companies in the communities GWTP serves. In identifying potential employer-partners, GWTP 

first identifies employers that provide living wages, opportunities for advancement, employment 

benefits, and a diverse workforce. GWTP then works to develop relationships with the employers 

through company visits to gain a better understanding of the skills required, equipment used, 

wor·kplace safety, and the general workforce culture of the company. If we determine the employer 

to be a viable partner, then we will invite the employer to the training facility to observe students 

participating In hands-on learning activities, and for validation of Industry-specific instruction. During 
83 


INSERT 33363A.054

the training facility visit, the employers also have an opportunity to speak with the students about 

their training. After these initial evaluative steps, we have a frank discussion with the employer to 

determine whether the company is open to hiring people with felonies. 

As employer· partner relationships develop and strengthen over time, the Occupational Skills 

Training Program graduates placed in employment with these companies serve as ambassadors for 

the Program, and their workplace success not only betters their own lives, but benefits all future 

Program graduates. 

2. Ms. Thomos, you work directly with these returning citizens as they try to start over. What are 

some of the key services and supports that GWTP provides to help them overcome the specific 

challenges they face and succeed? 

Greater West Town Community Development Project has extensive in-house support services to address 

the special needs of the multi·barriered populations that we serve. Transportation subsidies, emergency 

shelter referrals, required medical or dental services, career clothing, and other challenges are met by 

working directly with clients and coordinating services through our network of community and business 

partners. Our support services program is ready to respond to the hardships, disruptions, and extreme 

tragedies that too often affect the lives of families in the struggling, disadvantaged communities we 

serve. 

Upon acceptance into the Occupational Skills Training Program, all program participants receive an 

ongoing objective assessment which leads to the development of an Individual Employment Plan (JEP}. 

The career coach is responsible for this activity, and will assess the participant's history, support service 

needs, and barriers to employment. Support service strategies to address barriers to employment are 

identified and agreed to by the Career Coach and participant in the IEP. The Career Coach is responsible 

for ensuring that support services are provided, as needed, in order to ensure training completion. Case 

files for each program participant are reviewed at least monthly by the program manager to ensure that 

support service needs are being met and effectively coordinated. Support services not provided by 

GWTP will be coordinated with other community agencies that provide the services needed. GWTP 

works with more than 40 local social service and community agencies to ensure that program 

participants have access to the wrap-around support services deemed necessary to support their 

successful completion of the Training Program. GWTP has developed highly effective, collaborative, 

longstanding community partnerships to ensure access to social services for participants with special 

needs, such as persons experiencing homelessness, single women with families, domestic violence 

survivors, and those with prior felony backgrounds. Complimentary case management services are 

available through Olive Branch M ission, Haymarket Center, and St. leonard's Ministries. Complimentary 

Career Coaching and case management supports are provided by our community Adult Education and 

Training partners, such as Erie House, Chicago Commons, and Jane Addams Resource Corp. GWTP's 

Occupational Skills Training Program is also participating in the Transforming Impossible into Possible 

(TIP} program, developed by Or. Philip Hong and a research team at Loyola University Chicago. The TIP 

program is a 15 module transformative leadership development curriculum that empowers participants 

to develop self-awareness, confidence, hope, goal-orientation, leadership, accountability, 

conscientiousness, and grit. The program is designed to assist low-income job seekers experiencing 

homelessness, substance abuse, mental health issues, welfare receipt, and ex-offenders, in their 

transition to employment. 
84 

f 


INSERT 33363A.055

Other key services and supports that GWTP provides include, but are not limited to: 

Stable Housing 

Intense Job readiness preparation 

Transportation assistance 

Referrals for health assessments 

Dental referrals 

Vision Screening/Eye Glasses 

Referrals for anger management 

Provision of interview clothing/work uniform/work shoes 

Grooming if needed 

Good working relationships with Probation Officers helps clients have a successful outcome( 

holding clients accountable) 
85 

[Submissions for the Record follows:] 


INSERT 33363A.056

AFFORDABLE RENTAL HOUSING 

~A.c:r.I.O.N. ----A Call To Invest in Our Neighborhoods 

Testimony for the Record 

House Ways and Means Committee Hearing on the Geography of Poverty 

February 15, 2017 

Submitted by: 

Barbara Thompson 

Executive Director 

National Council of State Housing Agencies 

ACTION Co-Chair 

Scon Hockman 

Senior Vice President & Chief Credit Officer 

Enterprise Community Partners 

ACTION Co-Chair 

On behalf of the Affordable Rental Housing ACTION (A Call To Invest in Our Neighborhoods) 

Campaign-a national, grassroots coalition of nearly 2,000 organizations and businesses dedicated to 

creating and preserving affordable homes for low-income families using the Low-Income Housing Tax 

Credit (Housing Crcdit)-we appreciate the opponunity to submit conm1ents to the House Ways and 

Means Commincc on the occasion of its hearing on the geography of poverty. A full list of ACTION 

Campaign members is auachcd. 

Affordable housing promotes financial stability and economic mobility. h leads to bener health 

outcomes, improves children's school pcrfonnance, and helps low-income individuals gain employment 

and keep their jobs. h also provides a financial return on our nation's investment through increased tax 

revenue and job generation. II is the foundation on which any effon to reduce poverty should be built. 

As the Ways and Means Commincc considers solutions to poverty as well as reforms to our nation's tax 

code, we encourage the Commiucc tO consider the tremendous impact of the Housing Credit on the lives 

oflow-income Americans, its more than 30 years of success, and its continued bipanisan suppon. 

A Proven Tool to Address a Vast and Growine Need 

The Housing Credit is our nation's most successful tool for encouraging private invcsllllcnt in the 

production and preservation of affordable rental housing. Since 1986, the Housing Credit has financed 

roughly 3 million apartments, providing roughly 6.7 million low-income families, seniors, veterans, 

people with disabilities, and other vulnerable populations with access to homes they can afford. 

Though the Housing Credit has provided affordable homes for millions of low-income households, the 

unmct need for affordable rental housing continues to far outstrip the available resources. An 

unprecedented 11.4 million renter households-more than one in four of all renters in the U.S.-spcnd 

more than balf of their monthly income on rent, leaving tOO linlc for other expenses like food, medical 

bills and transportation. 

Meanwhile, we continue to lose affor<L1blc housing from our nation's stock. Nearly 13 percent of the 

notion's supply oflow-income housing has been pcnnanendy lost over the past 15 years. Over the next 

decade, the demand for affordable housing will become even greater as 400,000 new households enter the 

rental housing market each year, many of wbom will be low-income. According to a recent study by 

Harvard University's Joint Center for Housing Studies and Enterprise Conm1unity Panncrs, the number 

www.rcmalhousingacaion.org 
86 


INSERT 33363A.057

AFFORDABLE RENTAL HOUSING 

~A.C."T.I.O.N. 

----A Call To Invest in Our Neighborhoods 

of renter households who pay more than half of their income towards rem could grow to nearly 15 million 

by 2025. 

A Model Public-Private Partnership 

For 30 years, the Housing Credit has been a model public-private partnership program, bringing to bear 

market forces, state-level administration and more than $100 billion in private sector resources. Under 

the program, pri vatc sector investors provide up front equity capital into a property in exchange for a 

credit against their tax liability in future years. Credits can be claimed only after properties arc built 

and occupied by income-eligible residents at affordable rents. This unique structure transfers the real 

estate risk from the taxpayer to the private sector investor. 

The Housing Credit also benefits from state-level administration, which reflects local priorities. Each 

state determines bow to allocate Housing Credits to respond to specific local needs, directing resources 

where they arc needed most. For example, more than I 0 percent of Housing Credit properties nationwide 

arc set aside for rural communities, and some states have set aside more than half of their alloc.1tion for 

rural communities. Other state preferences include suburban communities, certain metro areas, and Native 

American reservations, to name a few- underscoring the Housing Credit's flexibility and ability to 

support low-income rcsidcms in all cypcs of communities. 

State allocating agencies also oversee a rigorous approval process for these developments and monitor 

properties for compliance with program rules after their completion. Each state is required by the tax code 

to provide only enough subsidy to ensure financial feasibility, and underwrite Housing Credit properties 

at three different stages of the developmcm process to ensure they provide no more Housing Credit than 

necessary to each development. 

Accountability through the Tax Code 

In the rare event that a property falls out of compliance anytime during the first 15 years after it is placed in 

service, the Internal Revenue Service is able to recapture tax credits from the investor. Therefore, it is in the 

interest of the private sector investors to ensure that properties adhere to all program rules, including 

income eligibility, rent limits and high quality standards. This rigorous private sector oversight is a 

hallmark ofthc program, and has contributed to its unparalleled record of achievement. In fact, only 0.66 

percent of all properties during the Housing Credit's 30-year history bave gone into foreclosure, a record 

far bencr than any other real estate class. 

Incentive to Address a Market Failure 

Virtually no affordable housing development would occur without the Housing Credit. That is because 

housing simply costs too much to build for owners to charge rents that are affordable to low-income 

households absent an incentive such as the Housing Credit. According to Harvard University's Joint 

Center for Housing Studies, to develop new apartments affordable to renter households working full-time 

and earning the minimum wage without the Housing Credit, construction costs would have to be reduced 

by 72 percent of the current co11strucrion cost average- making the homes either substandard or 

financially infeasible. 

www.rcntalhousingaction.org 
87 

f 


INSERT 33363A.058

AFFORDABLE RENTAL HOUSING 

A.C:r.I.O.N. 

A Call To Invest in Our Neighborhoods 

ACTION Calls on Congress to Support the Affordable Housing Credit Improvement Act 

Though the need for Housing Credit-financed housing has long vastly exceeded its supply, Congress 

has not increased Housing Credit authoriry in 17 years. To make a meaningful dent in the affordable 

housing supply gap and help hundreds of thousands of families in poverry, the ACTION Campaign 

urges Congress to expand the Housing Credit by at least 50 percent. On average, state Housing Credit 

allocating agencies receive applications requesting two to three times their available authority, but these 

viable projects must be tun1ed down because of the lack of Housiog Credit authority to meet the 

developer and investor interest. 

Senator Maria Cantwell (D-WA) and Senate Finance Committee Chaim1an Orrin Hatch (R-UT) are 

poised to reintroduce the bipartisan Affordable Housing Credit Improvement Act to expand the Housing 

Credit by 50 percent and enact numerous provisions to strengthen the program. We expect House Ways 

and Means Health Subcommittee Chairman Pat Tiberi (R-OH) and full Comminee Ranking Member 

Richard Neal (D-MA) also to soon introduce legislation containing many of the same provisions to 

strengthen the Housing Credit. The ACTION Campaign strongly supports these bipartisan effortS. 

The ACTION Campaign also stresses the importance of protecting the Housing Credit in tax reform, and 

making necessary adjustments to ensure that its production and efficiency are not compromised. This 

includes retaining the tax exemption on multifamily Housing Bonds, which provide financing to roughly 

40 percent of Housing Credit developments and are critical to sustain tl1e Housing Credit's production 

potential. 

\V\Vw.rcntalhousingaction.org 
88 


INSERT 33363A.059

Written Statement to Ways and Means Human Resources Subcommittee Hearing 

On the Geography of Poverty, February 15, 2017 

Charles Bruner, Ph.D. 

The House Ways and Means Human Resources Subcommittee held an important hearing on 

February 15, 2017 on the topic of the geography of poverty. This topic deserves continued 

attention- and additional focus upon issues of age and race within difference geographic areas. 

It also deserves further drilling down not only to a county level, but to a neighborhood and 

census tract level. 

This is needed to correct one statement in the release for that hearing that may be part of the 

perception about poverty but simply is not borne out by a detailed look at the facts: 

The traditional geography of poverty is changing. In recent years, poverty has shifted 

from cities to the suburbs, while poverty rates in rural areas are consistently higher than 

rates in urban communities. 

In fact, Elizabeth Kneebone's testimony from the Brookings Institution at the hearing itself 

showed that, in terms of Americans in poverty, both suburbs and cities have experienced 

steady increases in the numbers of people in poverty from 1970 through 2015, while the 

number of people in poverty in rural areas has declined. Of course, population growth during 

this period has been primarily in metropolitan areas, and this only speaks to the numbers of 

people in poverty and not to their rates. 

The Institute for Research on Poverty at the University of Wisconsin, however, shows poverty 

rates by center city, suburb, and rural/small town America over a similar time period (1967-

2013). While in 1967 the highest poverty rate was in the rural/small town areas (20 percent, 

compared to 15 percent for center cities and 7 percent for suburbs), by 2013 center city rates 

(18.9 percent) had surpassed those in rural/small town areas {16.5 percent), while suburban 

areas had shown the largest percentage increase (to 11.9 percent). 

The figures from both these reports come from United States Census data, which is the source 

for virtually all information about poverty in the United States. 

Further analyses of poverty over this period from the Census also show that there have been 

dramatic reductions in poverty among seniors, while the poverty rate among children has 

increased. Moreover, while 61 percent of seniors in poverty are white and non-Hispanic, 69 

percent of children living in poverty are either non-white or Hispanic. More of the poverty in 

rural areas is in the senior population, while much more of the poverty in the center cities is 

among children, particularly very young children. 
89 

f 


INSERT 33363A.060

When analysis is kept at the county level, the differences between center cities and suburbs 

generally are missed, as well as differences within neighborhoods in center cities or types of 

rural areas. When poverty is examined at the census tract level, the tracts with the highest child 

poverty rates (where 50 percent of the child population or more is in poverty) mostly are in 

center cities. Higher poverty areas for rural and small towns that do exist almost entirely are in 

the South and Southwest or on reservation land. 

These high poverty tracts, whether in center cities or elsewhere, generally are the most distant 

from job opportunities, educational and recreational supports, and access to good housing and 

transportation. They generally are highly segregated racially and places subject to historical 

discrimination. 

Finally, they are rich in young children. In census tracts with child poverty rates of 10 percent or 

less, 5.9 percent of all residents are young children (0·4). In census tracts with child poverty 

rates over 50 percent, 8.6 percent of all residents are young children (even with the undercount 

of young children in the census). These census tracts need commensurately more opportunities 

for children to grow and develop- physically, educationally, and socially- into healthy and 

productive adults- but generally have far fewer. 

Part of the subcommittee release was a statement from Chairman Adrian Smith (R-NH), 

that stressed the importance of finding different solutions related to different geographies and 

needs to reach one common goal: 

Our instinct might be to think rural Nebraska ond urban Chicago are so vastly different 

they have nothing in common. But what we ore charged to da in this subcommittee is to 

find woys for individuals and families to succeed, and those challenges are universal, even 

if they require different solutions ... It's important we realize and respect the differences 

between the constituencies we represent, as too often Congress proposes notional, onesize-fits-oil solutions when loco/ flexibility is really what's needed. 

As this work proceeds, it is essential to tackle poverty issues with particular attention to 

differences of who is living in poverty across geographies- seniors and young children; white 

non-Hispanic and nonwhite and/or Hispanic persons. 

Further, if America society is to eliminate or dramatically reduce poverty over the long-term, it 

is critical that children growing up today, whether or not their households can escape poverty, 

have the opportunity- particularly health, safety, and education- to themselves grow up to be 

free from poverty as adults and as they raise their own children. While it remains important to 

address the needs of seniors to live in safety and dignity, with their basic needs met, the longterm solutions to poverty ultimately will be determined by to the extent to which children can 

grow into adulthood healthy, educated, and ready to take on responsibilities of work, career, 

and parenthood. 
90 


INSERT 33363A.061

~~~~ E . i i nterpnse· 

Statement of Enterprise Community Partners 

ln Response to the Ways and Means Committee Hearing on "The Geography of Poverty" 

February 15, 2017 

Enterprise Community Partners appreciates !he opportunity ro provide comments in response 10 !he 

House Ways and Means Conuniuee's hearing on the important issue of"Tbe Geography of Poverty." We 

applaud House Human Resources Subeommiuec Chaim1an Adrian Smith's conunirmenr to finding 

solutions 10 address poverty, recognizing rhar rhc best approaches will differ among different types of 

conunuoitjcs. 

Enterprise is a national nonprofit organization that works to create opportunity for low- and moderateincome people through affordable housing in diverse, thriving communities. Recognizing rhar the lack of 

stable, affordable housing is a critical factor associated wirb poverty, Enterprise and irs family of 

companies find opportunities ro provide the development capital and expertise needed to build affordable 

housing and fund community development projects in urban, suburban and rural neighborhoods. 

Since 1982, Enterprise has raised and invc~red more !han $23.4 billion in equity, grants and loans ro help 

build or preserve nearly 358,000 affordable homes in strong neighborhoods. Two of the primary tools that 

we use - the Low-Income Housing Tax Credit (Housing Credit) and New Markers Tax Credit (NMTC)-

were made possible by the continued bipartisan support of the House Ways and Means Commiuee. 

Enterprise has invested over $ 11 billion in Housing Credit equity throughout rhe country to date, creating 

or preserving nearly 137,000 affordable homes across more than 2,000 developments. Enterprise bas also 

used the NMTC to invest $824 million in distressed communities, creating over 16,000 jobs. 

As the Ways and Means Conunincc considers solutions ro poverty as well as rcfom1s to our nation's tax 

code, we encourage the Committee ro consider the tremendous impact these programs have had to dare, 

their track records of success and their bipartisan support. We also encourage the Committee ro consider 

how ro invest in communities with an eye towards ensuring access ro opponunity for all low-income 

residents. 

Our Nation's Need for Affordable Housi.ng is Vast and Growing 

More !han one in four U.S. renter households- roughly II million households- arc severely rentburdened, meaning that they spend more than half of their monthly income on rent and are left with roo 

linlc for or her necessities like food, medical care, and transportation. Meanwhile, only one in four eligible 

low-income households receives any housing assistance, despite the fact that nor a single county in the 

U.S. has nearly enough affordable apartments. 

The affordable housing shortage is expected ro grow in the coming years. An estimated 400,000 new 

households will enter the rental housing marker each year for rhe next decade, many of whom will be 

low-income, while we continue to lose affordable housing from our nation's stock due to obsolescence, 

decay, and conversion to market rate. A study by Harvard University's Joint Cenrcr for Housing Sntdies 

and Enterprise Community Partners found !hat the number of severely rent burdened households could 

increase to nearly 15 million by 2025. Investing in the development and preservation of our nation's 

affordable housing stock will be a critical step towards mitigating the economic difficulties that millions 

of Americans face. 

Affordable Housing Improves Lives and Contributes to Local Economies 

Poverty creates a network of disadvanragcs that impacts all aspects of life, from education to health, many 

of which arc directly tied ro the place that a person lives. Research from Harvard University's Raj Cherry 

ENTERPRISE 

lO 0 ~reet NE • S\1itt: 580 • WashingJ.oo. OC 20002 • 202,842.9190 • www.&,1crpriseComnrunity.org • www.EdcrpriscCommuni1y.tom 
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found that each year a child spends in a high-povcny neighborhood - as opposed to a lowcr-povcny 

neighborhood with more opportunities- decreases her chances of going to college, increases her chances 

of becoming a single parem and decreases her expected earnings as an adult. 

Affordable housing is a critical intervention in the cycle ofpoveny that leads to better health outcomes, 

improves children's school performance and helps low-income individuals gain employment and keep 

their jobs. When families have access to affordable housing, they arc less likely to forgo needed doctor's 

visits and medications due to limited financial means. In this sense, affordable housing functions as a 

"vaccine" to many of the consequences of poverty, including food insecurity and mental and physical 

health ailments. 

Equally critical is the link between affordable housing and improved education performance. Poverty is 

often coupled with frequent housing moves due unstable living arrangements, and moving children is 

directly tied to lower test scores, behavioral problems in the classroom and an increased risk of dropping 

out of school. A stable living environment through affordable housing improves performance in school, 

which is directly connected to an individual's opportunity for fururc earnings and economic mobility. 

Finally, low-income families living in affordable housing have more discretionary income than lowincome families who arc unable to access affordable housing. The benefits of discretionary income allow 

families to allocate more money to necessities such as health care and food, and which gives them the 

abiliiy to pay down dcbi, access childearc and save for education, a home down payment, rctiremcni or 

other unexpected needs. 

The benefits of affordable housing also extend beyond the residents, providing a financial rerum on our 

nation's investment by creating jobs in the construction, real estate and related industries that play a key 

role in revitalizing distressed coll\Jllunities. 

The Housing Credit is a Proven Tool to Encourage the De••e.lopment of Affordable Rousing 

The Housing Credit is our nation's most successful tool for encouraging private investment in tbe 

production and preservation of affordable rental housing. It has financed nearly 3 million affordable 

homes since 1986, providing homes to over 6.5 million low-income households in all 50 states and all 

rypcs of communities, including urban, suburban and rural. 

The Housing Credit is also the ideal model to provide flexibility to local communities since urban, 

suburban and rural communities all face different housing challenges. The Housing Credit is administered 

by state housing agencies, which allocate the credits based on a competitive process in response to the 

needs of local communities. 

Enterprise urges Congress to expand the Housing Credit by ar least 50 percent. On average, stare Housing 

Credit allocating agencies receive applications requesting two to three times their available authority, but 

these viable projects must be turned down because of the lack of Housing Credit authority ro meet the 

developer and investor interest. 

We also urge the enactment of provisions to strengthen the Housing Credit by llUlking it more flexible and 

easier to use in a wider range of communities, including rural areas and others that are more difficult to 

serve. Senator Maria Cantwell (0-WA) and Senate Finance Committee Chairman Orrin Hatch (R-UT) 

have introduced the bipartisan Affordable Housing Credit Improvement Act to expand the Housing Credit 

by 50 percent and enact numerous provisions to strengthen the program, and we expect legislation 

containing lllllny of these provisions to be introduced in the House soon. Enterprise strongly supports 

these bipanisan effortS. 

Enterprise also stresses the imponance of protecting the Housing Credit in tax reform, and making 

necessary adjustments to ensure that its production and efficiency arc not compromised. This includes 

El'lTERPRISE 

10 G Stn.x1 l\"E • Suite S80 • W.shin.gton. DC 20002• 202.842.9190 • wv .. ·. EnterpriseComrmmity org • w"w.Enterpri~ mmumty oom 
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re1aining the tax exemption on multifamily Housing Bonds, which provide financing 10 roughly 40 

percent of Housing Credit dcvelopmems and are crilicalto sustain lhe Housing Credit's production 

potential. 

Addressing Poverty Also Requires Community Development 

Investing in affordable housing is a critical component of addressing poverty, but housing must be 

supplemented by investmcms in the community's social and economic infrastructure in order 10 provide 

opportunity to residents. The New MarkeiS Tax Credit (NMTC) is a proven tool to increase lhe flow of 

capital to businesses and low-income communities by providing a modest tax incentive to private 

investors. Between 2003 and 2012, the NMTC generated about 750,000 jobs and leveraged nearly $80 

billion in total capital investment to businesses and revitalization projects in COJmnunities with high rates 

of poverty and unemployment. 

Though the NMTC has been extended numerous times since its authorization with bipartisan support, it is 

currently set to expire in 2019, which would negatively impact distressed eonununities across the countty 

that rely on this credit to attract capital and revitalize their economic base. House Ways and Means 

Committee Members Pat Tiberi (R-OH), Richard Neal (0-MA) and Tom Reed (R-NY) have introduced 

the New Markets Tax Credit Extension Act of2017 to pem>anen!ly extend the NMTC. Enterprise urges 

Congress to enact this bipartisan legislation so that NMTC projects can continue to revitalize 

communities with high rates of poverty and unemployment. Enterprise al.so urges Congress to protect the 

NMTC in tax rcfonn by pcnnancntly extending its authority. 

lnclusi"e Communities Promote Access to Opportunity 

Enterprise is deeply committed to promoting fair and inclusive communities with access 10 opportunity. 

We believe in providing a range of housing choices for low-income families, which includes preserving 

existing affordable housing, supporring the revitalization of distressed communities and encouraging the 

construction of new affordable housing in high-opportunity areas. As the Ways and Means Commiucc 

considers solutions to poverty, we encourage the coordination of invcstmeniS in housing, transportation, 

education, economic opportunities and other critical dements of strong conmlUnitics the help families 

move out of poverty. 

Congress Should Expand Key Affordable Bousi.ng and Community Development Programs 

As Congress considers a thoughtful agenda to address tough problems like poverty through ambitious 

investments in infrastructure and refomlS to the tax code, Eoterprise strongly urges Congress to expand, 

strengthen and protect the Housing Credit and Housing Bonds, permanently extend the New Markets Tax 

Credit, and ensure that these invcstmeots are rnadc with an eye towards increasing opportunity for lowincome residents. 

ENTERPRISI: 

IOC SU'n'1 NE • Suite SSO • Washington. OC 20002 • 202.842.9190 • \\o'\\'W.Entcrpn..;cC'onununily.org • W\'.o"'W.EntcrpnscCOini!Ulity.oom 
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Testimony Submitted for the Record 

United States House of Representatives 

Committee on Ways and Means 

Subcommittee on Human Resources 

Hearing on "The Geography of Poverty" 

Submitted on March 1, 2017 

Submitted by 

Goodwill Industries International 

15810 Indianola Drive 

Rockville, MD 20855 

Phone (301) 530-6500 

Fax (301) 530-1516 
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Testimony Submitted for the Record 

United States Bouse of Representatives 

Committee on Ways and Means 

Subcommittee on Human Resources 

Hearing on "The Geography of Poverty" 

Submitted on March I, 2017 

Mr. Chairman, Ranking Member, and Members of the Committee, Goodwill Industries 

lntemational, Inc., looks forward to working closely with Congress, the Administration and other 

stakeholders to improve opportunities for all people in poverty whether in rural, urban, or 

suburban areas across the country. 

Goodwill lndustries International is the membership organization for !he 163 autonomous 

Goodwill* organizations in the United States and Canada. We provide support for each local 

Goodwill organization serving a diverse range of communities, from dense urban to very rum!. In 

20 I 5, local Goodwill organizations connected 312,000 people with employment in the United 

States and Canada. A ltogcthcr, local Goodwill organizations provided career and financial 

services to more than 37 million people, including 2 million people who engaged face-to-face 

with Goodwill team members and 35 million who used Goodwill mobile and online lc. ming to 

improve their skills or access virrual coaching and counseling services. 

Goodwill organizations arc innovative and sustainable social enterprises that fund job training 

programs, employment placement services and other community-based programs by selling 

donated clothing and household items in more than 3,200 stores and online via mechanisms like 

shopgoodwill.com*. Local Goodwill agencies also earn revenue and creme jobs by contracting 

with businesses and government to provide a wide range of commercial services, including 

packaging and assembly, food services prcparotion, and document imaging and shredding. 

Goodwill member organizations offer a ' 'aricty of programs including intensive one-on-one 

career services to meet !he unique needs of people in thci.r communities. Services focus on f.'IJnily 

sclf·sufliciency through financial stability practices that allow households to bcncr manage their 

money and save for the future. Goodwill leaders know stability at home is necessary so families 

arc healthy and safe so workers can be successful on !he job. 

As discussed by !he four witnesses in tbesubeommiucc hearing on February 15, 2017, 

communities of all types face a number of common challenges to overcoming poverty: lack of 

stable housing, education opportunities, transportation, quality childcare and job training. People 

living in po'·cny in rural, urban and suburban areas also face challenges unique to their area. 

Based on the experience of Goodwill's network of local organizations in communities in all fifty 

States, creativity and individualization arc key to overcoming barriers. One example of this is 

Goodwill of !he Finger Lakes, based in Rochester, New York, which collaborates with several 

parmers to operate AgrAbiliry, the USDA program that invests in national, state and regional 

projects to encourage, train and support people with disabilities to begin or continue a career in 

agricultural production, supporting indepeudent living iu rural areas while providing a critical 

resource - food - to the country. Goodwill organizations located in urban centers also respond to 

community needs with creative solutions. This is happening in Cleveland, Ohio, where Goodwill 

lndusrrics of Greater Cleveland and East Central Ohio has increased capacity to serve the 

community in an urban center by opening the Community Campu.s at Goodwill !hat houses 

Goodwill as well as more !han 20 other organizations. This co-location of small and large 

nonprofits !hat provide complimentary services creates a holistic, integrated approach Ulat saves 

precious resources for persons served and each organization. 

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