Today is Groundhog’s Day, and I was preparing my remarks, I kept coming back to this idea that we’d rely on a small rodent to predict our future. For those of you who may not have seen this morning’s news, Punxsutawney Phil did not see his shadow this morning, forecasting an early spring.
Whether or not the groundhog sees his shadow is about where he is standing now and what is behind him. In Cleveland, our past sometimes casts a long shadow. Historically, the groundhog is pessimist, much more likely to get scared and “predict” 6 more weeks of winter. But more often than not, it’s wrong. In the same way, our past challenges and even the struggles of today don’t have to pre-ordain our region’s prosperity in the future. And I believe that a focus on people can propel progress in Cleveland and beyond.
Community Solutions has worked on issues related to poverty for more than a century
My organization, The Center for Community Solutions is a nonprofit nonpartisan think tank engaged in improving health, social, and economic conditions. Many of the members of our Board, our funders, and our small and mighty staff, and my husband Kyle are here today. Thank you, so much, for your support.
As a think tank, we of course study issues, but we also actively work to change policy, practices, and perspectives. Community Solutions has become a trusted source of analysis and advocacy with a century-long legacy of pragmatic problem-solving in Ohio’s health and social service landscape.
The Center for Community Solutions is a legacy organization in a legacy city. Community Solutions is deeply rooted in the history of Cleveland. In the 1910s, a group of wealthy philanthropists and do-gooders combined their money and energy to create an organization which would examine systemic issues, pool resources, and foster coordination.
When it was established in 1913 as the Federation for Charity and Philanthropy, the concept was so innovative that it warranted a full-page article in Sunday’s New York Times. We have a copy hanging in our office on East 9th Street.
A lot has changed in the intervening 111 years, but what has never wavered is Community Solutions’ commitment to improving health, social, and economic conditions and our belief that thinking systemically, working to improve policy, and acting in concert can ignite lasting, positive change.
Community Solutions has been an incubator, a convener, a resource identifier, a trusted source of information, and a policy driver. My predecessors pushed for state legislation to establish County Boards of Developmental Disabilities to get people out of mental institutions. They were the catalyst for the collaborations which today are the Centers for Families and Children, Care Alliance, and Groundwork Ohio, among many others. We helped develop Cuyahoga County’s first-ever strategic plan for health and human services, and today we provide policy support for the Greater Cleveland Funder’s Collaborative. Over the years, we’ve contributed to just about every foundation, nonprofit, initiative, and government agency in town that works on health and social services.
We advocate with policymakers at all levels of government. Community Solutions is solidly nonpartisan but with a point of view. We believe that good ideas can come from anywhere. We evaluate policies and proposals based on their merits, not based on who is putting it forward and what political party they may be from. We are always looking for common ground, for the places where interests intersect.
Frankly, it’s not often that we lead from the front. For Community Solutions, it’s not about credit taking. And sometimes we’re most effective when we’re working steadily and quietly. As a legacy organization, we can stand to be patient and we know that incremental change is still progress.
You may not know our name, but you likely know our work, and you’ve probably encountered some of our findings. Just one example: My analysis, first published by The Center for Community Solutions showed that Cleveland is the second poorest large city in the country. And I update it every year when new data is released.
My expertise straddles public policy and applied research and a focus has been poverty and related issues. I’m particularly interested in finding sustainable solutions to address the needs of Ohioans in the moment, while seeking approaches to put struggling families on a new trajectory.
The recent experience of the COVID-19 pandemic illuminated some of the deepest vulnerabilities and the largest disparities. Yet we also saw the implementation of novel and innovative approaches to helping those in need. How we apply the lessons of this tumultuous time could mean the difference between thriving and merely surviving for our neighbors and communities.
5 Things you need to know about poverty in Cleveland
At The Center for Community Solutions, we’ve become a little obsessed with the number 5. We happen to have 5 policy priorities, and every Monday, we send out a “5 Things you need to know this week” newsletter. Today I want to talk about five things we all need to understand about poverty in Cleveland.
As Cleveland’s population has fallen, the poverty rate has risen
First, let’s look in the past to understand why we are where we are today. The total number of people living in poverty in Cleveland has stayed relatively steady over the past 70 years. It’s even fallen. When the modern method of measuring poverty was introduced in the mid-1960s, and as our country embarked on President Johnson’s so-called “War on Poverty,” there were just shy of 140,000 poor people in Cleveland. Today we’re at about 112,000. In population statistics, that’s not much movement over almost seven decades.
But what has changed is Cleveland’s total population.
In 1965, Cleveland was a city of just over 800,000 people. Today, Cleveland’s population is below 360,000. Cleveland lost more than half its population, although the pace of the decline has slowed significantly in the past decade, and Cleveland may be done shrinking.
With the total population falling and people in poverty staying about the same, the result is that poverty has become concentrated. The distance between all people and people below poverty is getting smaller and smaller. We are being squeezed. Because total population fell by half, it’s no surprise the share of Clevelanders living in poverty, the poverty rate, has nearly doubled going from 17 percent in 1965 to 32 percent in 2022.
The 112,000 people living in poverty in Cleveland include around 35,000 children, 93,000 younger adults ages 18 to 34, and 13,000 older adults. That means one-third of Cleveland’s population, overall, is living in poverty. Cleveland is a high-poverty city, and, by and large, we’ve gotten used to that.
Now there are two ways to reverse the trend and improve poverty rate. Either, we add people to the total population, diluting poverty. OR, we work to lift current residents out of poverty, We can, and should, probably work on both. But it’s going to be really difficult, almost impossible, to grow the City out of poverty.
There are certainly parts of the city which are growing. More people are living downtown. But we’re talking about thousands of new residents, not several hundred thousand people. It is imperative that we work to improve conditions for the people who are here now.
For a community to thrive, the people must thrive
You cannot have a thriving community, if the people within that community are not thriving! All of the world-class assets in Cleveland – and we certainly have some – won’t change fact that far too many Clevelanders are being forced to choose between food and housing, or are stuck in low-paying jobs with no hope of career advancement because they can’t afford reliable transportation, or have to choose between fixing their leaking roof or paying their heating bill. In a recently survey we conducted, commissioned by Cuyahoga Division of Senior and Adult Services, 46 percent of older Cuyahoga residents reported having to make choices between necessities in the past year because of money. The most common thing they’re giving up is food.
Every single issue that Community Solutions works on, and in fact, nearly all of Cleveland’s most pressing problems are a cause or a consequence of poverty.
The way we measure the poverty threshold is foundationally flawed
Which brings us to the second thing we need to realize: The system is not designed to uplift.
Take how we measure poverty. Official poverty statistics, count only pre-tax cash income and do not take into account public benefits which help struggling families get by. Social security does count because it’s considered a cash benefit, which is why older adults consistently have lower poverty rates.
It is also widely accepted that the bar we use, the poverty threshold, does not reflect income needed to get by. The Census Bureau puts it this way: “Although the thresholds in some sense reflect a family’s needs, they are intended for use as a statistical yardstick, not as a complete description of what people and families need to live.”
And in fact, MIT’s Living Wage Calculator puts the income needed to sustain a family of one adult and two children at over $80,000 per year, paying for everything themselves, including paying the full cost for full-time child care for the children. In contrast, the Federal Poverty Level (FPL), used to calculate eligibility for a wide variety of programs, is $25,820 for a family of 3 of 2024.
Eligibility for programs is set so low that people earn too much to qualify well before they are able to afford all their basic needs. There are points on the path from poverty to self-sufficiency that earning just $1 more means the loss of a public benefit worth hundreds of dollars to a family. This causes a benefit cliff and creates a disincentive to work.
These are design flaws built into the programs. And they aren’t an accident. But there are many policy solutions to improve programs. Introducing earned income disregards to reduce the disincentive to work and simplifying and streamlining eligibility determination would help improve access and could save money. Community Solutions will continue to advocate to strengthen the health and human services safety net.
Poverty costs us all. In lost tax revenue, reduced resources for infrastructure investments, increased health care costs, and much more. Closing gaps and reducing disparities is another way to propel economic progress in a high-poverty city. Health Policy Institute of Ohio released a report last year calculating that if we eliminated racial disparities, Ohio stands to gain $79 billion in annual economic output by 2050. A few years ago, the Federal Reserve Bank of Cleveland found that the racial income gap “is the primary driver behind the wealth gap and that it is large enough to explain the persistent difference in wealth accumulation” between Black and white residents.
Cleveland’s continued racial segregation is a legacy of redlining
And now we move to the third thing we have to acknowledge.
Cleveland has a lot of gaps to close. The county or regional-level statistics mask an enormous amount of variety within communities. Women, people with disabilities, and children are overrepresented in the population living in poverty. And non-Hispanic white residents of Cleveland are about half as likely to be living in poverty as people of color.
According to a 2021 Brookings report “Black residents are extremely segregated from the rest of the population in four cities: Detroit, Baltimore, Atlanta, and Cleveland.”
The legacy of redlining and historic disinvestment stays with us. These overtly racists policies are STILL casting a shadow.
When you look at the historical redlining maps from the Federal Home Loan Bank Board and Home Owners Loan Corporation, the areas classified as “hazardous” or “declining” in the 1930s and 40s, designed that way in part because people of color living were living there –– those parts of our community are concentrated on the east side of Cleveland.
And unfortunately, when we map negative health and economic conditions today we see the same geographic patterns. The maps look eerily, strikingly similar. Whether it’s parts of the City that still aren’t connected with Broadband; where unemployment is high; where people are living with diabetes; where they report poor physical health, poor mental health; where poverty is concentrated. The list goes on and on. The maps look the same.
It doesn’t have to be this way. Other cities have been able to move on from these patterns. “Compared to the rest of the country’s 100 largest metro areas, Cleveland ranks 98th in racial inclusion, with massive gaps in earnings, poverty, and employment” according to Brookings.
This is unusual among large U.S. cities and it is unacceptable. We see the civic sector working tirelessly to reverse these trends and move on from this legacy of racism, discrimination, and disinvestment. But we need to accelerate progress and we need to do lots of things simultaneously, focused on both place-based and people-based strategies.
If we are data driven, if we want to focus on the areas of greatest need, ALL of our considerable resources would be targeted to these places and these people. In Cleveland, our resources are considerable.
Government funding accounts for 75 percent of health and human services spending in Cuyahoga County
Which brings me to the fourth thing we need to understand. Cleveland is a generous and resource-rich community. I wasn’t surprised by the recent report that Clevelanders are the best tippers in the country, because we donate and we contribute and we support community initiatives. And we’ve been doing it for decades.
My organization was founded by people putting their own personal resources to work for the community. We’re blessed with a philanthropic community that is the envy of cities across the country. These resources are deployed to change our communities trajectory.
We also vote to make investments to address poverty. Cuyahoga County has a health and human service levy on the primary ballot March 19. Issue 26, if passed, will collect $137 million annually in local, flexible dollars which can be used to meet needs, fill gaps, and implement innovative solutions. It’s a renewal, not a tax increase. I’ll be voting for Issue 26 and I hope you do the same.
If you look at the total pie of spending on Health and Human Services, the considerable investments by philanthropy and United Way each year are dwarfed by the spending by government. In fact, 75 percent of the total investments in health and social services in Cuyahoga County came from public sources. This includes state and federal spending allocated by the state of Ohio and local dollars generated by property tax levies.
And this doesn’t even count resources flowing directly to families. The Supplemental Nutrition Assistance Program, or SNAP, provided about two and a half times as much, $270 million every month in direct benefits for Ohio residents. The USDA reported that every $1 of hunger benefits generates up to $1.79 in economic activity. Over the course of a year, SNAP alone could mean as much as $5.8 billion in economic activity in Ohio.
As we’ve seen, government is part of the problem, but they are also have a outsized role to play in the solutions to poverty.
And that’s the final thing you need to know about poverty in Cleveland.
The pandemic child tax credit was a huge success; and ended too soon
There are two times in the last decade or so when you can clearly, and immediately, see the impact of a policy change in the population level data. The first was when the Affordable Care Act was fully implemented and Medicaid expanded to cover all Ohioans up to 138 percent of the federal poverty level. The number and share of Ohioans who were uninsured dropped almost overnight. And there are 575,000 fewer Ohioans who are uninsured today than before Medicaid expansion.
The second time happened very recently. The COVID-19 pandemic was rough. However, one thing that came out of the pandemic is society and government tried a lot of new things to meet the unexpected challenges. There’s a saying in some policy circles that you never want a good crisis to go to waste. Ohio used just about every tool in the toolbox.
Among the innovation was a temporary change to the tax code which did more to lift children out of poverty than any other single program. But it’s not a program. It was the improvements to the child tax credit. For one year, in 2021, the federal government implemented enhancements to the Child Tax Credit, or CTC, to expand it to more children, to make it more available for low-income families, and, crucially, for 6 months, the U.S. Treasury was making monthly deposits of up to $300 per child in the bank accounts of millions of American families. About 95 percent of Ohio’s children benefited. These weren’t handouts, they were advances or pre-payments on the Child Tax Credit expected to be claimed by the family when they filed their tax returns.
Doing some back of the envelop math, Community Solutions estimated that those tax credits effectively lifted 10,000 children in Cleveland out of poverty. During this time, the Census Bureau was consistently and methodically collecting data on how families were using the credits.
The Census Bureau’s Household Pulse Survey in 2021 showed that people used those dollars exactly how one would hope. Among those who spent most of their child tax credit pre-payment in August 2021, 77 percent bought food, 61 percent bought clothing, and 41 percent paid for utilities. That was an usually high number using the money for clothing, but what happens in Ohio in August? It’s back to school time.
National studies showed that families who received Child Tax Credit pre-payments did not reduce their employment. That means the extra resources were enough to cover some expenses, pay down debt, or save for education, but not enough to convince working parents to stay home.
This is the only direct-to-families anti-poverty program which wasn’t tied at ALL to what the parents were doing. There were no work requirements, no compliance or redeterminations, or limitations on the use of funds. That meant the Child Tax Credit was very inexpensive to administer.
And you know what happened?
Child poverty in the United States was effectively cut in half!
But it didn’t last. When Congress allowed those enhanced tax credits to expire and other pandemic assistance ended, child poverty went right back to where it was. When it ended, 18 million children were no longer eligible for the full child tax credit because their family’s income was too low. According to the Center on Budget and Policy Priorities, 90 percent of children in poverty are in families which cannot claim the full credit.
A more modest proposal to bring back some Child Tax Credits has been introduced in Congress with bipartisan support. Community Solutions will be talking to state policymakers to see if Ohio can do what 15 states have already done and enact a state child tax credit in addition to the federal credit. We’re also going to see if we can improve Ohio’s earned income tax credit to reach more very low-income families.
Poverty is a very simple problem, that demands multifaceted solutions
So what does this all mean? At it’s core, poverty is about a lack of resources. It’s about money. It’s about people and families not having enough to afford the basics. It’s about being forced to make tough choices, choices that you know you are going to have to pay for down the line. This is simple economics.
It is no longer true that just having a job is enough to be above poverty. In fact, there were 6,000 adults living in Cleveland last year who worked full time, for the full year, and still didn’t earn enough for their households to be above poverty. fact, working 40 hours per week, 52 weeks a year at Ohio’s minimum wage of $10.45 per hour, someone would still not earn enough to be above the federal poverty level for a family of 3.
We must find ways to bring more resources to families. A good job with benefits that pays a family-sustaining wage is the fastest way for a family and all of its members to get out of poverty.
Steve Jobs said “When you first start off trying to solve a problem, the first solutions you come up with are very complex, and most people stop there. But if you keep going, and live with the problem and peel more layers of the onion off, you can often times arrive at some very elegant and simple solutions.”
When I was first traveling around the state talking about poverty, I used to say that poverty was a complex problem that required multifaceted solutions. But what I’ve come to realize is that poverty is actually a very simple problem. It’s about lack of resources. We still need multi-faceted solutions because the things that hold people and families back are so varied.
It could be simple, but it’s also difficult. Because if the changes needed to address poverty in Cleveland were easy, or affordable, or politically palpable, we would have already done them.
There is a different way. In order to propel our region and it’s people forward, we must take a good look at current conditions. Make a clear-eyed assessment of where things stand today and identify the avenues for progress. Ask questions about how we got where we are today and remove our pre-conceived notions to think creatively and expansively about possible solutions. Trying to hide our problems do not make them go away. And difficult doesn’t mean impossible.
Cleveland must continue to try things, to innovate, to do more of what works and to stop doing what doesn’t. We need to use all the resources at our disposal, but also recognize none of us can do it alone.
We can do anything, but we don’t have the money, the time, the energy, or the will to do everything. Community Solutions looks at data and uses analysis to identify the barriers that are holding us back. To look at where public policy just isn’t working, and find the levers that can be used to propel positive change in policy, practices, and perspectives. I ask each of you to do the same.
When, like the groundhog, we stop being afraid of what is behind us and we don’t allow the shadows of the past to determine our future, we can ignite growth and spring will come.