Combined Impacts: Potential Federal, State and City Cuts to Anti-Poverty Programs

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It was a tough week for folks at the Community Service Society of New York, which has been serving New York City's poor since 1848. President Obama rolled out his budget proposal, which included significant cuts to Community Block grants and other poverty fighting programs. That was on top of bleak news from Albany. Then, Mayor Bloomberg released his budget. It included the elimination of 17,000 child care slots that the working poor and near poor rely on and cut a voucher program that helps the homeless get into housing.  

David Jones is the CEO of the Community Service Society of New York that has been serving the city for 160 years. He worries that President Obama's budget is the best it might get this year, since Republicans control the House of Representatives in Washington.

Jones: All and all, if this were the bottom line, we think this would be harmful, but we are concerned that this is sort of  the most progressive idea. He is setting the bar relatively low, which means as compromises take place from here on out, we can even potentially expect more disastrous impacts on domestic programs that help the poor and near poor.

Hennelly: So, none of this happens in isolation. What's the synergy between what is happening in Albany and losing this federal money?

Jones: Well, clearly in education supports for low income people. We know for instance that education for people that are out of school, who have to get their GED, that this pincer movement by both the federal cutback and a state cutback can have a fairly pronounced impact. We are also looking at cuts that are supported by the state in a range of health care areas. We are concerned that the least powerful element in the health care debate is consumers, and we are afraid when the dust settles that consumer access to low cost health care will be on of the principal victims at the rate this is going.

Hennelly: Aren't these cuts coming down even as you see a steady increase in the people looking for help from non-profits like yours—their unemployment benefits have expired and they still have not found a place to plug in?

Jones: As a matter of fact, all our polling data and the Independent Budget Office of the city of New York are showing that while people are right to say that the New York economy is recovering on some basis, we also happen to lead the nation in long-term unemployed. In the last poll we did, we asked people if they had lost their job and how long they had been unemployed. About 40 percent of those saying they had lost their job said they had been out of work for one to three years. That starts to be a crisis in the making because if we have larger and larger numbers of people who can't get work for protracted periods of time, it is going to impact all sorts of things. Obviously it is devastating to the individual and their families, but it will inevitably lead to rather dramatic increases in homelessness and other such dysfunction that come when people cannot work and contribute to the tax base.

Hennelly: Are you seeing early warnings of a permanent underclass in America and New York?

Jones: Well, that is what we are concerned about. As a matter of fact, at least anecdotally, I am concerned that in my childhood, the Bowery was the only place you saw  chronically unemployed and homeless. That was theoretically happened to people at the end of the road, out of the Great Depression. We have a much larger cohort  beginning to build of young men and women who have been out of work, never really connected to the work force who are now marching through. They get older and creating real dangers for the viability like a place like New York. And we don't think people get it yet, but we are going to have all sorts of social disorder. That results from leaving that number of people with no connection to the work force."

Hennelly: The latest reports from the Federal Reserve Bank of New York reported that there was actually a slowdown in growth in our region — down from 2.5 percent in the first nine months to a flat line. And employment wasn't much better. It grew at only half the national anemic rate of 0.3 percent. What are the consequences of a jobless recovery?

Jones: People keep talking about, well we can't tax anymore, but we know that there is sort of a unseen tax — a large number of people who can't have any visible means of support end up burdening localities in ways that can be directly foreseen. Clearly some of it is going to present as increased rates of crime, which you are beginning to see but it is also reaching an unprecedented rate homelessness and not connecting that to the long term problems that people are incurring. We are also seeing numbers that are frightening to us among particularly young people without high school diploma.

Hennelly: You said that [your agency] CSS has documented that in New York City there is between 1.3 million to 1.6 million people of working age without a high school diploma?

Jones: As a matter of fact, six or seven month ago, we came out with a report at CSS that New York state and city has the lowest passage rate of the GED in the entire nation. We are now lagging behind Alabama and Mississippi at just the time that the question of such a credential becomes critical very every New Yorker. We have been pumping people into this economy without a high school diploma and that was thought to be all right. There will always be low wage jobs. Now there is such a surfeit of people trying to get low wage jobs that Starbucks is looking for years of college to before they consider you for employment as a barista. That is essentially going to leave a whole generation of young people who were either pushed out or dropped out who did not get a credential in enormously difficult shape and having no place to go in the economy.  

Hennelly: So you say that is happening while more and more senior citizens are actually re-entering the workforce?

Jones: Because pensions were so horribly hit, more and more seniors who would normally see as retirees are being forced back into low wage work as the greeters at everything  from the Home Depot , to Lowe's and the rest. But those used to be the entry level jobs for people that hadn't managed to get the credentialing and skills they needed to participate.