Illinois’ future is threatened by poverty and hardship

The seventh annual Report on Illinois Poverty, released today by the Illinois Poverty Summit, illustrates that there are many indications Illinois families are finding it increasingly difficult to make ends meet. 87 of Illinois’ 102 counties had increases in poverty, nearly 1.5 million Illinoisans are poor – almost 700,000 of them live in extreme poverty, below half the poverty line – and over one third of Illinoisans in poverty are children.

The data in the report reinforce the urgency for a renewed, comprehensive anti-poverty effort in Illinois. The hardship faced by Illinoisans is evident:

Troubling economic inequalities exist in Illinois in both incomes and assets.
·    Full-time, year-round working Illinois women make only 70% of what their male counterparts make.
·    Illinois renters have a poverty rate of 28.7% compared to a poverty rate of only 3.6% for Illinois families who own their homes.
·    White Illinois households have a 515.4% higher median net worth than minority households.
·    In the Chicago region, from 1970 to 2000, the share of families with middle-incomes dropped by 26.7%.
·    Cook County is home to some of the most startling inequality in the country: It has the second-highest number of millionaire households and the second-highest number of poor households of any county in the nation.
 
Income has stagnated and declined while expenses have soared. From the early 1980s to the early 2000s, Illinois families experienced very meager income gains. The poorest fifth of families in the state saw their average income increase approximately $145 per year, from $14,969 to just $18,032 during that two-decade period. Middle-income families saw their average income increase from $41,179 to only $50,032, around $420 per year. The period from 2000 to 2005 was even worse: the Illinois median household income dropped by over $5,000. During the same time period the cost of energy increased 42.1%, the cost of education rose 35.7%, and the cost of medical care increased 23.9%. Illinoisans are feeling the effects of these increases. Over 430,000 insured, working age Illinoisans incurred health costs in 2004 not covered by their insurance that totaled one quarter or more of their annual earnings.

Our children and young adults face significant educational and economic barriers to success. Illinois’ funding gap of $2,355 per pupil between high-poverty and low-poverty school districts was the second largest gap in the nation in 2004. Such funding disparities result in unequal educational opportunities for our children. Nearly 18% of young Illinois adults ages 18 to 29 lack a high school diploma, which severely limits their competitiveness in the current and future labor markets. Additionally, the yearly net college costs for a low-income Illinois student to attend a 4-year public college or university consumes an average of 52% of their annual family income – a significant barrier to obtaining higher education.

Income support programs, designed to supplement worker’s low wages, are being compromised by inadequate benefit levels, as well as capacity and access issues. Despite increased participation in the Food Stamp program in Illinois, the program does not reach even half of Illinoisans who are eligible. Additionally, only 2 out of 10 people who are eligible for housing support or TANF actually receive the benefit. An Illinois family of three receiving the average monthly TANF cash assistance only receives $3,036 a year, well below half the poverty line. Some families cannot even sign up to wait for assistance they are eligible for: over half of the public housing authorities in Illinois have closed waiting lists for housing vouchers.

Illinois’ fiscal health crisis is jeopardizing the current and future economic well-being of families and communities. Illinois has cut aggregate spending on vital public services, the state continues to under fund the state pension fund, and service providers feel the effects of severe payment delays. Such short-term, quick fixes weaken the state’s human services infrastructure, contribute to growing debt that our children will pay for through increased taxes and fewer public programs and services, and ultimately lead to more entrenched social and economic problems in the future.

Illinois leaders have made a number of sound decisions to address these problems: an increase in the state’s minimum wage, a new rental housing support program that makes housing more affordable across Illinois, and an expansion of health insurance for all children in the state. Illinois must build upon these changes and continue to gather momentum to reverse these troubling poverty and hardship trends. This year, the report includes a series of concrete policy recommendations that, if implemented, will help more Illinoisans realize freedom from poverty. Some of the recommendations include:

·    Hold statewide legislative hearings to inform a plan to reduce by half the number of Illinoisans living in extreme poverty by 2015.
·    Develop a plan to ensure healthcare for all people in Illinois.
·    Reform Illinois’ tax system so state revenues support both the current level of public services and address growing unmet needs.
·    Expand the state Earned Income Tax Credit program so low-income workers can keep more of their earnings.
·    Strengthen communities’ abilities to respond to rising costs of providing services through a cost of doing business adjustment for human services programs.
·    Increase family asset building by developing a state plan for universal children’s savings accounts, ensuring every child born in Illinois can save for a more secure financial future.

Downloadable copies of the 2007 Report on Illinois Poverty and the Chicago Area Snapshot are available at http://www.heartlandalliance.org/maip/research.html

For more information contact Amy Terpstra – the Mid-America Institute on Poverty of
Heartland Alliance for Human Needs & Human Rights
aterpstra@heartlandalliance.org