America's Young Families With Children Devastated by Two Decades of Shrinking Incomes, Soa

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America's Young Families With Children Devastated by Two Decades of Shrinking Incomes, Soaring Poverty To: National Desk Contact: Stella Ogata or Claude Duncan of the Children's Defense Fund, 202-628-8787 WASHINGTON, April 14 /U.S. Newswire/ -- Nearly two decades of shrinking incomes and soaring poverty have devastated all types of young families with children, turning the gap that has always existed between them and older, more established families into a chasm. "The implicit message to young Americans is frighteningly clear: bearing and raising and nurturing children may no longer be compatible with active pursuit of the American dream," said Marian Wright Edelman, president of the Children's Defense Fund. "No society can convey this message for long if it hopes to survive and prosper." According to "Vanishing Dreams: The Economic Plight of America's Young Families," a detailed analysis by the Children's Defense Fund in cooperation with Northeastern University's Center for Labor Market Studies of economic trends affecting families with children headed by persons under age 30: -- After adjusting for inflation, the median income of young families with children plunged by nearly one-third -- 32 percent -- between 1973 and 1990. For older families with children it dropped by only 6 percent, and for families without children it actually increased by 11 percent. -- These income losses in family income from all sources have affected virtually every group of young families with children: white, black and Latino; married-couple and single-parent; and those headed by high school graduates as well as high school drop outs. Only young families with children headed by a college graduate experienced a slight increase in their median income between 1973 and 1990. -- The huge income decline for young families greatly worsened the gap between them and other Americans. The median income for young families with children was more than two-thirds that of older families with children in 1973; by 1990 it had fallen to less than one-half that of older families. As a result of these income losses, the poverty rate for children in young families doubled from 20 percent in 1973 to a shocking 40 percent in 1990. -- The dramatically increased child poverty in young families does not reflect only the problems of America's most vulnerable populations. Those groups that a generation ago were largely insulated from high child poverty rates have been stripped of that insulation. Between 1973 and 1990 child poverty rates more than doubled in young white families (to 27 percent in 1990), young married-couple families (to 20 percent), and young families headed by high school graduates (to 33 percent). -- There were also astronomical increases in the child poverty rates of groups that have always had high poverty rates: in young black families, the 1990 child poverty rate was 68 percent; in young Latino families, 51 percent; in young female-headed families, 77 percent; and in young families headed by high school dropouts, 64 percent. -- In virtually every critical area of child development and healthy maturation, child poverty creates major roadblocks to individual accomplishment, future economic self-sufficiency, and national progress. Studies show, unsurprisingly, that a poor child is more likely than a nonpoor child to go without necessary food, shelter, and health care and to die in infancy. Poor children also are less likely than nonpoor children to be in good preschool programs or child care settings, and more likely to fall behind in school, drop out, get pregnant too soon, or be unemployed. -- The economic plight of young families is a national, not just an urban or a regional problem. Nearly three-fourths of the increase in the number of young families with children living in poverty came outside central cities. Young families with children in every region of the country suffered sharp declines in median income and steep increases in poverty between 1973 and 1989, even before the current recession further battered all regional economies. Young families are in trouble because of a devastating combination of profound changes in the American economy, government's inadequate response to families in trouble, and changes in the composition of young families themselves. Failing real wages (abetted by the drop in the minimum wage's value) and the growth of part-time, part-year, and temporary jobs all contributed to a cataclysmic decline in annual earnings for young workers. -- Median annual earnings of heads of young families with children plummeted by 44 percent between 1973 and 1990. These inflation-adjusted earnings losses were staggering for heads of young white families with children (40 percent), for high school graduates heading young families with children (41 percent), and for heads of young married-couple families with children (33 percent), as well as for heads of young families with children who were minorities (black: 71 percent; Latino: 44 percent) and high school dropouts (70 percent). -- Earnings losses for family heads were even greater than the decline in total family income, in part because so many families responded to the earnings loss by sending a second worker into the labor market. This strategy to sustain total family income only worked partially for families and has several drawbacks as well: higher child care costs, less time with children, and more familial stress. -- Nearly one-half of the increase in poverty among young families and children between 1973 and 1989 (before the start of the current recession) can be attributed to the changes in jobs and wages and to government policies that have made it less likely that government help would lift young families out of poverty. These changes have hurt all young families with children, regardless of their family structure, race or ethnicity, or educational attainment. -- Earnings and income losses were huge before the current recession. The greatest part of income losses for young families with children occurred during the 1980s. Their median income fell by 19 percent as a result of back-to-back recessions in 1980 and 1981-1982, and only rose by an insignificant 1.4 percent during the remainder of the decade. The current recession sent young families with children into an economic freefall, with their median income plunging by 9 percent in a single year from 1989 to 1990. The rest of the increase in poverty among young families and children reflects changing family composition. -- Today's young family heads are somewhat better educated than those in the generation preceding them, which would increase incomes, but they also are more likely to be minorities or single women struggling to raise children on their own. Because these groups have considerably lower earnings and higher poverty rates to begin with, poverty among young families and children rises as their share of the total group of young families rises. -- The growth in young female-headed families with children is in part a reflection of changing values. But the economic hardships associated with falling earnings and persistent joblessness among young adults also have contributed significantly to falling marriage rates, the increasing rates of out-of-wedlock childbearing, and growing numbers of single-parent families. -- The fastest growth in out-of-wedlock childbearing has occurred among women in their twenties, not among teenagers. -- Increases in poverty among children in young families are not the result of young Americans having more children. Indeed, young families as a group have responded to a tightening economic vise by postponing childbearing and choosing to have fewer children. But these attempts to adapt their behavior have been overwhelmed by the sweeping economic and social changes that now place young families with children in great jeopardy. "The current generation of young adults generally is no less educated, motivated, or responsible than its predecessors, " said Edelman. "As a group, they are more likely to complete high school, enroll in college, delay childbearing, and prepare for their futures than the generation before them. But in fundamental ways, the rules have changed. Young Americans now are less able to build a foundation for their own economic security, form stable families, provide adequate support for their children or have hope and confidence in the future. As a group, they are falling further behind older Americans and are bearing most of the burden of the nation's massive economic and social change and its loss in jobs and income. Edelman said that a child in a family headed by a parent younger than 30 is: -- Twice as likely to be poor today as a comparable child in 1973; -- If living with both parents, two and a half times as likely to be poor as in 1973; -- Nearly three times more likely to have been born out-of-wedlock than a child two decades ago; -- One third less likely to be living in a home owned by his family than a child just a decade ago; -- Three times more likely to live in a family that pays over half its income for rent than in 1974; and -- Less than half as likely to be pulled out of poverty by government help as his counterpart one generation back. "America's young families cannot wait another year for a response to the economic disaster that has struck them," Edelman said. "While the deterioration of their economic status will not be reversed quickly or easily, immediate steps must be taken by Congress in 1992. First, it is absolutely essential that Congress brings down the anachronistic and unfair budget walls that have locked in Cold War spending patterns for a post-Cold War world. We're still spending $9,718 per second for defense against vanishing enemies but only $707 per second on child health and only $70 per second on Head Start to start restoring the American dream. We need to make the budget walls vanish and act immediately in three areas to ensure that every child has a Fair Start, a Healthy Start, and a Head Start. A Fair Start Enactment of a refundable children's tax credit. As proposed in recent months in various forms and amounts by the National Commission on Children and key members of Congress from both parties, the federal government should bolster the incomes of families with children through the establishment of a refundable tax credit for children. Such a credit would reduce federal income taxes for middle- and low-income families and help the lowest income families that have no tax liability through a tax refund. While creating no new bureaucracies, a refundable children's credit would target tax relief and economic support precisely to the group -- families with children -- that has been hardest hit by declining incomes and rising poverty rates since 1973. The administration's alternative proposal is extremely regressive. It gives $310 to a family with two children if their income exceeds about $100,000; $280 if it is more than $50,000; $150 if income is between $15,000 and $50,000; and zero if it is under $15,000. And for the poorest of all young families -- AFDC recipients -- the administration has signaled the states that it will welcome their cutting benefits for children. -- Creation of a child support insurance system. To combat extremely high poverty rates among young female-headed families and to give all single parents the chance to lift their families out of poverty through work, federal and state governments should join in ensuring that all children who are not living with both parents receive a minimally adequate child support payment from the absent parent. If adequate payments cannot be collected on the child's behalf, despite the best feasible federal and state child support enforcement efforts, the federal government should make up the difference and guarantee that children do not suffer as a result of the shortcomings of the child support system. A Healthy Start -- Health insurance coverage and access. In the decade of the 1980s, the proportion of employed heads of young families with children whose employers paid for part or all of their health insurance dropped by one-fifth, and employers cut back on coverage for dependents even more than for workers. The nation must enact a national health plan to assure insurance coverage for all Americans. Children and pregnant women need basic health care now -- including prenatal and maternity care, check-ups, immunizations, and care for children who are sick or disabled. As an immediate step, the president and Congress must extend Medicaid coverage to every low-income child and pregnant woman. Steps also must be taken to ensure that this insurance provides real access to essential health services, not merely theoretical coverage. Necessary steps include universal access to childhood vaccines and increased funding for community and migrant health centers, the National Health Service Corps, and other public health activities. A Head Start -- Full funding of Head Start. A first step in bolstering the productivity of our next generation of workers lies in early investments in quality child care and early childhood development for America's children. Every dollar invested in early childhood development programs saves $5.97 in later special education, welfare, crime, and other costs. Head Start and other quality preschool and child care programs help keep children at grade level, help children get ready for school, and help prevent the need for costly special education programs in later years. Yet Head Start still reaches only one in three eligible preschool children. As recommended by prominent business groups, educators, and a broad range of study commissions that have examined the educational problems of disadvantaged children and youth. The president and Congress should act to ensure every child a Head Start by 1995 by enacting immediately S. 911, the School Readiness Act, and accelerating the funding increases it provides to boost the program's appropriation by $2.1 billion this year. Numerous other steps, detailed further in the recommendations section of Vanishing Dreams, are necessary to help today's young families with children and provide a strong foundation for future generations. Increases in the federal minimum wage and other initiatives to supplement low earnings all would help young parents support their children through work. Greater investments in the skills and productivity of America's future work force through education and job training programs also are essential, as are family preservation services to help stressed young families stay together and better nurture and support their children. Finally, the nation must maintain an adequate safety net to protect children when their young parents are unable to support them by aggressively pursuing full employment conditions, broadening eligibility for unemployment compensation, and ensuring that public assistance benefits are minimally adequate. Vanishing Dreams, by CDF analysts Clifford M. Johnson and James D. Wein and Northeastern University Center for Labor Market Studies Director Andrew M. Sum, is available for $6.50 postpaid from the Children's Defense Fund, 122 C St. NW, Washington, DC 20001. ------ Editors Note: Press copies available on request.

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