The Policy Shop: Tackling Chicago’s deep poverty crisis

The Policy Shop: Tackling Chicago’s deep poverty crisis

This edition of The Policy Shop is by Director of Fiscal and Economic Research Bryce Hill.

You’ve got $19 today. Can you get through the day on just that?

Food. Shelter. Clothes. Transportation.

Even if you make it through today, can you do it again tomorrow? Then the day after? Then for years?

No stress there.

That’s daily life for about 240,000 Chicagoans. They live in “deep poverty,” or less than half of what the federal government has set as the poverty line.

Deeply impoverished. In 2022, the deep poverty rate was 5.5% of all Americans and 9.2% of Chicagoans.

Chicago is facing one of the worst poverty crises in the nation. More than 450,000 live below the federal poverty line. That’s 17.2% of city residents, compared to a national rate of 11.5%.

Of that roughly 450,000 impoverished Chicagoans, 53% of them were in deep poverty.

A person living on half of the poverty income level means about $19 per day, or just under $7,000 annually in the city. An annual income below $29,678 is the poverty line for a family of four nationally, but a Chicago family in deep poverty exists on less than $14,000. That’s under $10 a day each.

The deep poverty rate is particularly high among three groups: 14.3% of children under age 18, 15.6% of Black Chicagoans and 17.7% of individuals in single-mother households.

Upward mobility. Like Chicago poverty in general, deep poverty is primarily concentrated among those who are able-bodied, of working age and their children. Disabilities do not impact 81% of the deep-poverty population. Only 10% of those in deep poverty are age 65 or over.

While 240,000 Chicagoans living on less than $19 a day sounds bleak, their demographics also offer insight into potential solutions.

Poverty solutions should focus on what is preventing able-bodied adults from taking full-time jobs. Evidence suggests anti-poverty programs that incentivize work have been effective in increasing employment and raising incomes to promote upward mobility.

Removing cumbersome regulations, improving the quality of education and fostering an environment in which employees, employers and communities can flourish all present opportunities for public policy solutions. Reducing poverty improves the lives of all Chicagoans, regardless of income status.

Our part. So what is the Illinois Policy Institute doing about poverty? We created the Center for Poverty Solutions. We’ve published a foundational report looking at the issue in Chicago, its place in the nation and the problems that have made the War on Poverty a multi-decade failure.

The next major step in that process was adding Dr. Eddie Kornegay as executive director of the Center for Poverty Solutions.

“I look forward to helping empower our communities to tackle one of the biggest problems the city faces – its growing poverty rates,” Kornegay said. “We can make our biggest mark on our communities by focusing our poverty reduction efforts on the individuals affected by the problems of poverty.”

Kornegay brings over 28 years of experience in urban ministry and community organizing to the role. Most recently he served as the director of R.I.S.E., an innovative pre-and post-release reentry program that provides practical skills, training and mentoring for those who are incarcerated.

After nearly 60 years and $12 trillion, the U.S. poverty rate remains stuck between 11% and 15%. We’ve focused on making poverty more bearable rather than helping people escape a trap that lasts for generations. We’ve created dependence and taken people’s dignity and purpose.

There are better ways to treat people. Free-market solutions can fix one of the most important policy issues of our time. That’s what we plan through the Center for Poverty Solutions, starting in Chicago.

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