Tackling Poverty in PA Starts With Understanding Barriers to Prosperity

It’s hard to save money.

A newly released survey and corresponding study from the Commonwealth Foundation on poverty in Pennsylvania highlights the barriers to prosperity that this mother and other low-income families face. Giving state lawmakers a better understanding of the nature of poverty is a first step toward finding better policy solutions for welfare, childcare, and tax policy.

The study combines data and in-depth interviews with Pennsylvanian households making less than twice the poverty line – or $53,000 for a family of four – to understand their experiences and identify common barriers.

The average gross household income of the participants was $33,657. Almost all live paycheck to paycheck, with no safety net. One participant, a retired warehouse manager, describes a typical experience. “I can pay my bills. I’m not behind on anything. It’s just that I don’t have that much left after I get done paying them … if this new bill goes through for next year for Social Security and $200 on top … I could probably save 25 to 50 dollars. But other than that, I can’t.”

Women, minorities, young adults, and children are more likely to live in poverty than other groups. Risk factors include lower education levels, frequent moving, prolonged childhood poverty, and living in low-income communities.

More than half of Pennsylvanians that live in poverty work. Sixty-three percent of participants were employed, self-employed, or looking for jobs. While policy changes that encourage more work help, boosting prosperity isn’t that simple.

Among those not working, the top reason for staying out of the work force was caring for a loved one or child. One mother, who works in medical billing, explains, “when you have to get your child to school, it’s hard to get her to school and be at a job within half an hour … I get [stuck at] finding a real great job because I have to base my hours around my daughter’s school.”

Other common barriers to work include lack of training, lack of proximity to work, and unreliable transportation. For some, keeping a job boils down to finding a way to get there every day.

But it’s not just environment and logistics. Asked to identify barriers to financial security, survey participants listed debt first, then taxes. They paid, on average, $4,575 per year in taxes – a significant slice of total household incomes averaging below $34,000.

One retiree, living off $1,000 a month, explains how she “saves” for her property tax bill. “I save 10% every month, and that’s the money I use to pay my taxes when they come.”

“My income is too much to qualify me for any kind of aid,” she says. “I make too much to qualify for help, but I don’t make enough money to live well.”

Pennsylvania has significant challenges ahead. The commonwealth’s aging population and declining workforce underscore the need for lawmakers to pass reforms that remove barriers to prosperity.

Anti-poverty advocates are quick to lobby for more tax dollars and new programs. But the Commonwealth Foundation’s report points to many things that the government should first stop doing. For example, as an alternative to low-income housing projects, which increase concentrations of poverty within communities, lawmakers should look to housing vouchers. They should also control spending, allowing residents to keep more of their hard-earned money, and remove restrictions that hamper home-based businesses or remote work – steps that would help workers who have dependents.

Pennsylvanians living paycheck to paycheck don’t want more handouts. They want pathways to long-term financial stability.

Elizabeth Stelle is the Director of Policy Analysis of the Commonwealth Foundation, Pennsylvania’s free-market think tank. Twitter: @ElizabethBryan