Developing strategies to end hunger
 

158 posts categorized "Assets for the Poor"

Countdown to 2015: A New Dawn for Global Development

For the last 15 years, the U.N. Millennium Development Goals (MDGs) have formed the bedrock of global development efforts -- goals on hunger, gender equality, and child and maternal mortality, among others. Bread for the World's recent analysis of the value of the MDGs refers to the goals as "an uprecedented global effort to achieve development goals that are identified collectively, achievable, and measurable."

Now, the MDG clock is ticking. When the goals were adopted in 2000, a 2015 deadline was set. They are to be replaced by a new set of goals-- Sustainable Development Goals (SDGs) -- starting in September 2015. Unlike with the MDGs, the process of determining what might follow them, a "post-2015" development agenda, has featured an active international debate. The U.N. High Level Panel on Post-2015 (HLP) -- the official process through which the post-MDG global development agenda is being shaped -- met four times for consultations that aired the views reported by a wide range of other groups.These meetings were held in New York in September 2012; London in November 2012; Monrovia, Liberia, in January 2013; and Bali, Indonesia, in March 2013. In May 2013, panel members presented a report outlining their vision and priorities for post-2015 development to U.N. Secretary General Ban Ki-moon, while in July, Ki-moon outlined his response to the HLP in his own report.

The process of negotiating the SDGs continued in 2014. In September, a special event on the MDGs and the post-2015 agenda was held during the 69th session of the U.N. General Assembly in New York. The theme was "Delivering On and Implementing a Transformative Post-2015 Development Agenda."

2015-Time-for-Global-Action_En

Source: UN/DPI

Earlier this month, on December 4, the Secretary General released an advance version of his synthesis report on the post-2015 development agenda, The Road to Dignity by 2030: Ending Poverty, Transforming All Lives and Protecting the Planet. The synthesis report aims to support U.N. member states’ post-2015 negotiations based on the world's experiences with the MDGs. The report proposes a set of six essential elements as well as a means of implementing the goals. The six elements are:

Dignity -- eradicating poverty as the agenda's overarching objective, and addressing challenges related to inequality and the rights of women, youth, and minorities;

People --  addressing education; health; violence against women and girls; and water, sanitation and hygiene (WASH);

Prosperity-- calling for inclusive growth that ensures all people have employment, social protection, and access to financial services;

Planet-- equitably addressing climate change; halting biodiversity loss and addressing desertification and unsustainable land use; protecting forests, mountains, oceans, and wildlife; and reducing disaster risks;

Justice-- issues including governance, reconciliation, peacebuilding, and state-building; and 

Partnership-- elements of transformative partnerships that place people, planet, and mutual accountability at the center.

According to the Secretary General's report, implementation of the post-2015 agenda should focus on:

  • Committing to a universal approach with solutions that address all countries and groups;
  • Integrating sustainability in all activities;
  • Addressing inequalities in all areas;
  • Ensuring that all actions advance and respect human rights;
  • Addressing climate change drivers and consequences;
  • Basing analysis in credible data and evidence;
  • Expanding a global partnership for means of implementation; and
  • Anchoring the new compact in a renewed commitment to international solidarity.

Today — unlike in 2000 when the MDG era began — 72 percent of the world’s poor people live in middle-income countries. Others live in developed countries -- in the United States, for example, 15 percent of the population was living in poverty during the Great Recession, and nearly a quarter of all children lived in households that had trouble putting food on the table. Both of these factors mean that the next set of goals must apply to all countries if the SDGs are to end extreme poverty by their deadline of 2030. The post-2015 development agenda provides an opportunity to promote equity and equitable growth in a way that is truly universal.

Three Charts, Three Reasons Empowered Women and Progress on Malnutrition Go Hand in Hand

Improvements in the status of women drove about half of the dramatic reduction in child malnutrition that the developing world has achieved in recent decades. This and many more pieces of evidence brought together in the 2015 Hunger Report affirm that ending discrimination against women and girls–besides being the right thing to do–is crucial to ending hunger. Here are three compelling charts that show how this plays out across an array of important empowerment measures:

As More Girls Complete Secondary School, Stunting Rates Fall

As More Girls are Married before Age 18, Stunting Rates Rise

As Maternal Deaths Increase, Stunting Rates Rise

 

The three charts above compare rates of child stunting (a key measure of chronic malnutrition) in low- and middle-income countries against three sample empowerment indicators: rates of secondary school completion for females; rates of death from complications of pregnancy or childbirth; and rates of child marriage. Each dot represents one country. 

Measuring gender discrimination is complicated because it is pervasive. It cuts across all aspects of human life. This is why the United Nations named a minimum list of 52 gender indicators that are essential to gauging progress. (Yes – these 52 items are the minimum list). The indicators encompass five areas: health, education, human rights, public life, and economic participation.

We can see that stunting rates are lower in countries where women are more empowered – i.e., where they do better on these indicators. This is an issue that merits a more robust research agenda because it shows us an important way forward on hunger.

A note on stunting: stunting means that a child has suffered chronic malnutrition before her/his second birthday. We can “tell by looking” because stunted children are far too short for their age, but the most significant effects can’t be seen: damage to health and cognitive development. Stunting undermines how well a child does in school and even her lifetime earnings. At the national level, stunting can cost several percentage points in GDP growth. Globally, one in four children is stunted.

Visit an interactive tool on the 2015 Hunger Report website to compare global stunting rates with any of 15 important women’s empowerment indicators, view trends by region, and see where individual countries fall. Read this to learn the story of how the tool was created.   

This post is part of Institute Notes’ ongoing series on data to end hunger.

Derek Schwabe

A Global Nutrition Report: Passing Grades, But More Effort Needed

GNRBlog 120914

These children will reach higher and go farther with proper nutrition. (Photo credit: accesstonutrition.org)

What is the extent of malnutrition and how effective are the measures being taken to fight it around the world? What’s being done by governments through policy mechanisms, development assistance, and donors with their program partners? Is civil society sufficiently prepared to be active partners and eventually take over efforts in their own countries? What measures of program and policy effectiveness have been developed?

The Global Nutrition Report (GNR) seeks answers to all these questions. First launched in London last month, its launch in Washington, DC, takes place today with events at the International Food Policy Research Institute (IFPRI), which co-authored the report, and later at USAID, where Administrator Rajiv Shah will speak to his agency’s and U.S. government efforts to reduce malnutrition through its programs and policies. The GNR is a “call to action” to place malnutrition – both undernutrition and obesity – higher on the development agenda.

IRPRI notes in the GNR that "165 million children under the age of five are estimated to be stunted (i.e. low height for age). Two billion people are estimated to be deficient in one or more micronutrients. Nearly 1.5 billion people are estimated to be overweight and over 500 million to be obese. These conditions all have severe consequences for survival, for morbidity, and for the ability of individuals, the economy and society to thrive.... and yet, resources to specific nutrition programs amount to a small fraction of one per cent of domestic or aid budgets."

The GNR includes a “dashboard” of more than 80 indicators of nutrition outcomes, program coverage, funding, and political commitments for all 193 United Nations member countries, “…which they can use to hold policymakers to their commitments and urge them to make new ones.” The report was first announced at the Nutrition for Growth Summit in 2013, and its release was a main topic of discussion at the Second International Conference on Nutrition (ICN2) held in Rome last month.

The report was delivered by an Independent Expert Group and guided at a strategic level by a Stakeholder Group whose members also reviewed the report. IFPRI oversaw the production and dissemination of the report, with the support of the Institute of Development Studies (IDS) in London. The Lancet medical journal provided an external review of the report, which is funded by the U.K. Department for International Development (DFID), the Bill & Melinda Gates Foundation, the Government of Canada, the Children's Investment Fund Foundation, the European Commission, Irish Aid, 1,000 Days, and the CGIAR Research Program on Agriculture for Nutrition & Health.

Recommendations in the report for governments, donors, NGOs, and nutrition community stakeholders include:

  • Building and sustaining global alliances to generate substantial improvements in nutritional status at the national level;
  • Larger investments in human infrastructure;
  • Scaling up nutrition interventions by scaling up local partner capacities; and
  • Expanding investments in “nutrition-sensitive” actions in agriculture, social protection, water, sanitation and hygiene, education, and women’s empowerment programs.

The GNR emphasizes that key challenges remain -- especially in the area of accountability, which must be strengthened in all areas. The report notes pointedly that relying on coordinated actions across development sectors, none of which have nutrition as the primary goal, allows policymakers to avoid responsibility.

Three suggestions were made for improving accountability and leadership. First, in the new set of Sustainable Development Goals (SDGs) for 2030 that is currently being developed through a global process, the nutrition stakeholder community needs to ensure that more ambitious SDG targets are set, including a target for nutrition, and that additional nutrition indicators are included. Second, national legislation and policies must insist on accountability among nutrition stakeholders, including self-evaluation and monitoring processes for member countries of the Scaling Up Nutrition (SUN) movement.

And finally, there is an urgent need to fill the huge gaps that remain in collecting nutrition data. As an example of this, the report says that only 60 percent of the 193 member states of the UN have sufficient data to assess whether or not they are on course to meet global targets.

Without better data and stronger accountability, we stand to lose much of the global momentum on fighting malnutrition that has been built in just a few years’ time. The next GNR could contain more failures than passing grades. But if we sustain the political will that has been created, build local capacities, and scale up successful nutrition interventions, a goal once thought to be merely aspirational gets ever closer: ending hunger and malnutrition in our lifetimes. Scott Bleggi

Second International Conference on Nutrition: Moving the Discussion Forward

In the 20 years since the first  International Conference on Nutrition (ICN), global awareness of the critical role of nutrition in human development has grown to record levels. Today, the dual problems of malnutrition -- undernutrition and obesity – are the focus of efforts by both governments and private companies. Undernutrition rates have dropped in the intervening years, but obesity has grown to the point where it now kills more than three times as many people as undernutrition. 

The first ICN was seen as an opportunity to bring leading nutrition scientists together with governments to address a growing problem. ICN2, being held this week in Rome, goes further by finalizing the wording of a Declaration on Nutrition, as well as details of its implementation, and seeking the signatures of the governments in attendance.

The proposed declaration is a pivotal document that, after reaffirming commitments made at the 1994 ICN and at World Food Summits, sets out specific plans of action and international targets that will lead to the eradication of all forms of malnutrition. Action items include reshaping food systems through public policy; improving nutrition by strengthening institutional capacity and encouraging collaboration among all stakeholders; promoting initiatives for healthy diets before pregnancy, through the 1,000 days period of early childhood, and in schools; and ensuring that a framework with actions and objectives is integrated into the 2030 global development agenda that will be finalized in the coming year.

Advocates are concerned about the very small role of nutrition thus far in this Sustainable Development Goals (SDGs) process: there are more than a dozen goals and nearly 200 targets, but nutrition is mentioned only once. The declaration also asks the United Nations General Assembly for its endorsement and declares a “Decade of Action on Nutrition.”

Proposing such aspirational goals for ICN2 has led to wide-ranging discussions. Some have criticized the declaration’s lack of accountability and spending targets. Others have criticized its lack of emphasis on nutrition-sensitive issues such as water, sanitation and hygiene (WASH), and a lack of recognition that nutrition directly impacts health interventions.  Another point raised is that in order to make advances in nutrition, there must be economic solutions as well. Critics have also pointed out that in some countries, “donor interest in nutrition is waning.” It is in fact true that scaling up successful nutrition outcomes in a district, region, or country requires multiple-year planning and adequate funding.

One bright spot of ICN2 was Pope Francis adding his voice to the fight against hunger and malnutrition.  

Francis_ICN2
Pope Francis addresses political leaders at ICN2 Photo credit: FAO

In his apostolic exhortation, Evangelii Gaudium (Joy of the Gospel), Francis said, “We are scandalized” by not having enough food for everyone and the resulting hunger. In his remarks at ICN2 on November 20, Francis said that food, nutrition, and the environment must be viewed as global public issues at a time when nations are more tightly linked with each other than ever before. He admonished global leaders to make sure their pledges to assure food security for all citizens are put into concrete practice, saying that the right to a healthy diet is about dignity, not charitable handouts.

The U.S. government’s commitment to improved nutrition increased when it began to fund the Global Health Initiative (GHI), which is now complemented by nutrition components of the Feed the Future initiative. Recognizing nutrition as a concern that crosses traditional development sectors, USAID adopted and has begun to implement a Multi-Sectoral Nutrition Strategy. Other government agencies and offices have begun working on a Global Nutrition Coordination Plan that will encourage collaboration and hopefully add value to the efforts of individual programs to improve nutrition. Finally, the House of Representatives has introduced H.R. 5656, the Global Food Security Act, which has a primary objective of reinforcing programs that “accelerat[e] inclusive agricultural-led economic growth that reduces global poverty, hunger and malnutrition, particularly among women and children….”

The objectives of ICN2, the policy goals of U.S. government nutrition strategies, and passage of H.R. 5656 are all reachable if we are, in the words of Roger Thurow, “outraged and inspired” to take action on global hunger, poverty, and malnutrition.

Scott Bleggi

Long-Term Solutions to the Child Migration Crisis

Mother & Child Nutrition

Photo by Joseph Molieri/Bread for the World

The child migration surge is out of the headlines and the number of children reaching the U.S. border has decreased dramatically, but the three nations of Central America’s Northern Triangle continue to grapple with violence and poverty. It may be only a matter of time until history repeats itself, because the root causes of unauthorized migration for both children and adults remain unchanged.

At the height of the crisis, Congress granted U.S. government agencies such as the Department of Homeland Security’s Customs and Border Patrol and the Department of Health and Human Services’ Office of Refugee Resettlement increased flexibility in spending previously allocated funds to respond to the crisis. So far, however, Congress has not approved Obama administration requests for additional funding, either for services at the border or for development assistance in the child migrants’ home countries of Honduras, Guatemala, and El Salvador.

Some congressional policy makers continue to seek long-term legislative solutions to the poverty and violence driving migration through increased and more effective U.S. foreign development assistance to the region. Bread for the World supports integrating migration issues into U.S. development assistance, including targeting programs to high-propensity migration regions in Central America and other regions that are sources of many immigrants.

In addition to congressional efforts to build momentum for a comprehensive solution to the root causes of migration from Central America, country-led solutions to reduce insecurity and poverty in the region are emerging. Multilateral organizations such as the Inter-American Development Bank are also involved in these discussions.

One of the plans emerging is the "Plan of the Alliance for Prosperity in the Northern Triangle." This plan was announced in late September 2014 by Secretary of State John Kerry and the foreign ministers of Guatemala, Honduras, and El Salvador during the UN General Assembly meeting in New York. It includes a plan by Central American governments to boost economic growth in the region and reduce unauthorized immigration to the United States.

So far few details of the plan have been made public, but the focus on the “root causes” in migrants’ nations of origin is a promising first step -- both in responding to the poverty and violence that drive child and adult unauthorized migrants from Central America to the United States and in engaging all countries involved in doing their part. It will take the engagement of both the United States and Central American nations to help solve the socioeconomic problems driving immigrants north.  Andrew Wainer

Three Charts, Three Important Stats from New Poverty Numbers

Yesterday, the Census Bureau released its most recent data on U.S. income, poverty, and health care for 2013. The data reflected the first drop in the nation’s poverty rate since 2006, from 15 percent in 2012 to 14.5 percent in 2013. The poverty rate among children fell more significantly, from 21.8 percent to 19.9 percent—its first decline since 2000. Thanks to job market growth, 2.8 million more people had full-time, year-round employment in 2013 than in 2012, enabling them to better support their families in 2013.

Beyond the topline national poverty rates for various groups, the data can tell us a great deal more.  Here are three graphics that help explain where the limited growth from the economic recovery is focused, which groups are noticing gains, and which groups still aren’t.

1. Poverty Falls for Every Major Racial/Ethnic Group for First Time Since 2006

Poverty Rates at Recession High, 2012, and 2013 by Race and Ethnicity

2013 was the first year since 2006 that the poverty rate fell across the racial/ethnic board. While the drop was not statistically significant for all groups except Hispanics, this is important news because it signals that the gains from economic growth are finally beginning to be felt by all—a sign of a more sustainable and equitably shared recovery. It should not have taken this long for this to happen, and we can make statistically significant advances against poverty across all groups if Congress and the President make decisive investments in human capital development, job creation, and better wages.

2. Top 10 Percent Gains, Everyone Else Loses

Percent Change in Real Income, 2010-2013, by Income Percentiles

This graphic helps us appreciate even the small poverty rate decline reported for 2013, because in reality, the vast majority of the working population earned less real income that year than they did after the Great Recession. Almost all of the benefits of economic growth since the recession have been captured by those who need them least—the top 10 percent of income earners. This is part of a much greater income inequality story, in motion since the 1970s. Without a robust policy response from our leaders, we will remain on the track of prosperity for a few, not for all. 

3. The Gender Gap Continues to Slowly Narrow

Amount Earned by Women for Every Dollar Earned by Men, 1960-2013

Women’s earnings relative to men’s grew by another percentage point in 2013, advancing the long, slow march to wage equality another step. Women now earn 78 cents for every dollar earned by men, up from 77 cents in 2012. The gender wage gap has been closing since women started to enter the workforce at an increasing rate in the 1960s. While differences in education and training account for some of the wage gap, much more is due to gender discrimination.

Most of the numbers released yesterday showed nominal improvements for America’s working class and those facing poverty and hunger in 2013, but we should be encouraged by them. We know that with the right steps we can make dramatic progress toward not only reducing, but ending hunger and poverty in the United States by 2030. But 2013 was a dismal year for Congressional action on any of those steps. If anything, inaction through the sequester, the government shutdown and persistent austerity proposals threatened to reverse progress that year.   

If we can sustain economic growth and poverty reduction even through complete Congressional inaction, imagine where we could be if our policy makers were to get serious about ending hunger and poverty.

Read more about the steps Congress and the president must take to end hunger in the 2014 Hunger Report, Ending Hunger in America. Derek Schwabe

World Hunger Drops from 868 Million in 2013 to 805 Million in 2014

Today the Food and Agriculture Organization of the United Nations (FAO) released the 2014 edition of The State of Food Insecurity in the World (SOFI). The report, Strengthening the Enabling Environment for Food Security and Nutrition, confirmsthat the Millennium Development Goal (MDG) target of cutting the rate of hunger in half is indeed within reach. But the MDGs expire at the end of December 2015, so time is growing short.

According to the report, the global number of hungry people fell more than 100 million over the past decade, and by more than 200 million since 1990-92.

Despite all the progress, several regions and sub-regions still lag behind. In Sub-Saharan Africa, more than one in four people are chronically undernourished, while Asia, as the world's most populous region, is home to the majority of hungry people - 526 million.

SOFI2014The absolute number of hungry people—which takes into account both progress against hunger and population growth—fell in most regions. The exceptions were Sub-Saharan Africa, North Africa, and West Asia.

According to a statement by the heads of the three U.N. agencies (FAO, IFAD, and WFP) that jointly publish the annual SOFI report, "This is proof that we can win the war against hunger and should inspire countries to move forward, with the assistance of the international community as needed.”

                                                                                                        

Dr. Jomo Kwame Sundaram, FAO Assistant Director-General provides an overview of the SOFI key findings

Additional information on global hunger:

2014 State of Food Insecurity in the World (Executive Summary)

Food security indicators – download the data

Quick Facts on Hunger

1.  Some 805 million people in the world do not have enough food to lead a healthy active life. That's about one in nine people on earth.

2. The vast majority of the world's hungry people live in developing countries, where 13.5 percent of the population is undernourished.

3.  Asia is the continent with the greatest number of hungry people – two-thirds of the total. The percentage in South Asia has fallen in recent years, but West Asia’s rate has increased slightly.

4. Sub-Saharan Africa is the region with the highest percentage of hungry people:  one in four people.

5. Malnutrition causes nearly half (45 percent) of all deaths in children under 5 – that’s 3.1 million child deaths each year.

6. One in six children in developing countries -- roughly 100 million -- is underweight.

7. One in four of the world's children are stunted. In some countries and in the poorer regions of others, the proportion rises to one in three or even higher. Stunted children do not reach their full physical or intellectual potential.

8. Studies estimate that if women farmers had the same access to resources as men, the number of hungry people in the world could be reduced by up to 150 million.

9. Across the developing world, 66 million primary school children attend classes hungry.

10. The WFP calculates that $3.2 billion is needed each year to reach all 66 million.

Faustine Wabwire

Ebola: Enemy of Food Security and Economic Growth

Last month, two U.S. citizens who contracted Ebola in Liberia were flown home for treatment. Their amazing recovery within just a couple of weeks must seem like a fantasy to desperate communities in the outbreak-stricken countries of West Africa.

Liberia, Guinea, and Sierra Leone are the hardest-hit by the Ebola crisis, which has killed nearly 2,300 people so far. These three countries are also among the poorest countries in the region and are in dire need of immediate assistance. Domestic food production has declined and markets are shutting down. Economic activity has slowed causing a sharp drop in state revenues necessary to combat the outbreak.

The International Monetary Fund (IMF) reports that economic growth is likely to decline from 11.3 percent to 8 percent in Sierra Leona; from 6 percent to 2.5 percent in Liberia; and from 3.5 percent to 2.4 percent in Guinea. In the same report, Liberia's Finance Minister Amara Konneh stated that the outbreak was threatening the country's post-civil war recovery.

If the Ebola crisis was occurring in the United States, it most certainly would not look anything like what it does in West Africa. The U.S. health care system has the capacity to minimize the effects of the outbreak. There would be no shortage of beds, medical personnel, and supplies as we’ve seen in the West African countries.

Bread for the World has always maintained that it’s cheaper to prevent a crisis than to respond after it has occurred. The Ebola epidemic is just one illustration of this principle. The United Nations has stated that controlling the epidemic will cost at least $600 million and will require three or four times the current number of healthcare workers. The funding for preparedness and contingency planning always seems to be in short supply.

Ebola Funding

In a statement last week, USAID Administrator Raj Shah stated, "The U.S. is committed to supporting the African Union's response to the urgent needs across West Africa as a result of this vicious disease." To date, the U.S. government response is as follows:

  • The United States will spend an additional $10 million to fight Ebola in West Africa, bringing its total investment against the epidemic to more than $100 million.
  • The new funds, announced Tuesday by USAID will support the African Union's deployment of roughly 100 health workers to support exhausted medical personnel.
  • The Pentagon announced Monday that it would send a 25-bed portable hospital to Liberia to care for sickened healthcare workers.

Resilience is a popular word these days for people who work on international development. We use it mostly to talk about the capacity to bounce back after a crisis. But we have also began to understand that resilience means the capacity to adapt as necessary to prevent shocks such as Ebola.

The U.S. government must continue to adapt its own approach to development assistance through investments in early warning, closer coordination with development partners including partner countries, the private sector and civil society. Over the last decade the U.S. government and its development partners have made some great progress improving how they provide development assistance. But shocks such as Ebola remind us how fleeting progress can be if it doesn’t include investments in institutions and systems, such as health care. This is why resilience must be prioritized on the global development agenda. 

Faustine_Typepad

Raising the Minimum Wage Can Help When Work Ends

We’ve talked before about how workers can benefit from an increased minimum wage, but the advantages continue even after health problems keep people from employment.  A higher minimum wage allows people to pay more into the Social Security system, therefore qualifying for increased disability and retirement benefits. 

Poster describing Social Security
1956 poster (via SSA.gov)

We can compare the current federal minimum wage of $7.25 an hour to what would happen if Congress passed the minimum wage bill it’s currently considering.  To make the numbers simple, assume that any wage changes would occur on January 1 each year.  The minimum wage would be $8.20 an hour in 2016, $9.15 an hour in 2017, and $10.10 in 2018.  After that, it would increase based on the Consumer Price Index; let’s assume an increase of 2.76%, which was the average increase over the past 25 years (1989-2013).  After rounding to the nearest nickel as the law dictates, that would be $10.40 in 2019, $10.70 in 2020, and $11 in 2021.

What would this really mean for someone who becomes disabled? Imagine a woman named Anne.  She started a minimum wage job on her 19th birthday, which was January 1, 2014, and works an average of 30 hours a week.  That’s not uncommon; in 2013, there were over 1.6 million people aged 16-24 in minimum wage jobs.

By the end of 2021, Anne would earn a total of $25,038 more if the minimum wage were increased as described above than she would if her salary stayed at $7.25 an hour.  From this additional income, she would contribute $1552 more than she otherwise would have into Social Security’s disability and retirement insurance system, if the withholding rate for those programs stays at its current level of 6.2%.

That extra investment in Social Security could pay off for Anne.  At the end of December 2021, Anne experiences a severe health problem that keeps her from working, she will qualify for higher Social Security Disability Insurance (SSDI) benefits.  Nobody likes to think about becoming too sick to work, but over 224,000 people aged 30 and under get SSDI; some of the most common reasons include injuries, mental illness, intellectual disabilities, and neurological disorders like epilepsy.  Experiencing medical problems is challenging enough without adding hunger and extreme poverty to the equation.

Using the detailed Social Security benefits calculator we can see what a difference a change in the minimum wage would make to Anne.  If the minimum wage increased as described above, she’d receive $1091 a month in disability benefits in 2022.  If the minimum wage stays at $7.25 an hour, she’d get just $1010 a month.  It might not sound like a big difference, and it will be a challenge to live on either amount in 2022, but raising the minimum wage will increase Anne’s disability benefits by more than 8%.  From the time Anne starts receiving SSDI (there is a five-month wait after becoming disabled) to the end of 2027, assuming annual cost-of-living adjustments of 2.76%, raising the minimum wage would provide her an extra $5859.  That’s money for housing, for transportation to the doctor’s office, for retraining in a new career.  It could be money for food. 

Raising the minimum wage would help people like Anne while she works, and also allows them to pay more money into the Social Security system.  This helps strengthen the system for current retirees and people with disabilities, and provides a stronger safety net if their working lives do end.

Stacy Cloyd

The Earned Income Tax Credit and the Minimum Wage: Two Sides of the Same Coin

What can $1247 a month buy you?  Imagine paying for housing, food, utilities, transportation, and other essentials on that amount, which is full-time work at the federal minimum wage.  Factor in little things that can bust a tight budget: a Christmas present for your mom, an occasional haircut, some tissues and medicine when you get a bad cold.  Could you afford to put aside anything for a medical emergency, a car repair, or retirement? Would you feel motivated and prepared to go back to school, or to get married and start a family?

coins falling into a person's cupped hands
Illustration by taxcredits.net

In this situation, don’t count on public benefits.  A single, childless person with this income would earn $2 too much for SNAP benefits and be $52 a month over income for the Earned Income Tax Credit (EITC).  In many states, this minimum wage worker would also fall into a coverage gap, earning too much for Medicaid and not enough to receive a subsidy for private medical insurance. 

There are two big ways to help low-wage workers in this situation: raise the minimum wage, or expand the EITC.  They each have pros and cons, but the good news is we don’t have to choose. 

The EITC arrives once a year.  A lump sum can help pay off debt or create savings accounts for retirement or emergencies, but if it’s November and your car breaks down or your day care bill is due, it doesn’t do much good to have a bunch of money heading your way in April.  Researchers have studied the best way to have EITC payments arrive throughout the year and various forms of this “periodic EITC” are part of Rep. Paul Ryan’s and Sen. Marco Rubio’s anti-poverty plans, but this could be a lot more complicated, inaccurate, and burdensome for employers to calculate than a simple change in the minimum wage would be.

Another difference is while everyone earning the minimum wage would benefit from its increase (so would  many of those earning slightly more, who would get raises to keep their salaries above less senior workers) the EITC is highly targeted.  It’s more generous to married couples and people with children, it is only available to people aged 25-64.  Also, you have to file a tax return to get it.  This might be a good way to encourage people to file tax returns, which helps the government keep track of people’s earnings so they get the right amount of Social Security benefits later on.  The EITC also rewards people who get married and helps ease the financial burden of having kids; that’s good for them but not for younger, older, or childless workers.  There’s bipartisan support for expanding the program, but disagreement on how to pay for that. 

“How to pay for that” is the final difference between raising the minimum wage and expanding the EITC—but it’s not as big a difference as some might think.  Wages are paid by employers, some of whom may cut their profits or raise their prices if they are required to pay their workers more.  This means shareholders and consumers ultimately pay the price.  The EITC is paid by the government, from taxes and other revenues.  Either way, the costs get spread around quite widely.  So does the cost of inaction, of keeping wages and tax subsidies low.  When full-time workers qualify for SNAP or go to the emergency room without insurance, the public pays.

The EITC and the minimum wage are not opponents; they are two roads to the same place.  If the minimum wage goes up, fewer people will need the EITC.  And by increasing the number of people served by the EITC and the benefit they receive from it, we can help people attain the stability they need to train and apply for higher-wage jobs.  The minimum wage and the EITC are different, but they can both make a big difference.

Stacy Cloyd

Stay Connected

Bread for the World