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July 01, 2004
 Poverty Holds City Back 
By C.C. Campbell-Rock
Lost in the debates over the fiscal affairs of the Orleans Parish School System, the state's financial obligation to the Saints, raises for elected officials and the living wage controversy is the elephant in the room: poverty. As the power plays over money continue, there is little, if any, attention being paid to the most glaring problem facing New Orleans and Louisiana.
Reducing poverty is the most daunting challenge facing the city in the 21 st century. New Orleans has one of the highest numbers of people in poverty in the nation, second only to Miami. Researchers say New Orleans will never be financially solvent until entrenched poverty is addressed.
As it commemorates its 40 th anniversary this year, Total Community Action, Inc., the city's premiere social services agency is trying to persuade elected officials to adopt a proven model for reducing poverty in New Orleans.
"Systematic poverty hampers, if not cripples, virtually every aspect of New Orleans, including its growth and future," according to the TCA report titled "Reducing Poverty in New Orleans-Working Paper #03-02."
Poverty in New Orleans
In the report, TCA takes aim at the deep and persistent pockets of poverty in the city that threaten the quality of life for all citizens
The percentage of people who live below the federal poverty level in New Orleans and Louisiana ranges between 24-27 percent.
"That's more than double the national average of 12 percent," says TCA executive Director Peter W. Dangerfield, Jr.
Dangerfield has studied poverty trends for more than three decades and recently received a doctorate in Public Administration from the University of Southern California. He says poverty in New Orleans is institutionalized, so any plan to reduce poverty must be based on innovative techniques.
Research from economists James Bobo, Timothy Ryan of the University of New Orleans and William Oakland of Tulane back up the Dangerfield's claim that poverty in New Orleans is so structured that unusual policies are needed to attack the problem.
In 1975, Bobo led a team of researchers in a study of the New Orleans economy, which highlighted that economic development could not be effective until the true nature of poverty is understood. "While some citizens benefited from the bull market of the 1990s, the poor and "working poor" lost standing, with some areas of the city showing increased unemployment and lost wages," according to Bobo's research.
"A person can work two jobs and still be poor in New Orleans, " Dangerfield says, "Even thought the study can conducted almost 30 years ago, identical conditions still exist in the New Orleans economy today. Structural poverty does not respond to the traditional means of economic development. While unemployment is generally 3 percent in pockets of poverty statewide, unemployment in New Orleans is as high as 24 percent"
And he adds that the figure don't include unemployed people who have given up on finding work.
" While unemployment is generally three percent in pockets of poverty statewide, unemployment in New Orleans is as high as 24 percent."
Peter Dangerfield, Ph.D.
TCA Executive Director
Dangerfield says New Orleans has experienced concentrated poverty for the past 40 to 50 years. The tearing down of the city's public housing developments including the Desire, Algiers-Fischer, and St. Thomas, has only exacerbated the problem.
"The long-term and pervasive poverty within the city is the result of the New Orleans economy being driven by one of the nation's largest service industries for more than 30 years. Decreased quality of education and rising housing cost have created a large number of working citizens whose incomes is not sufficient to lift them out of poverty. Without meaningful intervention from strategic government policy development and the advent of creative partnerships with the private sector, this trend will continue," according to the TCA report.
Asset building key to TCA's Poverty Reduction Plan
TCA, Inc. recommends the adoption of an official municipal policy on poverty reduction, with a stronger reliance on asset-building to reduce poverty in the City of New Orleans.
Oakland analyzed TCA's pilot program and says, "The positive impact on the economic development potential of New Orleans, provided by a successful program to reduce entrenched poverty would make such a program a good investment for the future of New Orleans."
During a sabbatical from TCA, Dangerfield consulted with Harrah's Entertainment and designed such a program for the casino operator's employees. Once workers completed a year with the firm, Harrah's helped first time homebuyers with closing cost.
"A lot of employers can't afford that, but public funds could be used as matching funds, maybe three to one, for first time homeownership or education," Dangerfield explains.
For a similar program at Liberty Bank and Trust Company, Liberty put up $10,000 and the government put up $10,000. That provided $20,000 to match employee's share of the closing costs for first time homeowners. First Bank & Trust also created an employer-employee match program.
Those employers who can't afford $10,000 can educate their employees about the Earned Income Tax Credit, Individual Development Accounts (a state program where eligible persons can set-aside some money and the state will match it), and the LaChips program, which provides health care services to children of the working poor.
Based on research from the Center for Social Development, the Brookings Institution, the World Bank, and the Institute for Research on Poverty and implemented through public-private collaborations, the pilot program for a municipal poverty reduction plan could be launched using $400,000 of Community Development Block Grant (CDBG) funds.
The grant could be used to create public-private collaborations that would use the poverty reduction pilot program to empower the working poor via education, homeownership and health care. Dangerfield hopes that by 2005-2006, the city will have an official poverty reduction policy.
TCA will soon release a mega-report documenting the extent of poverty in New Orleans, district by district.
"(City) and state officials will get a broad view of the extent of poverty in their districts, as well as the amount of money that can be recovered for poor people. All of these reports and other will further demonstrate the conditions of poverty in New Orleans."
"TCA is trying to induce a discussion and demonstrate that any policy of economic development must include a policy on poverty reduction. We want city and state officials to recognize the depth and length of poverty in New Orleans and adopt an official Poverty Reduction policy. We are encouraging those involved in public funds to use them creatively," says Dangerfield.
The New Orleans Tribune . June / July 2004
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