​Sen. Paul Gazelka (MN): It would be good for everyone if we closed the wealth gaps, but different researchers have charted different paths to fulfill that goal. For example, Stanford University economist, Thomas Sowell’s book Discrimination and Disparities, examines a complex array of prerequisites that lead to economic success and argues that “simple fixes” do not solve the problems.
[For more, see:
https://www.google.com/books/edition/Discrimination_and_Disparities/ZkR0DwAAQBAJ?hl=en&gbpv=1&printsec=frontcover]

Harvard University’s Raj Chetty, a social scientist, has used Big Data to create an “Opportunity Atlas,” identifying areas where children have a better chance to achieve education, employment, and wealth. The high-opportunity places tend to share five qualities: good schools, greater levels of social cohesion, many two-parent families, low levels of income inequality, and little residential segregation, by either class or race. [For more, see:
https://www.theatlantic.com/magazine/archive/2019/08/raj-chettys-american-dream/592804/].
We’ve seen that the “War on Poverty” did not solve the problems. according to these authors, we will need more complex solutions.

​Dr. Kijakazi: Until we address systemic racism and discrimination in the job market, people of color will face occupational segregation and its consequences-- a key factor that blocks them from accessing opportunities. Current programs help to bring people a little bit above the poverty level, but we need trajectories that will help them soar, so that they can grow wealth and thrive, not simply survive.

​Dr. Herd: Many programs such as Medicaid, SNAP and the Child Tax Credit, have been effective in ameliorating poverty, and the Welfare Reform movement eliminated some ineffective programs. Poverty has declined since the 1960s and economic security has increased, but there are still disparities and people who need help.

​Sen. Jack Whitver (IA): There’s definitely a problem when we provide assistance to families if the bread-winner is earning $13 per hour and then, if they get a dollar raise, their assistance is cut off.

Dr. Kijakazi: This Cliff Effect is a challenge for poor families. The Earned Income Tax Credit (EITC) is a good model because it is a graduated program and families can increase their income without losing the tax credit.

​Sen. Charles Schneider (IA): An additional problem is that the EITC comes all at once in a big check, when families may need the extra money every day to make ends meet.

Dr. Herd: The problem with EITC and many other programs is the administrative burden. The paperwork and need for documentation can be overwhelming. The timing is a criticism of EITC, but people tend to use it for significant necessary expenditures such as down payments on rent or car repairs.

​Sen. Harry Brown (NC): The most effective programs are bridge programs designed to incentivize people to get back on their feet and off the programs. People can get handicapped and dependent on the programs. There’s also the problem of fraud and abuse.

Dr. Herd: Fraud is actually minimal, assessed at 1-3%, which also includes mistakes; in fact, many more people who are eligible for benefits do not receive them, as opposed to the few who get benefits fraudulently. The administrative burdens make support programs expensive to maintain. Making it simpler and easier to prove eligibility and get access would reduce program administrative costs substantially.

Dr. Kijakazi: Most people do not want to be on public assistance programs. People take the benefits because they have to. It is burdensome, time-consuming, a challenge to stay enrolled, and also keep your job and care for your family.

​Sen. Thomas Alexander (SC): Some programs use private funds to help people get out of debt and subsidize housing costs. But these funds can disappear when people get a job and then rent costs go up.

Dr. Herd: Housing costs and the threat of eviction are major stressors for poor people. Subsidized housing, especially in high-rent cities, are often closed or have long waiting lists, and during that wait, people run out of money. There is a great need for affordable housing.

​Sen. Paul Gazelka (MN): Our State has generous welfare programs especially for education, but our African American communities are farther behind others, such as the Asian Americans. Why is this?

Dr. Kijakazi: There is a “model minority myth” about Asian Americans. People perceive all Asians as a monolithic group when, in fact, Asians come from many different places with many different cultures and assets that lead to different outcomes.

​Sen. Karen Spilka (MA): Massachusetts saw a similar problem with our programs. We invested substantial funds into education for African American students but did not impact the wealth gap. We realized we needed a more evidence-based approach and also to create short- and long-term interventions.

One step was to get data to determine what areas had more English-language learners and/or more low-income students and then allocate more education funding to those areas. A second strategy was our “Pay Equity Bill,” which prohibits employers from asking about an applicant’s current salary until after they have been offered a job. We increased EITC, implemented paid family leave, and increased the minimum age required for work.

Funding for these landmark educational programs could come from revenue generated by the proposed Millionaire’s Tax.

Dr. Kijakazi: There is no single silver bullet to redress the wealth gaps and end institutionalized racism. It will take a combination of short- and long-term programs. The Urban Institute explores promising, evidence-based solutions to advance equity and upward mobility.  Recognizing that shifts in technology, climate, demographics, and the global economy threaten to exacerbate inequalities and block opportunities for people to thrive, the Institute has examined effective strategies to harness these forces of change to create new windows of opportunity so that all people can thrive. [For more information, see: https://next50.urban.org/]