A U.S. Census Bureau report released last fall had bad news for Kentucky: Only Mississippi, Louisiana and New Mexico had higher state poverty rates. Over the last decade, the gap between Kentucky's poverty rate and the U. S. rate has grown.
In response, legislative leaders created a Poverty Task Force to explore what Kentucky could do. A December report contained many good ideas ranging from support for early childhood education to broadband access.
Then the legislature began work on a new state budget, and the options focused on how deeply to cut existing services. Proposals to raise new revenue through tax reforms have been largely off the table.
But as a recent Mountain Association for Community Economic Development report suggests, lack of adequate funding in important areas of training and family support is making it harder for low-income people to access good jobs that could improve their standard of living.
Without a skilled work force, Kentucky's businesses and economy also suffer. That, in turn, limits the tax base from which to raise needed revenue. This poverty trap will only tighten through ongoing budget cuts to vital educational programs and services. Our report shows that despite participating in the workforce or actively seeking work, a full one-third of Kentucky's working families were low-income in 2007, using measures that approximate a basic family budget. This share has only increased further during the current recession.
These families face significant barriers to better jobs. Over half have no adult with post-secondary education, and over one-fourth have an adult without a high school diploma or GED. More than a third lack health insurance, and most do not own their home.
One area of opportunity is in what are labeled "middle-skill" jobs — those that require more than a high-school diploma but less than a four-year degree. The Kentucky Labor Cabinet reports that about half of the job demand now and in the future is in middle-skill jobs. They range from jobs in health care to jobs in construction and in manufacturing.
In 2007, about 56 percent of the Kentucky job demand was in middle-skill occupations, but only an estimated 44 percent of the state's workers had adequate training for those jobs. By contrast, 19 percent of jobs in the state were low-skill, but low-skill workers made up 28 percent of the work force.
To help more Kentuckians avoid an endless series of dead-end jobs, Kentucky needs a stronger and more comprehensive workforce development strategy. That strategy should help individuals obtain the training that allows them to get better jobs and achieve continual progress along a career and skills path.
Kentucky has several models that are steps in the right direction. The Career Pathways initiative of the Kentucky Community and Technical College System was built precisely on this idea.
It has demonstrated success in student retention and graduation. Another success story is the Ready to Work program, which provides support services, counseling and access to education for individuals in the state's Temporary Assistance to Needy Families program.
But for the most part, the rungs on the ladder are missing — particularly at the lower end. Fifty-four percent of Kentucky adults have basic or below basic literacy, but the state spends 26 percent less than the national average on adult education per adult without a high school diploma or GED.
Tuition at Kentucky postsecondary institutions rose 60 percent between 2002 and 2007, and 47 percent of applicants for need-based financial aid are being denied funding despite meeting the income guidelines. A 2007 state auditor report suggests rising college costs have begun to impact enrollment growth. And the support services needed to help low-income families obtain education, retain employment and make work pay are missing or underfunded.
Medicaid in Kentucky covers parents only up to 62 percent of the poverty line. Kentucky has among the highest child-care co-pays for low-income families among the states. And unlike 24 other states, Kentucky does not yet have a state earned-income tax credit to help working families make ends meet.
Workforce development and income supports are not the full solution to poverty in Kentucky. But they are critical for the development of the Kentucky economy. Many middle-skill jobs provide vital services: increasing the energy efficiency of our housing and building stock; improving the health of our populace; and enhancing the competitiveness of our manufacturing base.
Embracing this opportunity requires new thinking about the relationship between economic development and poverty and the potential benefits of tax reforms that raise new revenue. Given the trends in our poverty rates, new thinking is exactly what we need.
Find the report, "Investing in Kentucky's Working Families: A Path to Shared Prosperity in the Commonwealth," at http://www.maced.org/WPFP-2010-release.htm