Appalacian Regional Commission & Poverty in Appalachia

Appalachia, as defined in the legislation from which the Appalachian Region Commission derives its authority, is a 200,000 square mile region that follows the spine of the Appalachian Mountains from south New York to northern Mississippi. Appalachia includes all of West Virginia and parts of twelve other states, Alabama, Georgia, Kentucky, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, and Virginia.

Almost 22 million people live in the 406 counties of the Appalachian Region, with 42% of the regions population being rural, compared with 20% of the national population.. Appalachias economic fortunes were based in the past mostly on the extraction of natural resources and manufacturing. The modern economy of most of the region, is gradually diversifying, with a heavier emphasis on services and widespread development of tourism. Coal remains an important resource, but it is not a major provider of jobs.

Manufacturing is still an economic mainstay, but is no longer concentrated in a few major industries (ARC-About ARC-The Appalachia Region). The main federal organization created to deal with Appalachian poverty was the Appalachian Regional Commission. The ARCs mission is to be an advocate for and partner with the people of Appalachia to create opportunities for self-sustaining economic development and improved quality of life. The Appalachian Regional Commission was established by Congress in 1965 to support economic and social development in the Appalachian region.

The Commission is a unique partnership composed of the governors of the 13 Appalachian states, and a presidential appointee representing the federal government. Grass roots participation is provided through local development districts- multi-county organizations with boards made up of elected officials, business people, and other leaders in the local communities.

ARC undertakes projects that address the five goals identified by ARC in its strategic plan: 1. Developing a knowledgeable and skilled population; 2. Strengthening the regions physical infrastructure; 3. Building local and regional capacity; 4. Creating a dynamic economic base; 5. Fostering healthy people. To meet these goals, ARC helps fund such projects as education and work force training programs, highway construction, water and sewer system construction, leadership development programs, small business startups and expansions, and development of health-care resources. The way the ARC works is that each year Congress appropriates funds, which the ARC allocates to its member states.

The Appalachian governors submit to ARC their state spending plans for the year, which include lists of projects they recommend for funding. The spending plans are reviewed and approved at a meeting of all the governors and the federal cochairman. The next step is approval of individual projects by the ARC federal cochairman. After the states submit project applications to ARC, each project is reviewed by ARC program analysts. The process is completed when the federal cochairman reviews a project and formally approves it.

The Appalachian Regional Commission funds programs in two broad categories, highway & area development. The highway program provides Appalachia with a modern system of four-lane highways the Appalachian Development Highway System (ADHS). The highway system is complemented by access roads that link the system to industrial and commercial sites. The area development category provides funding for most ARC non-highway projects, such as education, water and sewer systems, and health care. The aim of all these projects is progress by people toward economic security and a better quality of life.

Primary care clinics built by the ARC have put modern health care within a 30 minute drive of every Appalachian adult and child. A network of vocational schools and technical and junior colleges has given thousands of Appalachians relevant skills for todays job market. Modern sewer systems for industry have helped to create thousands of new jobs. Clean drinking water has been brought into the homes of hundreds of families for the very first time. New and rehabilitated housing at low to moderate cost has given thousands of Appalachian families their first opportunity at home ownership.

Thousands of kids have gotten a good start in life in comprehensive child care programs funded by the ARC. In doing these projects, the ARC joined other federal agencies, with the states, and local communities. In the future, the area development program will directly address the five goals of the ARCs strategic plan. The ARC says that future projects will achieve goal objectives in at least of one the following areas: education, physical infrastructure, leadership, business development, and health care.

The area development category also includes the distressed counties program, which provides administrative support funds to the Regions 71 local development districts. The ARC has provided special funds for the Regions poorest counties since 1983. Currently 108 counties qualify for distressed county status on the basis of low per capita income and high rates of poverty and unemployment. The distressed county program focuses on providing badly needed public facilities, especially systems to furnish clean drinking water and sanitary waste disposal, and human resource projects such as literacy training.

Under pre-1983 guidelines, most of these counties were too poor to qualify for federal aid for these facilities. The local development district (LDD) program, which provides administrative support funds to the Regions 71 local development districts. To ensure that funds are used effectively and efficiently, and to strengthen local participation, ARC works with the states to support a network of multicounty planning and development organizations, or local development districts (LDDs), throughout Appalachia.

The 71 LDDs cover all 406 counties in the ARC program. The LDDs most important role is to identify priority needs of local communities. Based on these needs, the LDDs work with their board members and other local citizens to develop plans for their communities economic development, to target and meet the most pressing needs, and to build community unity and leadership. The Clinton Administration requests $5. 4 million in 1999 for support of the LDD program, which is the amount approved by the Commission in 1998.

The LDDs are the organizational and institutional units put in place to help implement the ARC program and its goals and objectives at the local level. They work with member governments, local businesses, and citizens to determine local needs and priorities and plan for and develop programs that are regional in scope. The transfer of Federal programs to states and localities and the decreasing availability of Federal funds have increased the LDDs role and responsibilities in rural Appalachia. They fill the most pressing need in the entire rural development initiative, namely, the building of local capacity.

They are the mechanism for ensuring that small governments have the capacity to compete for Federal and state funding, and to promote rural development in Appalachia. They provide competent support staff to member governments to plan, initiate, and implement projects at the grassroots level. The LDDs in Kentucky received $626,000 in 1998, and this amount is estimated to stay the same in 1999 (ARC- Local Development Districts). Area development includes special regional initiatives, which are undertaken to help Appalachia respond to new economic developments.

In 1996, the ARCs 13 governors and federal Co-Chairman Jesse L. White Jr. launched three new initiatives designed to encourage economic growth and boost the vitality of the Region: Internationalization of the Appalachian Economy, Telecommunications, and Leadership and Civic Development. A fourth initiative was Entrepreneurship that was launched in 1997. The initiatives are broadly defined program areas that allow each state to determine its own specific objectives based on individual needs (ARC-Regional Initiatives).

The ARC also has the J-l visa program, which enables health care professionals from foreign nations to work in health manpower shortage areas in Appalachia. Under certain circumstances, the ARC will request a waiver of immigration requirements for foreign-trained physicians doing residency work in the United States under the J-l visa program. Physicians receiving these waivers must practice for at least three years in rural Appalachia, in areas called Health Professional Shortage Areas, as identified by the US Public Health Service.

The following is the number of total projects in 1997 done by the ARC. In terms of highway projects they had 21 grants, all of which dealt with the Appalachian Development Highway. In terms of non-highway projects, their was a total of 419 grants, including 60 for business development, 3 for child development, 148 for community development, 57 for education and job training, 3 for environmental and natural resources, 21 for Health grants, 72 for local development district planning and administration, 28 for leadership and civic development, and 24 for research and technical grants.

ARC- Programs Project Totals 1997). The following is a summary of the 1998 enacted budget and 1999 budget request of the ARC. In terms of the Appalachian Regional Development Program 57,555,000 million in 1998, was reduced to 56,589,000 million in 1999. The LDD Support and Technical Assistance maintained the same funding of 6,300,000 million. The Highways funding is going from 102,500,000 million in 1998 to 0 in 1999. In 1998 funding of the highway program accounted for 61% of the total ARC budget.

The Administration proposes additional funding of $200 million in 1998 and $290 million in 1999 from the Highway Trust Fund. Starting in 1999, Appalachian highway construction is to be funded solely from the Highway Trust Fund. This ends the ARCs involvement in its much criticized road construction efforts in Appalachia (ARC FY 1999 Budget Estimates). The federal government defines poverty as three times the annual cost of a minimally adequate diet, as defined by the U. S. Agriculture Department. It varies by family size, number of children, and age of the head of household, with an annual adjustment made for inflation, as measured by the Consumer Price Index (CPI). For example, a family of four with an income of $15,141 or less would be classified as poor according to the 1994 federal poverty thresholds. A misconception that exists about poverty, is that the federal poverty thresholds offer an accurate and complete definition of who is poor.

The poverty thresholds have been criticized for a number of shortcomings, which can cause one to underestimate the extent of poverty. The fact is that the conceptual basis of the federal poveerty thresholds- three times the cost of a subsistence diet- is no longer valid, as food now represents only one-fifth of the average household budget, while other expenses such as housing and child care, make up a larger share of the budget. Another problem with the threshold is that it implies that there is a black-and-white cut off point between the poor and the nonpoor.

But in reality the barely poor just below the poverty line will have more in common with the near-poor earning just above the threshold than with those earning less than half the threshold. The current poverty threshold captures neither proximity to poverty or depth of poverty. It is clear that federal poverty thresholds do underestimate poverty by ignoring the overall rise in national living standards, by adjusting only for inflation, results in a measure of poverty based on a constant 1960\’s standard of living.

It is recommended that the concept of relative poverty should be used, because it would reflect rising living standards along with rising prices, which would show that the current thresholds are too low, since they are based on a 1960\’s standard of living, and the extent of poverty is therefore underestimated. The thresholds are also criticized for understating a minimally adequate livelihood, by ignoring the rising standard of living or by setting the rates too low at the outset, which means that the real amount of money needed may be 50% more than the current poverty threshold based on surveys of the public.

FAMILIES FIRST, pp. 3-4) Despite these problems, the federal poverty thresholds are the only widely available measures that are consistent across geographic areas. I will also be using data from the Appalachian Regional Commission, which has identified the most severely distressed counties across the nation and conducted a program to target more resources to these counties within Appalachia. I will be looking at the poverty data on Appalachian Kentucky counties. Persistent Poverty. The persistence of poverty in rural communities has been one of the frustrating enigmas of this century.

Despite all the growth and changes that have happened over the decades, many rural communities, especially in the South and Appalachia, still lag far behind the rest of the nation in quality of employment and human development opportunities. The plight of the rural poor has gained national attention periodically, such as in the 1930\’s and 1960\’s, but no solutions have yet to solve the deep and structural problems of the rural poor. In 1990 the number of counties with high concentrations of poverty was 765, with 535 of those counties having a long-term and persistent problem with poverty over many decades.

They are mainly concentrated in the Southeast, Appalachia, and the Southwest, with others on Indian reservations in the North and West. These persistently poor counties represent 24 percent of all non-metro counties, 19 percent of the non-metro population, and 32 percent of the non-metro poor in the nation. The average unemployment rate in 1990 for these counties was 8. 5 percent, as compared to the 6. 6 percent non-metro average. But poverty is not only a problem of unemployment, because the prevalence of low-skill, low-paying jobs in rural areas means that many rural workers do not make enough money to pull them out of poverty.

The U. S. Department of Agriculture says that the nations poor are more likely to live in rural areas, with 25 percent of the poor, and nearly 30 percent of the full-time, full-year working poor. Rural poverty counties are smaller and less urbanized, with over half being nonadjacent to a metro area, which limits access for residents to urban area jobs, especially because transportation services are usually lacking and low incomes decrease the possibility of private transportation. Also poor counties typically have less high school graduates, which makes them more prone to economic disadvantage.

Most poor counties in average had larger numbers of high school dropouts putting them at risk of being unprepared to work and had people living in female-headed households. Despite the misconception that most poor are Black, nearly 80 percent of the non-metro poor are in fact, White. Along with poverty comes a lack of basic necessities such as health care, good nutrition, education, and public services that are needed to improve the lives of the rural poor. (U. S. Dept. of Agriculture)

The ARC used three socioeconomic measures (poverty, market income, and unemployment), to identify 606 counties in the United States that qualify as distressed, 150 of these counties are in Appalachia, with most being overwhelmingly rural. The state of Kentucky has historically ranked high among states with extensive rural poverty. In 1992, the ARC categorized 57 of the states 120 counties as distressed. The data shows that about three-fourths of the states distressed counties are in eastern Kentucky, with 38 of the 49 ARC counties categorized as distressed or severely distressed.

The data shows that 29 of the 30 poorest counties in Kentucky are in Appalachia, and 16 of the poorest counties in all of Appalachia are in eastern Kentucky showing that these counties are among the poorest in the nation. (Eller,p. 2) These poor counties need better infrastructures and improved education, health care, and public services. The ARC says that the economic status of Appalachia and the Mississippi Delta as of 1998, based on the 1990 Census Poverty Rate, 1994 Market Income, and 1993-1995 Unemployment Rate, shows that distressed counties in have at least 150% the US unemployment rate (9. ), 150% the US poverty rate, and less than 67% the US per capita market income ($12. 074) or 200% poverty. Distressed counties of Appalachia have a 9. 3% or more Unemployment rate, as compared to 6. 2% US average. They have a 19. 7% or more poverty rate, as compare to the US average of 13. 1%. Distressed counties in Appalachia have a per capita market income of $12,074 or less, as compared to the United States average of $18,201 (ARC-Distressed Counties of Appalachia, FY 1998).

All of this data shows that the Appalachia region is in distress, and has a many problems that must be overcome. The Poverty of Men. The 1994-95 Kentucky Poverty Commission says that the \\”current government programs do not fully address three major needs of men in poverty: guidance in obtaining academic or vocational education, an explanation of services available through the JOBS program or the Job Training Partnership Act, and employment counseling. \\”(FAMILIES FIRST,p. 30) The absences of training or experience limits employment opportunities.

Poor mothers automatically receive educational counseling as part of the AFDC/ JOBS program, but poor men usually do not participate in public assistance programs that require attending educational classes, nor are they advised of available education programs, such as the fact that non-custodial parents may be eligible to participate in the JTPA and JOBS programs. The Commission found that the two most common problems for both men and women in poverty is the lack of transportation and the tax burden.

The public transportation system of the state does not accommodate residents in Eastern Kentucky. The state income tax, which in 1994 had the sixth lowest income threshold, meaning that even those making $5,000 had to pay income taxes in Kentucky. The state offers a tax credit to help reduce the burden of the tax, such as a 50% credit for those making less than 10,000. (FAMILIES FIRST. p. 30-2) The state of Kentucky ranks number one in taxing the poor, which hurts the working poor most of all and shows a need to look at abolishing income taxes on the poor.

The Poverty of Women in Appalachia. The family structure of most of the poor in Appalachia is single female headed households. The reasons that more children live in households headed by single parents is largely due to increasing levels of divorce and a growing number of births to unmarried women. Single parent households grew by 64 percent from 1970 to 1993, from 3. 8 million to 10. 5 million. Single parent households make up 11 percent of all families in Kentucky. In Kentucky among family households with children, 21. ercent were headed by single parents in 1990 and 83 percent of these households are headed by women. Nationally estimates indicate that children who live in households headed by single parents are six times as likely to be poor. Kentucky children who live in single parent headed households have a large 51. 8 percent child poverty rate, which is twice as high as the 24. 5 percent child poverty rate. Also 40 percent of women who head families with children are officially poor, as compared to only 11 percent of married couples with children. (Smith-Mello,p. 13)

Single mothers that are poor, are disadvantaged because their child-rearing responsibility can result in economic and social hardships for their families with low earnings capacities and the absence of economies of scale. Single female headed families only have the earnings of their work to provide for the family, but it is far less than two parent families that can pool their earnings and responsibilities. The problem is worsened by the fact that female workers earn far less than men, with a wage gap among full time workers of women earning 70 percent as much as men. The low level of public assistance programs support is another problem.

In order to qualify for government assistance like Aid to families with Dependent Children, Food Stamps, Medicaid and public housing a single mother must be poor and was not able to work or risk losing all benefits. This was viewed as creating a disincentive to work and forced the recipient to continue drawing benefits which do not provide enough to lift a family out of poverty. Single mothers are therefore forced to either work with low earnings capacity and no benefits, living at or near the poverty line, or not work, live below the poverty line and have Medicaid to provide for the health of her children.

In Kentucky women in the AFDC program lose all benefits after only one year of work, and even though it usually works for the first year, it fails in the long run leaving most women at or near poverty with no medical assistance for their children. The lack of child support payments from non-custodial fathers is another reason why female headed families are in poverty, and that only six of ten mothers eligible for child support actually have such an award.

Also for those that do receive payments, only half get the full amount and over a quarter receive nothing at all. (Garfinkel,p. 208) When child support is not paid AFDC provides the support for those that qualify with about 41 percent of the money the state collecting going to reimburse the AFDC Program in 1995. In 1993 the state of Kentucky received 20 percent of AFDC money through child support collection, compared with 12 percent nationwide. The collection of child support payments can help lift women out of poverty.

Most women are not informed to the fact that there is legal services to help collect child support. (Families First,p. 26) In the article \\”reducing the child support welfare disincentive problem,\\” Bassi and Lerman say that the state the custodial parents receiving AFDC would be allowed to get a larger income gain from child support, but mothers would only be able to get the extra money by leaving and staying off of welfare, which would be hard to do for women that lack education and experience.

In the article \\”How will welfare recipients fare in the labor market? , Danziger, and Lehman say that the average welfare recipient will have great trouble in the labor market trying to find a good paying job that is above the poverty line. The need for affordable child care and health care is a major dilemma facing single mothers in Kentucky. The state of Kentucky does provide a child care allowance of about $243 per month to mothers participation in the JOBS program (Job Opportunities and Basic Skills).

The AFDC recipient is given child care assistance, and once AFDC payments stop, they can receive Transitional Child Care assistance if they meet income eligibility requirements. If they do not meet such income requirements, they must get help from non-profit organizations or suffer the burden of the cost on her own. The fact is that child care is very expensive and the allowance is not enough to offset the costs. Single parents cannot afford child care, with infants costing almost $100 a week.

For rural women they not only lack the ability to afford child care, but even when they can afford it, there is a lack of child care facilities in rural areas. In 1993 Kentucky subsidized the child care expenses of 27,000 children, and another 10,000 remained on a waiting list, and countless others failed to register when the waiting list was frozen in the fall of 1993. Kentucky businesses do not subsidize the creation of child care facilities, meaning that few businesses provide financial support to develop and operate child care services for employees children.

Families First. p. 25-30) A barrier to self-sufficiency in Kentucky\’s assistance programs is a lack of communication between the social worker and the recipient that causes the client not to know all the options available to gain independence. (Families First,p. 41) Women in the workforce. In 1990 the U. S. Census Bureau estimates that 54 percent of working age women in Kentucky are in the labor force, which has helped to maintain a standard of living that would be lost for most two parent families. ((Smith-Mello,p. 63)

In the article \\”Impact of work, family, and welfare receipt on women\’s self-esteem in young adulthood,\\” Marta Elliott used a national longitudinal survey of youth data of young women from 1980 to 1987 to show that marriage improved self-esteem, while motherhood and welfare receipt reduced self-esteem. Also being employed had a positive effect on change in self-esteem, especially for younger mothers, and shows that work promotes a positive self image of women, which is why becoming independent of welfare is positive with a good job.

But a problem is that most women on welfare lack the education or job experience to get good paying jobs with benefits that would promote self-esteem. In the article \\”Putting poor mothers to work,\\” Ellen Bassuk says that the situation of women receiving AFDC and the welfare reform law will have an adverse effect on women, because legislators have ignored the ways in which women\’s multiple roles as parents, homemakers, and breadwinners interplay in a labor market where entry-level jobs do not pay a livable wage.

In the article \\”Poverty, work, and community: a research agenda for an era of diminishing federal responsibility,\\” Claudia Coulton discusses how welfare time limits and strong work requirements make employment a necessity for family survival, but the availability of jobs has reached new lows in many low income areas. Also jobs with wages that can keep a family above the poverty line are decreasing. If most welfare recipients are to find steady jobs, low income communities need to change employment opportunities to prepare those on welfare for work, to offer access to work, and support to working families.

Margaret Brooks and John Buckner in an article on work and welfare, conducted a study to look at individual level factors that predict the employability of poor women. Their findings suggest that increased education and positive parental role models are extremely predictive of future employment. Also both added income from a partner and delayed childbirth increased the chances of a poor women gaining employment. The lack of affordable child care was found to be the greatest barrier to employment for women.

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