of The Poverty Institute.
Nonprofit director says businesses,
social services building bridges
Nancy Gewirtz
Position: Founding Director of The Poverty Institute at Rhode
Island College (along with Linda Katz, its policy director) and coordinator
of the One Rhode Island project. Gewirtz is also a professor of social policy
and social work at RIC.
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Background: Gewirtz was instrumental in the development and passage
of the Family Independence Act, the state’s welfare reform law, which was ranked
third in the nation by Tufts University.
Education: Doctorate’s and master’s degrees, University of Connecticut;
master’s degree, State University of New York Buffalo; undergraduate degree,
University of Massachusetts Amherst.
Age: 52
Residence: Providence
Nancy Gewirtz has been an advocate for low- and moderate-income people in Rhode Island for more than 20 years. The Poverty Institute serves as an independent voice to promote economic security for those with low and moderate incomes through policy analysis.
An offshoot of The Poverty Institute, the One Rhode Island coalition, was formed in 2002. It represents more than 135 organizations – including businesses – and lobbies for legislative initiatives at the State House.
Q. Most of the people who are poor in Rhode Island are working – some two jobs. How is that possible?
A. Our analysis shows that the cost of housing, for example, has doubled. The cost of food has actually increased 3 percent. But wages have remained stagnant, and so in the 1970s, a minimum-wage job would take the standard family of a mother and father and two kids – where the mother stayed home with the kids and dad worked – that would take them above the poverty level. Today, that same situation leaves them at 76 percent of the poverty line. The issue is that wages have been stagnant. Minimum wage has not kept up with inflation. It is true that we have lost a lot of manufacturing jobs so there has been a reduction in unions and their ability to really bargain for better pay. There is also globalization. The loss of jobs to other states and other countries is a factor. But the bottom line is that as we have switched from a manufacturing to a service economy, the wages that are paid are lower. I also think that one of the important factors is a growing income disparity. As a smaller and smaller group holds the majority of resources in this country, there is less to go around. And so government policy influenced by a relatively small group of people or institutions – with deregulation – has made it possible for the top to assume great levels of wealth. We know that the gap between the rich and the poor … the rich and everyone else, really, has never been as extreme since the 1920s and the days of the robber barons.
Q. You’ve said, ‘Poverty is moving into the middle class.’ What do you mean by that?
A. What’s driving that, fundamentally, is that costs are climbing so high and people’s wages have not kept up. One of the things The Poverty Institute does is that it issues a Standard of Need. It looks at what it costs to live in Rhode Island, as opposed to the federal poverty level. We have found that if a family with two young children needs child care and needs to pay their part of health care, they need to earn about $50,000 a year to support these children. Some of the programs we have helped to put in place, like child-care subsidies for low-income people and health care subsidies for low-income people actually make the difference … about whether people can make it. We’ve concluded that a family – a single parent with two kids – making $11 an hour can just barely make their base needs because they have access to child care and health care. So one of the things we are worried about is the government cutting these things back.
Q. What is your argument as to why a higher minimum wage is actually good for the economy?
A. My argument is that there is significant research that shows that when you give low- and moderate-income people buying power, they buy in the local community – whether it is their first car, or a home or a washing machine. Often, I know the argument is, ‘Give the wealthy more money and they will stay here.’ But the reality is that they buy a second home elsewhere, a place where it is warm. They don’t necessarily re-invest the money in the local economy. It is also, on some level, a moral issue. I don’t think that it is correct to have to put lots of state dollars into shelters and soup kitchens and so forth. I think if people work hard, and work 35 or 40 hours a week, they should be able to afford an apartment or a home. The further the income gap rises, the greater the need for the state to intervene.
Q. Let’s talk for a minute about tax breaks – particularly the idea of providing tax breaks to big companies to encourage them to stay here or expand. You raise a question of accountability.
A. The more jobs the better. The better paying jobs, the better. The more jobs with benefits, the better. We’re all on the same team. My concern is … and I just did an exercise with my students where we went through all of the bills introduced in the Legislature. If you look, there are literally hundreds of bills introduced every year regarding tax breaks. Some are very small. But the issue is … we have the governor in his Fiscal Fitness plan looking at how to balance the budget by cutting programs. Many of the items in his plan really attack the people who can least afford it. The Poverty Institute argues that if you think tax breaks are a good way to get businesses to come here and to stay here, then they should be accountable. We’ve studied the tax expenditure reporting laws. They don’t have the resources, nor are they allowed access to all of the information. So we don’t know why the tax breaks are given. We don’t know how much the state has foregone in terms of revenue. We don’t know if they have created jobs. We don’t know what specific benefit they have been to the Rhode Island economy. We estimated that it could be as much as $120 million a year that we give out in corporate tax breaks, where no one knows if they are doing any good.
Q. And you’re trying to gather more information about this?
A. We are submitting a number of pieces of legislation on corporate disclosure and on improving the tax expenditure report. Our goal is to get information so that we can say: ‘This one really works. Let’s have a hundred of these. But this one doesn’t work.’ I’m just calling for accountability. If we’re going to ask whether the welfare reform program works, we should be asking if the business tax expenditure works. Because in my point of view, all of the bills that The Poverty Institute and One Rhode Island are supporting show an economic impact on the state … they actually help the state. They generate better leverage for dollars. For example, having subsidized child care for low-income people brings more money into the economy because more people set up businesses in child care. I just want the same accountability on both sides of the budget.
Q. Do you see a sharp split between pro-business interests and the interests of those committed to social service programs?
A. We all have the same interests. Obviously, in society, there are going to be people who are either disabled or have serious illnesses and they can’t work. Society has a responsibility to take care of them. But, most people who want to work should be able to. The last thing that The Poverty Institute would be is anti-business. But there is this discrepancy. … For example, I am going up to the State House today (Feb. 11) to testify against eliminating the estate tax. That gets construed as being anti-rich people, anti-business. It isn’t. The state has to have a certain amount of resources to provide the services that businesses need. You have to have roads. You have to have bridges. You have to have an infrastructure. You have to have decent schools. If we give away the state’s revenue and we don’t even know if it is for a good cause, then I’m suggesting that it’s not going to be a business-friendly environment and Rhode Island could become a place where businesses do not want to come because they do not have the basic services they need.
Q. One aspect of The Poverty Institute is a group called One Rhode Island, a coalition formed in 2002. What is One Rhode Island?
A. Given the budget deficit that we have been facing, many of the programs we have worked to put in place are eroding away – are being cut back. Hundreds of thousands of Rhode Islanders depend on those programs. What we needed to do was put together a group, initially of advocacy organizations, that advocated for housing and health and food and child care … for basic economic support. We all had been up at the State House lobbying for specific programs. The Legislature gets a little overwhelmed. We decided as advocates to come together and put our bills together as a legislative platform that would be submitted as individual bills but part of a One Rhode Island platform. We then went out to see what other groups were interested in that and we were completely overwhelmed. Without much work at all we had over 135 organizations. Some of them businesses, also philanthropic organizations, unions, social service agencies and individuals. They could see that supporting this network … that it doesn’t make sense to give $5 million to housing and then take away child care. It’s the same family. And they all need to be preserved. People understood that. … We ended up, in a tight budget year, getting about $10 million of the $18 million we asked for.
