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Breaking the cycle: Why poverty can be a closed loop with few chances for escape

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In a big ballroom at Indiana University Southeast, sociologist Melissa Fry and her colleagues arranged tables with signs on them around the perimeter. Each station represented a certain service, including a school, a bank, a social services office, a grocery store and a hospital.

“But then there’s also like a payday loan kind of place. There’s also a pawn shop,” said Fry, the director of Applied Research and Education Center at IU Southeast. 

After setting up, Fry and her colleagues recruited participants to take part in a “poverty simulation.” Their goal was to inspire empathy, sensitize service providers and demonstrate the daily stresses facing people living in poverty.

The stations were staffed by Hoosiers living in poverty day in and day out. One week in real life equaled 15 minutes in the simulation. 

Shocking reality

“At the end of the simulation, [participants] join the group for a debrief discussion,” Fry said. “And sometimes you’ll have participants say, ‘Well, I don’t think it’s really like that.’”

At this point, some low-income volunteers explained to the participants that it is actually a lot harder than the simulation suggests. According to Fry, participants walked away with similar feelings — anxiety, stress, anger and an overwhelming feeling that, from the get-go, the cards were stacked against them.

The exercise at IU Southeast was a snapshot of what more than 700,000 Hoosiers living in poverty face each day. Researchers point to systemic issues that make it difficult for many of the state’s poor to break the cycle of poverty. 

Nutrition and child care: Poverty deters essential businesses

According to a 2019 SAVI study, 80,000 Indianapolis residents live in zones of concentrated poverty, areas where the poverty rate is at least 40%. 

Higher rates of poverty in a neighborhood deter many essential businesses from opening, according to SAVI analysts.

Unai Miguel Andres, a research analyst at SAVI, put it this way: “Capitalism is great for the economy, but not necessarily for the human need.”

Andres gave “food deserts” as an example of how poor neighborhoods fare in a capitalist system. Food deserts are areas where there is little access to healthy food options because of the absence of grocery stores. Neighborhoods that qualify as food deserts are also low-income ones, according to the United States Department of Agriculture definition. 

“Grocery stores are businesses that want to make profit,” Andres said. “If they see that by opening in a certain neighborhood they won’t turn in enough profit, they just won’t open there.”

He said high speed broadband technology, and other services that require an investment by private corporations, are also subject to profit motives.

Research shows that the care children receive in the first years of life is crucial to their long-term well-being and future success. Fry of IU Southeast said child care services follow a similar pattern in many of Indiana’s poorest neighborhoods. She has studied some of the state’s poorest neighborhoods and found that there is a dearth of such essential services.

“Quality child care in low-income markets is almost impossible, because the market doesn’t work. There’s no effective demand for high quality care because people can’t pay enough for high quality care,” Fry said. 

Public education: The great equalizer or a tool to further segregation?

Education is one of the tools that can break the cycle of poverty, according to Zahava Stadler, special assistant for state funding and policy at the Education Trust. 

But she says studies show things are not looking up when it comes to educating the poorest in a city like Indianapolis. 

“Our education system has a long way to go before it fulfills the promise of being the great equalizer,” Stadler said. “Because too much about the structural nature of our school funding system just reinforces and entrenches existing inequalities in our communities.”

The general idea that many have on school funding is that it comes from property taxes, which Stadler says is partially true. But there is also a complex formula that most states use to allocate funding based on the need of each school. States look at how much property tax each school district is able to generate and then give the districts more money to reach funding needs. While it’s not a perfect process and has loopholes, it largely works in many states, Stadler said.

“They basically try and rebalance things to a degree so that local wealth doesn’t become destiny for school districts,” she said.

But that’s not how it works in Indiana.

“Because Indiana doesn’t do step two,” Stadler said.“What they do is they say, ‘OK, here’s your funding target. We use our formula to determine the district’s funding target, and then we give you that money. ‘So there’s no accounting for local wealth. And what happens is that everybody agrees on the ground that the money the state gives them is not enough.”

This leaves poor neighborhoods with low property values, and in return, meager property tax amounts for under-funded and under-resourced public schools.

Low reimbursement for medical practices 

According to the Economic Policy Institute, high concentration of poverty in a neighborhood leads to disparities and inequality across the board. Health care is no exception.

As many as 9% of Hoosiers are uninsured — making them unable to afford health care. In addition, poor neighborhoods have higher rates of residents who depend on Medicaid and Medicare.

“The reality is that for doctors offices, it’s hard to make a practice work on just Medicare, Medicaid, because the reimbursement rate is so low,” Fry of IU said. “That’s the capitalism part, right?”

Stalled integration efforts

One way to ensure that poor Hoosiers — children and adults alike — are not destined to depend on subpar public services, such as education and health care, is integration.

“If you spread individuals with lower purchasing power within neighborhoods in combination with people that have access to more capital or more money to be able to purchase products or services, that means the services are going to be more spread out,” Andres of SAVI said. 

Federal programs aiming to make neighborhoods less segregated can be a step in the right direction, but they do not always work as expected. 

For example, a program that provides housing vouchers or rental assistance to low-income people instead of offering housing units — to allow them to seek housing in mixed income neighborhoods—seems to be stalling for many reasons, Fry of IU Southeast said. 

According to Fry, one problem facing some poor residents using these housing assistance programs is feeling like social pariahs in wealthier areas. Racism against Black residents deters many from relocating to more prosperous, usually predominantly white, neighborhoods.

“The other problem we actually see in southern Indiana is that a lot of landlords don’t want to take those vouchers for a couple of reasons,” Fry said. “The federal government has placed pretty significant standards on property owners in terms of how they have to maintain the apartments, which obviously should be safe, but some of the requirements are really onerous, and making it difficult for landlords to want to participate.” 

She said these vouchers can be ineffective if poor residents can’t find a place to use them.

Chain reaction

A 2015 study by the IU Richard M. Fairbanks School of Public Health and SAVI shows that zip codes in Indianapolis a few miles apart have a huge gap in life expectancy. 

Residents of wealthy neighborhoods in the metro area live up to 83.7 years — similar to countries such as Switzerland and Japan. In a poor neighborhood less than 30 miles away, residents live up to 69.4 years — less than countries such as Iraq and Bangladesh.

Tess Weathers, a research associate at IU who led the study, said this disparity is largely due to the unfair and different lives that Americans lead due to systemic racism, disparities in accumulated capital and where they live.

“And the ownership is not solely on individuals, which is often the thing we do in America. We place the ownership on individuals,” Weathers said. “Society, we as an entire country, or as a state, need to take responsibility for our role in that.”

This story was reported as part of a partnership between WFYI, Side Effects Public Media and the Indianapolis Recorder. Contact Farah Yousry at fyousry@wfyi.org or 857-285-0449. Follow her on Twitter @Farah_Yoursrym.

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