Many Texans Earn Low Pay, Hold Few Assets

Texas politicians like to tout the state’s economic growth, but more and more Texans are finding themselves teetering on the edge of poverty.

There is little doubt Texas has survived the Great Recession better than other states, but a study by the Corporation for Enterprise Development has found that 27.7 percent of Texas households have no financial cushion in case of an emergency. If you exclude homes and automobiles from the calculation, a full 50 percent of Texans have no assets they could use to survive if they suddenly lost their income.

When compared to the rest of the country, Texas ranks 41st in financial security. That means even if Texans survived the last economic storm, another one would swamp them. The corporation is a national non-partisan, non-profit that works to create and identify programs and policies that can help poor people move up the economic ladder.

The findings match up with the latest U.S. Census data on Texas, which found that 17.9 percent of Texans — or 4.4 million people — live below the poverty line. That’s 2.6 percent higher than the national average and ranks Texas 40th in the nation. Poverty is calculated by examining the make-up of a household and then comparing them to a minimum cost of living for such a household derived from the consumer price index. If the household makes less money than they need to survive, those people are considered to live in poverty.

There are many theories about why Texas has such a high rate — or if the rate is accurate — and even more ideas about how to solve it. But no matter where Texans stand on the political spectrum, these statistics should be important when considering who to vote for and what policies to support.

About 40 percent of the state budget goes to help the needy.

Poor people depend on Medicaid, a government-financed health insurance program, and as poverty grows so does the expense to the state. Medicaid represents a third of the Texas budget now, and this week Health and Human Services Commissioner Tom Suehs — who was appointed by Gov. Rick Perry — said the program will need an additional $15 billion in the 2014-2015 budget.

Suehs added that $5 billion of that total is the result of the Legislature not appropriating enough money for Medicaid in this budget cycle, the equivalent he said of writing a bad check.

Poverty is also most acute among children, with 25.7 percent of Texas children living in poverty, compared to 21.6 percent nationally. According to former state demographer Steve Murdock, a poor child who attends college is seven times more likely to move into the middle class, so public education is critical.

Yet Texas Education Commissioner Robert Scott, another Perry appointee, apologized last week to the Texas Association of School Administrators for the Legislature’s decision to cut per-student spending in Texas for the first time since World War II, and for cutting $1 billion out of his agency’s programs that have proven successful in boosting student achievement.

So the question remains: What role should state government play in helping people escape poverty?

The Texas Public Policy Foundation is a conservative think-tank in Austin with tremendous influence over Republican officeholders. Bill Peacock, the group’s vice president for research, said more budget cuts are the answer because government is too inefficient to make a difference.

“The poor don’t need a safety net, they need jobs,” Peacock said. Programs like Medicaid, he argued, require working people to pay taxes instead of spending their money in a way that creates more jobs. Conservatives believe that less government spending leads to greater economic prosperity.

Progressives, or liberals, believe that society and the economy are imperfect, and government plays a role in caring for the needy and providing a level playing field. The Austin-based Center for Public Policy Priorities is a non-profit that fights for better government programs to help the poor.

“There needs to be public policy that really enables economic mobility and removes policies that get in the way,” said Don Baylor, a senior policy analyst at the center. As an example, Texas law requires someone to empty their savings account before they can receive financial help, which also happens to make it more difficult for that person to get back on their feet.

In the Occupy Wall Street and tea party era, economic inequality will be an important issue in the 2012 election, particularly in Texas where it appears to be only getting worse. The choices of how to solve the problem couldn’t be more different.

Topics Texas