As federal lawmakers debate an economic stimulus package,an Iowa State University researcher has released a study of poverty in the United States from 1980 and 2000. David Peters says his report shows why Iowa has thus far weathered the current economic situation a little better than other states.
He says there were hardly any "persistently poor" communities and very few communities in Iowa that moved into poverty, and in fact, several moved out of poverty. So he says the state had relatively high levels of poverty in 1980, and relatively low levels by 2000.
Peters says the poverty was the worst in the south and southwest, and on the Native American reservations of the upper Midwest. He says Iowa’s diversified farm economy help it do better than other states.
Peters says he’s learned from his research some ways to deal with the current economic downturn. Peters says the first thing is to invest in educational systems, especially community colleges and adult worker programs, as they are able to respond quickly and get people re-trained and back into the workforce. He says government needs to be sure the support systems are there for workers.
Peters says investing in transportation systems and child care systems help poor people enter the labor market and subsidizing transportation systems help them get to work. Peters is an assistant professor of sociology who says creating jobs requires investments where they will pay off the most.
"The use of targeted tax breaks and infrastructure enhancements that target industries that are growing nationally and industries diversify the economic base,"Peters says, "so typically you want to avoid sort of lower end manufacturing, but invest tax breaks toward higher-end higher value added manufacturing, services, both professional services and local services that can’t be exported easily."
Peters says the targeted tax breaks and investments in working training pay off more than giving people stimulus payments. He says the downside of stimulus payments are the government has no control over how the money is invested, but by targeting job training and education, you are investing in "human capital" rather than just the financial capital of individuals. Peters’ complete study is available on-line.