Economic Reinvention and Prosperity

Economic Reinvention and Prosperity

On April 5th, 1968, Robert F. Kennedy delivered a speech to the Cleveland City Club. He was speaking about the assassination of Martin Luther King just the day before and the tremendous violence associated with it. But then he broadened the definition of violence. 

I want to read you an excerpt from his comments. He said: 

For there is another kind of violence, slower but just as deadly destructive as the shot or the bomb in the night. This is the violence of institutions; indifference and inaction and slow decay.

This is the violence that afflicts the poor, that poisons relations between men because their skin has different colors. This is a slow destruction of a child by hunger, and schools without books, and homes without heat in the winter. …..

And this too afflicts us all. 

According to Federal statistics, 17 percent of Oregonians are living in the violence of poverty. But the Federal Poverty Level has not been adjusted for inflation since the 1970’s and grossly under-estimates the number of people who are truly struggling just to keep shelter over their heads and food in their kids’ bellies. The Federal Poverty Level for a family of four, is still just over $23,500 a year. How do four people really live, let alone thrive, on that?!

I have experienced a taste of the destructive force of poverty. I am the first in my ancestry to be born outside of Oklahoma and Arkansas. That’s because my mom left her first husband for his brother, so they sort of had to get the heck out of Dodge – literally! I do think my mom did, to use an Okie expression, “Jump out of the Fryin’ pan into the fire” with that move. Nonetheless I will be forever grateful that I was born in the Pacific Northwest

I was raised a rough little farm kid in the foothills of Washington State. My family lived for a time without running water or electricity. My parents were very hard-working but alcoholism and mental illness took a toll and I wound up on my own at 16 and have struggled financially for most of my life.

I know exactly what it feels like to have to choose between paying the rent or keeping the electricity on. Or to put off going to the doctor when you need to because you have to have gas money to get back and forth to work in between paychecks. I know what it’s like to live in a car.

However, I did not have a child to care for in the midst of all of that.

I especially appreciate being here in a room of amazing and engaged women to discuss this issue. Because, while poverty crosses all boundaries of race and gender, it takes it’s heaviest toll on women. Women are far more likely than men to wind up in the crisis of poverty.

Part of this has to do with the fact, that even in our relatively modern culture, women are still the primary caretakers of our children.

Our state has some major challenges around these issues. A study released last week by the organization, Child Care Aware of America, concluded that Oregon had the least affordable childcare in the country for infants and 4-year-olds.

The average cost for infant day care in Oregon is currently $13,452 a year, according to the study. If the poverty level for a family of four in Oregon is $23,500 a year, how are working parents supposed to afford day care costs of $13,000? And what is your option if you are a single mother?

It should be clear that poverty is a human tragedy and a waste of human potential. 

But I think it is very important to recognize that poverty is also a tremendous drain on our economy.

In 2007, the cost of poverty on the U.S. economy was estimated to be $500 billion a year. Experts suggest that this number has shot up since the economic downturn in 2008.

Poverty costs taxpayers in a number of ways:

o Children who live in the crisis of poverty usually grow up to earn lower salaries than their non-poor counterparts. This reduced productivity is a direct loss of goods and services to the U.S. economy, as well as a loss of potential tax revenue. 

o Children in poverty are more likely to struggle academically and graduate half as much as children in higher income brackets.

o Children in poverty tend to have worse health than their non-poor counterparts, which raises health care costs for all of us.

o Poverty is a significant reason for why people wind up in the criminal justice system, which is extremely costly.

o Failing to address hunger in and of itself costs Oregonians over $2 billion annually, primarily from health care costs associated with poor nutrition and educational losses for kids who are too hungry to concentrate.

You know, ever since the onset of the Great Recession we have been hearing that what we need is economic recovery, but I think that is the wrong goal. Recovery has a sense of returning, of going back to the way things were.

But the way things were really wasn’t working so well for our shrinking middle class and burgeoning low-income populations.

Before the onset of the recession America had hit a dubious tipping point. The increase in our life expectancy had stagnated and even dipped downward for under-educated women. And this current generation of young people is the first American generation not expected to be as well off as their parents.

The United States is now the least upwardly mobile of any industrialized country. It is harder to cross the class line here than in any other developed nation. I don’t know about you but I didn’t sign up for that!

We don’t need to go back! We don’t just need economic recovery. We need economic reinvention.

And I think there are two key pieces to that reinvention. One, is to make the transition to clean, environmentally sustainable, no waste energy, transportation and business models.

And two is to do so in a manner that produces more living wage jobs and opportunities for people to rise out of poverty into prosperity.

I have been working on clean economy issues for 20 years and I will tell you that there is a lot of opportunity and momentum there now. Over the past few years the West Coast states have been working in a very collaborative fashion to accelerate clean economy development. This is in no small part because clean economy sectors are out-performing the conventional economy in jobs and wages. 

A recent, comprehensive jobs report showed that 510,000 Pacific Coast residents are earning full time clean economy paychecks. These are jobs in the energy efficiency, renewable energy, sustainable transportation and natural resources management fields. These sectors are growing jobs faster, paying better and have been more recession-resistant than other industry sectors.

I’ll talk a bit more about this in a moment, but tonight I want to focus mostly on the second piece – taking on poverty.

As First Lady I am leading The Oregon Prosperity Initiative, which aims to ensure that each Oregonian has access to economic security, a healthy life and engaged citizenship.

With the Prosperity initiative I have been working with a diverse group of folks including business leaders, poverty-reduction advocates and service providers, and many of the Governor’s policy advisors to create a poverty-reduction prosperity framework for Oregon.

The Governor and I felt this was timely because the top priorities of our Administration were designed to address the root causes of poverty:

• Our education reform efforts with a major emphasis on early learning are crucial. Evidence shows that investing in early learning is one of the single most effective ways to begin to break the cycle of generational poverty.

• And the health care transformation initiative will disproportionately benefit low-income people by bringing costs down and increasing access to services.

However, while these critically important pieces were moving we still lacked a framework to describe how it all connects to poverty reduction and increasing overall economic prosperity.

That is one of the critical roles of the Prosperity Initiative. Our approach is two-fold: 

• One, we are working to raise awareness about the crisis of poverty and the many amazing organizations that are working in the trenches to serve people in extraordinarily difficult circumstances.

• But very importantly, we are also going upstream to address the systemic causes of poverty so that over time far fewer of us will need those low-income services!

Toward that end, poverty-reduction strategies have been integrated into the Ten Year State Budget Plan.

The Prosperity Initiative is also working closely with the Oregon Business Council, who a year ago added poverty reduction as one of the top three goals of the Oregon Business Plan. We are now developing strategies toward meeting that goal. The fact that our business community is so engaged in this work is generating national attention.

The Prosperity Initiative is also highlighting and supporting several innovative Prosperity Impact projects:

o Kiva Oregon: How many of you have heard of the international program Kiva? For those who haven’t, it is very cool. You can go online and for as little as $25 invest in low-income entrepreneurs. Up until now Kiva has only supported entrepreneurs in developing countries. But I am delighted to report that we now have Kiva Oregon! So, in addition to the half a dozen African women in my investment portfolio, I also now have a couple of homegrown Oregon entrepreneurs! You can find a link to Kiva Oregon on our website, www.oregonprospers.org.

o Opportunity Communities: This work is the brain child of Donna Beegle, an amazing Oregonian who rose out of severe poverty to make a career helping people do the same.

o Oregon Solutions Prosperity Collaborative Projects. Through a grant from Northwest Area Foundation we are working with several of Oregon’s hardest hit counties to connect people in poverty with opportunities for good paying jobs.

Each of the Prosperity Impact projects are about creative, collaborative economic development. They are examples of economic reinvention.

I think that’s important because we tend to forget that our economy is not the Pacific Ocean or Mt. Hood. It is not a force of Nature or an act of God. It is a human-made creation. We invented it, which means we can reinvent it! And in fact we have done so time and time again.

I want to leave you with just a couple of examples of creative reinvention right here in Oregon that are delivering both pieces: providing environmental benefits and increasing prosperity for people and communities.

Sherman County: 

Prior to 2002 Sherman County faced a fate common to many rural western U.S. communities. They had very few employment opportunities and revenue of only a few hundred thousand dollars annually. And then the “winds of opportunity” blew in -- literally. Wind energy developers partnered with farmers and began installing turbines in wheat fields. The farmers receive a lease payment from the energy developers, which helps keep wheat farming economically viable.

Wind farms have brought more than $17 million in property taxes and investments into Sherman County. In an innovative and forward-looking approach the county saves 20-30 percent of the revenue it receives from wind development in a rainy day fund and to make infrastructure and community development investments. This pays for essential community needs like fire departments and health services, new supplies for students, and capital projects like construction of a new school, library and city hall.

Additionally, more than $1 million has been paid directly to county residents through the Sherman County Resident Compensation Program, which pays $590 per year to each county resident.

This is a low-carbon, clean economy version of the Alaska Permanent Fund from which Alaska residents receive annual payments as a share of the revenue from oil extraction.

While many rural counties are on the verge of bankruptcy, Sherman County is doing great!

St. Vincent Depaul:

Another great example is St. Vincent DePaul in Eugene. Decades ago they got creative about how to provide resources to people in the crisis of poverty in their community. They needed to be able to pay for the food and housing services and the people getting those services needed jobs.

They now employ 450 people in a whole fleet of recycling businesses – from resale at the thrift store, to the largest mattress recycling firm in the nation. They sell scrap metal and make beautiful new products from recycled glass.

Their profits provide everything from affordable housing to veterans job training, to veterinary services for pets of people who find themselves homeless.

Vernonia

Another amazing example of economic reinvention is taking place in Vernonia Oregon. It was determined that one of the biggest reasons that timber families were under pressure to leave their lands was because they could not afford health care or insurance. And so, a group of timber families got together started implementing sustainable forestry practices and selling the resulting carbon credits.

Investors buying the carbon credits know that all the money from those credits goes directly into paying for health care fort those timber families and funding a community health clinic.

Investor payments for carbon stored in family forest trees are deposited into landowner ATreeM cards which are specifically coded so they can only be used for health care services and products. Oregon is the pilot state for the ATreeM card.

That is the kind of bold innovation that is in our American cultural DNA! It’s what we’re really good at! We did it when we harnessed the power of oil beginning in 1859. We did it during the Industrial Revolution when we innovated mass production. We did it when we tapped the creativity of the space race to develop myriad new products and services that literally transformed technology and the economy. We did it yet again by leading the internet revolution.

We have an opportunity to do so again right now. And our little state of Oregon is uniquely positioned to provide leadership in creating conditions that empower people and reinvigorate the American Dream.

Throughout this first term, we have been employing strategies to reduce poverty in Oregon both in the short term and long term. 

In the long term, the Governor’s healthcare transformation efforts – reducing the cost of care while delivering better results – coupled with a more equitable education system that targets our earliest learners will deliver major benefits to low income Oregonians for decades to come.

In the short term, we’ve been working hard to bring jobs back to rural Oregon, increase opportunities for workforce training, increase the earned income tax credit, and increase funding for employment related day care – all of these things help working families keep more of the money they earn.

The Governor is very proud that since taking office he's helped to create over 60,000 jobs and significantly lower the unemployment rate.

However, we know that despite of these efforts, we are simply leaving too many Oregonians behind, and we have to do better.

Martin Luther King once said that if you didn’t talk about race you were destined to have racism. I think the same is true of poverty and the huge opportunity gap in America. It isn’t just going to go away if we ignore it.

But that is exactly the approach the right-wingers in the Republican party are taking. Just last week I read an article in The Nation magazine that described how the GOP won’t even blame Obama for the poverty crisis because to do so they would have to admit that poverty existed! That is stunning, dangerous and immoral.

Thank God it’s not how we behave here in Oregon! I have been really impressed and inspired by the eagerness of really diverse groups of people to taking on poverty and coming forward with creative ways to increase opportunity.

To close I’d like to leave you with a quote from Nelson Mandela that perfectly reflects the mission of Oregon’s Prosperity Initiative through innovation and reinvention:

“Overcoming poverty is not a task of charity, it is an act of justice. Like Slavery and Apartheid, poverty is not natural. It is man-made and it can be overcome and eradicated by the actions of human beings. Sometimes it falls on a generation to be great. YOU can be that great generation. Let your greatness blossom.”

I believe that when Oregonians stand up and say that poverty is no longer acceptable here, that we are going to work together to give all our people a chance to maximize their potential and their contribution to our society, then Oregon’s greatness will blossom.

Thank You!

 

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Cylvia is an award winning New Economy leader who is known for speaking truth to power.  She is a smart systems thinker who understands and is able to describe the deeper connections between seemingly unrelated issues.  She is a gifted writer and speaker and is the former First Lady of Oregon.  

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