WESTSIDEFORWARD

Bringing an end to decades of concentrated poverty on Chicago’s west side through strategic and cooperative community transformation investments.

Community Transformation

Overview

Bethel New Life aims to bring an end to decades of concentrated poverty on Chicago’s West Side through strategic and cooperative community transformation investments. We plan to achieve this by initiating a new era in our community development efforts through a strategy of investments that focus on:

  • Building a self-sustaining West Side economy that is connected to the larger regional economy.
  • Strengthening community capacity to benefit from investment.
  • Creating opportunities to bring individuals and families out of poverty.
  • Supporting policies and systems that help communities thrive.

Bethel’s primary investment areas for bringing about community transformation are:

COMUNITY ECONOMIC DEVELOPMENT
EDUCATION.

The Price of Poverty

a nationaL Crisis

With a gross domestic product of more than $15 trillion, the United States has the largest national economy in the world. In this time of fi nancial turmoil, political deadlock, economic strain and ever-increasing global competition, America today faces an unparalleled challenge to its economic strength and stability.

To meet this challenge, the U.S. needs to build a workforce that can compete in the 21st century and where all of its members can contribute their talents and skills. Yet, this is something that we are struggling to do, in large part because tens of millions of Americans live in poverty. In 2011, the offi cial poverty rate was 15.0 percent, with 46.2 million people inpoverty, many of whom live in areas of concentrated poverty. The same rate in 2011 for children under age 18 was 21.9 percent,more than one-fi fth of tomorrow’s workforce.

Children living in poverty do not have the same opportunities as children raised in wealthier households. Inequality disadvantages them in every aspect of their lives: they are less healthy, less educated, and more likely to enter prison than their more affl uent peers.Inequality of this magnitude has created an economic crisis. With fewer children fi nishing Below is a summary of our key investment areas and programs.

The Price of Poverty: A Crisis for Chicago’s WeSt Side

Chicago’s West Side communities (defined by Bethel as Austin, East/West Garfield Park, North Lawndale and Humboldt Park) are among the most disadvantaged in the City. In fact, the City’s Hardship Index ranking places these communities at an average ranking of 11th out of 77 community areas in terms of degree of hardship experienced by residents. The median hardship index rating for these community areas is 85 out of a possible 100. Higher index scores are indicative of higher degrees of hardship .

West
Garfield
Park
East
Garfield
Park
Humboldt Park North Lawndale Austin West Side Overall Chicago Overall
Area (sq mi)2 1.294 1.915 3.583 3.3185 6.095 16.07 227.01
Population2 25,444 24,399 62,276 39,836 96,635 248,590 2,714,856
Pop. Density (people/mi2) 19,664 12,738 17,381 12,508 15,854 15,629 11,593
Household size19 3.0 2.9 3.2 3.0 3.0 3.0 2.5
Median Income20 $24,600 $25,291 $29,124 $26,292 $33,557 $26,292 $46,195
Below poverty1 40.9% 47.1% 34.3% 43.9% 30.8% 39.4% 19.0%
< HS Education1 41.8% 40.6% 47.20% 44.8% 40.4% 43.0% 19.3%
Bachelor’s+2 17.1% 23.6% 17.70% 19.7% 18.4% 19.3% 33.0%
Employment Rate2 39.3% 40.7% 46.3% 38.8% 48.8% 42.8% 59.4%
Unemployment Rate (16+)1 25.6% 18.2% 15.0% 17.06% 22.1% 19.7% 9.3%
Per Capita Income2 $11,238 $12,992 $13,588 $12,752 $16,289 $13,358 $27,940
% 18-64 years of age1 57.8% 56.2% 61.2% 58.7% 61.9% 59.2% 66.2%
Hardship Index1 92 87 85 84 73 85
Hardship Index Ranking1 6 10 11 12 21 11

The Price of Poverty: A Crisis for Chicago’s WeSt Side

Currently, 33% of Illinois residents live in or near poverty and 22% of Illinois children live in poverty. The poverty rate for all of Cook County is 33.9% with an additional 22% of Cook County residents qualifying as low income. Taken together, over 55%of Cook County residents (1.5 million people) live at or near poverty. The majority of Chicago’s West Side neighborhoods have poverty rates that exceed 34.9%, with highest concentrations in East and West Garfield Park and North Lawndale. Poverty rates on the West Side of Chicago range from 27.2% (Austin) to 43.7% (East Garfield Park), encompassing some 77,000 residents. Extreme poverty rates on the West Side of Chicago range from 12% (Austin) to 24.3% (East Garfield Park), encompassing some 38,574 residents.

Community Area Total Population # Of residents living in poverty Rate of poverty (below 100%
FPL)
# Of residents living in extreme
poverty
Rate of extreme poverty (below 50%
FPL)
Rate of Poverty & Extreme
Poverty
Humboldt Park 53,387 18,475 34.6% 10,142 19.0% 53.6%
Austin 97,092 26,420 27.2% 11,621 12.0% 39.2%
West Garfield Park 18,885 8,058 42.7% 3,656 19.4% 62.0%
East Garfield Park 20,272 8,860 43.7% 4,916 24.3% 68.0%
North Lawndale 35,176 14,991 42.6% 8,239 23.4% 66.0%
Total 224,812 76,804 34.2% 38,754 17.2% 51.3%
Source: Social IMPACT Research Center’s analysis of the U.S. Census Bureau’s 2000 Decennial Census and 2007-2011 5-year American Community Survey.

The Price of Poverty: The West Side’s Extraordinary Wealth Gap

Transforming the West Side communities from communities of concentrated poverty, high rates of unemployment and low levels of educational achievement to look something more similar to Chicago overall will take substantial, focused investment in getting West Side residents employed in skilled jobs. Doing this will also require substantial improvement in the educational attainment of West Side residents. The extraordinary wealth gap between Chicago overall and the West Side in particular is related to a number of factors:

  • Only 57% of WS residents have a high school
  • Over 80% of Chicago residents have at least a high school education
  • Less than 20% of WS residents have a college degree
  • One third of Chicago residents have a college degree

  • West Side families tend to be larger than families in Chicago
  • Among families with children, WS families tend to have more children than families who live elsewhere in Chicago
  • Larger family size means that the family must have aproportionally larger income to remain out of poverty

  • Less than 60% of residents of the WS are of traditional working age (between 18-64)
  • More than 2/3rds of Chicago residents are of traditional working age (between 18-64)
  • Because the WS has more seniors and more children and fewer adults working, each worker must make higher wages to support those who are not in the workforce

  • West Side residents who are employed have a median hourly wage of $13.35
  • Chicago residents who are employed have a median hourly wage of $22.21
  • This large wage differential results from the fact that West Side residents tend to be in lower skilled/lower wage and sevice industry jobs

Making Transformation Happen

The Bottom Line

Making transformation happen will take a monumental effort. Bethel calculates that the following levels in Jobs, Training and Education will need to be achieved:

Jobs

63,000

permanent jobs @

$36,000/year

90,000

Jobs to be created

TRAINING

116,000

people trained and

placed in skilled jobs

75%

people age 10-40

trained for skilled jobs

EDUCATION

12,000

West Side youth obtain

associates degree or above

95% HS graduation

70% college enrollment

60% college graduation

employing the unemployed

The initial opportunity for improvement rests in those who are not yet employed but will be in the near future and in those who are not employed currently, but could be. Initial efforts must focus on newly employing 27,000 more individuals in skilled jobs. For positive transformation to occur, residents of the West Side need more and better paying jobs.

27,000 Jobs

New Jobs

$17.32

Hourly Wage

$974,167,766

Annunal new Wage
income to West side

Better Jobs for incumbent Workers

This phase involves moving the community from working poor/low income to working class. Even with these extraordinary efforts, a wealth gap will remain between Chicago as a whole and the West Side.

36,000 Jobs

Better Jobs

$17.32

Hourly Wage

$974,167,766

Annunal new Wage income
above that of current wages

Combined, employing the unemployed and better jobs for incumbent workers generates $1.2 billion in new annual wage income for the West Side. While the rate of poverty will be similar to that of Chicago overall, the median wage income levelwill still be about $16,000 less on the West Side than for the City as a whole.

The Bottom Line

Paying For The Transformation

If we do not transform the West Side, over the next ten years we will expend over $29.1 billion to keep the West Side poor and large numbers of residents locked up. Alternatively, over the next ten years we can make an effort to move the West Side from a community of concentrated poverty to a working class community, in part by reclaiming some of the money and many of the lives that we are now wasting.

Investment 95%
highschool
graduation
12,000
college
graduates
116,000
people
tained
116,000
job
placements
63,000
Jobs
supported
d
Education
Training
Employment
Sub Total
- - -
$1,223,790,128 $747,880,694 $725,446,500 - -
- - - $548,313,500 $160,833,333
- - $725,446,500 $548,313,500 $160,833,333
$1,223,790,128 $747,880,694
Total $3,406,264,155

Paying For The Transformation

the total cost of transforming the West Side over ten years is $3.4 billion. This is only 12% of the cost of not transforming the West Side and can be gleaned from cost savings and new tax revenues from wage income with no new investment necessary.

Reduction of Cost of Crime Reduction of Cost of Healthcare Reduction of Rates of Incarceration
Current Cost Burdern $6.3 billion $5.8 billion $10.6 billion
Potential Reduction (10 yrs) $3.1 billion $2.98 billion $3.2 billion
Total Generated by Reduction $9.4 billion
Current Wage Taxes $442,872,866
New Taxes from Wages (10 yrs) $2,021,102,884
Total Generated by New Taxes $2.0 billion
Total Revenue Generated by Transformation $11.4 billion

Paying For The Transformation

The good news is that over a 10-year period, the transformation of the West Side can more than pay for itself, improving the community, improving the city, and generating new revenue to support infrastructure and other City projects and services.

New Revenue &

savings from Transformation

$11.4 billion

Cost of

Transformation

$3.4 billion

Surplus

generated from

Transformation

$8.0
billion

THE COST OF DOING NOTHING1

Cost of Poverty

$18.5 billion

Cost of Interaction

$10.6 billion

Cost of Doing nothing

$29.1
billion

1Over 10 years

The Cost of Transformation

Even if we assume that the transformation costs incur a 30% scale-up cost and run 20% ahead of projections, the total cost of West Side transformation comes in at $5.1 billion, less than half of the projected new revenue and cost savings.

Cost of not transforming the West Side $29.1 billion10

Cost of not transforming the West Side $3.4 billion11

Our Organization

Overview

We believe that by making smart, strategic, sustainable investments we can move an entire community out of poverty. Based on our thirty-five years of experience and decades of poverty research, we know that making investments in education and community economic development will be most likely to create transformative results.

Below is a summary of our key investment areas and programs.

Community Economic Development

Business Development

  • Small Business Development Center
  • Entrepreneurship Training Program
  • New Life Community Investments
  • New Business Incubation
  • Neighborhood Business Development Center
  • Bethel Business Accelerator

Workforce Development

  • Advanced Manufacturing Program
  • Utility Construction Program

Asset Building

  • Homeownership Counseling
  • Financial Literacy

Education

  • Right Start for Families
  • Brain Train
  • Whole School Network
  • Out of School Time Education Consortium
  • West Side Educators Consortium

SENIOR HOUSING

  • Independent Living
  • Supportive Living