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    Calendar

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  • E-NEWS
    • 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 financial 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 official poverty rate was 15.0 percent, with 46.2 million people in poverty, 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-fifth 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 affluent peers.Inequality of this magnitude has created an economic crisis. With fewer children finishing 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 .

       

      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.

    • 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:

      WAGE DIFFERENTAL

      • 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 service industry jobs

      FAMILY SIZE

      • 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 aproportionaly larger income to remain out of poverty

      DEMOGRAPHICS

      • 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
    • Making Transformation Happen

      THE BOTTOM LINE

      Making transformation happen will take a monumental effort. Bethel calculates that the following levels in Jobs, Training and Economic Growth 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

      ECONOMIC GROWTH

      • 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
    • Employing The Underemployed

      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

      Annual 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.

      27,000 Jobs

      Better Jobs

      $17.32

      Hourly Wage

      $974,167,766

      Annual new Wage
      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 level will 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.

      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. 

      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 NOTHING

      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.

      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.

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