Nebraska's Families: Poverty Despite Work

The high poverty rate (13.8 percent) among Nebraska's children is cause for concern, since there is strong evidence that poverty can hinder development and adversely affect children's ability to become productive adults. It is commonly assumed that poor children live in families where parents could work but do not. Yet in Nebraska, of poor families with children and an able-bodied head, 82 percent had one or more workers. The problem is more severe in rural areas: 70 percent of Nebraska's working poor live in rural areas. The apparent contradiction of poverty despite work among Nebraska families with children is the result of both economic trends (increases in low-wage and part-time work) and government policies related to minimum wage, income tax credits, and availability of food stamps. This report analyzes strategies that can boost the incomes of low-wage workers. Nebraska should take steps to increase access to well-paying jobs by fostering improved educational attainment and job creation. Nebraska could establish a state earned-income tax credit based on the federal credit, and it could increase the state minimum wage above the federal requirement. Together, these actions would establish a public-private partnership to make work pay enough to eliminate poverty for a substantial number of Nebraska's working families with children. (TD)