A new report by the Annie E. Casey Foundation gives Arkansas some reason to be hopeful: 2014 data shows more young workers are on track to a stable career, many parents are paying a smaller share of their income on housing (freeing up their budgets for other essentials), and our kids are less likely to be living in poverty. In fact, for the first time in six years, our percentage of children living in poverty decreased. Arkansas workers still make a few dollars an hour less than neighboring states with similar economies, but in general, our families are more financially stable than they were just a few years ago. This is likely due in part to the significant decline in our unemployment rate. The percentage of kids whose parents don’t have full-time, year-round employment is also edging down (from 34 percent in 2013 to 33 percent in 2014).
More Arkansas teenagers ages 16-19 are either getting jobs or staying in school, which is a good indication that they are on the right track. Only 8 percent of kids in this age group are not in school or working, which is a huge (33 percent) improvement over the rate in 2010. That improvement moved Arkansas up 10 places in the national rankings (from 42 to 32) on that data point. That is good news for teenagers individually, who will be more likely to be financially successful and stay out of trouble, and it is also good news for our economy as a whole, which will benefit from increased employment.
Arkansas families enjoy a relatively low cost of living, which is why we usually fare well in state rankings on housing. Researchers pay attention to the share of a household’s income that goes to housing, because that is one of the biggest unavoidable expenses that can limit family budgets. Spending more than 30 percent of your income on housing is considered a high housing cost burden. The rate of kids in Arkansas who live in families with high housing cost burdens has decreased 10 percent since 2010 (moving from 32 percent of kids to 28 percent of kids).
Another positive sign for Arkansas families is a drop in the child poverty rate (from 29 percent to 26 percent). That change equates to 18,000 children in our state whose families no longer make poverty-level wages (income below $24,008 for a family of two adults and two children in 2014). Increasing household income, especially for poor families, is shown to increase positive outcomes for kids across the board, including improvements to child well-being, social and emotional development, test scores, and odds of financial success in adulthood.
We are moving in the right direction, but Arkansas is still in the worst 10 states for child poverty (our national ranking improved from 48 in 2013 to 41 in 2014). If we want to pull ahead nationally, we have to invest in proven policies that help these hard-working families and their kids gain financial stability. Arkansas needs an Earned Income Tax Credit, which would help workers keep more of what they earn, and is a long-standing successful poverty-fighting tool. Unlike half of other states in the US, Arkansas doesn’t have an EITC. We can’t expect to move away from the bottom if we continue to ignore the policy options which have succeeded in other states.
Read the full Kids Count Data Book here.