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July/August 2004

Inside This Issue:

 

Former TANF Recipients Earning More, But Still Below Poverty Thresholds
Since welfare reform was enacted in 1997, many rural families who are no longer enrolled in the Temporary Assistance for Needy Families (TANF) program are earning higher wages, but are still below poverty thresholds, according to a report from the Center for Rural Pennsylvania.

The report is based on a 2003 re-examination of the status of former TANF recipients surveyed in 2000. The same 282 former recipients surveyed in 2000 were re-surveyed in 2003 to determine how they were doing three years later, or six years after welfare reform was enacted. The 2003 sample included families that were more likely to be employed, had higher incomes and were more likely to be married.

Background
In March 1997, the welfare system was fundamentally changed in Pennsylvania with the implementation of TANF, which imposed a five-year lifetime cap on TANF recipiency, and required recipients to work at least 20 hours per week after two years. From a TANF caseload perspective, the program was a success. Between March 1997 and July 2003, TANF recipients statewide dropped from 469,153 to 217,426. In rural counties, recipients dropped from 62,159 in 1997 to 25,887 in July 2003.*

2000 Study
In 2000, the Center for Rural Pennsylvania awarded a grant to Dr. C. Nielsen Brasher of Shippensburg University’s Center for Applied Research and Policy Analysis to conduct an examination of the impact of welfare reform on TANF recipients in Pennsylvania’s rural areas.

For the study, Brasher received from the state Department of Public Welfare a list of all TANF recipients who had been on TANF during March 1997 and were no longer receiving assistance in 2000. From this list, the researcher surveyed a random selection of 840 persons who lived in rural counties. Of the 840, 282 cases, or 34 percent, were reached.

The 2000 study showed that while most families were no longer receiving TANF benefits, they typically were still relying on some form of government assistance and were often surviving on below poverty threshold income. Many former recipients also had stagnant low wages.

While it was not surprising that many former recipients started at or near minimum wage jobs after leaving TANF, it was disappointing that, one to three years later, they were still relying on these same wages.

However, the 2000 study revealed that families generally thought they were better off, almost all children still had some form of health insurance, and many family heads increased their education and skill levels.

A Re-examination
In 2003, 97 of the original 282 families (35 percent) were reached; 93 of which were still not receiving TANF.

The key findings are in the employment and wage areas. The number of respondents who were employed and the number of hours worked were similar to the 2000 results, but the average wage increased more than $2 from $7.50 to $9.59. This increase translated to an overall increase in monthly household income from an average of $1,505 in 2000 to $1,939 in 2003.

The wage gains also resulted in a drop in the percent of families in poverty from 48 to 35 percent, and a drop for families under 150 percent of the poverty threshold from 79 to 62 percent.

While this is an encouraging improvement, the reality is that despite the wage gains, almost 33 percent of families are still below the poverty thresholds and almost 66 percent are below 150 percent of the poverty level. (Note: Poverty thresholds are calculated by the Census Bureau, and this study used thresholds for 2002. Examples of these are $9,359 for a single person under 65, $12,400 for a parent with one child under 18, $14,494 for a parent with two children under 18, and $18,244 for a family with two parents and two children under 18. Only cash income is counted, so items like food stamps and medical assistance are not included as income.)

Public Assistance and Quality of Life
The study also noted a decline in the reliance on public assistance. Food stamp recipiency declined from 43 to 33 percent and Medicaid use decreased from about 66 to 50 percent. Housing assistance and childcare subsidies also declined.

On the other hand, during the past three years, families reported that their telephone, electricity and heat had been turned off in about the same proportion as in 2000. However, fewer were behind on their rent or mortgage.

Employment, Wage Growth Barriers
Several factors are influencing the lack of greater employment success. The most commonly cited was the lack of jobs in the area. Transportation and childcare were a problem in only about one fifth of the cases. This is down substantially from 2000 when more than half the respondents cited transportation and childcare as problems.

Education and illness/disability continued to stand out as substantial barriers and are important because they can be so overwhelming. A closer look at the data indicates that 10 out of the 14 respondents who reported illness/disability as a major problem were poor. This represents about one third of all poor families surveyed.

Education was seen as a problem in about half the cases, although only a major problem in about one fifth of the cases. This is despite the fact so many respondents had or were attempting to increase their education.

The respondents’ perception of the need for more education is well founded. As education increased, wages and income also increased, and poverty status decreased. Those who had less than a high school education (58 percent) or a high school diploma (44 percent) were much more likely to be poor than those with some college or a certificate (24 percent) or a college degree (16 percent).

Education and Training Programs
Respondents indicated a high degree of activity in education and job training programs while on TANF and after leaving TANF. Thirty-four percent reported increasing their education while on TANF and 21 percent after leaving TANF. Twenty-five percent enrolled in a job skills program while on TANF and 13 percent after TANF.

What is most striking was economic success by activity. The data show that respondents who enrolled in an education program faired far better than any other group. Those who enrolled in educational programs while on TANF earned an average of $10.73 an hour and had a 19 percent poverty incidence. This is much better than for the average respondent.

Those who enrolled in education or job skills activities after leaving TANF did even better.
This seems to support the theory that those obtaining real skills and education will be better off in the long run.

Family, Full-Time Employment and Economic Success
Together with education, family structure and employment were important indicators for economic success. Families who had two wage earners (married or living with a partner) were more economically successful than single parents. The more full-time wage earners in a household, the greater the economic success. In families where both partners worked, the poverty rate was 6 percent (much less than the national average) and monthly incomes were near $3,500. On the other hand, not working full-time normally resulted in poverty status for 63 percent of single household heads and 50 percent of married families.

Policy Considerations
The researcher suggests that the state find ways to enhance TANF recipients’ value to the economy while they are receiving and after leaving TANF. This entails, to the extent that the state can maneuver within the federal rules, encouraging educational programs, including GED completion and post secondary education. The post secondary education need not be college, but may include vocational education such as business school, certificate programs or computer training.

In addition, Pennsylvania should consider using more block grant money to provide for education and training, and associated childcare and transportation expenses for both current and former TANF recipients.
At the national level, Congress is still attempting to re-authorize TANF with modifications. Some important factors that should be highlighted as the re-authorization debate continues are the 40-hour work week and how to address secondary and post-secondary education, job search and vocational training.

The expanded work standards would place a greater demand for childcare and allow less time for education and vocational training.

For example, while rural families typically relied on a network of friends and relatives to take care of their children, the 40-hour work week would create numerous new challenges. In the area of education, the findings clearly show that the long-term benefits of having education and training justify counting them in the work requirement equation.

More Information
For a copy of the report, An Analysis of Employment Dynamics for Former TANF Recipients in Rural Pennsylvania, call the Center for Rural Pennsylvania at (717) 787-9555 or email info@ruralpa.org.

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Chairman’s Message
How do you say thank you to someone who has been such an important part of the history of the Center for Rural Pennsylvania? In July, Dr. Craig Willis, president of Lock Haven University, retired from his academic post and brought to a close more than a decade of service to the Center’s board of directors. Dr. Willis was a faithful board member who contributed much to the discussion and leadership of the Center for Rural Pennsylvania. He always happily undertook tasks that were brought to him and carried out his duties with a smile. On behalf of the board, I wish Dr. Willis well as he closes this chapter in his book of life and moves on to the next that will hopefully include some restful and reflective times in rural Pennsylvania.

Our country’s and Commonwealth’s economies are subjects that may not always pique everyone’s interest, but certainly impact everyone’s pocketbook. Analysts have studied our national economy’s ups and downs since the post World War II era. They have documented the rise and fall of the stock market, gasoline supplies and costs, and agriculture commodity prices. In the final issue of our Trends in Rural Pennsylvania series, which is featured on page 4, we take a look at the rural economy and how it has fared over the last years and decades.

It is reassuring to note that in rural Pennsylvania, the economy has significantly improved since the 1980s. In urban areas, the improvements have been even better. This economic dynamic continues to create a large gap between rural and urban areas. Rural areas may fare better in the future with the emergence of the high-tech sector. The real driving force that will help the rural economy thrive, however, is an educated work force and an ever-improving quality of life in our rural areas.

An educated work force was identified as a critical component in helping former Temporary Assistance for Needy Families (TANF) recipients transition out of poverty, according to a new report released by the Center for Rural Pennsylvania. An Analysis of Employment Dynamics for Former TANF Recipients in Rural Pennsylvania, which is featured on page 1, offers information on how former recipients of TANF are faring since they left the program in 1997. Dr. Niel Brasher of Shippensburg University’s Center for Applied Research and Policy Analysis conducted this re-examination of former TANF recipients in 2003. Overall, he found that families included in the research were more likely to be employed, had higher incomes, and were more likely to be married. Many, however, were still below poverty thresholds.

As the researcher notes in his analysis, those that obtained real skills and education while receiving TANF and after leaving TANF were economically better off in 2003.

Having an institution of higher education in rural areas is a benefit for the entire community. As reported in the article on page 6, rural educational institutions not only train our community and business leaders of tomorrow, they also contribute to the well being of the counties they call home by attracting a better educated and higher paid workforce.

In closing this issue’s message, I wish all of you an enjoyable summer. Please pray for our military men and women who are serving our nation here and in foreign lands. May God bless America.

Representative Sheila Miller

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Willis Ends Board Tenure
At its June meeting, the Center for Rural Pennsylvania’s Board of Directors bid farewell to Dr. Craig Willis, president of Lock Haven University, who is leaving the Center’s board on July 30.

Dr. Willis has been a member of the board since 1993.

The board presented Dr. Willis, who is retiring from his position at Lock Haven University on July 30, with a plaque to commemorate his longstanding and committed service to the board and to rural Pennsylvania.

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Trends in Rural Pennsylvania: A Rural Economic Reality Check
This is the final article of the Trends in Rural Pennsylvania series. The previous articles examined eight other areas of interest in rural Pennsylvania including: agriculture; local government capacity and fiscal stress indicators; transportation; socio-demographics; health care and human services; environment and natural resources; education; and the condition of existing local infrastructure.

A more detailed fact sheet on each featured topic is available upon request by calling or emailing the Center for Rural Pennsylvania at (717) 787-9555 or info@ruralpa.org.

The economy has seen its share of highs and lows over the past few years. And as most rural Pennsylvanians know, the rural economy has been riding the ebb and flow of that economic tidal wave.

To understand just how the rural economy has been faring over the last few years, the Center for Rural Pennsylvania looked at data from various sources about labor force, jobs, and businesses over recent decades.

The variety of data sources used for the analysis is complex, but necessary for a more complete picture. Some sources provide certain detailed data while others can show change over time. (See data sources below.)

Labor Force
According to 2000 Census data, 59 percent of civilian rural Pennsylvanians age 16 and older were working or looking for work. Of this rural civilian labor force, 5.9 percent were unemployed. According to statistics from the Pennsylvania Department of Labor and Industry, rural Pennsylvania’s current near record low unemployment rates remain above the better urban rates.

Establishments, Employees, Employment Size and Payroll
County Business Patterns data show that, in 2001, rural Pennsylvania had more than 1 million employees working in about 76,000 business establishments. Fifty-four percent of these establishments employed fewer than five workers. Just 49 of the total rural establishments employed 1,000 workers or more.

About one in four rural employees (23 percent) work in manufacturing. Health care and social assistance and retail trade follow, each with 16 percent of the total.

Retail trade is the largest sector in terms of the number of establishments, with 19 percent of the total. Other services account for 13 percent, while health care and social assistance and construction each employ 11 percent.

While the average rural establishment employs about 14 workers, manufacturing has the highest number of employees per establishment (aside from auxiliaries*) at 50, followed by educational services (44), management (40), and utilities (24).

The average rural employee earned $25,325 in 2001. This rural pay is about $9,850 less than the average urban worker, who earned $35,173. The gap between rural and urban average earnings has more than doubled since 1990 when the difference was about $4,900.

Establishments, Employment Over Time
Industry Trends reports more than 82,000 rural business establishments in 2001 and more than 1.2 million employees. About one-third of all establishments are in the services division while another 23 percent are in retail trade.

As with establishments, about one-third of employees work in services. The next largest employers are retail and manufacturing, each accounting for 20 percent of employment.

Both the number of employees and the number of business establishments have grown significantly since 1990; employees by 12 percent and establishments by 23 percent. But individual divisions experienced some interesting differences as seen in the chart at the top of the page.

In raw numbers, the fastest growing division is services with over 8,000 more establishments and over 93,000 more employees in 2001 than in 1990. The next fastest grower is retail, which added 2,000 establishments and 41,000 employees. Mining was the only division that lost both establishments (226) and employees (about 8,000). While manufacturing gained nearly 800 establishments, it lost more than 23,000 workers.

More Information
For the fact sheet, Trends in Rural Pennsylvania: A Rural Economic Reality Check, call the Center for Rural Pennsylvania at (717) 787-9555 or email info@ruralpa.org.

Data Sources
A variety of data sources were used for this analysis to get a more complete picture of the economy over time.

County Business Patterns, U.S. Census Bureau: The annual County Business Patterns provides information on employees, business establishments, employment size, and payroll by industry for each state and county. This is the only source from which to get payroll and employment size data. However, it is not ideal for looking at establishments and employment over time. Until 1998, County Business Patterns collected data on businesses by Standard Industrial Classification (SIC), a now dated system of classification. The current system used is the North American Industry Classification System (NAICS). Farming and public administration are not included in this database, however.

NAICS classifies businesses and employees into 20 groupings, called sectors, plus auxiliaries and an unclassified category.

The SIC system was comprised of 10 groupings, called divisions, plus an unclassified category.

Industry Trends, Department of Labor and Industry and Pennsylvania State Data Center: The state Department of Labor and Industry collects data on employment and establishments from businesses under their unemployment compensation program. This data is compiled for the second quarter of each year in the report, Industry Trends, published by the Pennsylvania State Data Center. Although this source presents only establishments and employment data, it provides the most consistent data over time since the SIC system was used through 2001. In addition, all divisions and parts of them are included. The limitation is that the Unemployment Compensation Law accounts for about 95 percent of all of Pennsylvania’s nonagricultural wage and salary employment. The number of employees, both full- and part-time, is counted at each establishment, so workers with multiple covered jobs will be counted more than once.

Decennial Census: Although the Decennial Census can show only employment, it includes every worker in the Commonwealth, and older data (1980) are readily available.

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Rural Colleges and Universities Bring More to Communities than Just Football
Whether your alma mater boasts corn or concrete as its campus setting’s defining characteristic, Pennsylvania’s rural and urban colleges have some more surprising and not-so-surprising differences. Pennsylvania is home to 263 colleges and universities, a total that ranks Pennsylvania third in the nation, only behind California and New York. Student enrollment is ranked fifth in the nation with over 610,000 students; an average of 2,319 students per school.

As one might expect, a student will pay an average of $3,000 more in tuition and room and board for an undergraduate education at one of the 117 institutions in an urban county than if the student attended one of the 37 schools in a rural county. Those students seeking associate degrees will find urban counties offering seven private and 16 public junior colleges, while rural counties provide no private and only four public junior colleges.

Even though both urban and rural colleges offer a wide variety of educational opportunities, 20 percent of urban students pursue graduate, post-graduate and professional degrees compared to the 10 percent of rural students.

Although no data was available comparing students sleeping through 8 o’clock lectures, 85 percent of rural college students attend their institutions full-time as compared to 65 percent of their urban peers.

The same trend can also be observed in faculty appointments; rural schools hire more full-time faculty than urban schools. Surprisingly, the rural college’s average student to faculty ratio of 10.8 exceeds the urban school ratio of 8.9.

Pennsylvania’s urban and rural educational institutions not only train our community and business leaders of tomorrow, they also contribute to the well being of the counties they call home. In rural counties with colleges or universities, 22 percent of people over 25 years of age have earned degrees beyond a high school diploma. However, only 18 percent of the 25-year and over population in rural counties without colleges or universities have achieved the same success.

Living in a rural county with a college or university may also mean thicker billfolds for the rest of its citizens. The average yearly household income in a rural county with a higher education institution is $43,726, while the average in a rural county without a college or university is $41,920.

Sources: U.S. Census Bureau, 2000 Census, and Pennsylvania Department of Education, Division of Data Services, September 2003.

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Just the Facts: Government Guys and Gals
In rural Pennsylvania, local government seems to be a “guy thing.” According to data from the Center for Local Government Services, in 2003, there were 7,007 rural elected municipal officials; 87 percent of whom were male, and 13 percent of whom were female. Among urban officials, 81 percent were male and 19 percent were female.

Among rural county commissioners, 70 percent were male and 21 percent were female, according to 2003 data from the Center for Local Government Services. In 24 out of Pennsylvania’s 48 rural counties, however, there was at least one female commissioner. Seven rural counties had two female commissioners.

While data on rural female school directors are not available, a 2002 statewide survey of school directors by the Pennsylvania School Board Association found that 62 percent of directors were male and 38 percent were female.

Currently, at the state level, 14 percent of legislators are female, ranking the Pennsylvania General Assembly as 44th in the nation in the percentage of women legislators. Nationally, 14 percent of Congress members are female.

Despite the gender imbalance at all levels of government, there are some interesting gender patterns at the municipal level. For example, in nearly 400 rural municipalities (23 percent), women make up 25 percent or more of all elected officials. Compared to the 1,115 rural municipalities with no female elected officials, these 400 municipalities have significantly more females than males living in the community and a higher percentage of females in the workforce, especially in professional and managerial positions.

Municipalities with 25 percent or more elected females received more tax revenues per capita than those without female officials. These municipalities also tended to spend more on public safety, recreation, and libraries than those without female officials. All municipalities spent about the same on streets and highways.

According to a 1999 Center for Rural Pennsylvania survey of municipal officials, the average female official was 56 years old and served in office for eight years. Twenty percent graduated from college and 25 percent were retired. Seventy-two percent of elected females said they initially ran for office so that they could be active in the community and 61 percent were encouraged to run for office by someone else. These were the same reasons that male elected officials gave when asked why they ran for office.

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Did You Know. . .

For every 1,000 residents in rural Pennsylvania, there are…
0.03 NEWSPAPER PUBLISHERS AND RADIO AND TELEVISION STATIONS a
0.03 BOWLING CENTERS a
0.95 RELIGIOUS ORGANIZATIONS a
1.07 ACTIVE ATTORNEYS b
1.78 ACTIVE PHYSICIANS c
1.56 LICENSED BARS AND TAVERNS d

Sources: a) U.S. Census Bureau, County Business Patterns, 2001; b) Pennsylvania Bar Association, 2002; (c) Pennsylvania Office of Rural Health, 1999; (d) Pennsylvania Liquor Control Board, 2002.

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