Income inequality in NWA widens, child poverty rates remain high

As Northwest Arkansas has flourished since the Great Recession, not all families have ridden the prosperity wave, according to Laura Kellams, the Northwest Arkansas director for Arkansas Advocates for Children and Families (AACF).

In a recent report from AACF on child poverty and the impact on healthcare, education and wellness, Kellams said the region ranks among the highest in the nation for the growth in income inequality.

A recent study by the Economic Policy Institute shows the Fayetteville-Springdale-Rogers metro area ranked 15th nationally out of 916 metro areas. The top 1% of households in the region earn an average of $1.961 million annually, the other 99% earns an average annual wage of $52,823. The report found top 1% of earners made 37.5 times the income of the bottom 99%.

Kellams said this matches the gap in some the nation’s wealthiest enclaves such as New York, New Jersey and Cape Coral-Fort Myers, Fla. In contrast, none of the peer regions outlined by the Northwest Arkansas Council for economic comparisons rank in the top 50 for income inequality. Those regions include Des Moines, Iowa, Raleigh-Durham, N.C., Madison, Wisc., and Austin, Texas.

The AACF report notes the barriers for low-income families can’t just be about meeting the children’s needs. It also must be an investment in the region’s and state’s economic future. The report found child poverty rates have come down since the recession, but too many families still struggle. Almost half of the children (48%) in Northwest Arkansas are growing up in families with low incomes, or combined incomes of $41,560 for a family of three.

A staggering finding in the report was the number of children living in poverty in Benton and Washington counties is higher than in any other county in the Arkansas Delta. In areas such as north-central Fayetteville, the child poverty rate is 58.5%. In east Springdale, the rate is 52.1%. and in northeast Rogers the child poverty rate is 50.5%. In north Siloam Springs and Gentry the poverty for kids is also in the highest level 41.4% to 58.5%, according to the latest U.S. Census Bureau American Community Survey.

The AACF report also found roughly 4% of kids across the state remain uninsured. In Washington County the rate is 7%, while in Carroll and Madison counties the uninsured rate for kids is 9%, and in Benton County the rate is 4%. Kellams said across the region roughly 38% of children (50,000 kids) have health insurance through ARKids or Medicaid. The number of kids covered under Medicaid-CHIP remains highest in rural counties like Carroll and Madison at 50% and 45% respectively. In Benton County roughly 34% or 22,500 kids are covered under the Medicaid/CHIP program. In Washington County that number is 40% or 22,048 children.

AACF reminds families receiving health coverage under the expanded Arkansas Works Medicaid program run the risk of being dropped if they don’t sign in online and report work hours which are requirement for their coverage. As more low income adults were covered under Arkansas Works they also signed up their kids for ARKids First, helping to reduce the number of kids without health coverage. Interestingly, the kids had been eligible all along, but Kellams said it wasn’t until the adults got coverage that they also signed up the kids. She said adults who are insured are far more likely to care about their kids being insured and vice versa.

The report also highlights some populations are a higher risk of poverty in the region. About 82,000 kids in Arkansas have at least one parent who is an immigrant. That’s about 11% of kids in the state, the report states. More than 90% are U.S. citizens. The reports states these children have a tougher economic climb than their peers, citing the 2018 Race for Results report from the Annie E. Casey Foundation.

The Casey report found immigrant kids are more likely to live in poverty than their peers. Roughly 69% are growing up in low-income families, or those whose incomes are not higher than $41,560 for a family of three. In comparison, 52% of Arkansas children whose parents were both born in the United States live in low-income families,

Kellams said these indicators underscore the importance of federal and state policy decisions, citing the national discussions around DACA and the fear being felt locally.

“We’ve seen families who are scared to sign their children up for school, or even to take them to doctor’s appointments,” said Mireya Reith, executive director of the Arkansas United Community Coalition.

Melisa Laelan, president of Arkansas Coalition of Marshallese, said she’s seen the same reaction among the Marshallese community, even though federal law gives Marshallese-born residents legal status outside of the immigration system.

The AACF report notes local business leaders understand that fear mongering around DACA is not conducive for the region’s economic well being. The Northwest Arkansas Council has been vocal about creating a welcoming community. Mike Harvey, chief operating officer at the council, said this week for the region to continue its growth trajectory it must be able to attract a talented workforce from around the globe. He said 56% of the region’s population was not born here, and about of third of them have immigrated from other countries, mainly Latin America, India and China.

The report states more than 5,000 people in Arkansas have obtained DACA permits under the administration of former president Barack Obama. These permits defer deportation for undocumented immigrants who came to the U.S. as children. With the Trump Administration ordering the DACA policy illegal, immigrants have no assurance they can stay in the U.S. long-term.

The AACF report also looks at the $8.50 per hour minimum wage in Arkansas and the gap between that the $25.03 per hour minimum living wage for a one adult and two children in Arkansas. This living wage is calculated using housing, food and childcare costs. At $9 per hour this same family of three is considered living in poverty. Walmart, the region’s largest employer, pays store workers an average between $9.63 and $10.81 per hour, according to Glassdoor.

“A lot of people still have the ‘pull yourself up by the bootstraps’ mentality, but the world doesn’t work like that. People can work 60 hours a week and still have not enough money to buy diapers,” said Sarah Wendell, family /community service director for Economic Opportunity Agency of Washington County.