1. Coordinated Leadershiip Conference4/16/08Page No. 1 “I see one-third of a nation ill-housed, ill- clad, ill-nourished… The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.” Franklin Roosevelt's second inaugural speech, from January 20, 1937

2. State Senate Subcommittee on Aging & Long Term Care February 26, 2008 Presentation organized by Susie Smith Director of California Elder Economic Security Initiative, Insight Center for Community Economic Development (www.insightcced.org); ssmith@insightcced.org; (510) 251-2600 x108)www.insightcced.orgssmith@insightcced.org “Myth of the Golden Years: Introducing an Alternative to the Flawed Federal Poverty Line”

3. Coordinated Leadershiip Conference4/16/08Page No. 3 Introduction Insight Center for Community Economic Development is a national non-profit research, consulting and legal organization Established as a War on Poverty program in 1969 Economic security issue focus since the mid-1990’s

4. Coordinated Leadershiip Conference4/16/08Page No. 4 “I work hard, pay taxes, the system will take care of me in my older years” Not true anymore! What is the “Myth of the Golden Years”?

5. Coordinated Leadershiip Conference4/16/08Page No. 5 Statewide, data-driven coalition to raise awareness and shape policy to help the elderly make ends meet Part of a national movement Builds on the work of the nationally acclaimed Family Economic Self- Sufficiency Standard Project, and the California arm of that: Californians For Economic Security Guided by state and region steering committees The CA Elder Economic Security Initiative ™ program

6. Coordinated Leadershiip Conference4/16/08Page No. 6 Long Term Goals & Strategy Close the gap between elders’ income and their basic expenses Paradigm shift in policy, advocacy and direct services for the elderly Strategy: coalition-building, education, advocacy and outreach using a new, research-driven framework of income adequacy

7. Coordinated Leadershiip Conference4/16/08Page No. 7 California Research Partner: UCLA Center for Health Policy Research To understand where we are, we need to understand where we’ve come from…

8. Coordinated Leadershiip Conference4/16/08Page No. 8 No “Hard” Data on Poverty I see one-third of a nation ill-housed, ill-clad, and ill- nourished… Franklin Roosevelt's second inaugural speech, from January 20, 1937 http://c250.columbia.edu/dkv/extracts/0711_f dr_newdeal.html. http://c250.columbia.edu/dkv/extracts/0711_f dr_newdeal.html

9. Coordinated Leadershiip Conference4/16/08Page No. 9 War on Poverty required “hard” numbers… To measure progress required a standard methodology The number calculated as poor had to be high enough to make progress possible But not so high as to look bad

10. Coordinated Leadershiip Conference4/16/08Page No. 10 The Federal Poverty Line Developed in 1963-1964 by Mollie Orshansky of the Social Security Administration -Department of Agriculture's 1955 Household Food Consumption Survey = 1/3 of after tax income spent on food -Multiplied economy food plan (designed for temporary or emergency use) x 3 = poverty

11. Coordinated Leadershiip Conference4/16/08Page No. 11 Federal Poverty Line, continued… Varied by family size Same amount in every state Indexed in 1969 to the Consumer Price Index (CPI) Some additional fine tuning subsequently, but has basically remained the same See http://aspe.hhs.gov/poverty/papers/hptgssiv.htmhttp://aspe.hhs.gov/poverty/papers/hptgssiv.htm

12. Coordinated Leadershiip Conference4/16/08Page No. 12 Measure Now Widely Used To track trends Evaluate economic policy Discussed in presidential campaigns

13. Coordinated Leadershiip Conference4/16/08Page No. 13 Eligibility Many public programs now use the poverty line for eligibility 135% FPL used by Medicare for low-income subsidy of Part D Some eligibility categories of Medi-Cal are tied to FPL

14. Coordinated Leadershiip Conference4/16/08Page No. 14 Funding Programs Older Americans Act requires priority to “greatest social and economic need” areas … many states use FPL in formula

15. Coordinated Leadershiip Conference4/16/08Page No. 15 Implicitly, as a Yardstick When evaluating policies, the poverty line is often used as a reference standard Elizabeth Hill recently recommended, “reducing the grants for SSI/SSP couples down to 125 percent of the federal poverty level.”

16. Coordinated Leadershiip Conference4/16/08Page No. 16 Why We Need to Change Based on 1950’s consumption patterns Incorporates outdated and inadequate food measure -Food plan was updated in 1975, 1995, and 2005 but FPL does not reflect those changes The food plan chosen was designed only for short term use

17. Coordinated Leadershiip Conference4/16/08Page No. 17 Why change, continued… Does not account for regional differences in cost of living The inflation adjustment (CPI) -Does not reflect costs experienced by elders -Does not reflect increased standard of living Even Orshansky admitted that her measure undercounted poverty

18. Coordinated Leadershiip Conference4/16/08Page No. 18 Time to move to the 21 st century Just because some of us learned to type on a manual typewriter does not mean it is still an adequate tool We need to use current knowledge and adopt a modern tool to measure income adequacy

19. Coordinated Leadershiip Conference4/16/08Page No. 19 Elder Economic Security Standard Index Based on actual spending by older adults in this century Relies on credible publicly available data Is specific to retired older adults Provides a measure of income adequacy = the amount needed to cover basic needs Developed by UMass-Boston & Wider Opportunities for Women, refined in collaboration with UCLA CHPR

20. Coordinated Leadershiip Conference4/16/08Page No. 20 Cost Components Housing, the largest cost for most Medical Care, a major cost for elders Food at home Transportation, local Miscellaneous, including telephone, clothing, home repair

21. Coordinated Leadershiip Conference4/16/08Page No. 21 High Housing Costs Threaten the Economic Security of Seniors in California Source: Wider Opportunities for Women (2008), Elders Living on the Edge: The Impact of California Support Programs When Income in Retirement Falls Short: Washington, DC. The Elder Standard Index was tabulated by the UCLA Center for Health Policy Research using the WOW-UMass Gerontology Institute national methodology.

22. Coordinated Leadershiip Conference4/16/08Page No. 22 Elder Economic Security Standard Index: Santa Clara and Humboldt Counties Monthly Expenses SANTA CLARAHUMBOLDT Owner w/o Mortgage Renter, One Bedroom Owner w/o Mortgage Renter, One Bedroom Housing$421$1,068$368$551 Food$308 $231 Transportation$202 Health Care = Good$293 $378 Miscellaneous @ 20%$245 $236 Elder Standard Index Per Month $1,469$2,116$1,415$1,598 Elder Standard Index Per Year $17,632$25,391$16,985$19,176

23. Coordinated Leadershiip Conference4/16/08Page No. 23 Income and Expenses: Gaps in California Source: Wider Opportunities for Women (2008), Elders Living on the Edge: The Impact of California Support Programs When Income in Retirement Falls Short: Washington, DC. The Elder Standard Index was tabulated by the UCLA Center for Health Policy Research using the WOW-UMass Gerontology Institute national methodology. Elder Standard Indexes and Benchmark Annual Incomes for Single Elders in Los Angeles County, 2007

24. Coordinated Leadershiip Conference4/16/08Page No. 24 Our National Partner: Wider Opportunities for Women (WOW) A national non-profit advocacy organization celebrating over 40 years of helping women and their families achieve economic independence and equality of opportunity. www.wowonline.orgwww.wowonline.org Directs the National Elder Economic Security Initiative™ program Expanding across the country w/nat’l database

25. Coordinated Leadershiip Conference4/16/08Page No. 25 National Research Partner: Gerontology Institute at UMass Boston State EESI partners AARP National Council on the Aging The Urban Institute Income Benefit and Policy Center National Committee to Preserve Social Security and Medicare Women's Institute for a Secure Retirement Health Policy Institute at Georgetown Public Policy Institute Institute for Women’s Policy Research ACCRA-the Council for Community and Economic Research The National Council of La Raza The National Caucus and Center on Black Aged, Inc. The Pension Rights Center National Academy of Social Insurance Who comprises the National Advisory Board?

26. Coordinated Leadershiip Conference4/16/08Page No. 26 Where is the Elder Economic Security Initiative? Blue: Current State Partners Green: Potential Targets for Future State Partners

27. Coordinated Leadershiip Conference4/16/08Page No. 27 What is happening in other states? Massachusetts -Raised asset limits on Medicaid from $2,000 to $10,000 -Governor to reawaken the statewide LTC commission -Outreach to seniors – “Its not your fault!” -Undersecretary of Elder Affairs has agreed to formally encourage service providers to use Elder Standard Index in planning and evaluation

28. Coordinated Leadershiip Conference4/16/08Page No. 28 28 Other states, continued… Illinois -Support home/community-based LTC programs Pennsylvania -Spend down on Medicaid -Director of the Interagency Council on LTC -Merge aging and LTC state offices -Use the Elder Standard Index in Area Agency on Aging strategic plans Wisconsin -Senior Care Program – prescription drug

29. Coordinated Leadershiip Conference4/16/08Page No. 29 Long Term National Policy Goals 1)Shift the national, state, and local dialogue from one the that focuses on elder poverty to a discussion on elder economic security. 2)Promote equitable and rational policy by using the Index in evaluating existing policies and developing new policies for older adults.

30. Coordinated Leadershiip Conference4/16/08Page No. 30 National Policy Agenda 1)Income and Health Security for All -Support employer-based retirement savings programs including pensions -Social Security – leveling the playing field between men and women: crediting caregiving -Revise asset limits and income eligibility levels to reflect the findings of the Elder Standard Index (e.g. FS, LIS, HEAP) -Support the creation of affordable housing for seniors and housing supports -Support traditional Medicare

31. Coordinated Leadershiip Conference4/16/08Page No. 31 National Policy Agenda, continued… 2) Home and Community-based Long-term care -Universal social long-term care insurance of home and community-based LTC services 3) Supporting Older Workers -Eliminate penalties to working longer at fewer hours -Support Medicare as first payer for workers 65+ -Support workplace accommodations for older workers -Create education and training opportunities for older workers

32. Coordinated Leadershiip Conference4/16/08Page No. 32 1) Encourage local and statewide use of Elder Standard Index by other policymakers, CDA, public agencies, non- profit organizations, and foundations 2) Promote savings and asset accumulation opportunities for younger workers 3) Allocate funds to support the annual update of the Elder Economic Security Standard Index 4) Support and expand outreach efforts California Policy Recommendations: Short-term

33. Coordinated Leadershiip Conference4/16/08Page No. 33 Source: Wider Opportunities for Women (2008), Elders Living on the Edge: The Impact of California Support Programs When Income in Retirement Falls Short: Washington, DC. Benefit Cliffs: The Result of Outdated Policies

34. Coordinated Leadershiip Conference4/16/08Page No. 34 1) Adopt the Elder Economic Security Standard to evaluate the impact of existing policies and measure economic needs of older adults California 2) Pass a resolution to urge the federal government to recognize the flaws of FPL & adopt the Elder Standard as a new, improved way to measure and address income adequacy for older adults 3) Expand the allocation of low-income housing tax credits for elders and increase the supply of affordable, supportive housing Policy Recommendations, Long-term

35. Coordinated Leadershiip Conference4/16/08Page No. 35 When Retirement Income Falls Short: The Impact of California Support Programs Source: Wider Opportunities for Women (2008), Elders Living on the Edge: The Impact of California Support Programs When Income in Retirement Falls Short: Washington, DC

36. Coordinated Leadershiip Conference4/16/08Page No. 36 1.Expand local and statewide coalitions 2.Unite family and elder economic security coalitions 3.Expand research 4. Convene leaders in housing, food, health, and aging to develop next set of policy proposals Building the Movement: Californians For Economic Security

37. Coordinated Leadershiip Conference4/16/08Page No. 37 For more information on Cal-EESI, contact: Susie Smith, Director California Elder Economic Security Initiative Insight Center for Community Economic Development Oakland, CA ssmith@Insightcced.orgssmith@Insightcced.org; (510) 251-2600 x108 For more information on the National EESI Program, contact: Ramsey Alwin, Director of the National Elder Economic Security Initiative™ program Wider Opportunities for Women Washington, DC ralwin@wowonline.orgralwin@wowonline.org; (202) 464-1596 x107 For more information on the methodology, contact Steve Wallace Steve Wallace, Professor and Associate Director Center for Health Policy Research UCLA Center for Health Policy Research Los Angeles, CA swallace@ucla.eduswallace@ucla.edu; (310) 794-0910 Statewide average and county-specific Elder Economic Security Standard Index can found at: 1) www.insightcced.org 2) www.healthpolicy.ucla.edu/ elder_index08feb.htm Contact Information

38. Coordinated Leadershiip Conference4/16/08Page No. 38 Insight Center for Community Economic Development would like to thank the California Elder Economic Security Initiative ™ Steering Committee for their tireless support of older adults in California The California Elder Economic Security Initiative is funded through the generous support of the following organizations: Area Agency on Aging of the County of Los Angeles, The California Endowment, California Community Foundation, California Policy Research Center, The California Wellness Foundation, City of Los Angeles Department of Aging, Council on Aging - Silicon Valley, Health Trust, Wider Opportunities for Women, UC-Program on Access to Care, United Way of the Bay Area, and Y & H Soda Foundation. The national project is funded with generous support from the Retirement Research Foundation and The Atlantic Philanthropies. Acknowledgements