Growing up in poverty was not fun. To be certain, there was a lot of love in my house, and I will never be able to repay my mother for the sacrifices she made to keep a roof over our head. But when you are using the oven to heat your house, or your grandmother is walking miles upon miles each day to work as a maid because she could not afford the bus, I can say that it is easy for hope to slip away.
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Over the past seven years, poverty in our nation has only become more concentrated. A recent study by the Economic Innovation Group shows that more than 50 million Americans are living in “distressed communities,” including 1.4 million South Carolinians. Between 2010 and 2013, these distressed communities lost 6.7 percent of their jobs, and 8.3 percent of their businesses closed, while prospering ZIP codes saw job growth of 17.4 percent and business growth of 8.8 percent.
The study looked at seven factors — percentage of the population 25 or older with a high school degree, housing vacancy rate, adults not working, poverty rate, median income ratio, change in employment percentage and the percentage of change in the number of businesses — in order to drill down to the root causes of poverty.
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In Columbia, 39.1 percent of the population lives in a distressed ZIP code. So while the poverty rate is 24 percent, or a quarter of the population, the percentage of Columbia residents who live in communities either already in poverty or in danger of slipping into poverty is much higher. In other areas of the state, this problem is even more pronounced; Williamsburg and Barnwell counties, for example, the entire population lives in a distressed ZIP code.
As someone who comes from one of these distressed communities, I have built my agenda in the Senate around helping those in poverty. My first bills focused on education and workforce development, with the goal of ensuring that every child has access to a quality education and that we encourage the growth of apprenticeships and other technical skills as our state’s manufacturing sector booms.
Now, I have introduced the Investing in Opportunity Act, bipartisan legislation to stimulate job growth and entrepreneurship in low-income communities. My Senate colleague Cory Booker, D-N.J., and friends in the House of Representatives Pat Tiberi, R-Ohio, and Ron Kind, D-Wisc., joined me to introduce this important bill that will encourage long-term investment in areas that have been left behind after the great recession.
This innovative approach will streamline our tax code in order to encourage dollars to be reinvested in areas that need it most, while creating a framework for bringing in new capital. It does not create a new government program or expand the federal bureaucracy, and it focuses on encouraging investment of private dollars. The Investing in Opportunity Act opens the door to private capital in the following ways:
▪ Removes barriers to investment through a temporary capital gains deferral in exchange for reinvesting in distressed communities.
▪ Encourages investors to pool resources through newly created “opportunity funds” — established specifically for making investments in distressed communities.
▪ Concentrates capital by establishing “opportunity zones” — geographically targeted low-income areas that will be designated by governors.
▪ Provides incentives for investors to make long-term commitments to these communities.
We know that most families living in these communities are just looking for the chance to succeed, the opportunity to reach the American Dream. Unfortunately, the possibility of doing so has diminished over the past decade, and that is a trend we must stop. The Investing in Opportunity Act is an important step toward bringing success back to all of America, and with bipartisan support on both sides of the Capitol, we have a real opportunity to move forward.
Sen. Scott is Republican who was served in the U.S. Senate since 2012; contact him at SenatorTimScott@scott.senate.gov.