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"Poverty, Race and the Y2K Problem,"

by Margaret Anderson July/August 1999 issue of Poverty & Race

Y2K is not longer only a computer problem. It is a people problem. The following scenario could happen in American communities in early 2000:

• The children in lower-income and minority communities are hungry in January and February, because state and local governments have had Y2K failures and not distributed food stamps and unemployment and TANF payments.
• Child support payments are late.
• Some of the elderly have not received their private pension payments.
• Small businesses in the community have shut down temporarily while they fix their Y2K problems and have cut payroll: households that live from paycheck to paycheck have no paycheck, and no money to buy food or pay rent.
• To add further pain, the food banks in the community are short on food because they received fewer contributions than normal in November and December - organizations and households that normally give during the holiday season were “stockpiling” for themselves to prepare for possible Y2K shortages.

How could this happen? Is it plausible? What can we do about it?

Following is a brief explanation of what Y2K is, a snapshot of current Y2K readiness in areas vital to poorer communities, and suggestions on what can be done in the next few months to prepare for the New Year.

What is Y2K?

When the clock strikes “12” on the evening of December 31, 1999, and many of us are welcoming in the new millennium, thousands of others will be watching anxiously to see whether Y2K problems with software programs and embedded systems are causing failures in their organizations’ computer systems, the electrical power grid, the banking system, plant manufacturing floors and other of society’s most important systems and services.

The origin of the Y2K computer problem is relatively simple. At the dawn of the computer age 30 to 40 years ago, programmers, wanting to save limited and expensive storage space, followed the standard business practice of using only two digits to code the year in many computer programs and computer chips (e.g., writing 1998 as 98).

Over the years, other programmers, building applications upon applications, kept the two-digit formula. Today, with the birth of a new millennium a few months away, we are facing the unexpected consequences of this seemingly insignificant programming shortcut.

On January 1, 2000, when the new year is represented by 00, many computers will think it is 1900, causing date-driven computations to fail and computer-reliant systems to malfunction or shut down. In fact, current systems that perform post-2000 forecasting or transactions have already begun to experience failures. These problems will increase during 1999, crescendo during 2000, and continue after 2000.

Large mainframe computers and desktop PCs may not be the most significant aspect of the Y2K problem. Many experts are even more concerned with the millions of embedded systems (in which date-sensitive software code is burned into silicon chips) that operate devices, systems, networks and plants. Embedded systems are in critical life support equipment in hospitals, community telephone and water systems, financial and telecommunications networks and chemical plants.

Estimating the consequences of the Y2K problem or avoiding them is not simple. No one can say with certainty what will happen, but predictions range from minor inconveniences – a letter from your bank indicating that your credit card account is 100 years past due – to the other extreme of long-term infrastructure breakdowns in systems that supply food, water, power, communications and other basic necessities of modern life. While no one can know for sure, there is substantial cause for concern that the economic, environmental and human costs could be substantial in the United States and even more so in the world at large.

Y2K Snapshot

The poor and most vulnerable in our communities – disproportionately poor and recent immigrants — are often kept afloat by the social safety net that an alliance of government, foundations and nonprofits has painstakingly crafted over the years. That safety net is very vulnerable to Y2K-related failures, and the organizations that provide the safety net programs and services are very late in addressing their risks.

According to the President’s Council on Year 2000 Conversion, “Americans rely upon state and local governments for many important services…. The vast majority of these services rely upon automated processes that are at risk of experiencing Year 2000-related failures.” In its March 1999 report, the Senate Committee [on Y2K] states that it has “serious concern about the Y2K readiness of state and local governments.” The Committee noted “a vast disparity in the readiness level of the individual states, and a disturbingly low overall level of preparedness on the part of county and local government jurisdictions.”

These government-provided services include systems that move money into lower-income and minority communities through programs such as Temporary Assistance for Needy Families, food stamps, unemployment insurance and child support. They subsidize public housing and support foster child services. They provide grants to nonprofits that in turn provide vital services such as home health visits and job training.

Federal agencies are still trying to collect information from all of the states on the Y2K readiness of these systems. Information is scant and worrisome. In addition to the 50 state governments, there are 3,068 county government jurisdictions and approximately 87,000 other local government jurisdictions within the United States. Many state, county and local governments have not taken adequate steps to solve their Y2K problems. A survey conducted by the National Association of Counties at the end of 1998 found that 49% of counties did not have a countywide plan to address Y2K issues. Five states report they will not have their food stamp systems repaired until October at the earliest. Six states report their WIC nutrition programs will not be ready until sometime between October and December. Obviously, this does not leave time for adequate testing.

The level of emergency preparedness for potential Y2K problems also varies dramatically from community to community. Local leaders who believe existing emergency procedures for fires, hurricanes or floods will suffice for Y2K are not responding to the advice of both the Federal Emergency Management Agency and the Red Cross. Both state that unique preparations are needed for Y2K because systems (e.g., electricity, telephone, 911, hospitals) may all fail at the same time, and there is a reasonable probability multiple communities will be affected at the same time. Communities must be prepared to be more self-sufficient and not depend on state or federal relief in the same timeframes as usual.

The level of emergency preparedness required must be evaluated on a community basis, because the threats will vary dramatically, depending on the Y2K readiness of service providers and the local government. Studies have shown that medium and small-sized utilities, whether electric, gas, water or telephone, are at higher risk of failure than large organizations because they started much later and may not have the funds to make necessary corrections. Local governments have control over 911 services, traffic lights, fire and police readiness. Some localities will be ready. Others will not.

Communities must assess their risk and make plans accordingly in order to ensure that shelters and provisions are available for those who cannot prepare for themselves.

The nonprofit community, which typically advocates for the poor and is the direct provider for many of the services critical to the poor, is also late in addressing Y2K. Nonprofits need to act now in order to be prepared to respond to societal impacts of Y2K. They must be able to function themselves, and potentially handle increased demands on food banks, shelters and health clinics. Nonprofits, the advocates for the poor and vulnerable, should be working today to address Y2K policy and implementation issues at all levels of government.


There is not much time left to correct the computer Y2K problems, but there is still time to minimize the people problems, particularly at the community level. Steps that can be taken include:

• Convene meeting with the nonprofits and community groups, the emergency management community, local governments, to coordinate and as necessary develop community-level contingency plans for poor communities and vulnerable populations.
• Demand credible information and contingency plans on the govern–ment’s ability to move public payments into the community in the first quarter of 2000.
• Develop emergency plans for funding nonprofits and individuals if public payments fail.
• Mount public education and outreach campaigns for the community.
• Press for much more aggressive leadership at the national, state and local levels.
• Encourage churches, schools and other nonprofits to coordinate and provide emergency food and shelter to low-income and minority communities.
• Advocate for 1999 funds for food banks so they can stockpile food appropriately for 2000.

Margaret Anderson is the Director of Policy at the Center for Y2K and Society (1800 K St. NW, #924, Wash., DC 20006, 202/775-3157). The Center was established by 15 foundations in 1998 to address the potential societal impacts of Y2K. Information on the Center can be found at

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