Poverty and Income Inequality Don’t Just Happen

November 12, 2013

Now, here’s an interesting fact to chew over. If the wealth in this country were evenly distributed among adults, each of us would have $301,000.

By this measure, we’re not the wealthiest country in the world. That distinction goes to tiny Switzerland, according to the latest Global Wealth report from Credit Suisse.

But we’ve got, by far and away, the highest percent of millionaires (42%) — and an even larger share (46.5%) of all the people with more than $50 million in the 19 countries the Credit Suisse analysts could compile data far.

At the same time, we’ve got 15% of the population — 46.5 million people — so poor as to fall below the Census Bureau’s very low poverty thresholds.

Blogger Matt Bruenig crunched some numbers and found that it would take $175.3 billion to lift every one of them out of poverty, as officially defined.

That may seem like a great deal of money. But it’s only a bit over 1% of the value of the goods and services our country produced last year — and according to my number-crunching, only about $3,770 per person.

Now, I don’t want to lend credibility to the troll who alleges that I’m a “commie terrorist,” but these numbers do get the mind churning.

On the one hand, the Credit Suisse figures underscore how unevenly wealth is distributed. On the other hand, Bruenig’s indicate how relatively little we’d have to redistribute to end poverty — well, not really, but at least according to the measure we use.

As Bruenig says, we have mechanisms to do this. We could, for example, expand the refundable Child Tax Credit and Earned Income Tax Credit. We could expand SNAP (the food stamp program), instead of arguing over how much to cut it.

We could, Bruenig adds, establish a “mild basic income and a negative income tax.” These aren’t radically leftist notions.

Economist Milton Friedman, whom no one would call a leftist, proposed a negative income tax back in 1962. As he described it, people would file tax returns and get a refund of sorts for some portion of however much their income fell below the threshold at which they would owe anything.

This ultimately became the basis for the EITC, but the tax credit helps only people who work and their dependents. And it does very little for parents who earn very little and for those who are childless, even if their earnings are fairly decent.

Though Friedman viewed the NIT as an alternative to existing welfare programs, it wouldn’t have to be. On the other hand, it could replace them if the refunds were big enough to pay for basic needs.

I know economists have concerns about disincentives to work — as, of course, do policymakers. Comfortable hammock and all that.

And perhaps there’s something to this, though I note that we don’t seem to have these concerns when the issue is what are effectively income supports for people who are already well-off, e.g., the various tax benefits to homeowners.

These alone would pay for more than half the cost of lifting everybody out of poverty, according to Joint Taxation Committee estimates that Bruenig cites.

The basic point here, which Bruenig makes well, is that poverty is a function of policies that distribute income unevenly, not a spontaneous phenomenon. Wealth likewise, I’d add.

Policies built into the federal tax code are an obvious example — not only so-called tax expenditures in the individual income tax system, but the tax treatment of assets that are passed on to heirs.

State and local tax policies also enter into the picture, since, on average, they collect the highest percent of income from residents in the bottom fifth of the income scale and the lowest percent of all for the top 1%.

Less obvious, but surely important are school financing policies, which tend to provide significantly more resources for the schools wealthy kids can attend and shortchange the schools for the poorest, who arguably need more.

Insofar as a good education increases future earnings, the uneven distribution of tax dollars contributes to uneven income distribution in successive generations.

Diverse labor policies also affect earnings, of course. These have generally tended to depress wage growth for the vast majority of workers.  And the savings they enable businesses to achieve go to owners, who may be shareholders — and in many large corporations, to CEOs.

Housing, transportation and urban development policies have also played a part by concentrating poor people in pockets of poverty, with limited access to jobs and, as aforementioned, good schools.

I’m sure some of you can think of others.

In short (after what perhaps should have been shorter), poverty and income inequality don’t just happen. We’ve created them — or at the very least, made decisions that foster them.

By the same token, we could make decisions to reduce them. We’ve got the wealth and a wealth of ideas. Not, however, the political will that can come only from a broad consensus that creating the conditions for shared prosperity is a must-do.


Better Poverty Measure Shows Worse U.S. Poverty Rate

November 6, 2013

We should be used to this by now. The Census Bureau has just reported a higher national poverty rate than the rate it reported in September. According to its Supplemental Poverty Measure, the rate is 16%, instead of 15%, as the official measure indicated.*

This means that somewhat over 2.7 million more people — a total of 49.7 million — were living in poverty last year. On a somewhat brighter note, the percent of people living in severe poverty, i.e., below 50% of the applicable threshold, is again lower — by 1.5% — than the official measure shows.

We again see shifts up and down for state-level rates as well.

For example, the rate for the District of Columbia rises from 19.3% to 22.7%, according to the three-year averages the Census Bureau uses for the SPM. Rates based on the three-year averages dropped in 28 states and increased more than the District’s in five.

As in the past, we also see shifts in rates for different age and race/ethnicity groups. For example, the poverty rate for blacks dips from 27.3% to 25.8%, while the poverty rate for Asians rises from 11.8% to 16.7%.

The poverty rate for non-Hispanic whites is till the lowest, but it’s higher than the official rate — 10.7%, as compared to 9.8%.

The rate changes all reflect differences between the crude, official measure and the SPM, which goes at poverty measurement in a different — and more sensible — way.

I’ll forgo another summary of how the SPM works. I took a stab at one last year and the year before. And the Census Bureau has a more extensive (and wonkish) explanation in its report.

From a policy perspective, both the overall higher poverty rate and the rate shifts are especially important because they show both the impacts and the limits of major federal benefits programs.

So far as the rate shifts are concerned, the most striking are those for the young and the old.

  • The child poverty rate drops from 22.3% to 18%, reducing the number of children in poverty by about 3.2 million.
  • For children, the severe poverty rate is less than half what it is under the official measure — 4.7%, as compared to 10.3%.
  • The poverty rate for seniors rises from 9.1% to 14.8%, increasing the number of poor people 65 and older by nearly 2.5 million.
  • The severe poverty rate for seniors also rises, from 2.7% to 4.7%.

The higher rates for seniors reflect principally the amount they spend on medical out-of-pockets, e.g., deductibles, copays.

This seems to me pretty good evidence that the chained CPI, which could still become the new cost-of-living adjustment measure for Social Security benefits, would disadvantage the 36% of seniors who rely almost entirely on them, as well as younger people who receive them because they’re severely disabled.

At this point, however, Social Security remains by far and away the single most effective anti-poverty program we’ve got. The SPM report shows that, without it, 26.6 million more people of all ages would have been poor — and the poverty rate for seniors a whopping 54.7%.

The report speaks to another issue that Congress is debating — and one that it isn’t, but should deal with swiftly.

The hot issue is SNAP (the food stamp program) — not whether to cut it because Congress has already done that, but by how much more.

So it’s useful to know that pre-cut SNAP benefits lifted 4.9 million people, including 2.2 million children, out of poverty last year. They were the single most important factor in the marked drop in severe child poverty, the Center on Budget and Policy Priorities reports.

The back-burner issue is the soon-to-expire Emergency Unemployment Compensation program, i.e., cash benefits for workers who’ve been jobless longer than their regular state programs cover.

I may have more to say about this, but will note here that unemployment insurance benefits generally reduced the SPM poverty rate by somewhat less than 1% — about 2.54million people.

UI benefits have lifted fewer and fewer people out of poverty since 2009 — mainly because fewer jobless workers are receiving them, according to a recent CBPP analysis based on other Census figures.

Retrenchments Congress made in the EUC program in early 2012 are part of this story. I suppose more recent figures would show the impact of sequestration as well.

House and Senate negotiators apparently still hope to stop the across-the-board cuts — at least for while. But this is a far cry from an agenda that would bring the very high poverty rate back down to where it was when we rang in the 21st century.

* The SPM report cites 15.1% for the official measure, noting that this is not statistically significant from the previously reported figure. Several other official measure figures in the report also differ from those the Census Bureau earlier reported.

The differences, if I understand correctly, reflect the fact that the SPM universe includes children under 15 who are living in a household with adults to whom they’re not related. For comparability, I’m using the official measure figures in the SPM report here.


DC Poverty Rate Ticks Down (Maybe)

September 19, 2013

Hard on the Census Bureau’s Income, Poverty and Health Insurance report come results from the American Community Survey. And, as the headline indicates, the overall D.C. poverty rate seemingly dropped — but barely. So little, in fact, that the percent difference from 2011 is within the margin of error.*

More detail on that, plus some other gleanings from the survey.

Poverty Rates a Mixed Story

The poverty rate in the District apparently declined from 18.7% in 2011 to 18.2% in 2012. This left about 108,860 residents below the very low poverty thresholds — just $23,283 for a two-parent, two-child family. And, as I noted, the margin of error — 1.3% — casts doubt on real improvement.

Assuming a real drop, the poverty rate was still 1.8% higher than in 2007, just before the recession set in. It was also 3.2% higher than the national rate.**

The extreme poverty rate, i.e., the percent of residents living below 50% of the applicable threshold, effectively flat-lined at 10.4%. In other words, more than 62, 200 residents were devastatingly poor, especially when we consider the high costs of living in D.C.

As in the past, the child poverty rate was much higher than the overall rate. It was 26.5% last year. So nearly 28,590 D.C. children were officially poor. Well over half of them — 15.8% — lived in extreme poverty.

Both the plain vanilla and the extreme poverty rates for children were lower than in 2011 — the former by 3.8%. But they were both higher than in 2007, when the child poverty rate was 22.7% and the extreme poverty rate for children 12%.

They were also both higher than the national rates. These, as I earlier reported, were 21.8% and 9.7%.

Race/Ethnicity Gaps Still Very Large

Well, let’s just say One City we ain’t — not, at any rate, from the story the ACS figures tell. For example:

  • The black poverty rate was nearly three times the rate for non-Hispanic whites — 25.7%, as compared to 7.4%.
  • For blacks, the extreme poverty rate was 14.5%, while for non-Hispanic whites only 5.2%.
  • For Hispanics, the poverty rate was 22.1% and the extreme poverty rate 10.2%.

We see similar disparities in median household income.

  • The median income for non-Hispanic white households was a very comfortable $110,619.
  • For black households, the median income was barely more than a third of that — $39,139.
  • Hispanic households did better, on average, with a median income of $51,460.

The white, non-Hispanic household median was notably higher here than the nationwide, by $53,610. The medians for black and Hispanic households were also higher, though by much smaller amounts.

Some Clues to the Poverty Rates

Needless to say (I hope), unemployment and under-employment go far to explaining the persistently high poverty rates in the District.

In 2012, nearly half (48.1%) of poor residents between the ages of 16 and 64 didn’t work at all. An additional 25% worked less than full-time or intermittently.

But that leaves about 8,618 working-age residents who were employed full-time, year round and still not earning enough to lift them out of poverty — or at least, not them and dependent family members.

It’s a fair guess that these are mostly residents who don’t have the formal education credentials that living wage jobs here, as elsewhere, increasingly demand. This is probably also the case for some of the part-time and some-time employed.

What we do know is that the poverty rate for adults 25 years and older who had just a high school diploma or the equivalent was 22.8% last year — and for those with less, 34.5%.

By contrast, the poverty rate for those with at least a four-year college degree was just 5.1%.

What Could Narrow The Gaps?

Well, we won’t solve the unemployment problem overnight.

Even if Congress restored the federal jobs lost to sequestration (highly improbable), the local near-term unemployment rate would probably be somewhere in the neighborhood of 8%, judging from Gray administration estimates.

And it would probably be considerably higher for the least educated residents, if the trends the DC Fiscal Policy Institute reported for 2012 continue.

Getting more residents qualified for high-skill jobs would surely help. But we’d still have a very large low-wage sector — all those hotels, restaurants and other retail businesses.

The brouhaha over the Large Retailers Accountability Act, a.k.a the Walmart bill, has spun off into what seems to be serious consideration of raising the District’s minimum wage — and its tip credit wage too perhaps.

A full-time, year round minimum wage worker currently can’t earn enough to lift a three-person family over the poverty threshold — even if s/he never takes even a few hours of unpaid time off because of illness.

So a reasonably robust, comprehensive increase would be a step in the right direction. Granting tipped workers a right to some paid leave would help too.

Far from a total answer, but things the DC Council could do right now.

* Because the survey sample size for the District is relatively small, the margins of error, i.e., the amounts the reported percents could be too high or too low, are sometimes more than 1%. In the interests of simplicity, I’m reporting the percents as given.

** As the Census Bureau advises, I’m using the results of the Current Population Survey for the national figures. The national ACS figures are somewhat different.


Offical U.S. Poverty Stays Flat at 15%

September 17, 2013

I was all set to write about how the official U.S. poverty rate dipped down, as experts had predicted. But no. The Census Bureau reported this morning that the 2012 rate was statistically the same as in 2011 — 15%.

The economy has supposedly been in a recovery mode since June 2009, but the poverty rate hasn’t budged for three years now. It’s still 2.5% higher than in 2007, just before the recession set in — and in fact, a bit higher than the year the recession officially ended.

As I and many others have often cautioned, the official rate is based on an over-simple, outdated measure that understates the number of people who barely — if at all — have enough to live on.

It also, as some examples below indicate, fails to capture the anti-poverty impacts of many of our major safety net programs.

At this point, however, the results it produces are what we’ve got. And the measure is consistent from year to year. So trends are reasonably reliable.

Here then is some of what we learn from the poverty portion of the new report.

The Big Numbers

All told, nearly 46.5 million people were poor enough to fall below the Census Bureau’s very low poverty thresholds — about $18,500 for a parent and two children, for example.

Though the poverty rate is the same, it represents about 249,000 more people than in 2011.

Of these, 6.6% — 20.4 million — were so poor as to fall below 50% of the applicable threshold, i.e., to have lived in what’s commonly referred to as extreme poverty.

Both the rate and the raw number are the same as in 2011 — and not surprisingly, higher than in 2007, when somewhat under 15.6 million people were in extreme poverty.

Race-Ethnicity Gaps

Poverty rates for all major race-ethnicity groups also flat-lined. So the disparities remained very large. For example:

  • The black poverty rate was nearly three times the rate for white, non-Hispanics — 27.2%, as compared to 9.7%.
  • The poverty rate for Hispanics was 25.6%.
  • For Asians, the poverty rate was 11.7%.

The extreme poverty rates mirror these gaps — only 4.3% for white, non-Hispanics and a somewhat higher 5.7% for Asians, but 10.1% for Hispanics and 12.7% for blacks.

Married and Single

The disparity between poverty rates for married couples and families headed by a single person also remained extraordinarily large.

For families headed by a single woman, the rate was nearly five times times the rate for married couples — 30.9%, as compared to 6.3%.

The gap was smaller for families headed by a single man, but 14.6% of them were still officially poor.

Young and Old

As in the past, the child poverty rate, i.e., for people under 18, was considerably higher than the rate for the 65 and older crowd.

  • The child poverty rate was 21.8% — statistically the same as in 2011. Nearly 16.1 million children were officially poor — more than a third of all people in poverty.
  • More than 7.1 million children — 9.7% — lived in extreme poverty.
  • By contrast, the poverty rate for seniors was 9.1% and their extreme poverty rate just 2.7%.

We can chalk the age disparities up largely to the oft-maligned Social Security programs. Without them, the senior poverty rate would have been nearly four times greater.

However, the disparities are larger than they would be if the Census Bureau used a less crude measure, as we see in the results of last year’s Supplemental Poverty Measure.

The Bureau didn’t preview its SPM figures this year, but it did the equivalent with a few examples of what researchers can learn by using its table creator tool.

So we learn that counting the the Earned Income Tax Credit would reduce the number of poor children by 3.1 million. And if SNAP (the food stamp program) benefits were counted, 4 million fewer people would have qualified as poor.

I don’t suppose I need to say that these benefits are squarely in the House Republicans’ bull’s eye.

Policies to ensure that the economic benefits of the recovery reach the very large number of poor and near-poor working families in this country seem a distant dream.

But the new poverty figures ought to be a wake-up call.


Lifetime Poverty Risk Much Higher for Blacks Than Whites

August 28, 2013

About a month ago, the Associated Press reported survey data indicating that nearly four out of five American adults would experience economic insecurity by the time they turned 60.

Many columnists and talking heads picked up on the story. Unlike most, James Taranto at The Wall Street Journal raised various objections to the economic insecurity measures the AP source used. One (unemployment) I agree with. The others not.

Taranto argues, among other things, that one of the measures — near-poverty — is “arbitrary” because it’s set at 150% of the applicable federal poverty threshold. Half again as high isn’t “near,” he says.

Well, blogger Matt Bruenig responds, what if we just measured the likelihood of at least a year in poverty, as measured by the official thresholds?

He dips into a paper published in 2001 and discovers that more than half (51%) of adults will have experienced a year’s worth of poverty or more during a “lifespan” encompassing ages 25 through 75.

Large differences, as you might expect, when levels of formal education are factored in. But what’s truly striking are the cross-cutting differences.

With or without a high school education or more, rates for women are higher than for men. More striking are the very large differences between blacks and whites of both genders.

By the age of 75, nearly 70% of black men with a high school education or more have spent at least a year in poverty, as compared to 30.7% of white men in the same (perhaps over-broad) category.

For similarly-qualified black women, the rate rises to 77.5% — about 40% higher than the rate for their white counterparts.

For black women with less than a high school education, the chances of not experiencing poverty in adulthood are a mere 1.7%. And about 70% have already lived in poverty by the time they reach 35.

The 75-year-old rate for black men without a high school education is 95.6% — more than 21% higher than for their white counterparts.

We’ve had two recessions since these figures were calculated. So it’s reasonable to assume that the poverty risk rates would be higher if more recent figures were crunched.

Whether the black-white disparities would be smaller is an open question. But they surely wouldn’t have disappeared.

From the early 1960s forward, the black unemployment rate has always been at least twice the rate for whites, writes Algernon Austin at the Economic Policy Institute in an overview of the “unfinished business” from the 1963 March on Washington.

Though the black poverty rate is significantly lower than it was 50 years ago, it’s drifted back up since 2000 and, at last count, stood at 27.6% — nearly three times the rate for whites.

The earnings gaps for those employed are very large too, especially at higher education levels.

For example, full-time white male workers with at least a four-year college degree earn about 18% — roughly $16,950 a year — more than their black counterparts. The race gap for women is smaller, but still close to $5,000 a year.

Professor Mark Rank, who gave the AP its headline figures, apparently chose his economic insecurity indicators to bring more whites into the pool than the Census Bureau’s poverty figures do — and with good intentions.

“Only when poverty is thought of as a mainstream event, rather than a fringe experience that just affects blacks and Hispanics, can we really begin to build broader support for programs that lift people in need,” he says.

Which is tantamount to saying that we, as a society, don’t care all that much about poverty and its root causes so long as we think they’re minority issues.

If true — and I think it is — we’ve not transformed “the jangling discords of our nation into a beautiful symphony of brotherhood,” as Dr. Martin Luther King hoped we would when he spoke to the marchers half a century ago.

No one, I think, would say we’ve made no progress. Whether we’re marching forward in all areas is a whole other matter.

Who would have thought 10 years ago that federal voting rights protections would have been such an urgent item on last Saturday’s march agenda?


Congressman Ryan Renews War on the War on Poverty

August 7, 2013

Congressman Paul Ryan, Chairman of the House Budget Committee, held a hearing last week supposedly to get a “progress report” on the War on Poverty.

A highly suspect enterprise, since Ryan had already proclaimed the War on Poverty a failure — most recently less than a week before the hearing.

“When I look at the money spent, when I look at the programs created, when I look at the miserable outcomes and the high poverty rates, … [I say] ‘We can do better than this.”

Interestingly, however, most of the witnesses he’d called didn’t engage in wholesale trashing on our anti-poverty programs, though Jon Baron, who heads the Coalition for Evidence-Based Policy, came pretty close.

Ryan’s Republican committee colleagues pulled out all the stops. References to “perpetual dependency,” confiscating taxpayers’ money, a remarkable attack on the Catholic church for calling on the government to help serve the poor.

Democrats countered with some myth-busting — mainly the notion that poor people don’t want to work. They also repeatedly noted that large majorities of safety net beneficiaries either are working or aren’t expected to — because they’re children, elderly and/or severely disabled.

And they took the occasion to point out the irony of a hearing on poverty when the House has already passed a budget (Ryan’s creation) that guts several major safety net programs and sets a spending level that will force severe cuts to others.

In the midst of all the bickering and posturing, some genuine issues emerged. To me, the biggest of all was what we should expect anti-poverty programs to do — and how we can know whether they’re doing it.

For Ryan, the programs have “miserable outcomes” because about 46 million people fell below the official poverty threshold last year.

Congressman Van Hollen, the committee’s highest-ranking Democrat, and Sister Simone Campbell, best known as the leader of the Nuns on the Bus, countered with top-line figures from the Supplemental Poverty Measure.

As I’ve written before, the SPM factors in major non-cash benefits, e.g., SNAP (the food stamp program), plus money received from the refundable Earned Income Tax Credit and partially refundable Child Tax Credit.

These benefits reduce the SPM poverty rates — or, as is commonly said, lift people out of poverty. Some examples from the Center on Budget and Policy Priorities, which foresightfully launched a preemptive strike on Ryan’s messaging.

Not good enough for Congressman Sean Duffy. We need to “get to the root cause of poverty, not just address pain.”

Nor for Ryan. “We focus on how much money the government spends.” True in his case for sure. “We should focus on how many people get off public assistance — because they have a good job.”

Or more tellingly in the TV clip I linked to above. “Our goal is not to make poverty easier to handle … and live with. Our goal in these programs ought to be to give people a temporary hand so that they can get out of poverty.”

And so Ryan chose to put Eloise Anderson, head of his home state’s Department of Children and Families, on the panel — the Republicans’ “star witness,” Greg Kaufmann at The Nation smartly observes.

The state’s welfare program got 93% of families off the rolls, she said. What we need in other programs are work requirements and time limits like those in the Temporary Assistance for Needy Families program.

No one, I think, would argue against programs that help people who can work prepare for and find jobs that will enable them to support themselves and their families. (Whether that’s a good description of TANF is another matter.)

But time-limiting all our safety net programs will surely leave some people in destitution — rather like the conditions former reporter Dan Morgan recalls from the early 1960s.

And is getting people off the rolls and over the official poverty line the only result we should measure?

What then do we do about people who are too old or too disabled to work — or working and still unable to make a go of it without public assistance?

About children, whose health, well-being and future prospects are significantly improved when they’ve got enough to eat, good medical care, a safe, stable place to live and positive learning experiences from an early age?

I’d be the last person to say that our anti-poverty programs are all they ought to be. But the only result Ryan and compeers seem willing to credit is far too narrow.

I personally think that a group so eager to claim their Christian bona fides would hesitate to dismiss programs that feed the hungry and heal the sick — services that local charitable organizations can’t do alone.

See, for example, the Bread for the World figure Sister Simone cited to show this — a $50,000 per year additional burden on every single congregation in the country merely to compensate for the SNAP cuts in Ryan’s budget.

And it’s genuinely offensive to hear Ryan claim that his attacks on anti-poverty programs aren’t “about cutting spending.”

If he really wanted to “start a conversation” about how we could better approach the multifarious problems that underlie our high poverty rate, then why has he plunged ahead with budgets that embody his radically right-wing conclusions?


Over a Million and a Half U.S. Families Live on $2 Per Person Per Day — Or Less

July 15, 2013

The World Bank draws one of its “extreme poverty” lines at $2.00 per person per day — the equivalent of $2,190 a year for a family of three.

This is a level of deprivation we associate with villages in sub-Saharan Africa or the slums of New Delhi. It’s about 12% of the Census Bureau’s official poverty threshold for the three-member family.

But by one measure, an estimated 1.65 million U.S. households with children were at or below the Bank’s threshold in 2011 — 4.3% of all households with children headed by someone who wasn’t elderly.

This is the headlined finding of a newly-published paper by sociologists Luke Shaefer and Kathryn Edin (yes, the same one whose work I used for my post on unwed fathers).

They came to their project from Edin’s earlier interview-intensive studies of poor single-mother families. “She mentioned that she felt like she was going into more and more homes where there was really nothing in income,” Shaefer says.

So the two decided to find out how many families were in such straits and how they survived.

To do this, they analyzed years of data from the Census Bureau’s ongoing Survey of Income and Program Participation, using the Bank’s $2.00 a day threshold.

They started in 1996, just before states began implementing “welfare reform,” and ended in 2011, when the Great Recession was officially over, but not its effects on the labor market.

Various complex statistical maneuvers I won’t even try to account for. This paper is not for popular consumption.

What we need to know to understand the findings is that the Shaefer-Edin team looked at households in extreme poverty based first on their cash income, including what they received (or didn’t) from the Temporary Assistance for Needy Families program and the program it replaced.

They then sequentially added in the largest federal means-tested benefits — SNAP (the food stamp program), housing subsidies and refundable tax credits, i.e., the Earned Income Tax Credit and Child Tax Credit.

The results clearly document what the team refers to as “the virtual disappearance of a cash safety net for non-workers.” Also, I should add, for some low-wage workers without full-time, year round jobs.

In 1966, cash assistance lifted about 1.15 million families above the extreme poverty line in any given month. By mid-2011, it lifted only about 291,000.

Though means-tested benefits expanded over this period, they couldn’t offset the combined impacts of the deliberate shrinkage of welfare caseloads and the recessions and sluggish recoveries during the 2000s, including the last and biggest.

We see, for example, that extreme poverty among households with children increased by 50%, even when all the means-tested benefits are factored in.

For single-mother families — the single largest type in TANF — the extreme poverty rate increased by nearly 68%, again after adjustments for the means-tested benefits.

Leave them out and the increase soars to 229% — a clear reflection of the end of a cash assistance guarantee for extremely poor families.

On the brighter side, SNAP reduced extreme poverty among households with children by 48% in mid-2011. This is with the soon-to-expire benefits boost that was part of the Recovery Act.

Fold in the rest of the means-tested benefits and 2.38 million children lived in families where they and their parents had somewhat more than $2.00 a day to live on.

But 1.17 million children still didn’t.

No policymaker, I suppose, deliberately decided to let any of America’s children live at a poverty level defined as “extreme” for developing countries.

But our policymakers share bipartisan responsibility because they decided to focus anti-poverty efforts on “the working poor” and let families headed by parents with the greatest barriers to ongoing gainful employment fend for themselves.

We see this in the Census Bureau’s own poverty figures.

In the past two decades, Shaefer and Edin report, families in deep poverty, i.e., below 50% of the applicable threshold, have received substantially less aid from public programs, while those at 50% to 150% of the threshold have, on average, gotten more.

Thus, the team concludes, “our current major safety-net programs are blunting some of the hardship that … households ["at the very bottom"] would otherwise face. However, it would be wrong to conclude that the U.S. safety net is strong, or even adequate.”

We knew this, of course, but perhaps not how shockingly inadequate it is.


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