Millions of People Living Always on the Margin

June 12, 2014

Nearly 50 years ago, Molly Orshansky, who invented our official poverty measure, noted that when the number of people below the applicable poverty threshold rose, the number just above dropped. And then the reverse happened.

“This reciprocal trend,” she wrote, “suggests that there may be a sizable group in the population living always on the margin — wavering between dire poverty and a level only slightly higher but never really free from the threat of deprivation.”

A recent report from the Census Bureau confirms this insight. Or so it seems.

What we know for sure is that, in 2011-12, virtually the same number of people who were near-poor at the beginning fell into poverty as rose above the Bureau’s near-poverty cut-off, i.e., 125% of the applicable poverty threshold.

Fewer than either remained in the near-poverty group for even this brief period. So many people are indeed on the margin — 14.7 million in 2012. And if past is prologue, almost as many will plunge (or plunge back) into dire poverty as will gain more than brief freedom from the threat of deprivation.

This is only one of the interesting things the report tells us. The other big eye-opener, for me, is that the near-poverty rate doesn’t behave like the poverty rate.

The latter is always considerably higher — 15%, as compared in 4.7% in 2012. But the poverty rate swings up and down as recessions set in and end. The near-poverty rate barely registers the downturns and upturns in our economy.

Here’s another difference. The poverty rate for seniors, according to the official measure, is much lower than the rate for children — 9.1%, as compared to 21.8% in 2012. But the near-poverty rates were statistically the same.

In other ways, the near-poverty rates resemble differences in poverty rates among groups the Census Bureau reports on, but only in a very general way.

For example, in 2012, the near-poverty rate for blacks was higher than the rate for whites — 6.3%, as compared to 4.5%. But the poverty rate gap was more than twice as great — 27.2%, as compared to 12.7%.

Similarly, the near-poverty rate for single-mother families was higher than the rate for married couples — 7.3%, as compared to 2.8%. But again the gap was far wider for their respective poverty rates — 30.9%, as compared to 6.3%.

What this means, of course, is that fewer blacks and single mothers were living on the margin because more were officially poor, which is very poor indeed.

This is also the case for working-age people not in the labor force, including those with severe disabilities. The poverty rate for those neither working nor actively looking for work was 28.4%, while their near-poverty rate was 6.7%.

These are only a few examples of comparative rates, based on the latest published Census figures. The near-poverty rate report also compares rates for 2012 with those for 1966, when Orshansky published her paper.

Overall, the near-poverty rate dropped, though only by 1.6%. And it dropped enough to be statistically significant for virtually every group the report breaks out.

The exceptions related to changes in our labor market. Specifically, the near-poverty rate for adults over 25 with less than a high school diploma or the equivalent was 1.8% higher in 2012.

Rates were also higher for adults in this age group at every education level below a four-year college degree or more. For those with the degree(s), the very low near-poverty rate was effectively the same — 1.2%.

And what about our safety net? Census can’t backtrack to 1966, but it does provide figures for the number of near-poor people who benefited from six major programs — or types of programs — in 1981.

We see significant changes in the number and percent of near-poor people served between the baseline year and 2012 for only four. And only one of them represents a decrease.

In 2012, 9.9% fewer near-poor people received public assistance, i.e., cash benefits from the Temporary Assistance for Needy Families program* and/or one of the dwindling state general assistance programs.

Near-poor participation in SNAP (the food stamp program) increased by the same percent. But the increase for the Earned Income Tax Credit was larger — 12.5%. And it’s the only safety net program Census reports on that benefited more near-poor than poor people.

The program with the greatest reach of all was the free and reduced-price part of the school lunch program. In 2012, it served 84.6% of near-poor children and a barely higher 88.5% of children in poverty. For the near-poor, this represents a 16.6% increase over 1981.

By and large, I think these changes, as well as the raw participation figures tend to confirm studies indicating that safety net spending has shifted toward people who, for one reason or another, are viewed as deserving — adults who work and those who can’t be expected to.

More conclusively, the report confirms the fragile hold on even a modicum of income security that Professor Mark Rank, among others, has sought to demonstrate — and that Orshansky flagged so long ago.

* TANF hadn’t replaced welfare as we knew it in 1981. So the comparison is to its predecessor.


Summer Brings Hunger, Despite Free Meal Programs for Children

June 5, 2014

“I usually do, in the summertime, go without eating, says Jean C., one of the Witnesses to Hunger. She tells her kids she’ll eat later, but the oldest has caught on.

Summer is always an especially difficult time for low-income parents with school-age children.

During most of the school year, their kids get free or reduced-price lunches. A growing number also get no-cost or low-cost breakfasts. They may get an after-school snack — or even supper — if they stay to participate in an “educational or enrichment” activity, e.g. tutoring, a photography class.

But summer rolls round. Now parents have to stretch their budgets to serve three squares a day, every day — and like as not, something in between.

Not surprisingly, Census surveys have found higher rates of food insecurity among families with school-age children during summer months.

The U.S. Department of Agriculture administers two summer meal programs designed to address this problem — one only for schools that provide subsidized lunches during the school year and one for nonprofits and government agencies generally.

With some exceptions, subsidies are available only to programs in areas where at least half the children qualify for free or reduced-price school meals — or (extra paperwork here) to those that can show that half the children they serve do.

But meals are free to all participating children. And USDA’s more inclusive program — the Summer Food Service Program — reimburses at somewhat higher rates than for free school breakfasts and lunches during the school year.

The summer meal programs are doing better than in recent years, according to the Food Research and Action Center’s just-released status report. But better isn’t all that great.

Nationwide, the programs served more than 2.9 million children during July 2013 — 15.1% of children who’d received free or reduced-price lunches during the prior school year.

This is surely better than July 2012, when they served 14.3%. The higher rate, however, reflects not only an increase in the number of children served, but a smaller decrease in the number who’d received free or reduced-price lunches.

And it’s still lower than rates before 2010, when a downward trend had already set in. By way of comparison, the rate was 20.8% in 2002.

FRAC cites recession-related budget cuts to programs that commonly serve subsidized summer meals — both summer school and a variety of others, e.g., arts and crafts classes at public recreation centers, daytime soccer camps.

Even so, only about one in five children who might have gone hungry — or more likely, caused their parents to — benefited from a summer meal program more than five years before the Great Recession set in.

This suggests other limits. So do FRAC’s more recent participation rate breakouts, which consistently show wide variations among states — in the latest case, ranging from 30.4% in New Mexico to 4.5% in Oklahoma.

First off, the SFSP hinges on sponsors to launch and operate programs — and so on interest, organizational capacities and resources the subsidies don’t provide. And so-called area eligibility, i.e., the 50% rule I mentioned above, tends to limit where they can locate their programs.

Summer meals are said to help draw children into worthwhile activities. But I’ve been told the opposite is also true.

In other words, sponsors generally need to offer activities with some appeal because the prospects of something free to eat aren’t a sufficient magnet. Or perhaps they might be, but carry a stigma the activities counteract.

Sponsors and other community organizations need to let families know what the programs offer and where — seemingly obvious, but only 40% of low-income families recently surveyed knew where free summer meal sites were located.

Transportation to program sites is a problem, especially in rural areas. Elsewhere also, since 40% of the food-insecure parents surveyed — not nearly all of them rural — cited lack of transportation as a reason their children didn’t participate in a summer meal program.

There’s a whole other kind of limit. FRAC tells us that July is generally the peak month for summer meal programs. In other words, many don’t operate from the time schools close to the time they open again.

So presumably parents of many of those more than 2.9 million children had to come up with the three squares a day during some good part of the summer vacation.

All of which is to say that USDA’s summer meal programs, fine as they are, may not be the solution to hunger for parents like Jean — and in worse cases, their children.

They could get help from a bill recently introduced in Congress — of which more in my next post.


Of Poverty Traps and Benefits Cliffs

April 28, 2014

Congressman Paul Ryan, as we know, views safety net programs as a “poverty trap” because they’re means-tested.

“The federal government effectively discourages … [poor families] from making more money, his War on Poverty report says, because they’ll lose benefits if they do — and pay higher taxes as well.

Whether these prospects actually discourage work is debatable — and at the very least, contingent on many variables. The loss of benefits isn’t. Progressives and conservatives alike have commented on the so-called “cliff effect” — to different ends, as you might imagine.

I’ve been puzzling over policy solutions because cliffs or something very like seem inherent in means-tested programs. And to some extent, they are.

But that doesn’t mean we should just shrug our shoulders — or view the only solution as “universal programs” akin to Medicare, as Roger Senserrich at the Connecticut Association for Human Services apparently does.

A recent report by Children’s HealthWatch shows that we could make progress by looking carefully at the real-world causes and effects of cliffs.

The report focuses on SNAP (the food stamp program) and, as one might expect, effects on children’s health when families lose all or a portion of their benefits due to income increases.

The distinction here indicates that SNAP is already structured to create a downward slope, rather than what the word “cliff” brings to mind. Benefits nevertheless dwindle — and eventually disappear — as income rises.

Families can be hit with a double or triple whammy because other safety net and work support programs are also means-tested. A Witness to Hunger, for example, worked overtime for a month, “and they just cut me off food stamps, and they cut my kids’ medical insurance off.”

This may be one reason that income increases are often not enough to compensate for lost SNAP benefits, as results of a CHW survey show.

For example, young children in families who’d altogether lost their benefits were 78% more likely to be food insecure than those in families who’d consistently received them.

For those in families whose benefits had been reduced, the likelihood was 55% greater. And caregivers were 30% more likely not to seek health care for themselves or another family member because they felt they couldn’t afford it.

The CHW report is entitled Punishing Hard Work, though not only wage increases can send families over the cliff.

They can also lose SNAP benefits when a disabled child starts receiving Supplemental Security Income, for example, or when an absent parent starts paying child support. In either case, children should be better off, but may not be.

CHW advocates several federal policy solutions to moderate the cliff effect.

One reflects a recommendation the Food Research and Action Center has made for many years. Use the U.S. Department of Agriculture’s Low-Cost Food Plan instead of the Thrifty Food Plan as the basis for determining maximum SNAP benefits.

As FRAC has explained — and the Institute of Medicine confirmed — the TFP is unrealistic in various ways. And it understates the costs of foods in the market baskets used to set benefit levels, as CHW itself has shown. Even more so the costs of foods that would make up a healthful diet.

A shift to the Low-Cost Food Plan wouldn’t affect the maximum income threshold, but it would leave families with larger benefits during the tapering-off period.

Two other recommendations address permissible deductions in gross household income. Both would increase the likelihood of a net income below the poverty line — the eligibility cut-off for SNAP.

One would eliminate the cap on deductible housing and utility costs — just $478 a month for most families.

The other would expand the current medical expenses deduction, which is now available only to elderly family members and those who receive disability benefits. Yet families can incur out-of-pocket healthcare costs for other members, even if they’re covered by Medicaid.

These costs often increase with income, as families move to private health insurance plans, as CHW observes. So expanding the medical expense deduction would help preserve one benefit as another shrank.

This is one example of why policymakers should “look across programs to determine … unintended consequences related to increasing family income.”

CHW looks to the Affordable Care Act as a potential vehicle, since it gives states an opportunity to create linkages between healthcare subsidies and other federal benefits.

Well, we know what Congressman Ryan thinks of the ACA. Another “poverty trap,” he calls it.

But if he were really concerned about encouraging people to “begin … getting the dignity of work, rising [sic] their income,” etc., he’d be focusing on the kinds of solutions CHW advocates instead of trying to gut programs like SNAP.

 


Survey Flags Unfair Treatment of Homeless Individuals in DC

April 17, 2014

Last fall, the National Coalition for the Homeless and a team of graduate students from George Washington University set out to learn “the extent to which homeless individuals in Washington, D.C. have experienced discrimination as a result of their housing status.”

They conducted a survey. And now we have a glimpse of the results. Within limits (of which more below), they indicate that many homeless people in the District have felt discriminated against — or at least, had experiences which persuaded them that others have.

The researchers wound up with usable surveys of 142 individuals — 110 men and 32 women. This is, of course, a very small fraction of the population of homeless adults in the District who have no family members with them, as last year’s one-night count indicates.

I don’t have the data to figure out whether the gender breakout — or the race/ethnicity breakouts — are reasonably representative. I rather doubt they exist. The gender breakout, however, does nearly mirror the shelter bed allocations in this year’s Winter Plan, and these are based on past demand.

The survey respondents were asked a number of questions about their experiences with private businesses, law enforcement, medical services and social services.

As the NCH website suggests, they were also asked questions about other groups, e.g., employers, landlords. But these didn’t yield statistically significant results. So they’re not in the report.

In fact, the report quantifies responses to only one question: “How often, in your experiences, did the following groups [private businesses, etc.] discriminate against people without housing?”

One could answer “often” to this on the basis of second-hand information, e.g., having been told that homeless people weren’t welcome in some McDonald’s restaurant.

Yet the survey itself included questions about direct personal experiences, especially with law enforcement. Unfortunately, as Michael Stoops at NCH confirmed, the sample was too small for statistically significant results on such important particulars.

That said, we seem to have considerable consensus that private businesses and law enforcement officers at least sometimes treat homeless people unfairly — 70.4% of affirmative responses for the former and 66.6% for the latter.*

Nearly 50% perceived discrimination by medical services and 43.7% by social services. For the former, the report includes two very disturbing anecdotal fragments.

A woman said she was refused care by local health care providers because “the staff thought she was faking it to get inside.” Another respondent said, “When I got stabbed, the paramedic said there was nothing wrong with me …. [H]e said I just wanted to get out of the rain.”

I’m frankly disappointed in this report because I’m sure as can be that people who are identifiably homeless are treated differently from thee and me — and in ways that are consequentially harmful.

The fact, sad as it is, that passersby make them feel “disconnected from the world,” as one respondent said, isn’t as harmful as getting rousted by the cops — or worse. And it’s far less harmful than being denied medical care.

These aren’t just perceptions of differential treatment. And I wish the report had provided more of them, even anecdotally, because, to me, they’re compelling evidence of a serious social problem — and one that’s reflected in a host of policy choices.

The report is nevertheless one of the first of its kind. And it’s only one portion of a campaign that NCH is waging — a complement of sorts to its annual reports on hate crimes against homeless people.

Here in the District, as elsewhere, NCH seeks to have a bill of rights for homeless people enacted. Three states and Puerto Rico already have such bills.

Alternatively, Stoops suggested, the District could amend its Human Rights Act to prohibit discrimination based on housing status.

Either action would provide a basis for legal claims against public or private entities that deny people medical care, social services and/or opportunities to work, rent, sit in a fast food restaurant, a library or a public park because they have no home of their own.

Needless to say, we wouldn’t see a flood of legal claims, though you can bet the Chamber of Commerce will claim otherwise, as it has in California.

The potential for legal action might make some difference, however. In the best of cases, it would prompt some apparently needed education in our public agencies and private-sector enterprises.

And we, as a community, would have officially recognized “the humanity of people who are homeless,” as the latest NCH hate crimes report says we must. That would prompt us to act when we perceive inhumane treatment — as it should, even without new legislation.

Surely we’d respond if our grandmother was told she was “just faking it” when she went to a healthcare clinic.

* The report collapses responses ranging from “rarely” to “very often” into a single “yes”.

 


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