Census Poverty Rates Defy Predictions

Well, the crystal ball gazers blew it. The Census Bureau just reported that the poverty rate didn’t rise last year. The official 15% rate isn’t statistically different from the 2010 rate, it says.

This is surely good news. It nevertheless means that more than 46.2 million people were so poor as to fall below the Bureau’s very low poverty thresholds.

And well over 20.3 million — 6.6% — were so extremely poor as to fall below 50% of the applicable threshold. This is what’s commonly referred to as severe poverty.

What also hasn’t changed is the distribution of poverty across different age and race/ethnicity groups. For example, in 2011:

• The child poverty rate was 21.9% — not statistically different from the rate in 2010.
• The poverty rate for seniors was 8.7% — again, virtually the same as the 2010 rate.
• The black poverty rate was nearly triple the poverty rate for whites — 27.6%, as compared to 9.8%.
• The poverty rate for Hispanics was 25.3%.

Poverty rates among family types also replicate a familiar pattern. The percent of married couples who were officially poor was 6.2%, while the rate for single-woman households was five times higher — 31.2%.

Severe poverty rates were, of course, lower. But they mirror the same disparities. For example:

• Nearly 1 in 10 of America’s children — 9.8% — lived in severe poverty last year.
• The severe poverty rate for blacks was 12.8% and for Hispanics, 10.5%.
• By contrast, severe poverty afflicted 4.4% of whites and only 2.3% of seniors of all racial/ethnic groups combined.

What we’re to make of all this I’m really not sure. We’ll undoubtedly have many analyses in days to come.

In the interim, we can ferret out of the Census report a couple of policy-relevant messages, based on examples it provides of what the statistically adept can find out by using its online tool.

One we might guess from the relatively low senior poverty rate. Without Social Security benefits, about five times as many elderly people would have been counted as poor.

This is surely a testimony to one of our oldest anti-poverty programs — and a warning of what could happen if some of the “reforms” that are being widely promoted became law.

An additional 2.3 million people were lifted above the poverty threshold by unemployment insurance benefits.

A more imminent danger here because more than 2 million jobless workers will lose these benefits in January if Congress doesn’t extend the only still operative federally-funded UI program.

Millions more will have, at most, 26 weeks of benefits — this at a time when 40% of those actively looking for work have been unemployed for longer.

So here’s a case where our federal policymakers could keep what are still really depressing poverty numbers from getting worse.

Whether they will or not depends on what voters decide in November.

New Angles On How Many Poor People There Are In The U.S.

I remarked some time ago that we didn’t know how many poor people there were in the U.S. We still don’t because the Census Bureau is still working on a measure that would take account of many factors the official measure ignores.

As part of the process, it’s been releasing annual alternative poverty estimates based on recommendations the National Academy of Sciences made back in 1995. The latest set came out in early January — three multi-columned spreadsheets, each with many, many figures.

I couldn’t make heads or tails of them, though I could see that the poverty rate for 2009 might be as low as 12.8% or as high as 17.1%, depending on which NAS recommendations were applied. So  there could have been as relatively few as 39 million people in poverty or as many as 52.5 million.

Fortunately, a new brief from the Economic Policy Institute gives us non-economist the big picture — though not an answer to how many poor people there are.

As EPI explains, the alternative estimates make different kinds of adjustments in the poverty threshold, i.e., the dollar cut-off for counting people as poor, and/or in what’s counted as income.

The official threshold is three times the food budget at the time the official poverty measure was developed, with adjustments for inflation based on the Consumer Price Index for All Urban Consumers.

The Census Bureau produces alternative thresholds by adjusting for out-of-pocket medical expenses, cost-of-living differences in different parts of the country and a different measure of consumer price inflation — the Consumer Expenditure Survey.

Looking only at the alternative thresholds, the share of the population in poverty seems higher than the official 14.3% rate the Bureau reported in September. Hence a high-end estimate of poor people so much greater than the official 43.6 million.

The income adjustments tell a different story.

The official measure counts only cash income, i.e., wages and cash benefits like Social Security and unemployment insurance.

The alternative measures take account of non-cash benefits like food stamps, housing vouchers and Medicaid and of tax credits like the Earned Income Tax Credit and the Child Tax Credit.

With these included, the poverty rate is lower than the official estimate, even when taxes are factored in. As with the thresholds, how much depends on which adjustments are made.

The Center on Budget and Policy Priorities also crunched the numbers. It came to basically the same conclusions about the income adjustments, though with a more political slant aimed at justifying the temporary new and expanded tax credits and benefits in the economic recovery act.

According to CBPP, the recovery act improvements kept 4.5 million people out of poverty. An additional 11 million were lifted above the poverty threshold by the regular versions of five of the programs — the Earned Income and Child Tax Credits, unemployment insurance and food stamps.

And, as EPI also shows, the biggest anti-poverty impact came, as it has in the past, from Social Security retirement benefits. CBPP says these kept more than 20 million people out of poverty. Looking at its table on program impacts as a whole, the number seems more like 21.4 million.

In short, the major federal anti-poverty programs are doing what they’re supposed to do. Without them, a vastly larger number of people would have been poor enough to be counted as such.

I don’t suppose I need add that these programs are at high risk — if not of annihilation, then of significant retrenchments.

New Census Figures Show DC Poverty Rate Rose Again Last Year

As you may have read, the figures the Census Bureau released two weeks ago showed that the poverty rate in the District had gone down — from 18% in 2008 to 17% in 2009.

Jenny Reed at the DC Fiscal Policy Institute cautioned us that the new figure was actually a two-year average that might mask the impacts of the recession. We should wait, she said, for the single-year 2009 results of the American Community Survey.

Now we have them. And indeed, they show the poverty rate increased last year — up by 1.2% from 2008. The 2009 poverty rate in the District was 18.4% — 4.1% higher than for the nation as a whole.

Here are some other things we learn:

• The child poverty rate rose again. In 2009, a shocking 29.4% of all D.C. children lived below the poverty level — up by 4% from 2008. This is 6.7% more poor children since 2007 and 9.4% more than for the nation as a whole.
• The percent of blacks living below the poverty level was more than three and a half times higher than the percent for non-Hispanic whites — 26.8%, as compared to 7%. The gap here is 2.8% greater than in 2008 and 4.4% greater than in 2007.
• We see a similar, though much smaller gap between the poverty rates for Hispanics and non-Hispanic whites — a 3.7% difference. It was considerable greater last year — 10.9%.
• The percent of individuals living in deep poverty, i.e., below 50% of the poverty level, rose again — from 9.8% in 2008 to 10.7% in 2009.
• A large gap here too, but only for blacks versus non-Hispanic whites. The percent of blacks in deep poverty was 16%, as compared to only 4.3% for non-Hispanic whites. The percent of Hispanics in deep poverty was smaller than either — 3.1%.
• There are still huge race/ethnicity income gaps. The 2009 median income for non-Hispanic white households was $104,201 — $67,253 more than for black households and $47,380 more than for Hispanic households.

There are probably many reasons for the District’s persistent high poverty rate and the yawning race-linked gap between the haves and the have-nots.

One jumps out from the new ACS figures — the mismatch between the demands of the local labor market and the formal education credentials of many of our fellow residents.

For individuals with only a high school diploma or a GED, the poverty rate was 25.5%. For those with less, it was 28.3%. The latter is six times greater than the percent for individuals with a bachelors degree or higher.

These figures should be a call to action, were any needed, for reforms in the public education system that don’t emphasize high test scores at the expense of struggling learners. Do any of our educators hold the exit door open when low-scorers want to give up? Will they when the pressure to produce year-over-year improvements increases?

They’re also a powerful argument for job training programs that encourage drop-outs to work for their GED and high school graduates to get some further education under their belts. These programs are not where the District should be looking as it seeks to rebalance its budget.

UPDATE: The poverty figures I used come from the annual tables entitled Selected Characteristics of People at Specified Levels of Poverty in the Past 12 Months. After posting this, I found that the Census Bureau also released a brief comparing 2008 and 2009 poverty rates. The 2008 rate for the District is different from the one in the detailed table. According to the brief, the poverty rate in the District increased by 0.8% and the poverty rate for children by 2.7%. I’ll leave it to the experts to explain the discrepancy.

More Grim News About The Affordable Housing Crunch

Shortly before the Census Bureau issued its new poverty/income report, the Bureau and the U.S. Department of Housing and Urban Development released figures from their latest housing survey. Bad news about the affordability of rental housing, especially for households below the federal poverty line.

In 2009, about 18.6 million renter households paid 30% or more of their current income for rent,* i.e., at or above the HUD cutoff for affordability. That’s 52.6% of all renter households. Close to a third paid at least half their current income for rent, aptly characterized by HUD as a “severe rent burden.”

As we’d expect, housing costs were a greater challenge for low-income households. About 73% of them — 6.8 million households — paid at least 30% of their current income for rent. Rent consumed half or more of all current income for 5.6 million households — just under 60%.

The Center on Budget and Policy Priorities reports that the severe rent burden figure for low-income households represents a 17% increase since 2007 — 800,000 more households in just two years. Compared to 2003, the increase is a whopping 45% or 1.7 million more households.

These figures reflect at least four converging factors.

One is the continuing shrinkage of affordable housing stock. Earlier this year, the National Low Income Housing Coalition reported that 6.3% of affordable units had been lost between 2001 and 2007.

Shrinkage in the District of Columbia has been more dramatic — more than a third of low-cost rental units lost during about the same time period.

Two other factors are both impacts of the recession. One, of course, is the prodigious number of jobs losses, which have left many households with less or no current income. What might have been affordable for them a couple of years ago now leaves them without enough ready cash for basic needs.

The other, related impact is foreclosures, which have increased competition for the limited number of moderate and low-cost rental units available. CBPP reports a nationwide 11.3% increase in rental costs since 2006. The old law of supply and demand at work.

A fourth major factor is government housing policies. At the federal level, rental assistance for low-income families has failed to keep pace with rising needs. Last year, CBPP reported that total funding for low-income housing programs in 2008 was $2 billion (5%) less than in 2004.

For 2009, Congress appropriated several hundred million dollars less for housing vouchers than agencies would have been eligible for if allocations been based on use and costs — this notwithstanding enormous waiting lists and rising rents.

CBPP estimates that funding for the current fiscal year is just about enough to renew all the vouchers families were using in 2009. The same is true for the President’s proposed Fiscal Year 2011 budget, though it would also provide funding for about 10,000 new vouchers for people with disabilities and families who are homeless or at risk of homelessness.

So we’re looking here at about 2.2 million vouchers, assuming (as we shouldn’t) that Congress goes along. That would leave an enormous gap between families in need of housing assistance and the help the federal government will provide.

Here in the District, the waiting list for affordable housing has reportedly grown to more than 26,000 households. The Fiscal Year 2011 budget will provide local funding for about 80 more units. Not a penny more for the tenant-based vouchers that allow households to live in apartments with market-based rents.

Even in better times, the District never came close to the targets or funding levels recommended by the Comprehensive Housing Task Force — a diverse group of experts commissioned to produce a long-range housing strategy for “an inclusive city.”

So the Census/HUD figures aren’t just a recession-caused blip. They’re the cumulative results of long-standing failures to give affordable housing the priority it deserves.

* The survey figures include households that reported paying 100% or more of current income for rent. The spreadsheets note that these may reflect a temporary situation, living off savings or a response error. I have followed CBPP in including them in my calculations.