We Shouldn’t Have to Choose Between Kids and Seniors

A striking full-page ad in last Sunday’s Washington Post. A toddler and an elderly woman, both posed as boxers, below the headline “Who Is More Important?”.

Here we go again, I thought. Another message about how spending on Social Security retirement benefits and Medicare is impoverishing the next generation.

But no. The actual message is “We Shouldn’t Have to Choose.” Helping to lift seniors out of poverty is good. We should make the same choice for kids.

The evidence the ad gives is a contrast between child and senior poverty rates. The former is a year out of date, but this doesn’t make much difference because the most current official rate — 21.9% — isn’t significantly lower than the rate for 2010.

Where the ad creators got their senior poverty rate (9.3%) is a mystery to me. The latest official poverty rate for seniors is 8.7% — surely better for the case the nonprofit advertiser is making.

If the figures aren’t right, the overall message surely is. Our child poverty rate is shamefully high. And Social Security is undoubtedly one of our most successful anti-poverty programs — arguably the most successful.

Though we don’t have poverty rates dating back to 1939, when it was created, we do have figures showing a dramatic drop from 1960 forward. The latest reported rate is about four times lower than the rate that year.

And Social Security benefits were the most important factor. The senior poverty rate without them would have been a mind-boggling 54.1%.

These are the official poverty rates, of course. The Census Bureau’s Supplemental Poverty Measure produces a higher senior poverty rate, mainly because it factors in out-of-pocket medical expenses.

The latest SPM boosts the senior poverty rate to 15.1%. This is nevertheless far lower than it would be without Social Security benefits.

So how would we achieve anything like the same result for kids?

The organizations named in the ad — the Next Generation and its campaign spin-off Too Small to Fail — clearly don’t want a replica of Social Security and have thus far said little about affordable health care insurance for kids.

Their aim at this point is to start a national conversation — and apparently to build a sense of responsibility among businesses, policymakers, parents and other caregivers.

The fact sheets on the Too Small website tee up a host of issues gathered under four main headings — education, health, work-life conflict and 24/7 media, i.e., the benefits and perils of access to computers and other digital technologies.

Most, but not all of the issues disproportionately affect low-income children and youth. And addressing them would, as the campaign says, increase social mobility — specifically, the likelihood that children born at the bottom fifth of the income scale will move up in adulthood.

But it’s hard for me to see how the agenda one might derive from the fact sheets would significantly reduce poverty among this generation of kids while they’re still kids — or for that matter, significantly mitigate the hardships that affect them, e.g., hunger, homelessness, acute parental stress.

These, as we’ve been told many times, help explain why so many low-income children perform so poorly on the achievement tests that are now the make-or-break for schools, teachers and ultimately students.

Perhaps the diverse topics for our national conversation will eventually shake out into an actionable policy agenda.

My own sense, however, is that they wouldn’t “create the protections and level of support that are afforded our seniors” — as limited as those are.

For that, we’d need to revisit the principles underpinning major elements of our safety net. First and foremost, however, we’d need a reset of the priorities reflected in the across-the-board cuts that began this week.

Education alone will take a $2.1 billion hit this fiscal year and possibly additional cuts thereafter as Congress parcels out spending so that the totals will come in below the mandatory spending caps — unless, of course, it can agree on an alternative.

A remote possibility now, but down the road apiece a big threat to Social Security benefits.

We need to “fight together for America’s next generation,” as the Post ad says. But we may well need to fight together for the elder generation too.

Census Bureau Reports 16.1% Poverty Rate

Another round of news on poverty in the U.S. — this time from the Census Bureau’s latest report on the results of analyses using its Supplemental Poverty Measure.

Once again, the national poverty rate is higher than the rate the Bureau earlier reported, using its official measure — 16.1%, as compared to 15.1%.

In other words, about 3 million more people — a total of nearly 49.7 million — were living in poverty last year.

On the other hand, the percent of people living in extreme poverty, i.e., below 50% of the applicable threshold, is 1.5% lower than the official measure shows.

We get a mixed picture for state-level poverty rates, for which the Bureau uses three-year averages. Some of the rates are higher than the official rate. Some lower.

The rate for the District of Columbia rises sharply — from 19% to 23.2%. This is higher than the rate for any state except California.

As I’ve written before, the official measure sets poverty thresholds at three times the annually adjusted costs of what used to be the U.S. Department of Agriculture’s cheapest food plan.

The SPM starts from the costs of basic living expenses, adjusted for differences among major geographic areas and also differences in living situations, e.g., renting versus owning.

To these, it adds some other “necessary expenses,” e.g., payroll taxes, health care co-pays and other out-of-pocket costs.

On the other side of the ledger, it takes account of not only cash income, but some “near-money” federal benefits like tax credits and also some in-kind benefits, e.g., food stamps, two forms of child nutrition assistance, housing subsidies.

And it uses actual household size, rather than counting only household members who are related to one another, as the official measure does.

These differences explain not only the difference between the overall SPM rate and the official rate, but shifts in rates for different age and race/ethnicity groups.

We see, for example, that:

• The child poverty rate drops from 22.3% to 18.1%, reducing the number of children in poverty by about 3 million.
• The poverty rate for seniors rises from 8.7% to 15.1%, increasing the number of poor people 65 and older by somewhat more than 2.6 million.
• The poverty rate for blacks drops from 27.8% to 25.7% — still far higher than the non-Hispanic white rate of 11%, but now 2.3% lower than the rate for Hispanics.
• The poverty rate for Asians rises from 12.3% to 16.9% — the largest percent change for any race/ethnicity group reported.
• For children, the extreme poverty rate is less than half what it is under the official measure — 5.1%, as compared to 10.3%.
• For seniors, however, the extreme poverty rate rises — from 2.3% to 4.3%.

This year’s report is unusually timely because it gives us a read on the anti-poverty effects of some benefits that are at immediate risk. It tells us that:

• Food stamp benefits lifted more than 4.6 million people, including  about 2.1 million children, out of poverty last year.
• Well over 8.6 million more people, including nearly 4.7 million children, would have fallen below the poverty threshold if their family’s disposable income hadn’t been boosted by refundable tax credits.
• Unemployment insurance benefits kept nearly 3.4 million people out of poverty — mostly adults, but about 963,400 children too.
• And Social Security — the single most effective anti-poverty program we’ve got — accounted for 25.6 million fewer poor people than there would have been without its benefits. Poverty rates for all age groups would have been higher. The rate for seniors would have soared to 54.1%.

So there are the benefits. Now here are the risks.

The farm bills now pending in Congress would cut food stamp benefits for at least half a million households — 1.3 million if the House version prevails. The House bill would also mean no more food stamps at all for as many as 3 million people.

As you’re well aware, the Bush-era tax cuts are expiring. We can be quite confident that most will be renewed.

But Congressional Republicans want to extend earlier versions of the refundable Earned Income Tax Credit and Child Tax Credit, not the expanded versions that have made a significant difference to low-income working families.

The federal program that funds unemployment insurance benefits for longer-term jobless workers will also soon expire. Some two million workers and their families may face the new year with no source of cash income.

Lead Republicans in Congress are about to sit at the bargaining table with their Democratic counterparts and White House officials to thrash out an alternative to the so-called fiscal cliff.

They say they’ll be amenable to increased revenues (not to be confused with higher tax rates for the wealthiest 2%).

But the deal must also include “real changes to the financial structure of entitlement programs” — apparently something along the lines of the recommendations in the plan produced by the co-chairs of the President’s fiscal commission, a.k.a. Bowles-Simpson.

These recommendations would cut Social Security retirement benefits in several different ways. With the average benefit now only $1,230 a month, we could see more seniors in poverty if the Democrats don’t hold firm to the position they’re taking now.

NOTE: A couple of the benefits impact figures reported by the Center on Budget and Policy Priorities are a bit higher than mine. This is also true for figures reported by the Center for American Progress. I’m at a loss to explain the discrepancies.

DC Poverty Rate Hits 19.2 Percent

A couple of weeks ago, the Census Bureau released the results of its 2010 Current Population Survey.

Much attention here in the District of Columbia to the increase in our local poverty rate. Up to 19.9%, we were told. Trailing only Mississippi and Louisiana.

That poverty rate was based on a small sample, which means it could be off by quite a bit. The two-year average Census recommends yields a rate of 18.9%. The even more reliable three-year average is 18.1%.

But these rates, of course, don’t tell us whether poverty has been trending up or down. Nor anything about specific impacts.

So I waited for the results of the American Community Survey — partly because its one-year figures are reasonably reliable, but also because there are lots more state-level figures.

Now we’ve got them. Here’s some of what we learn, combined with my analyses based on figures from prior years.

Poverty Rate

In 2010, the District’s poverty rate did indeed go up, though not by quite as much as the one-year CPS figure indicates.

According to the ACS, the rate was 19.2% — 0.8% higher than in 2009 and 3.9% higher than for the nation as a whole.

The new rate means that about 109,620 District residents lived below the Census Bureau’s very low poverty thresholds. These vary by household size and composition. But, to give you a sense of how low they are, the average threshold of a family of four was $22,314.

Child Poverty Rate*

The already very high child poverty rate increased to 30.4%. This is 8.8% higher than the national rate and 7.7% higher than in 2007, just before the recession set in.

Translated into more human terms, the new rate means that about 30,500 D.C. children lived in poverty last year.

One tiny bright spot. The percent of children in deep poverty, i.e., in households with incomes below 50% of the poverty threshold, dropped by 2.6%.

It is still, however, a very high 16.2% — 6.6% higher than the national rate.

Race/Ethnicity Gaps

We see once again that poverty is not an equal opportunity condition here in the District or in the nation as a whole.

In 2010, 8.5% of non-Hispanic white District residents lived in poverty. The poverty rate for black residents was more than three times greater — 27.1%. The rate for Hispanic residents was nearly double the non-white Hispanic rate — 14.7%.

Deep poverty rates also varied — from 5.9% for non-Hispanic whites to 14% for blacks, with Hispanics in the middle at 8%. All three of these rates are greater than the 2009 rates. The increase for Hispanics — 4% — was markedly greater than for the other two groups.

Not surprisingly, we see similar gaps in median average household income. For non-Hispanic white households, the median was $99,220 — an eye-popping $45,052 more than the national median for these households.

The District’s black household median income was more than two and a half times lower than the median for all District households — $37,430, as compared to $60,903.

Hispanic households fared better, though not nearly so well as non-Hispanic white households. Their 2010 median income was $60,798.

In short, these are mostly grim figures — and a far cry from the “one city” Mayor Gray envisions.

To my mind, the child poverty rate rings the loudest alarm bells because we’ve got volumes of research showing that children who live in poverty have much higher risks of poor health, developmental delays, academic difficulties and other problems;

These, the research shows, pave the way for lifelong poverty — and thus another generation of children who are born with two strikes against them.

* All the child poverty figures are for individuals up to the age of 18.

UPDATE: Shortly after I posted this, the Coalition on Human Needs published a state-by-state list of poverty rates reflecting the new ACS report and its reports for the four years preceding.

According to the list, the District’s 2010 poverty rate is higher than any state’s. Alabama and Kentucky tie for second place, with rates of 19% all but two states’, Mississippi’s and New Mexico’s.

A separate CHN list provides state-by-state child poverty rates. The District’s rate is the second highest, topped by Mississippi’s 32.5%.

Census Bureau Reports Record Number Of Poor Americans

The Census Bureau opened its press briefing on the just-released 2010 income, poverty and health insurance data with a brief statement from the director. The yearly figures, he said, show “how day-to-day people are faring under changing economic conditions.”

By almost every measure, the answer is not well at all. Between 2009 and 2010:

• The poverty rate rose from 14.3% to 15.1%. The new rate is the highest since 1993.
• The number of people in poverty increased by 2.6 million. The total number now — 46.2 million — is the largest in the 52 years Census has been publishing such figures.
• The percent of people in deep poverty, i.e., with incomes at or below 50% of the applicable poverty threshold,* increased to a record-high 6.7%.

As in the past, poverty rates were considerably higher in some population groups than others. For example:

• The child poverty rate increased to 22% — up from 18% in 2007.
• The number of children in poverty increased by 950,000 to a 16.4 million.
• Nearly 7.4 million of these children (9.9%) were in deep poverty.
• The poverty rate for blacks was well over two-and-a-half times the rate for non-Hispanic whites — 27.4% as compared to 9.9%.
• The deep poverty rate for blacks was more than three times higher — 13.5% as compared to 4.3%.
• The poverty rate for Hispanics was 26.6% and the deep poverty rate 10.9%.

A reporter asked the Census Bureau experts whether they could explain why the poverty rate rose. Was told that the Bureau produced statistics, not explanations. One factor suggested, however, was the growing number of people who’d had no — or virtually no — work during the entire year.

In 2010, 86.7 million people over the age of 16 worked less than one week — an increase of more than 3.4 million over 2009 and of more than 11.3 million over 2007. Not surprisingly, 23.9% of these potential workers lived below the poverty threshold.

Seems to me another arrow in the quiver of those of us who want Congress to pass the President’s jobs bill.

Yet the bill, as he himself says, “can’t solve all our nation’s woes.” He’s referring, as White House communications indicate, to the dwindling economic security of the middle class.

The economic woes of low-income Americans pre-date the recession too. As the Center on Budget and Policy Priorities reports, the poverty rate has been rising for most of this decade — in boom years as well as downturns.

We’ll need a comprehensive strategy — and a smart one — to do something about this. We’ll need a broad-based commitment. Things as they are, I’m not holding my breath.

* The Census Bureau’s poverty thresholds are more complex than the poverty guidelines used in determining eligibility for federal benefits programs. Using one of the Bureau’s weighted averages, we see that a family of four in deep poverty would have had an income of no more than $11,157 for the year.