New Reports Provide Different Perspectives on Poverty

January 13, 2014

One thing you can say about last week’s War on Poverty anniversary. It sure produced a lot of grist for my mill. I’m having trouble wrapping my mind around it all.

So for now I’ll focus on two very different perspectives provided by new reports. Both speak in different ways to unfinished business. And both indicate needs to modify our strategies because conditions have changed and experience has illuminated our difficulties, as President Johnson foresaw when he proposed the War.

One, from the Census Bureau, tells us that poverty is a common experience and a usually temporary, though sometimes recurrent one. These findings are generally similar to research I wrote about earlier, but based on more current data.

The other report, from the Urban Institute, tells us that some portion of the population is not only persistently poor, but likely to cycle in and out of deep poverty — or to remain there.

Episodic Poverty

The Census Bureau carved out two three-year periods from its Survey of Income and Program Participation, which collects data from the same sample of individuals every four months for at least two and a half years.

Not surprisingly, poverty figures were higher for the second period — January 2009-December 2011. But the basic picture is the same as for the first, which ended shortly after the recession set in.

During the more recent period, 31.6% of the population lived below the applicable poverty threshold for at least two months — more than double the official annual rate. But only 3.5% was in poverty for the entire three years.

By 2011, 5.4% of people who hadn’t been officially poor in 2009 were. At the same time, 36.5% of those who’d been poor in 2009 no longer were.

The median length of time for any single spell of poverty was slightly over six and a half months. Only 15.2% of spells lasted more than two years.

We see a high degree of economic insecurity — and not only in the very large percent of Americans who suffered at least one spell of poverty within a relatively short period of time.

Nearly half of those who recovered sufficiently to rise above the applicable poverty threshold — 6.2 million people — still had family incomes below 150% of it. For a three-person family, this was less, on average, than about $26,875 in 2011.

An additional 11.9 million who didn’t fall into poverty dropped from 150% of the threshold to somewhere closer to it. So even within this relatively short period, some 18.1 million people were on the verge of poverty.

Deep and Persistent Poverty

“Deep poverty” here means having a household income below half the applicable poverty threshold — less than $9,249 a year for a single parent with two children in 2012. Well over 20.3 million people in the U.S. were that poor last year — about 6.6% of the population.

Urban Institute researchers have found that some portion of them are stuck in poverty — and worse. Many are “hovering around the deep poverty threshold, without ever earning enough to escape poverty altogether.”

Theirs is a “chronic state,” an Institute account of the research says. And it can persist from generation to generation. How many are bemired there the report doesn’t say — and perhaps couldn’t.

The main thrust is that deep, persistent poverty is rooted in a complex of serious personal challenges, e.g., drug and/or alcohol addiction, severe mental or physical disabilities, chronic illness.

Because of or in addition to these, persistently poor people have other “co-occurring challenges,” e.g., homelessness, functional illiteracy, a criminal record.

Our safety net programs aren’t designed for them, the researchers say. Many, in fact, are conditioned on work — the Earned Income Tax Credit, for example, and Temporary Assistance for Needy Families. SNAP (the food stamp program) has work requirements also, though only for able-bodied adults without dependents.

The report itself is addressed to foundations, which could contribute to solutions in various ways. But it points to the need for policy changes that run counter to the vision underlying virtually all plans for what to do about poverty in America.

Because it involves accepting the fact that “deeply poor adults may never be self-sufficient” or even able to work steadily. In some cases, perhaps not at all — and for reasons that don’t qualify them for disability benefits.

Policymakers may, however, take to the other piece of the Institute’s agenda — early and intensive interventions to break the cycle.

About 3% of children — and an alarming 15% of those who are black — spend more than half their childhoods in deep poverty. We have lots of research documenting the long-term damages of childhood poverty. They’re presumably more common and/or severe in cases of deep childhood poverty.

We also have studies indicating that some programs can do a lot to mitigate them — not only programs that address basic needs like good nutrition and health care, but early childhood education and home visiting programs.

The Urban Institute also mentions several small-scale holistic initiatives that may provide models for “blunting the effects” of chronic poverty. “We can sure make things better for the kids,” one of the researchers says.

But meanwhile, we’ve got a system based on expectations that may be wholly unrealistic for the parents instead of a commitment to provide whatever services and supports they need — and for however long they need them.


New DC Poverty and Shared Prosperity Figures Show Uneven Progress

December 3, 2012

Last week, I took a crack at the Half in Ten campaign’s updated poverty reduction and shared prosperity indicators for the nation as a whole. It’s also updated a smaller set for each state and the District of Columbia.

Here then is what we can learn from the new figures for the District.

We can look at these in a couple of ways — in comparison to last year’s or to the same indicators for the whole country. We can also see how the District ranks among states.

But the District isn’t a state. And however much it deserves to be one, comparisons to other large cities rather than to states as a whole would be more appropriate for issues like Half in Ten’s.

So let’s just look at the indicators themselves.

On the whole, we see more progress than backsliding. But — no news to any of you, I guess — the District has a long way to go on both the poverty and shared prosperity fronts.

For some indicators, the progress would be expected.

For example, the official poverty rate for the District dropped, though it was still well above the national rate. Ditto for the unemployment rate.

We see progress that can’t be attributed simply to the improving economy, however. The backsliding calls for other — or at least, more complex — explanations too.

Good Jobs

In addition to the unemployment rate, Half in Ten provides a handful of indicators for the employment prospects of relatively young District residents. Forward movement across the board:

  • The percent of freshmen who completed high school in four years increased from 56% to 62.4%* — far below the nationwide 75.5% rate, but progress nonetheless.
  • The percent of “disconnected youth” dropped by 1%, leaving us with nine out of every hundred youth who were neither working nor in school.
  • The already-high percent of young adults (25-34) with at least a two-year college degree rose to 62.7%.

Stronger Families

The good jobs indicators clearly relate to child, youth and family well-being. Unlike these, the indicators Half in Ten puts in the strengthening families category are a good news/bad news story.

In the good news part, the rate of births to teen mothers dropped from 50.9 to 45.4 per 1,000. Still considerably above the national 31.3 rate, but moving in the right direction.

And the percent of residents without health insurance dropped to 6.9% — well below the 15.7% national rate, which also registered a drop last year.

In the bad news part, the pay gap between men and women workers reportedly grew — and by a lot.** In 2010, it was considerably smaller than the nationwide gap. Last year, it was bigger.

And the rate of children in foster care rose from 18 to 20 per 1,000. Notwithstanding what I said about the rankings, I can’t resist noting that the District’s rate is far higher than any state’s.

Economic Security

Good and bad news for indicators in this category also.

On the good news side, the rate of food insecure District households dropped from 13% to 10.9%, while the nationwide rate rose.

And the percent of jobless District residents who received unemployment insurance benefits shot up from 36.3% to 64% — at least in part due to program reforms the District adopted to get its share of the reward money offered by the Recovery Act.

On the bad news side, the percent of District households without bank accounts — a measure of asset-building capacity — rose from 24.4% to 41%.

Might the marked increase have something to do with the new fees banks are charging — or their higher minimum balance requirements?

One economic security indicator that looks very positive is, I think, misleading.

We’re told that the number of rental units for very low-income households increased from 53 to 77 per hundred — almost 20 more than the nationwide rate.

How could that be when we know we’ve got an affordable housingĀ  crisis here?

The answer lies in the U.S. Department of Housing and Urban Development’s definition of “very low-income,” i.e., at or below 50% of the median income for families in the area.

The area HUD carves out for the District includes nearby suburbs populated by very well-off folks.

A median income for the District alone would put more units out of reach — even more if Half in Ten had linked its indicator to “extremely poor households,” i.e., at or below 30% of AMI.

Half Full, Half Empty and Now What?

So we’ve got progress on more indicators than not. But we’ve still got well over 109,000 poor District residents and lots more who aren’t getting a share of that prosperity that parts of our envisioned One City enjoy.

Our local officials could move some indicators in the right direction — or further in the right direction.

But much depends on what Congress decides to do about tax revenues and spending cuts in whatever bargain emerges to pull us back from the so-called “fiscal cliff.”

________________________________________

* These figures are for the 2007-8 and 2008-9 school years. After Half in Ten published its update, the U.S. Department of Education released high school graduation rates for 2010-11. These are the first set to reflect a standardized calculation method for all states.

The District’s on-time graduation rate was 59% last year. This, at the very least, raises questions about the prior progress shown.

** The wage gap figure Half in Ten provides is significantly greater than the gap reported by the American Association of University Women. Part of the difference derives from how annual earnings are calculated, but there’s got to be some other factor too.


Mixed News on Progress Toward Poverty Reduction and Shared Prosperity

November 26, 2012

A year ago, the Half in Ten campaign restarted the clock for cutting poverty in half in 10 years.

As I wrote at the time, it also expanded the goal to include growing a more inclusive and economically secure middle class. It set three top priorities for achieving this — each fleshed out in specific strategies.

Half in Ten established indicators to measure progress (or lack thereof) toward both the poverty reduction and new priority goals.

The first set of figures — mostly 2010 data — were the baseline. Now we’ve got a first year’s worth of updates.

So how are we doing? Not easy to answer within the compass of a blog post.

The full report includes 21 indicators — some new and some reflecting fairly old data because sources either haven’t been updated or lag behind even Half in Ten’s base year.

Half in Ten has a summary of the full set. Also a handful of indicators online.

I’d planned to plow through the online set, using last year’s report for baselines.* But I felt I was losing the forest in the trees. Some of the more interesting indicators too.

A different approach, therefore.

Poverty Reduction

No progress here, as you probably already know. Both the official poverty rate and the somewhat higher rate based on the Census Bureau’s Supplemental Poverty Measure were essentially flat for the two-year period.

Meanwhile, income inequality increased. In 2011, the richest 5% of households got 22.3% of all earnings. The bottom two-fifths got just over half as much — 11.6%.

Good Jobs

Some of the indicators in this group don’t speak to the goodness of jobs, but rather to the issue of whether people have jobs at all.

Generally progress there — except for people with disabilities, whose employment rate dropped from 28.6% to 27%.

More consistent progress on indicators reflecting the employment prospects of young people. For example, the percent of high school freshmen who graduated in four years had increased, as of the 2008-9 school year.

But when we turn to workers in low-wage occupations, we see a partial explanation for the widening income gap.

For full-time workers in service occupations, median annual earnings were just $24,300 — less than $2,000 over the poverty line for a family of four. There’s been no real dollar increase for them since 2000.

Lack of paid sick leave is one — though far from the only — factor depressing yearly earnings for low-wage workers.

In 2011, only 36% of workers earning no more than $11.13 per hour, i.e., slightly below the median or less, had any paid sick leave benefit. This is 4% less than in 2010, suggesting that a lot of not-good jobs got worse.

Strong Families and Communities

Most indicators in this group relate to the current and prospective well-being of children and young adults. And they all moved in the right direction in 2011.

We see, for example, that the teen birth rate continued its downward slide, reaching a record low of 31.3 births for every thousand women in the 15-19 age bracket.

And the percent of people without health insurance dropped from 16.3% to 15.7%. We can credit this to the initial impacts of the Affordable Care Act, Half in Ten says.

Economic Security

End of moderately good news. Only one indicator — food insecurity — remained relatively flat. And even that increased from 14.5% of households in 2010 to 14.9% in 2011.

The percent of jobless workers who received unemployment benefits dropped by 10% to just over half.

Low-wage workers faced a growing affordable housing shortage. In 2010, there were only 58 affordable units available for every 100 very low-income renter households. This is four fewer than in 2009.

No relatively current figures for asset poverty, i.e., less in savings and other cash sources than a family would need to live at or above the poverty line if it had no income stream for three months.

What we know from the indicator is that the percent of asset-poor households increased by 4% between 2006 and 2009, leaving somewhat over 27% of all households at high risk of poverty.

What Will Next Year’s Indicators Show?

Congress has already decided that the unemployment benefits indicator will worsen — unless prospects for long-term job seekers dramatically improve.

It seems on the brink of deciding to let the food insecurity rate rise, since both the House and Senate Farm Bills would cut benefits for half a million households.

But the fate of most indicators — and the people whose lives underlie them — depend on what sort of bargain Republicans and Democrats strike to address the misnamed fiscal cliff.

Half in Ten offers “the right choices” for them — which, of course, are very different from the choices of the right.

* The 2010 figures are supposed to be accessible online. They weren’t when I published this, but I’m told the web tech team is working on a fix.


New Reports Show Widespread Economic Insecurity In America

December 27, 2011

The latest Census reports sparked a lot of media attention to poverty in America — the issue’s annual 15 minutes of fame.

No surprise to anyone that the poverty rate rose last year — even when measured by the very low poverty thresholds based on food costs.

More notable perhaps were the increases found when the Census Bureau used its new supplemental poverty measure.

But everyone, I think, knows that poverty rates give us an incomplete picture of how low-income people in the U.S. get along — or don’t — financially.

Three recent reports round out the poverty rates with data on economic insecurity — defined by each in a different way. Brief recap follows.

Census Report for the New York Times

The New York Times asked the Census Bureau to use its supplemental measure for an analysis that captured the number of people with incomes above the poverty threshold, but by only 50%.

Turns out that there are 51 million Americans in what the Times reporters call “the fretful zone,” where one untoward event can mean a plunge into what we officially define as poverty.

Adding the poor and “near poor” together, we find that nearly a third of the U.S. population is economically insecure.

Wider Opportunities for Women

Wider Opportunities for Women provides a much more detailed analysis of people who are “living below the line” that represents economic security.

The measure here is one that WOW has developed in collaboration with the Center for Social Development at Washington University in St. Louis — the Basic Economic Security Tables (BEST) Index.

Basically, the index pulls together basic living costs, including work-related expenses like child care, and adds some savings for both emergencies and retirement.

These, needless to say, are different for different family configurations — number of workers in the household, number of children (if any), their ages. The index adjusts accordingly.

The WOW analysts slice and dice the population to show us discrete results for some configurations and also for some major racial and ethnic groups. We thus get a fairly complex picture of who lacks “financial stability.”

Bottom line is that 45% of people in the U.S. live in households that do. This figure comprises 39% of all adults and a very disturbing 55% of all children.

For single women, the economic insecurity rate rises to 62%. For African-American and Hispanic women, to 76% and 80% respectively.

These, as WOW acknowledges, are conservative figures because the index doesn’t include items that many families would consider essential — “commonplace” purchases like gifts and home electronics or big-ticket investments like sending a child to college.

The rates are still plenty high enough to give anyone pause — especially now when programs that shore up below-the-line budgets are so vulnerable to further spending cuts.

Economic Security Index

We get a third, lower estimate from a research team headed by Yale Professor Jacob Hacker. They’ve developed what they call the Economic Security Index, though it actually measures economic insecurity.

People count as economically insecure if they meet two basic conditions.

  • Between one year and the next, they lost at least 25% of their inflation-adjusted household income, less out-of-pocket medical costs — because they made less, had higher medical expenses or both.
  • They didn’t have enough “liquid assets,” e.g., money in a bank account of mutual fund, to make up the difference.

The latest ESI report projects long-term figures — mainly from the Census Bureau — forward to 2009.

End result is an estimated 20.4% of Americans who experienced economic insecurity that year.

Note, however, that these are only people who suffered a major economic loss. People too poor to make ends meet don’t get into the estimate unless they were significantly better off the year before.

Still, it’s notable that Americans in the bottom fifth of the income scale register highest on the multi-year ESI — nearly double the rate of the top fifth for the 10-year period preceding our Great Recession.

Same for groups that have disproportionately high poverty rates — African-Americans, Hispanics, single-parent families and people who didn’t graduate from high school.

The report doesn’t have much to say about this.

But I think it’s fair to guess that people who are making barely enough to cover their household’s basic needs — if that — can’t afford to sock away a stash for the rainy days that come, even when the economy is booming along.


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