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.


Can’t Work and Don’t Work Are Sooo Different

October 3, 2013

Congressman Kevin Cramer (R-ND) sparked some hostile interest when he responded to a message on his Facebook page that implicitly rebuked him for voting in favor of the Republicans’ new SNAP (food stamp) bill.

The message quoted at length a passage in the Book of Matthew in which Jesus says that, at the Last Judgment, those “on the right” will enter the Kingdom of Heaven because “I was hungry and you fed me, I was thirsty and you gave me to drink … Whatever you did for one of the least of these…, you did it for me.”*

Cramer retorts with an excerpt from Thessalonians: “If anyone is not willing to work, let him not eat.”

This has become somewhat of a trope in the right-wing side of the debate — prompted, at least in part, by strong, broad-based advocacy for SNAP and other safety net programs on the part of faith-based organizations.

Congressman Stephen Fincher (R-TN), for example, cited it during the debate over the Farm Bill that failed to pass — largely, though not entirely because the SNAP cuts weren’t big enough to satisfy enough of the Tea Party types.

I first came upon the passage as an injunction against SNAP in some comments on one of my posts — the most extreme of a fair number that trashed on the program or benficiaries thereof.

The commenter, self-identified as Proud NeoCon, A True American, asserted, among other things, that those who are purportedly too disabled to work “are just hiding behind … fake made-up illnesses” and thus “are too disabled to live.”

Don’t ask me to explain the logic here — or how one can read a passage that, as I understand it, refers to some who Paul hears are “disorderly,” idle “busybodies” as a justification for letting anyone who can’t earn enough to afford food starve.

I mention this ripple in the backwaters of my blog because the Proud NeoCon comments recently evoked a heart-wrenching response from Billy.

It speaks to the value of SNAP and also, I think, weaknesses in other parts of our safety net — one of which may soon be remedied by the Affordable Care Act.

Here’s a summary, with some inter-weaved quotations and a parting shot from Billy himself.

Billy is a former marine, married to a woman with a mild mental disability. He used to “work [his] butt off and made GOOD money.”

Then came the recession. He lost his job and, with it, his health insurance. His health “deteriorated,” and his wife was “labeled unable to work.” So the only income they had came from his disability insurance — the SSDI program that’s got the Washington Post on another of its entitlement rampages.

They couldn’t see a way to meet their children’s needs, pay the rent and electricity bills and still afford more than $2,000 a month for the medicines he’d been prescribed. “Of course, the children came first and I had to do without my life-giving medications, which is why I’m terminally ill,” Billy writes.

Now SNAP covers a portion of their expenses, making sure that he, his wife and their two boys (“ages 2 and 5, so way too young to work”) have “JUST enough food for healthy meals.”

“So to CORRECT you,” he concludes, “about ‘can’t work’ and ‘don’t work’, [t]hey are sooo different. I know. I live it.”

Perhaps Congressman Cramer intended his Bible quote to refer only to able-bodied adults without dependents, whom the House SNAP bill would toss out of the program unless they work at least half time or manage to get a slot in a workfare or job training program.

However, the bill invites states to reap rewards from reducing their SNAP rolls by imposing work requirements on able-bodied adults with very young children, even if they’ve no one to care for them.

Also on some adults with disabilities — even those for whom paying work is infeasible.

This last is a feature that the Post‘s extensive story on the sponsor — Congressman Steve Southerland (R-FL) — failed to mention.

We do learn, however, that he too finds justification in the Bible — oddly in Adam’s duty to tend the Garden of Eden, which last time I checked, was neither paying work nor training for same.

But I digress. It’s hard to know whether Billy could have paid for his medications, without depriving his family of food and a home, if he’d signed up for SNAP earlier. The maximum benefit they could have received was nowhere near $2,000 a month.

But what if they’d been able to purchase subsidized health insurance, as the ACA will soon make possible? Too late to save Billy, it seems — and, of course, even more objectionable to Cramer and his colleagues than SNAP.

Which is why we’re wondering how long the government shutdown will last — and whether it will be able to honor the debts it’s already incurred.

If Billy is worried about his SSDI checks and reloads of the EBT card for his family’s SNAP benefits, he’s got good reason.

* I am quoting one of the familiar translations. The passage as posted on the Congressman’s Facebook page ended differently, but to the same effect.


Severe Disability Puts Households at High Risk of Hunger

July 22, 2013

Responding to one of my food stamp posts, Dianne comments, “I am over 65, SSI/Social Security and get $143 a month food allotment. And the last week have nothing. Tea, sugar and do without!”

A recent report from the U.S. Department of Agriculture shows she’s far from alone.

The researchers looked at households where a “working-age” member had a disability — in other words, an adult between the ages of 18 and 64. But this is a mere technicality because Dianne may not be much older.

The food insecurity rate for the target household group was about twice that of households that had no working-age disabled member, according to their responses to the Census Bureau’s 2009-10 surveys.

These, however, were not all households where the adult in question was too severely disabled to work, as Dianne may be, since she’s receiving SSI (Supplemental Security Income) benefits.

About one in three households in this group were food insecure, i.e., couldn’t always afford enough of the right kinds of foods for everyone to eat healthfully.

More than half of these — 17.3% — had what USDA calls “very low food security.” They’re households like Dianne’s, where at least one member recurrently went hungry.

This acute food insecurity rate, as I prefer to call it, was nearly four times greater than the rate among households that included no disabled working-age adult.

Well, SNAP (food stamp) benefits are supposed to protect against hunger — indeed, to provide “a national nutrition safety net.” They obviously don’t, though we’d have vastly more — and worse — hunger without them.

One reason is that not all households stalked by hunger get them. This is apparently the case for households the USDA study focused on.

Slightly under a third of households with a severely-disabled working-age adult participated in SNAP, even though special rules tend to make them eligible at higher gross income levels and, in some cases, with no asset limit.

Of those who did, 31% suffered from acute food insecurity anyway.

The USDA report understandably bypasses the possibility that SNAP benefits are just too low for recipients to get through the month without running short.

It does, however, flag some factors that may disproportionately affect people with disabilities, e.g., difficulties getting to a grocery store and/or preparing meals on their own.

Recall that the Thrifty Food Plan — the current basis for food stamp benefits — assumes that recipients will make many of their meals from scratch.

SNAP also assumes that households will have 30% of their own income to supplement their benefits. This, as the Food Research and Action Center has said, is an outdated assumption.

But it’s perhaps especially out of sync for households that include someone with a severe disability.

On the one hand, both SSI and SSDI (Social Security Disability Insurance) benefits are very low.

For SSI, the average for someone who isn’t elderly is $525 a month, according to a new fact sheet prepared for the Center on American Progress. For most, it’s their only source of income.

The average for SSDI recipients — mostly people who used to work, but are now too disabled to do so — is about $1,129 a month. It drops to $962 a month for those who were formerly low-wage workers.

Some of these recipients undoubtedly live in households where another adult works. But as the USDA report notes, the working member’s earnings may be lower than they’d otherwise be because of the time needed to provide care.

At the same time, expenses for households with a disabled member are often unusually high. There are health care costs, of course, and perhaps home care for help with daily personal needs.

There may be costs for adaptive equipment like a wheelchair or a special type of telephone. Costs for an emergency alert service.

A study the USDA report cites found that someone with a disability that limited work for a year or more would need nearly three times the income of someone with no work-related disability to have the same food insecurity rate.

We see this finding play out in the analysis itself. Even with incomes three times the federal poverty level, 13% of households with a severely-disabled working-age member were food insecure.

USDA concludes that “public and private food assistance programs tailored specifically to households with members who have disabilities may be necessary to substantially reduce their food insecurity.”

No argument here. But we’ve clearly got a bigger fix needed than specific tailoring, since more than half of all households with SNAP benefits are nevertheless food insecure.

Reforms to bring SSI benefits into the 21st century would help too.


Census Bureau Reports 16.1% Poverty Rate

November 15, 2012

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.


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