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.


Extending Unemployment Benefits Won’t Help All Jobless Workers

August 24, 2012

Looking back on my post about the expiring federal unemployment insurance benefits, I realized I’d left out important parts of the picture.

One is the growing number of workers who’ve been jobless more than 99 weeks — longer than the maximum for benefits even when both federal programs were in full force.

The other is that lots of workers who lose their jobs through no fault of their own can’t get UI benefits at all.

In 2010, for example, only 44% of these workers got any benefits from their state programs, according to a recent brief from the Urban Institute.

The brief documents what we probably would have guessed. A very high percentage of the left-out workers are “disadvantaged,” e.g., blacks and Hispanics, single mothers, teens and young adults.

Both blacks and Hispanics are also unusually likely to be among the long-term unemployed, another Institute brief tells us.

We know from other sources that single mothers were far more likely to be jobless and actively looking for work last year than married mothers — or the labor force as a whole. This was also true for the 16-24 year old age group.

The disadvantaged workers are less likely than others to get UI benefits because states have eligibility rules that tend to exclude them.

These, in some cases, are related to the workers’ disadvantages in the labor market.

Virtually all states, for example, have minimum earnings requirements. The time period they use varies, but the earnings threshold will always disadvantage low-wage workers whose jobs weren’t ongoing and full-time.

Workers who got jobs through temporary agencies are often out of luck — even if they put in a full day, every day.

Only 22 states will provide benefits for workers who have to quit for reasons most of us would find compelling, i.e., domestic violence, the need to care for a sick or disabled family member.*

Not surprisingly, single mothers seem to fall into this group, though the Institute’s report isn’t altogether clear on this.

Many are also left out in the 23 states that won’t provide benefits for workers who are looking for a new job that isn’t full time. We know anecdotally that single mothers may have no alternative because they can’t afford the high costs of child care.

The Recovery Act gave states a financial incentive to eliminate such barriers in their UI programs.

Thirty-nine states and the District of Columbia adopted the first and only partial payment option — or already had it on the books.

But only 34 states and the District took the minimum three actions that netted them the full amount they could receive.

Just one and the District went for the fully battery. Still barriers for disadvantaged workers in both jurisdictions, however.

Some states have since tightened up their requirements — this rather than raise the imprudently low UI taxes they’d decided to collect from employers.

The end result is a patchwork of coverage.

But there are only five states in which more than half of all jobless workers got UI benefits in 2010. And only one — Alaska — where the rate topped 60%.

* Eleven other states will provide benefits for workers who quit because of domestic violence, but not because of a family member’s illness or disability.


Long-Term Unemployment Benefits Saved, But Scaled Back

February 17, 2012

So the Republicans and Democrats agreed on a deal to extend long-term unemployment insurance benefits — defying predictions of another cliffhanger or worse.

Also extended, as you’ve probably read, were the employee payroll tax cut and the “doc fix” to avert huge cuts in Medicare reimbursements. As you may not have read, some programs for low-income people got a new, temporary lease on life as well.

The UI benefits extension is surely good news for the million or so jobless workers who’d otherwise have lost their benefits in March. Also good news for jobless workers who’d have run through their regular state benefits by year’s end.

No extension would have meant benefits losses for nearly 4.5 million by December — 12,600 in the District of Columbia alone.

Add to the good news column some changes in the UI program that didn’t get into the deal — or survived only in more palatable forms.

The most problematic would have denied benefits to jobless workers without a high school diploma or the equivalent unless they were enrolled in classes leading to same. There’s no such barrier in the final bill.

But (why is there always a but?) the well-known 99 maximum weeks will soon be a thing of the past.

As I wrote awhile ago, the Extended Benefits program kicks in only when states’ unemployment rates are higher than they were during a comparable period in a prior year — and kicks off when they aren’t.

Because Congress didn’t change the law to let states shift their comparison period back, more and more states will “trigger off” EB. The expectation now is that no state — or the District — will be able to offer the final 10 or 20 weeks of benefits by December.

Because Congress did change the law, fewer weeks of benefits will be available under the other federally-funded program — Emergency Unemployment Compensation.

EUC benefits kick in directly after workers have exhausted their regular state unemployment benefits. They’re structured in tiers.

At this point, the first two are available to all jobless workers, giving them a maximum of 34 weeks — less only if they find employment.

Workers qualify for the next tier only if they live in states where the unemployment rate is at least 6%. That nets them 13 more weeks.

If they live in states where the unemployment rate is at least 8.5%, they can move to a fourth tier and get another 6 weeks.

The total then for workers in most states has been 79 weeks — counting the weeks available in their regular state program, but not EB.

The extensions legislation cuts the maximum number of weeks to 73, beginning in September. From June through August, the maximum will remain 79 weeks, but only in states where the unemployment rate is at least 9%.

At the same time, the legislation establishes a minimum 6% unemployment rate for the second tier. And it raises the minimum unemployment rates by half a percent for the remaining tiers.

As of September, the third tier becomes four weeks shorter and the fourth, final tier four weeks longer.

Bottom line is that, as of September, only 63 weeks will be available in most states. At this point, jobless workers have more weeks available in all but seven.

I suppose we should be grateful. The Republicans reportedly wanted to cap benefits at 59 weeks, as the original House bill would have.

So the Democrats got more than a strict split-the-difference deal, though only because they’d already followed the Obama administration’s lead in letting states trigger off while their unemployment rates remain abnormally high.

Even here, they negotiated a temporary fix, giving states with unemployment rates of at least 8.5% an additional 10 weeks of EUC if they’ve no EB weeks to provide. The boost is good only through May, however.

Huffington Post blogger Arthur Delaney reports that it will benefit jobless workers in at least 10 states.

I’d be remiss if I didn’t note another Democrat victory here. The estimated $30 billion the UI benefits extension will cost won’t be offset by any tampering with the Child Tax Credit.

If House Republicans had had their way, refunds that help support more than five million low-income children would have been part of the pay-for.

So it’s not a perfect deal. But a deal got made. And it’s a whole lot better than the extension the House passed in December.

UPDATE: After I (hastily) posted this, I found that the Center on Budget and Policy Priorities had created two tables that lay out the changes in the EUC program and the total weeks of benefits that will be available, with and without EB. A clearer picture of the complex end results than my prose could manage.


House GOP Has Radical Agenda For Unemployment Insurance

December 14, 2011

I guess you’ve read by now that the House Republican majority (with help from some Democrats) has passed a bill that would extend federal unemployment insurance benefits.

Sort of. Jobless workers couldn’t get them for as long as they can now. Nor could all jobless workers now eligible get them.

The benefits cuts have gotten the most attention. The other so-called reforms deserve more because they’d effectively change the very nature of unemployment insurance.

Perhaps this is all a not-to-worry.

The UI benefits provisions are bundled together with a bunch of other measures, including some that ensure the bill won’t become law — even if the Senate passed it, which it won’t.

Senate Majority Leader Harry Reid has pronounced it dead on arrival. “The wrong side of ridiculous,” he said, referring specifically to the UI changes.

This by no means ensures a clean extension. Reid doesn’t have enough Democrats to overcome a potential Republican filibuster threat. Many House Republicans would probably balk.

Yet Congress is in a hurry to wrap up business so members can go home for the holidays.

All but some of the diehard Tea Party types don’t want to face constituents who’ll lose their benefits — or their payroll tax cut, which the House bill would also extend.

So lots of hurried compromising may go on behind closed doors.

Here then are some thoughts on what might seem one of the less divisive UI reform provisions — a novel “participation in reemployment services” qualification.

At this point, states decide who should be eligible for UI benefits, though they’ve got some federal guidelines to follow. Rules relate strictly to immediate past and future legal employment.

The House bill establishes an unprecedented requirement based on the type of work an applicant could qualify for.

Specifically, no one could receive UI benefits unless he/she had a high school diploma or an equivalent like the GED or, if not, was “enrolled and making satisfactory progress in classes leading toward the satisfaction” of the minimum education requirement.

Jeff Carter, the Acting Director and President of the D.C. Learns, attacks this provision from several perspectives.

Briefly, he notes the large number of jobless workers who’d be affected — a goodly, though unknown number of the more than 1.5 million who are actively looking for work without the credential now. More, of course, as time goes on.

He then argues persuasively that the requirement will effectively deny unemployment benefits to a large percent of these workers. There are already long waiting lists for adult education classes, he says.

And like as not, many affected workers don’t have the basic literacy skills to do the work GED preparation classes require. Nor is it clear that those who do should be enrolled in these classes anyway, since there are other ways to get up to speed for the exams.

“Perhaps,” Jeff says, “it [the education provision] was a misguided attempt to provide an incentive to those lacking a high school diploma.”

I wouldn’t altogether rule this out. But we can make other inferences from the predicable results.

Perhaps, for example, the House Republicans hope to cut program costs by erecting new barriers to enrollment.

Whether or no, their bill suggests something more radical than that.

Basically, the education requirement would convert an insurance program to a welfare program — a source of cash assistance contingent on what the drafters seem to view as preparation for work.

Lest we doubt the intent here, the bill also authorizes drug tests for applicants — something state policymakers have already seized on to screen out applicants for public benefits.

And it denies UI benefits to millionaires — or so the Republicans say.

If I understand what the bill says correctly, it actually takes back all or some portion of the benefits paid to high-income taxpayers, including those filing jointly who had no taxable income of their own.

This is not, as it might seem, just a gesture to us 99%. And, as the Political Correction blog notes, it’s not really a cost-saving measure either.

Rather, the “millionaire” exclusion establishes a means test for unemployment compensation — another feature of public assistance programs.

All these welfare-like provisions are, to my mind, an entering wedge for further attacks on the UI program. Because what they say is that we’ve got waste in it — people getting benefits who don’t need or deserve them.

Once you start down that road, you end up … Well, I don’t know where. But with something that’s assuredly not the straightforward insurance program Congress created nearly 80 years ago.


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