Same Personal Choices, But Lesser Results for Blacks

February 20, 2017

As my recent post on black homelessness suggested, we’ve got various substantive explanations for the disadvantages so many blacks face in the labor market. These basically boil down to the qualifications employers look for — and past experiences that turn them off.

But we can’t altogether discount out-in-out discrimination — or something close enough to produce the same result. A recent intriguing recent study tends to cast doubts on color-blind hiring and other employment decisions, e.g., wages, promotions.

At least as importantly, it bolsters challenges to a still-common explanation for poverty, including the persistently high black poverty rates. A bit of context and then key findings.

Personal Responsibility in the Poverty Debate

Fiscal and social conservatives have long linked poverty to failures of personal responsibility. The law that ended welfare as we knew it — significantly entitled the Personal Work Responsibility and Opportunity Reconciliation Act — effectively set a five-year limit for poor parents to shape up.

And it requires states to punish parents who don’t regularly engage in the work-readiness and/or job search activities prescribed for them. Implicitly, parents need threats of total income loss to make choices that someone else has decided are the most responsible for them.

Work activity requirements aren’t the only way that both the federal law and some state laws embed a view of personal responsibility. The goals Congress set, for example, include promoting marriage, as if marrying — and staying married — were choices in favor of less (or no) reliance on public benefits.

Sixteen states* still have laws embedding a very old notion of personal irresponsibility, i.e., choosing to remain financially dependent on government benefits. The choice in this case is having more children so as to get larger benefits.

So-called family caps surely gained traction because those mothers, like other alleged welfare-gougers, were so commonly identified as black — a racist stereotype promoted, but not originated by former President Reagan.

Top Personally-Responsible Choices

In the mid 2000s, two senior analysts at the Brookings Institution crunched a lot of data and concluded that teens and working-age adults can reduce their chances of poverty to a mere 2% if they did three things — graduate from high school, get a job, then marry, but not until 21 and only then have children.

Both the analysts — Ron Haskins and Isabel Sawhill — are thoughtful people, genuinely concerned with poverty, not in casting blame on the millions of poor people in this country. Nor did they use their findings to claim that a high-school diploma and a marriage license guarantee anyone a poverty-free life.

On the contrary, they proposed policies to essentially make those choices pay off and broadened the range later in work with other colleagues. See, for example, the recent agenda co-authored by Sawhill.

Some social conservatives, however, seized on the three personal choices to shift responsibility to individuals alone. Some of you may recall, for example, former (and perhaps still-hopeful) Presidential candidate Rick Santorum’s speech at the 2012 Republican convention.

Unequal Outcomes From Following the Steps

Analysts at the Brookings Institution returned to the three steps — or, as they refer to them, norms or rules. They’ve somewhat refined these since Haskins and Sawhill published the original set.

The second step is now either getting and keeping a full-time job or having a partner (not necessarily a spouse who does). Sawhill herself seems now to envision personally—and financially–responsible motherhood without benefit of clergy. But that’s fodder for a whole separate post and off-topic here.

The new Brookings’ analysis finds that blacks are about as likely as whites to complete the first step, but about 14% less likely to have a full-time job or live with anyone else that does. So we’ve got, at the very least, indications of discrimination in the labor market.

But what about blacks who took all three steps? Well, things don’t turn out for them as well they do for whites. The measure here is middle-class status — an income three times the federal poverty line. That was $70,650 for two parents with two children in 2013, the survey year the analysts used.

Seventy-three percent of whites either achieved or remained middle-class, while only 59% of blacks did. So there’s a 14% black-white gap in the low-income group. What percents so low as to be officially poor we don’t know.

We do know, however, that the gap closes in the next 200% of the FPL range and then widens again. So when we reach what I suppose most people would consider wealthy — more than about $1.6 million for our four-person family — we find nearly twice as many whites as blacks.

In short, playing by these rules seems, as the original research promised, to significantly reduce the likelihood of poverty in a given year. But other factors point to inequities within our system.

We have research indicating discriminatory hiring — for example, the oft-sited study of what happened when employers received resumes with identical credentials, but some with names likely to flag the applicants as blacks.

We know that success in the labor market hinges on factors beyond the Brookings’ scope — post-secondary education, for example, and family resources for a whole lot of things, e.g., contributions to that education, connections, the money to pay for rent, food and the like during unpaid internships.

We nevertheless have in the Brookings research a good rebuttal of the still-persistent view that poverty and near-poverty generally reflect failures of personal responsibility — or, as Rich Lowry at The National Review recently put it, lack “the moral agency” to “honor ..[the] “basic norms” originally set forth at Brookings.

* The source I’ve linked to includes California, which only recently repealed its cap.


Black Homelessness a Sign of Where History Still Needs to Go

February 14, 2017

Well, we’re still In the midst of commotions created by our President and his choices for some top-level officials.

We’re also in the midst of Black History Month — a time when we’re supposed to pay more attention than we usually do to important people and events that brought blacks in America and thus America itself to where we are now.

A worthwhile endeavor. We may even discover the up-and-coming Frederick Douglass.

I’m taking a different tack, though one that’s far from unique. Where does the black stream of American history have yet to go? That’s a much larger question than I’m prepared — or indeed, suitable — to answer.

So I’ll d return to an issue that’s still drawing people to my blog — why homeless people don’t work or do, but are homeless anyway.

My last post on the issue ended with a bare mention of race discrimination. I left it hanging because it’s one of those complex cause-effect factors.

I’ll try to disentangle some of them here, conscious that I’m over-simplifying what merits a book, but also that those factors speak to the larger question I led off with.

Black Over-Represented Among Homeless

Homelessness itself is as good a starting point as any, since it’s unusually common for blacks. They represent 39.1% of all homeless people, according to the latest breakout from the U.S. Department of Housing and Urban Development.

That’s less than 10% smaller than the percent of homeless whites — and nearly three times the percent of blacks in the U.S. population as a whole.

High Black Poverty Rates

Nobody needs a post to tell them that people of all races are homeless because they can’t afford housing. That itself is over-simple. Some can afford housing, with or without a subsidy, but still may still have no safe, stable place to live.

Criminal records pose a barrier to both privately-owned and public housing. More on that below. We need here to recall that they’re not the only records that can keep people out of housing they can afford.

Merely having been poor at some time in the past can keep people out — even housing a federal voucher would subsidize — because landlords commonly check credit histories. Not out of idle curiosity, of course.

But lack of ready money accounts for a lot. And the black poverty rate, like the homeless rate is disproportionately high — and has been ever since the Census Bureau started breaking out its survey results by race.

Which takes us to work issues. Obviously, since people who have good-paying jobs can pay for housing, though not necessarily where they want it. And, as we all know, the readiest path to those jobs, is a good education.

Labor Market Disadvantages Linked to Persistent Segregation

Blacks’ disadvantages in the labor market date back to slavery, when some freed by former masters or self-liberated worked for pay, but far more, still-enslaved were denied any education.

The Jim Crow laws that replaced slavery didn’t prohibit educating blacks, but generally allowed it only in schools that were, as the Supreme Court eventually found, “separate but unequal,” inherently so, though they were also often unequal in other ways.

Federal laws notwithstanding, blacks remain segregated in many communities due in part to local housing policies, e.g., zoning, discriminatory housing practices, and vestiges of past discrimination by the federal government.

Disadvantages to living in neighborhoods — or whole communities — where policies have concentrated blacks are themselves a cause-effect tangle, reflected in the high black poverty rate.

A major, though not the only reason for the rate is lack of marketable skills — literacy, including now computer proficiency and, beyond that, a formal education credential, which employers use as a threshold sign of those skills.

Schools in high-poverty neighborhoods generally have less money than those in well-off neighborhoods and they need more to ensure that the disadvantages of poverty don’t hold children back.

This issue is far from new and hasn’t garnered much by way of consensus on solutions. I may return to it, especially now that desegregation and equal educational opportunities have again become front-page controversies.

For now, the end result will have to suffice. For too many black youth, it’s is lack of a high-school diploma or the equivalent — the minimal qualification for most jobs — and virtually all paying enough to make housing affordable.

Growing up and going to school in a high-poverty neighborhood may not altogether account for this. We’ve also got some persuasive evidence that black students don’t get a fair shake.

For example, they’re far more likely than their white peers to incur punishments that not only deter them from learning, but can tempt them into criminal behaviors — or at the very least, gain them criminal records. And so we loop back ….

Disproportionate Criminal Justice

It’s common knowledge by now that our criminal justice system sweeps in a far higher percent of blacks than whites. Police practices of various sorts put them at higher risk, according to reliable local investigations..

We’ve reasons to question whether they’re treated equally thereafter — how they’re charged, if at all, whether they’re actually sent to jail or prison, whether they’re sent back for failing to comply with parole requirements they can’t meet, including payments of court fees and fines.

Now, as I said, public housing authorities and owners of federally-subsidized housing must bar people who’ve been convicted of certain drug offenses, but some go considerably further.

Private-sector landlords generally may pick and choose tenants, though with a recently-announced constraint that may not remain a federal fair housing enforcement policy.

The weeding out helps account for the high black homeless rate. Whether sheltered or living in some place “not meant for human habitation,” homeless people are likely to be on the streets most of each day.

That in itself can lead to a criminal record, even for such harmless behaviors as resting on a park bench or sleeping under a bridge because there’s no room in a shelter—or the shelter’s too unsafe.

And so we’ve got a loop-closer, though hardly one that accounts for either the high black homeless rate or the closely-related poverty rate.

Like the other factors I’ve cited, these are more or less systemic. We mustn’t, however, levy the whole blame on systems. Every one of the factors I’ve cited affords evidence of out-and-out discrimination.

Another piece of the puzzle I’ll have to leave for another day. But even this much means, of course, that we’ve every reason to recognize the many millions who overcame — and did so much to make many of our worst policies past history.

But it also reminds us that we’ve got a long way to go — and right now, urgent needs to preserve the progress we’ve made.


Yawning Opportunity Gap for Our Kids Because We Don’t View Them All As Ours

November 27, 2016

A recently-published book by Professor Robert Putnam warns that the American Dream is in crisis. We’ve had ample evidence of the symptoms for some time. But the fundamental issues Putnam raises seem to me more relevant than ever.

Other research has already told us that children who grow up in low-income families tend to remain low-income as adults, who then have low-income children, etc. Conversely, children who grow up in well-off families generally remain well-off. And so forth.

We’ve also had research showing that whom you’re born to has become more determinative in the last 30 or 40 years — a major point for Putnam.

He focuses on two related reasons. First, the “opportunity gap,” i.e., disparities in the resources parents and communities invest in children, has grown.

And second, we no longer think of everybody’s children as “our kids” because families have become increasingly segregated by income, education, neighborhood and related measures.

Thus, well-off families invest in their own children and what their own children will directly benefit from, e.g., the schools they attend. But they neither know much nor care much about the opportunities for children in the depressed neighborhoods across town.

We’re on our way to becoming a society where class is hereditary, he told a recent gathering (and those of us virtually present). The graphs he showed confirmed the basis for the alarm bells he’s trying to set off.

He referred to most of them as “scissors graphs” because the lines tracking the developmental opportunities children have grow further and further apart over time. Likewise factors he views as related, e.g., two parents in the home.

Now, the opportunities he dwells on don’t altogether explain why children born to poor and near-poor parents tend to remain stuck in the bottom fifth of the income scale.

Those resources their parents don’t have include money for food, decent, stable housing in a safe neighborhood, high-quality child care (unless they’re among the shrinking number for whom it’s subsidized), diapers …. Well, I needn’t go on with this inventory.

We know from other research that food insecurity, homelessness or even just moving from one home to another and then another and the stress parents inevitably communicate when they’re struggling with such things all put children at a disadvantage in the classroom.

We know that low-income children often don’t benefit from high-quality early education. Lack of resources, parental and public, mean that inequalities begin at “the starting gate,” as the Economic Policy Institute entitles its report on the problem.

This, I think, is why Putnam says that schools aren’t to blame for the widening income gap, though they don’t narrow it either. But he cites a related factor that, in his view, is — the unequal opportunities children have to participate in extracurricular activities.

Playing organized sports or in a band or orchestra, he says, teaches teamwork and develops what’s now often called grit — the will to keep working at something, despite setbacks and frustrations.

All children used to have opportunities of this sort. They now cost, on average, $800 a year, he says. That’s nothing, of course, for well-off parents, but more than some low-income parents can afford.

Even low-income children who beat the odds and not only graduate from high school, but go on to college don’t overcome the opportunity gap. Only 29% who scored high on standardized tests graduate, while 74% of high-income students do.

The difference here, Putnam says, is mostly not tuition costs or the formidable loans that all but well-off students must incur to gain a degree.

It’s rather a reflection of the investments parents made much earlier — the time they spent interacting with their infants and toddlers, the dinners that brought the whole family together, the religious services they attended, etc.

What this seems to mean is that the low-income students are in some way not prepared for college, test scores notwithstanding. I find this baffling.

Even if what Putnam calls our “pay to play” extracurricular system denied them an opportunity develop grit, they surely have it or they wouldn’t have learned what those test scores reflect, given the well-known problems of the schools they’re likely to have attended.

More baffling is the way he slides over the link between early opportunities children have — or don’t — and the color of their skin, a point the Washington Post‘s reviewer touched on.

If the time and money parents have to invest in their children is correlated to their income, then race discrimination, both past and present, deserves far more attention.

Putanm tends to use parental education, rather than income per se in his analyses — this, it seems, because he’s most concerned about the divide between social classes.

We’ve always had large racial disparities in college-level degrees. But even blacks who’ve graduated from college generally get paid less than whites, as the Economic Policy Institute’s analyses show.

If relatively more low-income children have only a mother to provide the interactions he views as so critical, it’s partly because most low-income women (like their better-off counterparts) want to marry reliable breadwinners.

So the disadvantages black men suffer in our labor market, e.g., higher unemployment rates, lower wages, help explain why a high percent of black mothers are single.

If low-income black children don’t always have fathers investing quality time in them, it’s also in part because our criminal justice system puts a disproportionate number of black men behind bars, thus giving them an additional disadvantage when they’re released.

And if communities consist of class-based enclaves, that’s partly because of discriminatory zoning and other housing policies — and discriminatory practices by lenders, real estate agents and landlords.

Putnam’s nevertheless right in saying that policy choices have widened the opportunity gap — and that policy choices can narrow it. Those he recommends are themselves fairly narrow.

This perhaps is because, as he stresses, he’s trying to start a national conversation about a problem that’s got no simple, quick fixes. But it’s also because he’s focused on children, especially the very young — and on what could conceivably prove politically feasible.

So nothing new here, as Jill Lepore’s account in The New Yorker says. But we don’t need new as much as do. And, as she also (sort of) says, we can’t count on much do from our federal policymakers.

The book is nevertheless timely — more so than I think Putnam expected — because it calls on us to consider whom we view as our kids and, more broadly, as members of our community.


Election Rigged, But Not As He Says

November 7, 2016

I’m thinking, as I’m sure you all are, about the election. Hard, in fact, to think about anything else today. This much we know. It’s rigged, though not as one prospective sore loser has said.

We’re familiar by now with the barriers states have erected, especially since the Supreme Court hobbled enforcement of the Voting Rights Act.

But here’s an old one that will prevent an estimated 6.1 million U.S. citizens from voting tomorrow — state laws that disenfranchise people who’ve been convicted of felonies. More than three-quarters of them have fully paid their “debt to society.”

Like the voter ID laws, the contraction of early voting periods and the like, the felon disenfranchisement laws deny voting rights to a far higher percent of blacks than citizens of other races.

Roughly four times as many, the Sentencing Project reports — or roughly one in thirteen, as compared to one in fifty-six. And like the other laws and practices, the most exclusionary are in Southern states.

Florida and Virginia, which pundits have viewed as swing states during this Presidential election cycle, bar more than one in five blacks from voting because of a felony conviction.

The top four states all have Republican-controlled legislatures. And all but one — Virginia — have Republican governors too.

Virginia’s governor recently moved to restore voting rights to all former felons who were no longer on probation or parole. Blocked by a court after the Republican House and Senate leaders, joined by four other voters sued.

Do we detect a partisan interest in the felon disenfranchisement laws? For sure. But the laws are rooted in racism, as The New York Times editorial board explains.

Briefly, the harshest laws date back to the days when Southern states sought to prevent blacks from exercising the voting rights granted by the 15th Amendment to the Constitution.

The laws prohibiting felons from voting were an early and common way to avert “the menace of Negro domination,” as the candid president of Alabama’s constitutional convention put it. States, of course, doubled down with poll taxes, literacy tests and other formidably challenging  requirements.

Fast forward to the late 1960s. A number of states began to pare back their felon disenfranchisement laws. Yet the number of ex-felons denied the right to vote grew — from fewer than 1.8 million in 1976 to the projected 6.1 million.

The rate of black disenfranchisement due to felony convictions has grown accordingly. In 1980, laws in only two states barred more than 10% — neither, incidentally, in the South. Today, laws in nine do.

We all know what accounts for this — our war on crime, especially drug-related crimes, including mere possession and petty dealing. Nearly 40% of people behind bars for drug law violations are blacks, according to the latest figures from the Bureau of Justice Statistics.

Looked at another way, blacks are about 10 times as likely to be incarcerated for a drug offense as whites, though the best data we have indicate that use rates barely differ.

We can’t, I think, attribute the glaring difference in incarceration rates entirely — or even mostly — to race discrimination in courtrooms, though we can’t rule that out either.

Police forces generally don’t patrol well-off neighborhoods, looking for people taking a toke or selling a bag. And those who live there — mostly whites — usually don’t sell drugs on street corners anyway, as Christopher Ingraham at Wonkblog points out.

If well-off people do get arrested, they’ll have lawyers to negotiate plea bargains so as to reduce the offense they’re charged with to a misdemeanor — or to mount vigorous defenses.

Poor and near-poor people must rely on public defenders, who’ve got far too many clients to represent as effectively as the right to counsel requires.

Even if well-off people are convicted of a felony, they’ll have the money to pay the fines and fees that courts often levy. Doing that is frequently required to end a period of probation or parole.

And that will restore voting rights to ex-felons in 18 states, assuming they’ve satisfied all other conditions. But dozen impose lifetime bans on at least some people ever convicted of any felony.

So a middle-aged black man in Florida who’s been active in Democratic politics recently learned he can’t vote because of a petty drug crime he committed 30 years ago. “I don’t have a voice,” he says. “I’m like an anonymous person.”

He, no longer anonymous, represents a very large number of Americans who’ll have no voice in decisions that will powerfully affect their lives — and ours.

An injustice piled on top of injustices that go along way to explaining why they lack a right many of us still take for granted, legal and possibly illegal voter suppressions notwithstanding.


Total DC Poverty Rate Ticks Down Again (Barely). Rates for Blacks Rise.

September 15, 2016

CORRECTION: The overall poverty rate change for DC falls within the margin of error. A preview table I saw indicated it didn’t. But I should have verified.

The Census Bureau has taken to blasting out all its major poverty reports in rapid-fire succession. So we now have the results of the American Community Survey — not a report in the usual sense, but a huge number of online tables.

They cover a wide range of topics. And the ACS sample is much larger than what the Bureau uses for its two other annual reports. So we can get reasonably reliable figures for states and smaller jurisdictions.

I’ve again dug into a few tables for the District of Columbia — mainly those most directly related to poverty. We could, I suppose, take heart from another year of progress. But it’s modest and mixed. Both the extent of poverty in the city — and related inequalities — remind us how much remains to be done.

Poverty and Deep Poverty Rates for DC Residents Still High

About 110,380 District residents — 17.3% — lived in poverty last year. The new rate is just 0.4%* lower than the rate reported for 2014. It’s 2.6% higher than the new ACS national rate — and rates for all but eight states.

It’s also nearly 1% higher than the local rate for 2007, just before the recession set in. The population has grown since then. So the seemingly small rate difference means that the District is now home to about 18,600 more poor people. And they’re very poor indeed, for reasons I’ll touch on below.

Roughly 58,700 District residents — 9.2% of the total — lived in deep poverty, i.e., had incomes less than half the maximum set by the poverty threshold the Census Bureau uses for a household like theirs.

The new rate is perhaps 0.1% lower than the rate for 2014 — in other words, basically the same. It too is higher than the rate for the nation as a whole.

Child Poverty Rate Still Far Higher Than Overall Rate

The child poverty rate has consistently exceeded the rate for the population as a whole, both in the District and nationwide. The local rate last year was 25.6%. Like the overall rate, it’s 0.4% lower than the 2014 rate.

But it still represents about 29,710 children — about 300 more than in 2014 because, again, the rate reflects a somewhat larger population. It too is higher than the disproportionately high national rate.

More than half the District’s poor children — 15,088 — were deeply poor. The new rate is higher than the 2014 rate — 13%, as compared to 12.4%.

Race/Ethnicity Gaps Still Large

Poverty is not an equal opportunity condition here in the District or anywhere else. As in the past, we see this writ in black and white in the ACS figures. Brown and tan also, though to a lesser extent.

Last year 26.6% of black District residents were officially poor, as compared to 6.9% of non-Hispanic whites. The deep poverty rate for the former was 13.3%, while only 4.5% for the latter.

Both rates for blacks were higher than in 2014. The plain vanilla rate for non-Hispanic whites was the same then, but their deep poverty rate somewhat higher.

For Hispanics, the poverty rate was 11.6% and the deep poverty rate 5.5%. The rates for Asians were 12.3% and 9.4%.

We see the same large disparities in the ACS figures for household incomes — a related, but broader indicator than the poverty rates.

The median household income for non-Hispanic whites was nearly three times the median for black households — $120,400, as compared to $41,520. Median incomes for Hispanic and Asian households fell in between.

The median for non-Hispanic white households was an eye-popping $63,400 more than the national median — an even larger difference than reported for 2014.

More Residents Suffering Hardships Than Poverty Rates Show

I always remark, at least in passing on the fact that the poverty thresholds the Census Bureau uses for analyses like these are very low.

They’re almost surely too low to accurately reflect the number of households without enough money for basic needs in communities nationwide. But they’re egregiously too low in high-cost communities like the District.

Consider, for example, a single mother with two children. They’re officially not poor if her income, before taxes was roughly $19,100 last year.

An affordable apartment for them would have had to cost no more than about $477.50 a month. But a modest two bedroom apartment, plus basic utilities cost roughly $980 more. It would have left the mom with about $1,580 for all her family’s other basic needs over the course of the year.

Even with SNAP (food stamp) benefits, she’d have been hard pressed to put enough food on the table in part because groceries here cost far more than the nationwide average, according to a cost-of-living database.

And the benefits assume she’ll spend 30% of her own adjusted income. So there goes a quite a bit of the money she’d have left after paying the rent. Probably more than her expected share, in fact. If not, then some hungry days for her.

She’d still have to pay for a host of other things, of course, e.g., clothes, soap, toothpaste and cleaning supplies, transportation. These aren’t necessarily costlier in the District than elsewhere. But we know daycare is.

She’d have to pay some part, even with a subsidy. The subsidy’s not a sure thing for a working woman like her, however. Without it, the average of cost even just after-school care for her kids would exceed her total income.

I don’t think I need to flog this point further. But we do need to put the new District poverty figures in perspective. [Your policy message here.]

* All the ACS tables include margins of error, i.e., how much the raw numbers and percents could be too high or too low. For readability, I’m reporting both as given. The overall poverty rate beats the statistical text, but others Small year-over-year changes may mean no real differences.


Income Growth Did a Lot to Push Poverty Rates Down

September 14, 2016

I think my quick-off-the-dime post on the new official poverty rates didn’t give enough credit to household income increases as a reason they virtually all declined. Progressive analysts quickly heralded the significant income growth the new report shows.

The “typical family’s income,” i.e., the median for all households, increased by a record amount, whether you look at the dollars or the year-over-year percent, said Center on Budget and Policy Priorities President Robert Greenstein.

The one-year real-dollar growth was greatest for the bottom fifth of the income scale, the Economic Policy Institute reported, while stressing that all but the top five percent still haven’t fully recovered from the Great Recession.

So here’s a brief look at the income side of the ledger — and a few policy-related remarks.

The “typical family” gained a bit over $2,800, making for an estimated 5.2% increase. All the major types of households the Census Bureau reports on, e.g., married couples, single-mother families, gained in varying amounts.

Likewise all the major race/ethnicity groups. Most of those that had suffered the worst losses during the Great Recession gained the most, EPI later noted. But the percent gains didn’t vary much. So the gaps remain very large.

The median income for black households, for example, was roughly $26,000 less than the median for white non-Hispanic households — and the median for Hispanic households $17,800 less.

But the median for Asian households topped them all at $77,166. This confirms the underlying disparities I noted in reporting the Asian poverty rate.

We also see continuing marked disparities between married couples with children and single-parent families — single-mother families especially.

Their median income was about $37,800, as compared to $84,626 for the married couples. The estimated increase for both was about the same. So at least single-mother families seem not to be losing ground, though a far higher percent still lived in poverty.

Some Republicans predictably accentuated the negative. “Billions of dollars” invested each year, “but more than 43 million people continue to live in poverty,” said the House Ways and Means Committee Chairman.

But public policies do help account for the income gains — and thus the lower poverty rates. Greenstein cites several.

First off, the labor market is getting tighter — a factor economist/blogger Jared Bernstein stresses. Employers have generally found they have to pay more to get (and keep) the workers they need.

The Federal Reserve has done its share by keeping interest rates very low, rather than raising them, as it often has when the unemployment rate drops to a level that could trigger more than a miniscule inflation increase.

Second, employers in 23 states and the District of Columbia had to raise wages for their lowest-paid workers due to minimum wage increases. More local governments set their minimum wages above their state’s level — or had earlier passed laws requiring increases.

Minimum wage increases generally have what economists call “spillover effects,” i.e., raises employers put in place to preserve differences between their lowest-paid and somewhat better-paid workers.

So the recent increases almost surely help explain the higher median household incomes, perhaps especially the boost for the bottom fifth.

Yet “there is more to be done,” as the Coalition on Human Needs headlined its executive director’s response to the Census Bureau’s official and supplemental poverty measure reports. Even more to be done than the measures she singles out, as she would be the first to say.

I’ll follow her lead because once one really gets into what policymakers could do to raise incomes enough — and for enough people — to make poverty a rare, brief experience a post (or statement) turns into a treatise.

She does, however, make two points I’ll borrow because they speak to how I’ve gone at the new Census figures. One addresses the disparities in both poverty rates and incomes.

Steps like a federal minimum wage increase, funding to expand affordable child care and reforms in the Earned Income Tax Credit “wouldn’t just have the effect of lifting all boats.” They’d address income inequalities — not only between non-Hispanic whites and racial and ethnic minorities, but between men and women.

The other point is that we need to do all we can to ensure that our policymakers do no harm. Those grumblings about the billions foretell further efforts to cut federal anti-poverty programs until they can be drowned in a bathtub.

 

 


U.S. Poverty Rate Slides Down

September 13, 2016

The Census Bureau has just reported that 13.5% of people in the U.S. — about 43.1 million — were officially poor last year. One wouldn’t pop a champagne cork over numbers like these. But they’re lower than reported for 2014, when the rate was 14.8%, representing roughly 46.7 million very poor people.

Rates declined for every major population group the report breaks out, except working-age adults with disabilities, whose rate remained 28.5%. All reported groups, except Asians also had lower deep poverty rates, i.e., household incomes less than half the thresholds the Bureau uses to separate the poor from the non-poor.

On the flip side, we still see large disparities. And the somewhat improved rates don’t necessarily reflect meaningful income gains.

Children Still the Poorest, Seniors Still the Least

The child poverty rate has exceeded the overall poverty rate since at least 2006, when I started tracking. Last year it dipped to 19.7%, just 1.4% lower than in 2014. The new rate represents about 14.5 million children — more than a third of all the poor people in our country.

About 6.5 million children — 8.9% — lived in deep poverty. This too is somewhat fewer than in 2014, but still alarming, especially given what we know about the lifelong damages that even just plain poverty can wreak on young children.

As in the past, people 65 years and older had the lowest poverty and deep poverty rates among the major age groups — 8.8% and 2.8% respectively. We can chalk this up largely to Social Security retirement benefits, as the Census Bureau’s new report on its Supplemental Poverty Measure shows.

Race/Ethnicity Gaps Still Yawning

Nothing much new here, except the rates. For example, the poverty rate for blacks was still more than two and a half times the rate for non-Hispanic whites — 24.1%, as compared to 9.1%.

The deep poverty rates nearly mirror these gaps — 10.9% for blacks and 4.3% for non-Hispanic whites.

Hispanics fared better than blacks, but hardly well. Their poverty rate was 21.4% and their deep poverty rate 8.5%.

Rates for Asians were lower — 11.4% and 6.2% respectively. But several analyses suggest we’d see some larger gaps — and in other cases, virtually none or even reversed — if the Bureau differentiated among the subpopulations this group comprises.

Low Inflation a Factor in Poverty Rate Drops

We should take always take poverty rates like these with a large grain of salt because the thresholds are so very low. One dollar over the threshold and everyone living in the household (except for some children) is officially not-poor.*

The thresholds aren’t altogether fixed, however. The Bureau adjusts them annually, based on the CPI-U — what consumers in metro areas spend on a market basket of goods and services.

The CPI-U remained virtually flat in 2015. So even a miniscule increase in household income could boost all its members over the applicable threshold.

In other words, the new, lower poverty rates don’t necessarily signal substantial, widespread income gains. They do, however, mean that more workers got paid somewhat more — and more who wanted to work got jobs that paid more than a pittance.

* Children under 15 who aren’t related by birth, marriage or adoption to any of the adults in the household are not part of the “poverty universe,” so far as the official measure is concerned.