Another Right-Wing Way to Decimate Anti-Poverty Programs

September 29, 2016

Seems that the notion of a universal basic income has gained traction since I last blogged on it. Or perhaps it’s regained traction, since it’s had moments in the spotlight dating back to the Nixon administration.

Two books, I think, account for this. One is by Andy Stern, the former president of the Service Employees International Union. The other, by Charles Murray, isn’t brand new, but rather a second version of his 2006 book.

Stern tees up a UBI because, he says, the growing uses of technology will create more low-wage jobs — and fewer jobs altogether — regardless of our traditional policy solutions, e.g., investments in infrastructure, minimum wage increases.

Murray also cites the impending replacement of human workers by robots and the like. But that’s not the real reason he argues for a UBI.

He comes at his proposal from the far right, just as Stern comes at his from the left. He’s indebted to conservative economist Milton Friedman, whose negative income tax bears some resemblance to his UBI.

But he’s also a surprising heir apparent of the traditionally liberal architect of Nixon’s Family Assistance Plan — an early stab at ending welfare as we knew it. And of liberals whose labels need no qualification — Martin Luther King, Jr., for example.

He’s among less strange bedfellows at the right-leaning American Enterprise Institute, which has him on the payroll and published his book. Helped him promote it too by hosting a dialogue between him and Jared Bernstein, who’s in a relatively comparable position at the left-leaning Center on Budget and Policy Priorities.

That’s what got me started on this post, though I’ve thought of returning to the UBI for some time. So here’s the pared-down final draft, focused solely on Murray — what he advocates, why and why we who advocate for low-income people should care.

Murray would have the federal government give every adult citizen $13,000 a year. Nothing, one notes, for children, though they do cost money.

Nor for immigrants who aren’t citizens, but live here legally, including those who qualify for major safety net benefits if they’re poor enough.

But there’d be no such benefits. Murray would blow away all so-called transfer programs, both safety net and social insurance, i.e., Social Security and Medicare.

His privileged adults would have to spend $3,000 of their UBI for health insurance — not nearly enough for a policy that kicks in before very high out-of-pocket costs. They could, of course, spend more for a better policy, if they had the money.

If they didn’t, they’d be left with $10,000 for all other expenses — $1,180 less than the current federal poverty line for a single person. Murray admits that’s not enough to live on.

He seems to think that more people would work — or work for longer hours and/or higher wages — because they’d no longer have the “disincentives” built into safety net programs, i.e., the fact that benefits phase out and ultimately end as incomes rise.

Those purported disincentives probably don’t cause the vast majority of poor and near-poor people to remain so when they could instead earn enough to support themselves and their families.

But they too aren’t the main reason Murray wants to do away with all safety net and social insurance programs — obviously, since the latter mostly benefit people whom no one expects to work.

Not, of course, instead of donating to faith-based and other nonprofits that help our poor neighbors — many of which we taxpayers also collectively support through grants from federal programs.

The civil society Murray refers to is somewhat like the one House Speaker Paul Ryan claims our federal programs crowd out. But it’s also individuals. He suggests, for example, that a guy who’s got just that $10,000 a year could live with his girlfriend. (Not making this up.)

He also, however, thinks that the $10,000 would halt the declining marriage rate — and enable people, notably women to choose not to work. So they could “contribute their social capital” as they don’t now.

Set aside, if we can, this hostility to women in the workforce and the nostalgia for a golden age that never was. The Murray-type UBI may seem appealing mainly because it’s simple.

We do have a lot of programs exclusively for poor and near-poor people, though not so many as conservative opponents claim. And they do form a complex maze of differing eligibility requirements, administering agencies and the like.

All gone. Instead, a monthly deposit in your bank account. (Yes, you would have to have one.) And if you’re not dirt poor, you’d better keep some of your UBI there because Murray’s plan includes “clawback” tax on incomes over $30,000.

It would nevertheless transfer more of what we pay in taxes to people who need the extra income less. At the same time, more would need more than they do now — the elderly especially, though not us only.

One can imagine a UBI that replaces only programs for low-income people and gives them enough to live on, plus some to save for emergencies and investments that will make life better for them and their kids, e.g., a college education, a supplement (not replacement) for Social Security retirement benefits.

That’s what King had in mind for his “guaranteed income,” which would have been pegged to “the median for our society” and increased as total national income grew.

But even a UBI lower than Murray’s would cost an enormous amount. At $10,000 a year, it would consume about three-quarters of the entire federal budget — and nearly all the tax revenues the federal government collects, according to Center on Budget estimates.

So, of course, there’d be no money for safety net programs — or many other things we value, e.g. public education, medical research. And, as Bernstein noted, our economy would lose the corrective effects our responsive safety net programs provide during downturns.

Well, our federal policymakers won’t replace all our safety net and social insurance programs any time soon. Large majorities support them — Social Security and Medicare most of all, but the principle underlying safety net programs too.

So why should we concern ourselves with anything like the Murray plan? In part because it’s a better arrow in the quiver of anti-government types like him — and has been for a long time.

But also because versions, more and less fleshed out, span the political spectrum. And one can see how some form of guaranteed income could help reduce poverty.


How Public Policies Helped Drive Down the Family Food Insecurity Rate

September 26, 2016

My recent post on SNAP (food stamp) benefits used the latest food (in)security figures to show that those benefits don’t always provide sufficient supplemental nutrition assistance. This is surely true. But it’s a relatively small slice of the story the new report tells.

So here’s the upside and how we might at least partly account for it.

Less Food Insecurity and Less Out-in-Out Hunger

First off, as I noted, the U.S. Department of Agriculture reported a significantly lower food insecurity rate for 2015 — 12.7% of households, as compared to 14% in 2014. The drop translates into well over 1.5 million households or roughly 5.8 million fewer food insecure people.

The “very low food security” rate also declined, from 5.6% to a flat 5%. So roughly 2.9 million fewer people lived in households where at least one member at least sometimes didn’t have enough to eat.

New Low for Food Insecure Children

As in the past, families with children had a higher food insecurity rate than households without — 16.6%, as compared to 10.9%.

But children themselves were food insecure in only 7.8% of families — roughly 3 million. And only 0.7% — about 274,000 — had such severe food insecurity that a child sometimes had to skip a meal or even go without food for a day.

“Only” may seem to trivialize the child hunger problem. But the share of households with food insecure children was the lowest since USDA began tracking the way it does now, in 1998.

How the Economy Helped

The recovering labor market surely helps account for the lower food insecurity and hunger rates. The former peaked at 14.9% in 2011 and the latter ticked back up to 5.7%.

The unemployment rate than averaged 8.9%. It was probably around 5% when households were asked about their food security last year. So more had a breadwinner actually earning bread. And fewer breadwinners were working part-time, though they wanted full-time jobs.

Average hourly wages in the private sector grew, though not as much as labor advocates — and presumably the workers they advocate for — would have liked.

At the same time, auto fuel prices plummeted. And prices for food and most other commonly-purchased goods and services barely increased — or not at all.

These three factors together suggest that some households had enough more to spend on food — and could make the extra go far enough — to shift them into the food secure majority.

How Policies Probably Helped, Though Not Food Related

I earlier cited two public policies that almost surely help explain the marked growth in median household incomes last year. Both minimum wage increases and the Federal Reserve’s decision to let the labor market get tighter presumably meant more money in more families’ budgets for food.

The Center on Budget and Policy Priorities suggests other policy-related factors. These include the Affordable Care Act, especially, it says, in states that expanded their Medicaid programs.

We shouldn’t altogether discount other ACA features that could have given households more money to spend on food — the substantial subsidies for low-income people who purchased their health insurance on an exchange, for example, and the extended funding for the Children’s Health Insurance Program.

How Nutrition Assistance Policies Helped

SNAP caseloads have steadily shrunk as workers who’d lost their jobs during the Great Recession found others — or got more hours back into their schedules. They’ve unfortunately also shrunk because some very poor people couldn’t find jobs or slots in a training program that would keep them eligible for SNAP.

The Center, however, suggests that SNAP may have reached more eligible individuals and families last year. We know it reached a near-record high in 2014, the latest year USDA has published rates for.

The policy angle here is partly the agency’s effort to encourage outreach by awarding bonuses to states that achieved the highest — and most improved — participation rates.

But it’s also both state and local efforts to bring eligible households into SNAP just because they’d then have more funds to combat hunger. (House Republicans, as you probably know, would do away with this “incentive” by converting the program to a block grant.)

We should also look to other nutrition assistance programs, including the free and reduced-price schools meals the federal government subsidizes.

They’re obviously a factor in food security rates, since parents have more to spend on the meals and snacks they alone can provide if their children get fed for free — or for very little — when school’s in session.

The Center cites one relevant policy change that can help account for last year’s lower family food insecurity and hunger rates — community eligibility.

It’s an option high-poverty schools have to serve free breakfasts and lunches to all their students. More low-income children will get them because it eliminates applications barriers and the stigma children often feel when they know their peers will know they’re poor or nearly so.

The option became available to schools nationwide for the first time in 2014-15. More than 14,200 adopted it then. An additional 4,000 or so joined them the following school year, the first half of which falls within the USDA survey time frame.

So parents of more than 8.5 million children could have saved the costs of ten meals a week for each for roughly half the year. These were not all low-income parents, but at least 40% probably were.

Schools that adopt community eligibility must serve free breakfasts, as well as lunches. But some schools have long served them — never as many as lunches, but the gap is closing. In 2014-15, more than 91% of schools that served lunches also served breakfasts.

Well over 11.6 million low-income children got them on an average day — about 474,600 more than during the prior school year. The Food Research and Action Center, the source of these figures, attributes the increase in part to community eligibility.

A separate, though possibly related reason is that more schools have begun serving breakfasts in the classroom or some other way that doesn’t require children to eat in the cafeteria before the school day begins.

They’ve thus eliminated both the logistical barrier posed by having to get kids to school extra early and the stigma kids may feel because it’s obvious their parents haven’t fed them.

Four states and the District of Columbia had passed laws requiring at least their high-poverty schools to serve “breakfast after the bell” by 2015.

So here’s another way that public policies have played a role in reducing food insecurity and out-in-out hunger for both children and their parents. Still a lot more to do, but we know a lot about what that should be.

More than I’ve covered here, but we know quite a lot about the rest too.

More Homeless DC Families to Shelter, But Still Signs of Progress

September 22, 2016

I remarked last year that the DC Interagency Council on Homelessness produced a markedly better plan for how the District would full its obligation to shelter homeless families during the winter season.

This year’s plan is similar, though with different numbers. It’s interesting in a couple of ways that speak to progress in the District’s homeless services program — and to problems that it alone can’t solve.

More Homeless Families in Need of Shelter

The estimated number of families the District will have to shelter is considerably higher than last year’s. This might seem a no-brainer. Last January’s one-night count identified 1,491 of them, marking the latest high in a virtually unbroken trend.

The shelter plan doesn’t project that many for this coming January. Nor need it, since the annual counts include families in transitional housing.

It does, however, indicate a significant shortage of units at the DC General family shelter, plus the apartment-style units the Department of Human Services regularly contracts for to shelter families with special needs.

DHS, as the plan makes clear, has already acted on the expected shortage, knowing it would have a deuce of a time contracting for motel rooms in mid-winter, what with the influx of visitors drawn by the inauguration festivities.

I mention this mainly because it’s a refreshing contrast to plans issued during the former administration, especially the last, which merely assured us that DHS would use some combination of “resources” to comply with the law.

More Homeless Families in Shelter When Winter Begins

The explicit reference to motel rooms and the number already contracted for aren’t the only — or most significant — contrasts. We see, for example, more families in DC General when the winter season formally begins, in November.

This reflects the Bowser administration’s decision to let families with no safe place to stay into the shelter year round, rather than only on freezing-cold days, when it has no lawful choice.

That was the unwritten policy until the Gray administration whittled it back and then altogether abandoned it. Predictably, a crush of homeless families sought shelter when they first could, creating problems not of their making.

I’m reverting to history here because it shows that what one finds — and doesn’t — in the annual Winter Plan signals policy and other management decisions. We see two others in the monthly estimates of shelter units needed.

More Homeless Families Than Projected Units Needed

Though the new plan begins with more families in shelter, it estimates fewer total units needed than families likely to show up at the intake center. This is partly because it includes estimated exits, as the last several plans also did.

Some unspecified number are families expected to move from shelter to housing temporarily subsidized by the District’s rapid re-housing program.

DHS has had long-standing problems meeting its rapid re-housing targets for various reasons. One, which still applies, is the acute shortage of housing that homeless families could conceivably afford to rent when their subsidies expire.

Another, related, has been families’ understandable reluctance to accept rapid re-housing. That may be less common now because they know they can return to shelter whenever they must.

It’s nevertheless the case that the Winter Plan estimates considerably more monthly exits late in the season than the current rapid re-housing placement rate. That, I’m told, has improved to an average of 100 families per month.

The plan, however, projects 155 exits in March, when winter officially ends, making for a 667 total during the five months it covers. Where, one wonders, will DHS — or families themselves — find so many low-cost housing units available to rent in a city where they’re disappearing.

Such as remain are hardly all available or suitable for families that surely want to exit from DC General at least as much as DHS wants them out.

More than a third of the units that the lowest-income District households could afford are occupied by those with higher incomes, according to apparently updated figures from the Urban Institute.

Only 8% of all the units have more than three bedrooms. A special exit problem then for families with more than a couple of kids — just as it’s apparently a problem for well over 100 families who’re affordably housed now.

Families Saved (for Now) From Homelessness

There’s another reason for lower total unit estimates than families likely to ask intake center staff for help. Last year, the District launched a program to prevent family homelessness.

It’s somewhat like the long-standing (and always under-funded) Emergency Rental Assistance Program, but it’s for families only and can provide a wider range of resources, tailored to their needs.

The success rate is reportedly very high — 90% of families referred to the nonprofits the District has contracted with haven’t become homeless. Or so it seems. What we know is that they haven’t  asked for shelter.

These early results, combined with the additional $1 million the new budget will invest in the program led the working group that developed the plan to adjust last year’s monthly entrance figures down by 10%.

One can only hope that the lower estimates prove accurate — and more importantly, mean that families aided actually have safe, reasonably stable homes of their own.






New Census Report Proves Again That Anti-Poverty Programs Work

September 19, 2016

Only so much number crunching a lone blogger like me can do. So I’m behind the curve on the Census Bureau’s Supplemental Poverty Measure report, issued the same day as the report using the official measure.

As in the past, the SPM shifts poverty rates up and down. The overall poverty rate, for example, is higher — 14.3%, as compared to the official 13.5%. The child poverty rate drops from 19.7% to 16.1%, while the senior poverty rate rises from 8.8% to 14.3%.

These differences, as well as others derive from numerous differences between the measures. For example, the SPM includes the children who aren’t part of the official measure’s poverty universe.*

This is relatively minor, compared to other differences — thresholds among them. Instead of those I’ve nattered about, the SPM begins with consumer spending on four basic needs, plus a small additional for others.

It then deducts for work-related expenses, e.g., transportation, child care, and for child support payments and medical costs that individuals themselves must pay. (Those medical out-of-pockets largely explain the higher senior poverty rate.)

The annual threshold adjustments differ too — and in a way that may make yearly changes in the SPM poverty rates “confusing,” the Center on Budget and Policy Priorities says. It specifically cautions against comparing the new SPM figures to last year’s.

I’ll confine myself then to what we can glean from another major difference. For the official measure, only pre-tax cash income counts in determining whether a household and the members it recognizes were poor.

The SPM deducts for taxes. It also includes income derived from the refundable tax credits and the cash-equivalent value of a some safety net benefits that the federal government funds either entirely or in combination with states.

What we can see, because of an analysis the Bureau provides, is what poverty rates would have been without one or another of the safety net benefits — both cash and cash-equivalent. It folds in Social Security retirement and disability benefits, though they’re not for low-income people only.

As always, Social Security proves the most effective anti-poverty measure we’ve got. Without the benefits it provided, about 26.6 million more people would have been part of the poverty rate, boosting it to over 22.6%.

Well over a third of all seniors would have been poor — nearly triple the rate with those benefits factored in.

The Earned Income Tax Credit and Child Tax Credit again come in second. They lifted about 9.2 million workers and their dependents over the poverty threshold, including 4.8 million children. Their already-high poverty rate would have been 22.6% without the credits.

Not all low-income workers benefited, however. Current law denies the federal EITC to both young and elderly workers. And the credit is very small for age-eligible adults who don’t have children — or who do, but not in their homes for more than half the year.

In short, an anti-poverty measure that works, but could work better. One could say the same for other safety net benefits the SPM report accounts for.

SNAP (the food stamp program), for example, as I’ve often said. Yet even with its current limits, it lifted roughly 4.6 million people, including nearly 2 million children out of poverty last year.

Results for Temporary Assistance for Needy Families, which I’ve also often gone on about, were pathetic — a 0.2% nick in the poverty rate.

An even more pathetic impact from the Low Income Home Energy Assistance Program, which neither the administration nor Congress seems much interested in funding.

We don’t see a large boost over the poverty thresholds from federally-funded housing subsidies either — a generously rounded up 2.5 million fewer poor because of it. In this case, we do have an actively interested administration — and what seems moderate support from majorities in Congress.

But the SPM thresholds take account of what people must spend for housing. And, as everyone knows, housing costs have been rising virtually everywhere.

So federal budgets would need to do more to keep those costs from driving up poverty rates than merely ensure that as many households have vouchers as they do now — or the same chance to live in public housing.

The Census Bureau reports each of the anti-poverty programs separately. So we can’t see how many people were lifted out of poverty by, say, SNAP plus a housing subsidy.

The Center on Budget rolls all the programs together and concludes that they cut the poverty rate almost in half last year.

It also notes, as have other analysts, that households surveyed tend to under-report the benefits they’ve received — mainly just because it’s hard to recall exactly how much one gets, perhaps from multiple sources and usually over some period of time.

At a minimum then, the safety net benefits, plus Social Security lifted about 38.1 million people over their poverty threshold — more seniors than younger people, but still about 7.9 million children.

CBPP warns that cuts in the programs would plunge more people into poverty. That’s, I think, what any fair-minded person would conclude from the SPM analysis.

It shows, with hard numbers, that our major anti-poverty programs work, notwithstanding the constant drumbeat from the right about how they’ve failed. It also shows they could work better — some perhaps if just more amply funded, some surely if also reformed.

* The SPM report adjusts the official rates to include the missing children. So one finds a higher overall poverty rate and higher child poverty rate there.

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.