Offical U.S. Poverty Stays Flat at 15%

September 17, 2013

I was all set to write about how the official U.S. poverty rate dipped down, as experts had predicted. But no. The Census Bureau reported this morning that the 2012 rate was statistically the same as in 2011 — 15%.

The economy has supposedly been in a recovery mode since June 2009, but the poverty rate hasn’t budged for three years now. It’s still 2.5% higher than in 2007, just before the recession set in — and in fact, a bit higher than the year the recession officially ended.

As I and many others have often cautioned, the official rate is based on an over-simple, outdated measure that understates the number of people who barely — if at all — have enough to live on.

It also, as some examples below indicate, fails to capture the anti-poverty impacts of many of our major safety net programs.

At this point, however, the results it produces are what we’ve got. And the measure is consistent from year to year. So trends are reasonably reliable.

Here then is some of what we learn from the poverty portion of the new report.

The Big Numbers

All told, nearly 46.5 million people were poor enough to fall below the Census Bureau’s very low poverty thresholds — about $18,500 for a parent and two children, for example.

Though the poverty rate is the same, it represents about 249,000 more people than in 2011.

Of these, 6.6% — 20.4 million — were so poor as to fall below 50% of the applicable threshold, i.e., to have lived in what’s commonly referred to as extreme poverty.

Both the rate and the raw number are the same as in 2011 — and not surprisingly, higher than in 2007, when somewhat under 15.6 million people were in extreme poverty.

Race-Ethnicity Gaps

Poverty rates for all major race-ethnicity groups also flat-lined. So the disparities remained very large. For example:

  • The black poverty rate was nearly three times the rate for white, non-Hispanics — 27.2%, as compared to 9.7%.
  • The poverty rate for Hispanics was 25.6%.
  • For Asians, the poverty rate was 11.7%.

The extreme poverty rates mirror these gaps — only 4.3% for white, non-Hispanics and a somewhat higher 5.7% for Asians, but 10.1% for Hispanics and 12.7% for blacks.

Married and Single

The disparity between poverty rates for married couples and families headed by a single person also remained extraordinarily large.

For families headed by a single woman, the rate was nearly five times times the rate for married couples — 30.9%, as compared to 6.3%.

The gap was smaller for families headed by a single man, but 14.6% of them were still officially poor.

Young and Old

As in the past, the child poverty rate, i.e., for people under 18, was considerably higher than the rate for the 65 and older crowd.

  • The child poverty rate was 21.8% — statistically the same as in 2011. Nearly 16.1 million children were officially poor — more than a third of all people in poverty.
  • More than 7.1 million children — 9.7% — lived in extreme poverty.
  • By contrast, the poverty rate for seniors was 9.1% and their extreme poverty rate just 2.7%.

We can chalk the age disparities up largely to the oft-maligned Social Security programs. Without them, the senior poverty rate would have been nearly four times greater.

However, the disparities are larger than they would be if the Census Bureau used a less crude measure, as we see in the results of last year’s Supplemental Poverty Measure.

The Bureau didn’t preview its SPM figures this year, but it did the equivalent with a few examples of what researchers can learn by using its table creator tool.

So we learn that counting the the Earned Income Tax Credit would reduce the number of poor children by 3.1 million. And if SNAP (the food stamp program) benefits were counted, 4 million fewer people would have qualified as poor.

I don’t suppose I need to say that these benefits are squarely in the House Republicans’ bull’s eye.

Policies to ensure that the economic benefits of the recovery reach the very large number of poor and near-poor working families in this country seem a distant dream.

But the new poverty figures ought to be a wake-up call.


Census Poverty Rates Defy Predictions

September 12, 2012

Well, the crystal ball gazers blew it. The Census Bureau just reported that the poverty rate didn’t rise last year. The official 15% rate isn’t statistically different from the 2010 rate, it says.

This is surely good news. It nevertheless means that more than 46.2 million people were so poor as to fall below the Bureau’s very low poverty thresholds.

And well over 20.3 million — 6.6% — were so extremely poor as to fall below 50% of the applicable threshold. This is what’s commonly referred to as severe poverty.

What also hasn’t changed is the distribution of poverty across different age and race/ethnicity groups. For example, in 2011:

  • The child poverty rate was 21.9% — not statistically different from the rate in 2010.
  • The poverty rate for seniors was 8.7% — again, virtually the same as the 2010 rate.
  • The black poverty rate was nearly triple the poverty rate for whites — 27.6%, as compared to 9.8%.
  • The poverty rate for Hispanics was 25.3%.

Poverty rates among family types also replicate a familiar pattern. The percent of married couples who were officially poor was 6.2%, while the rate for single-woman households was five times higher — 31.2%.

Severe poverty rates were, of course, lower. But they mirror the same disparities. For example:

  • Nearly 1 in 10 of America’s children — 9.8% — lived in severe poverty last year.
  • The severe poverty rate for blacks was 12.8% and for Hispanics, 10.5%.
  • By contrast, severe poverty afflicted 4.4% of whites and only 2.3% of seniors of all racial/ethnic groups combined.

What we’re to make of all this I’m really not sure. We’ll undoubtedly have many analyses in days to come.

In the interim, we can ferret out of the Census report a couple of policy-relevant messages, based on examples it provides of what the statistically adept can find out by using its online tool.

One we might guess from the relatively low senior poverty rate. Without Social Security benefits, about five times as many elderly people would have been counted as poor.

This is surely a testimony to one of our oldest anti-poverty programs — and a warning of what could happen if some of the “reforms” that are being widely promoted became law.

An additional 2.3 million people were lifted above the poverty threshold by unemployment insurance benefits.

A more imminent danger here because more than 2 million jobless workers will lose these benefits in January if Congress doesn’t extend the only still operative federally-funded UI program.

Millions more will have, at most, 26 weeks of benefits — this at a time when 40% of those actively looking for work have been unemployed for longer.

So here’s a case where our federal policymakers could keep what are still really depressing poverty numbers from getting worse.

Whether they will or not depends on what voters decide in November.

New Angles On How Many Poor People There Are In The U.S.

January 20, 2011

I remarked some time ago that we didn’t know how many poor people there were in the U.S. We still don’t because the Census Bureau is still working on a measure that would take account of many factors the official measure ignores.

As part of the process, it’s been releasing annual alternative poverty estimates based on recommendations the National Academy of Sciences made back in 1995. The latest set came out in early January — three multi-columned spreadsheets, each with many, many figures.

I couldn’t make heads or tails of them, though I could see that the poverty rate for 2009 might be as low as 12.8% or as high as 17.1%, depending on which NAS recommendations were applied. So  there could have been as relatively few as 39 million people in poverty or as many as 52.5 million.

Fortunately, a new brief from the Economic Policy Institute gives us non-economist the big picture — though not an answer to how many poor people there are.

As EPI explains, the alternative estimates make different kinds of adjustments in the poverty threshold, i.e., the dollar cut-off for counting people as poor, and/or in what’s counted as income.

The official threshold is three times the food budget at the time the official poverty measure was developed, with adjustments for inflation based on the Consumer Price Index for All Urban Consumers.

The Census Bureau produces alternative thresholds by adjusting for out-of-pocket medical expenses, cost-of-living differences in different parts of the country and a different measure of consumer price inflation — the Consumer Expenditure Survey.

Looking only at the alternative thresholds, the share of the population in poverty seems higher than the official 14.3% rate the Bureau reported in September. Hence a high-end estimate of poor people so much greater than the official 43.6 million.

The income adjustments tell a different story.

The official measure counts only cash income, i.e., wages and cash benefits like Social Security and unemployment insurance.

The alternative measures take account of non-cash benefits like food stamps, housing vouchers and Medicaid and of tax credits like the Earned Income Tax Credit and the Child Tax Credit.

With these included, the poverty rate is lower than the official estimate, even when taxes are factored in. As with the thresholds, how much depends on which adjustments are made.

The Center on Budget and Policy Priorities also crunched the numbers. It came to basically the same conclusions about the income adjustments, though with a more political slant aimed at justifying the temporary new and expanded tax credits and benefits in the economic recovery act.

According to CBPP, the recovery act improvements kept 4.5 million people out of poverty. An additional 11 million were lifted above the poverty threshold by the regular versions of five of the programs — the Earned Income and Child Tax Credits, unemployment insurance and food stamps.

And, as EPI also shows, the biggest anti-poverty impact came, as it has in the past, from Social Security retirement benefits. CBPP says these kept more than 20 million people out of poverty. Looking at its table on program impacts as a whole, the number seems more like 21.4 million.

In short, the major federal anti-poverty programs are doing what they’re supposed to do. Without them, a vastly larger number of people would have been poor enough to be counted as such.

I don’t suppose I need add that these programs are at high risk — if not of annihilation, then of significant retrenchments.

New Census Figures Show DC Poverty Rate Rose Again Last Year

September 28, 2010

As you may have read, the figures the Census Bureau released two weeks ago showed that the poverty rate in the District had gone down — from 18% in 2008 to 17% in 2009.

Jenny Reed at the DC Fiscal Policy Institute cautioned us that the new figure was actually a two-year average that might mask the impacts of the recession. We should wait, she said, for the single-year 2009 results of the American Community Survey.

Now we have them. And indeed, they show the poverty rate increased last year — up by 1.2% from 2008. The 2009 poverty rate in the District was 18.4% — 4.1% higher than for the nation as a whole.

Here are some other things we learn:

  • The child poverty rate rose again. In 2009, a shocking 29.4% of all D.C. children lived below the poverty level — up by 4% from 2008. This is 6.7% more poor children since 2007 and 9.4% more than for the nation as a whole.
  • The percent of blacks living below the poverty level was more than three and a half times higher than the percent for non-Hispanic whites — 26.8%, as compared to 7%. The gap here is 2.8% greater than in 2008 and 4.4% greater than in 2007.
  • We see a similar, though much smaller gap between the poverty rates for Hispanics and non-Hispanic whites — a 3.7% difference. It was considerable greater last year — 10.9%.
  • The percent of individuals living in deep poverty, i.e., below 50% of the poverty level, rose again — from 9.8% in 2008 to 10.7% in 2009.
  • A large gap here too, but only for blacks versus non-Hispanic whites. The percent of blacks in deep poverty was 16%, as compared to only 4.3% for non-Hispanic whites. The percent of Hispanics in deep poverty was smaller than either — 3.1%.
  • There are still huge race/ethnicity income gaps. The 2009 median income for non-Hispanic white households was $104,201 — $67,253 more than for black households and $47,380 more than for Hispanic households.

There are probably many reasons for the District’s persistent high poverty rate and the yawning race-linked gap between the haves and the have-nots.

One jumps out from the new ACS figures — the mismatch between the demands of the local labor market and the formal education credentials of many of our fellow residents.

For individuals with only a high school diploma or a GED, the poverty rate was 25.5%. For those with less, it was 28.3%. The latter is six times greater than the percent for individuals with a bachelors degree or higher.

These figures should be a call to action, were any needed, for reforms in the public education system that don’t emphasize high test scores at the expense of struggling learners. Do any of our educators hold the exit door open when low-scorers want to give up? Will they when the pressure to produce year-over-year improvements increases?

They’re also a powerful argument for job training programs that encourage drop-outs to work for their GED and high school graduates to get some further education under their belts. These programs are not where the District should be looking as it seeks to rebalance its budget.

UPDATE: The poverty figures I used come from the annual tables entitled Selected Characteristics of People at Specified Levels of Poverty in the Past 12 Months. After posting this, I found that the Census Bureau also released a brief comparing 2008 and 2009 poverty rates. The 2008 rate for the District is different from the one in the detailed table. According to the brief, the poverty rate in the District increased by 0.8% and the poverty rate for children by 2.7%. I’ll leave it to the experts to explain the discrepancy.

More Grim News About The Affordable Housing Crunch

September 26, 2010

Shortly before the Census Bureau issued its new poverty/income report, the Bureau and the U.S. Department of Housing and Urban Development released figures from their latest housing survey. Bad news about the affordability of rental housing, especially for households below the federal poverty line.

In 2009, about 18.6 million renter households paid 30% or more of their current income for rent,* i.e., at or above the HUD cutoff for affordability. That’s 52.6% of all renter households. Close to a third paid at least half their current income for rent, aptly characterized by HUD as a “severe rent burden.”

As we’d expect, housing costs were a greater challenge for low-income households. About 73% of them — 6.8 million households — paid at least 30% of their current income for rent. Rent consumed half or more of all current income for 5.6 million households — just under 60%.

The Center on Budget and Policy Priorities reports that the severe rent burden figure for low-income households represents a 17% increase since 2007 — 800,000 more households in just two years. Compared to 2003, the increase is a whopping 45% or 1.7 million more households.

These figures reflect at least four converging factors.

One is the continuing shrinkage of affordable housing stock. Earlier this year, the National Low Income Housing Coalition reported that 6.3% of affordable units had been lost between 2001 and 2007.

Shrinkage in the District of Columbia has been more dramatic — more than a third of low-cost rental units lost during about the same time period.

Two other factors are both impacts of the recession. One, of course, is the prodigious number of jobs losses, which have left many households with less or no current income. What might have been affordable for them a couple of years ago now leaves them without enough ready cash for basic needs.

The other, related impact is foreclosures, which have increased competition for the limited number of moderate and low-cost rental units available. CBPP reports a nationwide 11.3% increase in rental costs since 2006. The old law of supply and demand at work.

A fourth major factor is government housing policies. At the federal level, rental assistance for low-income families has failed to keep pace with rising needs. Last year, CBPP reported that total funding for low-income housing programs in 2008 was $2 billion (5%) less than in 2004.

For 2009, Congress appropriated several hundred million dollars less for housing vouchers than agencies would have been eligible for if allocations been based on use and costs — this notwithstanding enormous waiting lists and rising rents.

CBPP estimates that funding for the current fiscal year is just about enough to renew all the vouchers families were using in 2009. The same is true for the President’s proposed Fiscal Year 2011 budget, though it would also provide funding for about 10,000 new vouchers for people with disabilities and families who are homeless or at risk of homelessness.

So we’re looking here at about 2.2 million vouchers, assuming (as we shouldn’t) that Congress goes along. That would leave an enormous gap between families in need of housing assistance and the help the federal government will provide.

Here in the District, the waiting list for affordable housing has reportedly grown to more than 26,000 households. The Fiscal Year 2011 budget will provide local funding for about 80 more units. Not a penny more for the tenant-based vouchers that allow households to live in apartments with market-based rents.

Even in better times, the District never came close to the targets or funding levels recommended by the Comprehensive Housing Task Force — a diverse group of experts commissioned to produce a long-range housing strategy for “an inclusive city.”

So the Census/HUD figures aren’t just a recession-caused blip. They’re the cumulative results of long-standing failures to give affordable housing the priority it deserves.

* The survey figures include households that reported paying 100% or more of current income for rent. The spreadsheets note that these may reflect a temporary situation, living off savings or a response error. I have followed CBPP in including them in my calculations.

New Poverty Figures For Each Congressional District

October 25, 2009

In May 2008, three major progressive organizations launched the Half in Ten Campaign–a national advocacy effort aimed at cutting the poverty rate in half by 2018.

Half in Ten and one of its partners, the Center for American Progress Action Fund, have produced a breakout of the latest census data on poverty by Congressional district. This is a great tool for showing Members of Congress how the recession is driving up poverty rates among their constituents.

The data are also a powerful argument for initiatives to address persistent racial, ethnic and gender disparities and the shamefully high rate of child poverty, which now tops 25% in 76 Congressional districts in 27 states from sea to shining sea. Add to these the District of Columbia at 25.7% and Puerto Rico at a shocking 56.2%.

We know now that the poverty rate when Half in Ten set its goal was 13.2%–up by 0.8% from 2007. All the experts warn that the next census will show a still higher rate. Yet Half in Ten believes it goal is achievable if we commit to it and go about rebuilding our economy “in a way that promotes shared progress.”

It’s got what seems to me a sensible, maybe even politically feasible policy agenda to get us moving in the right direction.

New Census Poverty Figures Show Little Change

September 29, 2009

The Census Bureau has just released its 2008 figures on poverty. By and large, they show little change from 2007, either for the nation as a whole or for the District of Columbia.

For the nation as a whole:

  • The overall poverty rate increased to 13.2%–up by 0.2% from 2007.
  • The percent of children in poverty increased to 18.2%–here too, up by 0.2%.
  • The poverty rates for Hispanics and non-Hispanic whites increased by 0.6% and 0.3% respectively, while the poverty rate for blacks declined by 0.6%.
  • However, race/ethnicity gaps remain significant, with 12% more Hispanics and 14.8% more blacks than whites below the poverty threshold.

Poverty rates in the District were higher and one-year increases greater than for the nation as a whole.

  • The poverty rate for all D.C. residents was 17.2%–up by 0.8% from 2007.
  • The percent of children in poverty was 25.9%–up by 3.2%.
  • As for the nation as a whole, Hispanics were the hardest hit by the onset of the recession. Their poverty rate increased by 6.5%.
  • The poverty rate for blacks increased by 0.9%, while the rate from non-Hispanic whites dropped by 0.7%.

The new figures show that poverty in the District is still heavily concentrated among racial and ethnic minorities.

  • The percent of non-Hispanic whites below the poverty threshold was 6.7%, with 4.3% of them in deep poverty, i.e., below 50% of the threshold.
  • For blacks, the poverty rate was three-and-a-half times greater–23.6%. And the deep poverty rate was three times greater–13.5%.
  • For Hispanics, the poverty rate was 17.6%–more than two-and-a-half times greater than the rate for non-Hispanic whites. Though the deep poverty rate was also higher, the gap was less dramatic–3.3% greater.

So what are we to make of all this? Obviously, the District still has what the DC Fiscal Policy Institute has called two economies, with large disparities between whites and racial and ethnic minorities.

As my partner Matt just wrote, these apparently are linked to levels of education. In 2008, 32.5% of D.C. residents below the poverty threshold had less than a high school diploma and an additional 20.1% no more than a diploma or GED, as compared to just 4.6% of those in poverty with a bachelor’s degree or higher.

But there could be other factors at work here as well. As a new report by the Center for American Progress shows, unemployment rates for blacks and Hispanics have been persistently higher than the rate for whites, even when one controls for gender, age and education.

So we need to look at what CAP calls “labor market segmentation” and possible discrimination, as well as needs for more robust, inclusive training programs and significant improvements in education, from early childhood through high school and beyond.

Bottom line is that policymakers have to do more than promote economic recovery. Blacks and Hispanics will still be disproportionately at the bottom of the income scale unless policies and programs are tailored to address the disparities.

And even the best of these won’t work overnight, so there’s a need to mend our frayed safety nets too.