America’s Poverty Rate Increases

English: Number in Poverty and Poverty Rate: 1...

English: Number in Poverty and Poverty Rate: 1959 to 2009. United States. (Photo credit: Wikipedia)

The ranks of America’s poor are on track to climb to levels unseen in nearly half a century, erasing gains from the war on poverty in the 1960s amid a weak economy and fraying government safety net.

The news report is so disturbing that it has already been reprinted in multiple publications and on any number of social media feeds.  It also invokes many possible responses—dismay that more people living in poverty; concern that that our safety net is crumbling; alarm that children will be poorer than their parents; and distress over what the future of our nation will be as a result.

Those are not my immediate responses.  I think about the day-to-day reality of being poor.  One recent evening,  I was at Wal-Mart with my husband and my 14-year-old son.   My son needed something for school the next day, but had forgotten to tell us until that evening so we ran to Wal-Mart to get it.  In front of us in the checkout line was an older man buying food. He had Vienna sausage, Spam, day-old white bread, and canned beans.  Nothing in his basket needed to be cooked, and nothing cost more than a dollar.

Because of my years working as a social worker I knew that this man must live somewhere that did not have a stove or microwave.  He could have a room at an SRO, he could be at a shelter, or he could live on the streets.  As we left, I saw him get on his bicycle with his bag. The bicycle was old and had no headlight. It was late, and the Wal-Mart was on a highway—not the sort of location you would want to be riding an old bike without a headlight if you had a choice.  I could only feel sad.

The 2010 poverty level was $22,314 for a family of four, and $11,139 for an individual, based on an official government calculation that includes only cash income, before tax deductions.

It’s very easy to look at this numbers and think only in abstract terms.  But I prefer to think in concrete terms—what do those figures mean when considering what someone needs to live?  The poverty level presumes a family of four can live on less than $22, 314 a year, but how?  Let’s assume rent is low—say $500 a month (and I don’t know anywhere a family of four can find a place for that)—rent alone has already taken up more than a quarter of the year’s money.  And that rent may not include utilities like gas, electric and water—let’s add another $200 a month for that.  Have we talked about transportation?  A car with gas, insurance and maintenance can take a significant portion of the remainder, but even public transportation such as buses and subways require money—travel is not free.  What else is essential?  Food, clothes, insurance, insurance co-pays, over the counter medication (insurance does not pay for aspirin or Benadryl) child care, not to mention cleaning supplies and hygiene products.  Even if a family receives some assistance from the government, that assistance is minimal and limited to food, rent subsidy, or small amounts of cash that usually comes tied to conditions such as work or training programs.

The truth is that it is possible to work full time and still fall under the poverty line.  Indeed, $22,314 a year is equivalent to working full time (40 hours a week, for 52 weeks) for $10.73 an hour, well above the minimum wage in most states.  And it is not the isolated case where working people make that little.  The median wage in the US in 2010 was only $26,364, only $4,050 more than the poverty rate for a family of four.  That means half of all U.S. workers made wages less than that.  It is possible that many live in households where other people work, or that they have taken second or third jobs, but it is still a sobering statistic when the numbers are translated into basic necessities like food, shelter, and clothing.

There are many who say the Federal Poverty Level does not accurately measure poverty (see our blog post about it here).   Many have advocated measuring poverty in terms of basic needs.  The National Center for Children in Poverty has a Basic Needs Calculator, which evaluates how much it really costs to live in a given state and city (or county).  In most places, it costs almost twice the federal poverty level to make ends meet for a family of four.  That is without any extras, no books, no trips to the library, no picnics in the park.

We have talked before about how much more expensive it is to do basic things, like diapering your baby, if you don’t have much money.  And we have also talked about the disadvantages people without money face in getting a good education or otherwise breaking free from the cycle of poverty.  We talk about these things because these are the concrete realities of poverty.  The numbers are disturbing in the abstract, but when you bring them to a personal level, like the man shopping in Wal-Mart, they are downright heartbreaking.

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Mismeasuring Poverty

Mark Levinson of The American Prospect has an interesting article, Mismeasuring Poverty, in which he argues that the Federal Poverty Level, developed 50 years ago, measures the wrong expenses. He also argues that the Supplemental Poverty Measure, developed by the current administration, measures the right expenditures, but at the wrong levels.  The U.S. poverty line is now approximately 36% of the nation’s median income rather than 50%, as it was when first established 50 years ago.

Most other developed countries use a measure of poverty based on the share of families below 50 percent or 60 percent of median income. Adam Smith explained the rationale for this in The Wealth of Nations. He defined the lack of “necessaries” as the experience of being unable to consume “not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without.”

Smith seems to speak directly to the issue of families who lack diapers and other basic needs beyond food and shelter.

What do you think?  Does the Federal Poverty Level adequately measure poverty?  Is the Supplemental Poverty Measure the appropriate measure?  Should we find another measure?

Consider helping those who cannot provide diapers for their family members with a donation to the National Diaper Bank Network.

Measuring U.S. Child Poverty against the Rest of the World

The UNICEF Innocenti Research Centre recently issued Report Card 10, “Measuring child poverty”, which identifies the United States as having the second highest incidence of child poverty of among 35 of the world’s richest nations.  Among EU countries and other countries belonging to the Organisation for Economic Cooperation and Development (OECD), the United States, with  23.1% of its children living in households which fall within “poverty” levels as defined by the OECD, ranked 34th of 35, just above Romania.  Only in Romania were a higher percentage of the nation’s children living in poverty.

It is not news that the United States has a high percentage of children living in poverty.  As the National Center for Children in Poverty notes,  21% of U.S. children live below the federal poverty line and 44% of U.S. children live in low-income families.  Indeed, children, who represent just 24% of the U.S. population, make up 34% of the U.S. population living below the U.S. federal poverty line.

While it is true that the two measure different things: the federal poverty standard measures “absolute poverty” and the OECD standard measures “relative poverty,” the message is the same–an astonishing number of children in one of the richest countries in the world live in poverty, and that the United States, a country that likes to think of itself as a model of economic prosperity for the world, when compared to countries which are its economic peers or near-peers, falls below all with the sole exception of Romania.

Headlines have focused on the comparison with Romania, but the really interesting aspect of the report does not actually involve the U.S.

The UNICEF report also includes the “child deprivation” ranking of the EU nations, providing a perspective into what the international community identifies as necessary for raising healthy children.  The report identifies 14 items, the lack of two of which identifies children as deprived.  The required items go beyond merely ensuring the basics for sustaining life, but measure the quality of life.  It is not enough that there is food, but the food must be nutrious, with fruit and vegetables and protein every day.  It is not enough that the child have shelter, but the child must also have enough light and room to do homework, and be able to invite friends home to play and eat.  It is also not enough that the child have clothing, but the child must also have at least some new clothing.  The list also includes items necessary to developing young minds through the exchange of ideas found in books (other than school books) and through the internet.  And the opportunity to be involved in social activities with classmates–money to participate in school trips and events, and the opportunity to play, with outdoor equipment like bicycles or rollerskates and indoor games and toys.

In measuring child deprivation, the report uses a standard of basic childhood comforts that greatly exceeds the rather modest standard of living decried by conservative commentators skeptical of the U.S. poverty rate as overly luxurious.  The UNICEF report presumes that children’s most basic needs–food, shelter, health care, personal hygiene products necessary to keep clean and healthy, such as soap, toothpaste, and diapers where necessary–alone are insufficient without ensuring that the food is the right kind of food, and that children have the opportunity to participate in the larger society through the exchange of knowledge (through books and the internet) and social interaction and to grow as individuals through play and leisure activities.

The U.S. is not part of the ranking, but it is intriguing to consider how the U.S. might rate against its economic peers in the EU.  Because the deprivation standard is based on an objective set of criteria, the very high end of U.S. income would have no effect on the relative position of its poorest children, as could be argued was a factor in the U.S.’s poor showing in the relative poverty ranking.  Still, it seems likely the U.S. would also rank quite low on the child deprivation scale as well.   U.S. government programs focus on the most basic needs–food, shelter, and, to some extent, health care–alone.  There are no provisions for hygiene items and new clothes, let alone internet or subsidies for school field trips.   Indeed, some politicians argue that the U.S. government provides too muchblunting ambition to suceed by providing too many services to people in need.  (There is little evidence that cuts to programs gets more people to work.)  Others argue that the current economic crisis means we must cut these very basic supports in order to shore up our national debt.

Both arguments are short-sighted.  If, as these same politicians say, children are our nation’s future, shouldn’t we give them not just the bare minimum to survive, but the basics they need to thrive?  Nutritious food to grow strong bodies, space and books enough to develop young creative minds, and opportunitiy for play and friends to encourage engagement in society.   Without these things, we are impoverishing not only our children’s opportunity to grow but also our nation’s future.

Moreover, the report demonstrates that the current economic climate is not a valid excuse for shortchanging a nation’s children.   Although Iceland is recovering from bankrupty, and Ireland is not far from bankruptcy, both have “child deprivation” rates of less than 5%.   The report demonstrates that governments can take effective action to limit child poverty and prepare our children for the future.

As  Gordon Alexander, the director of UNICEF’s Office of Research, noted, “The best performers show it is possible to address poverty within the current fiscal space. On the flip side, failure to protect children from today’s economic crisis is one of the most costly mistakes a society can make.” It is possible to do better than we do.

Food for Thought on Tax Day

As you scurry to finish your taxes in advance of today’s deadline (or gloat that you have already spent your refund), consider for a moment that there will be many people who receive a tax credit because, even though they are working, that job does not pay enough to raise them over the poverty line.  As noted in this blog post from Bread for the World, “In 2010, 10.7 million people with jobs lived below the poverty line. A full-time minimum-wage earner makes only about $14,500 a year.”  The Earned Income Tax Credit helped lift 5.4 million of these people above the poverty level, but often, depending on where they live, this is not enough to allow them to meet the Self-sufficiency Standard, which defines the amount of income necessary  to meet basic needs (including taxes) without public subsidies (e.g., public housing, food stamps, Medicaid or child care) and without private/informal assistance (e.g., free babysitting by a relative or friend, food provided by churches or local food banks, diapers from a diaper bank, or shared housing).

The family types for which a Standard is calculated range from one adult with no children, to one adult with one infant, one adult with one preschooler, and so forth, up to two-adult families with three teenagers. The Self-Sufficiency Calculator for various states are available on the internet–for example, you can find the calculator for Washington State here, for Colorado here, and for DC here.  You can also look up the most recent tables for your state here.  In each case, the Self-sufficiency Standard is much higher than the poverty level, and demonstrates how much many people with paying jobs must rely on “safety net” programs such as food stamps, housing assistance, and various other forms of assistance to make ends meet.

In the call for lower taxes, many of these same government programs that millions of people rely on are the first programs to be cut.  If your only concern is the bottom-line tax number, one way to lower your taxes yourself is to donate to private charities, which can be deducted from your taxes.  As public services are cut, the need is for private assistance increases dramatically.  Consider lowering your taxes for next year by donating to a charity today.  Some things to think about as you file your taxes.

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