Safety Net

New Census Data Show Historic Gains on Poverty. Here’s How to Keep the Momentum Going.

Yesterday the Census Bureau released new data showing that Americans made historic gains in income, poverty reduction, and health insurance. Wonks everywhere predicted good news—but what we saw in the data went well beyond our expectations.

As antipoverty advocates, we’ve become so accustomed to poverty staying stagnant—or getting worse—since the turn of this century that we barely know how to celebrate this kind of progress properly.  So, let’s take a minute to appreciate it.

The U.S. poverty rate saw one of the largest single-year declines in almost 50 years. After years of stagnant incomes the typical American household got a raise for the first time in nearly a decade, with median household income rising more in one year than ever recorded. Meanwhile, the share of Americans without health insurance dropped to a record low, making 2015 the first time we’ve seen simultaneous improvements on all three fronts—poverty, median household income, and health insurance coverage—since 1999.

The improvements we’re marking this week didn’t happen by accident—they’re the result of policies that work. And with the wrong policy choices, we could see these important gains erased.

Take the minimum wage. State and local minimum wage increases likely played a big role in the decline in poverty and increase in income that we saw in 2015—as well as the faster wage growth among African American and Hispanic workers, and women (all of whom are disproportionately likely to be low-wage workers). They also likely helped the gender wage gap hit 80 cents for the first time ever, and led to even stronger progress on the wage gap for African American women. And in states that enacted minimum wage increases, low-wage workers saw faster wage growth than workers in states where minimum wages stayed flat.

Variation across states demonstrates the difference that policy choices make

On the health insurance front, the Affordable Care Act remains the gift that keeps on giving. The tremendous gains in coverage that we saw in 2014 and 2015 brought the nation to a record low uninsured rate of 9.1%. But here too, variation across states demonstrates the difference that policy choices make. The average share of uninsured individuals in states that hadn’t expanded Medicaid by January 2015 was 12.3%, compared to just 7.2% in states that had adopted Medicaid expansion. It is clear that the national gains would have been even stronger if 19 states weren’t still refusing to expand their Medicaid programs.

And let’s not forget the safety net. Census data released yesterday using the Supplemental Poverty Measure (SPM), an alternative measure that takes into account critical poverty-reducing investments such as nutrition assistance and tax credits for working families, reminds us how important these and other programs are to cutting poverty and mitigating hardship. According to the SPM, without Social Security nearly 27 million more Americans would have been poor in 2015—that would be an increase of more than 58% in the share of poor Americans. The Supplemental Nutrition Assistance Program protected 4.6 million Americans from poverty. And the Earned Income Tax Credit and low-income portion of the Child Tax Credit together accounted for 9.2 million fewer individuals living in poverty last year.

We’ve got to keep moving the needle in the right direction, particularly as we have yet to return to pre-recession levels of poverty and incomes. And despite strong progress on the national poverty rate, poverty among children, female-headed families, African-Americans, Hispanics, Native Americans, and people with disabilities remains dramatically higher than the overall national rate.

But the big takeaway from yesterday’s data that we should all be shouting about is that we know we can make great progress in cutting poverty—if we make the right choices. Now is the time to double down on the policies we know make a difference, such as making job-creating investments in infrastructure, research, and education; raising the minimum wage and further strengthening tax credits for working families; ensuring paid leave, childcare, and fair schedules, as well as closing the gender wage gap; protecting and strengthening vital safety net programs; and removing barriers to employment for people with criminal records and their families, and workers with disabilities.

Today we should all celebrate the progress we are finally making. But tomorrow, we must use this news to inform the work we do together in the months and years ahead. Now is the time to recommit to making the right choices so that we don’t turn back.

Related

Safety Net

The Federal Poverty Line is Too Damn Low

The U.S. Census Bureau’s announcement today that the number of Americans living below the poverty line fell between 2014 and 2015 is good news. But before we get too excited, it is worth noting that the federal poverty line was a meager $12,000 for a single person living alone in 2015 (and only about $24,000 for a married couple living with two children).

If your initial reaction to that is “whoa, that’s waaay too low for a person to lead a minimally decent life on in the USA,” then you’re in good company. In a recent survey conducted by the conservative American Enterprise Institute (AEI) and the Los Angeles Times, Americans were asked, “[What is the] highest annual income a family of four can have and still be considered poor by the federal government.” The average response was $32,293—an amount 34 percent higher than the current federal poverty measure.

In short, conservatives did a poll on how much income it takes to avoid poverty, and the answer they got back was more than $8,000 above the federal poverty line.

The wonks reading this might be thinking “well, if the federal government says a married couple with their two kids only needs $24,000 to live a minimally decent life, then they must have good reasons to think this is enough.”  I’m a bit wonkish myself and generally trust official government statistics—but the federal poverty measure is a big exception.

The main reason I don’t trust this approach to measuring poverty is shown in the figure below. In 1963, the poverty line for a family of four was 50% below median family income—or one-half of the income of the typical four-person family in America. Today, however, the poverty line for a family of four is 66% below median family income.

The federal poverty line is getting further away from median family income

That means to be officially counted as poor today, a family has to be much poorer compared to the typical American family than it had to be in 1963. In fact, if the federal poverty line today was set at the same place relative to median income as it was in 1963 it would be about $33,000, rather than $24,000.

The AEI survey results are not a fluke. We know from decades of evidence that the public’s understanding of the income needed to avoid poverty increases over time at a rate faster than inflation, and closer to the increases in mainstream incomes and living standards.

So why hasn’t the official poverty line been adjusted over time in a way that reflects the public’s more accurate understanding?

The reasons for this are largely political.

In the early 1960s—around the time when the Beatles were just becoming famous here—Mollie Orshansky, an employee in the Social Security Administration (SSA), developed working estimates of what it meant to be poor at that time.

The data available to Orshansky wasn’t particularly sophisticated, or even timely. For example, she based her estimates in part on a food consumption survey conducted in 1955. When the federal government started using her calculation of the poverty line in the mid-1960s, Orshansky and federal officials understood that it would need to be adjusted over the long-term for increases in mainstream living standards. The SSA “made a tentative decision early in 1968 to adjust the poverty thresholds for the higher general standard of living.”

But then two things happened that year. First, officials in the Johnson administration prohibited the SSA from making this kind of adjustment, likely in part due to concern that the updated figures would show an increase in poverty. Second, Richard Nixon was elected President.  After he took office, his budget office issued a directive making the Orshansky thresholds the “official” poverty measure, and specifying that they would be adjusted for inflation only.

There have been repeated recommendations to reform the poverty measure

In 1970, Orshansky said this decision would likely “freeze the poverty line despite changes in buying habits and changes in acceptable living standards.” There have been repeated recommendations to reform the poverty measure since then, but no President has been willing to revise the Nixon directive.

The Census Bureau has an alternative measure of poverty, the Supplemental Poverty Measure, which improves the current federal poverty measure in many respects. But even this approach puts the poverty line at about $25,000 to $26,000 for a family of four—and that’s still too low.

Here’s a better approach: dump the current official poverty measure and replace it with two different measures. One measure would be anchored to half of the typical (median) American family’s income in 2016 and then adjusted for inflation over time; the other would be set at the same level initially, but adjusted annually using the median income over a 5-year period. This way, the poverty line won’t drift away from mainstream living standards of living over time.

It’s 2016: We need a poverty measure that reflects what the public thinks is required to meet basic needs in Beyoncé America.  But instead we’re stuck in Beatlemania America—and that needs to change.

Related

Safety Net

Inequality Trends, Rising Incomes, and More: What to Look for in the New Poverty Data

There is a buzz around the office this morning, and it’s not just because pumpkin spice lattes are back. It’s because this week we wonks are going to be diving into a treasure trove of new data on poverty, income, and health insurance from the Census Bureau.

Two Census reports—the Current Population Survey and the American Community Survey—are critical resources for advocates, researchers, journalists, and policymakers alike. They provide rich information on issues that impact people’s health and economic wellbeing, ranging from their living situations, to public benefits usage, to how much money they earn.

These data, which are for 2015, inform us about what is working to cut poverty and reduce inequality, and how we might do better from a public policy perspective. Here are four key trends wonks will be examining closely:

Incomes are rising—likely for minimum wage workers, too

Some researchers are forecasting that real median household income might see the largest one-year jump in more than a decade. Low-wage workers should see a rise, too—especially in states that raised their minimum wage. This increase is particularly important for women, who make up nearly two-thirds of all minimum wage workers.

Rising wages, particularly for low-wage workers, could mean that this is the year we learn that the gender wage gap among full-time workers—which stood at women earning 79 cents for every dollar earned by their male counterparts—finally broke the 80 cent-barrier. (Not quite shattering this particular glass ceiling, but moving a step closer!)

Anti-poverty advocates will also examine these data to see if the income gains will reach families in deep poverty—those who have incomes of less than half the poverty line (approximately $12,000 annually, for a family of four).

Don’t kid yourself—racial and gender inequalities are alive and well

Any improvement in the poverty rate and the gender wage gap is critical, but we’re a long way from widespread economic equality. For example, the wage gap for women of color is severe: Last year, African American women typically earned only 60 cents, Native American women 59 cents, and Hispanic women 55 cents, for every dollar earned by their white Non-Hispanic male counterparts.

These gender and racial disparities apply to poverty rates, too. Hispanics and African Americans experienced poverty rates about 2.5 times higher last year than white Non-Hispanics. Women are also more likely to face poverty, as are individuals born in a foreign country, persons with disabilities, and single-parent families.

There is a hidden story in these data about who is more likely to be poor and paid unfairly that wonks and others need to shine a light on.

The data are seriously flawed—especially for LGBTQ people

Every year this Census release sparks conversation about how the stats themselves could be improved. Two topics come up repeatedly: The flawed way that we measure poverty and the shocking lack of data about LGBTQ people.

There is widespread agreement that the federal poverty line—$24,300 for a family of four in 2016—is far too low, which means many more Americans are experiencing serious economic hardship than are deemed officially “poor.” This disconnect isn’t surprising, considering the Official Poverty Measure (OPM) was developed more than half a century ago. A lot of things have improved since then—cars, phones, computers, Americans’ appreciation of soccer—but the OPM hasn’t, even as families’ needs and spending patterns have changed dramatically.

The OPM also fails to account for numerous public policies that relieve hardship. This is one reason why many wonks are fans of the Census Bureau’s alternative Supplemental Poverty Measure (SPM).

The SPM includes income households receive through assistance programs like the Supplemental Nutrition Assistance Program (SNAP), which lifted 4.7 million people above the poverty line in 2014; as well as tax credits such as the Earned Income Tax Credit and Child Tax Credit, which together lifted 9.8 million people out of poverty in 2014. The SPM also incorporates some of households’ necessary expenditures, such as clothing and utilities, and geographic variation in housing costs.

While these poverty measurements are less than ideal, they are far better than having almost no data at all—as is the case for members of the LGBTQ community. The lack of sexual orientation and gender identity data in these data sets is glaring, given that the limited data we do have demonstrate that LGBTQ individuals face higher poverty rates than many other communities. Since funding for anti-poverty initiatives often depends upon being able to show that economic need exists, this dearth of data can prevent the LGBTQ community from receiving help even when there is a clear need.

We must redouble our efforts to ensure we collect much-needed data on the LGBTQ community while also working to reform the way we are collecting and measuring poverty data.

Public policy choices reduce or exacerbate poverty, inequality, and hardship

Last year the Census data demonstrated the huge impact the Affordable Care Act had on Americans’ health care coverage, as uninsured rates fell to a historic low with declines in all 50 states and the District of Columbia. This year wonks anticipate a new low in the uninsurance rate—perhaps even below 9 percent—though it would be even lower if more states expanded Medicaid coverage.

Next week’s release will also show how other smart social programs are effectively reducing poverty. For example, last year’s SPM data revealed that without Social Security fully half of American seniors would have been poor, and that without refundable tax credits, nearly 1 in 4 children would have fallen below the poverty line as well. This evidence has fueled increasing calls from advocates and policymakers to strengthen and expand Social Security, refundable tax credits, and other key safety net programs.

Wonks look forward to continuing to assess our public policy choices based on this year’s data.  We already know a lot about what to do to reduce hardship, boost economic mobility, and increase opportunity.  The new Census data can help us move in the right direction—if we ask the right questions, and look for the answers.

Related

Culture

Where the Internet Doesn’t Reach

“I don’t mean to alarm you,” my friend said just before I visited her home in the hills of rural, Southeastern Ohio, “but there’s no bathroom out here. There’s no running water.”

And the driveway, she said, was a rutted, steep rise of dirt, holes, and gravel—a quarter-mile long.  “The first test,” as she put it.

When my 15-year-old Honda and I actually made it to the top, she came out in front of her house and waved at me, impressed.  She lived in a converted garage with piles of empty cans and tools in the yard, a chimney trembling with wood smoke.

“A lot of people,” she said, “just turn back.”

Rural poverty seems like something out of a Laura Ingalls Wilder book—something quaint and distant. Something over. But many of my neighbors and family members in Appalachia grew up—or their parents grew up—in homes without running water or indoor plumbing. That kind of living is not a relic from the past. It’s the life of many people today, some of whom I know and love.

Not everyone has the internet.

I stopped assuming my friends would have driveways.  Many of them are homesteading in the deep, ridged woods, or squatting in trailers in fields, or just getting by in overcrowded farmhouses. I stopped assuming they would have bathrooms, trash pickup, or even electricity. Not everyone I know has power—either because the bill hasn’t been paid or the house was never on the grid to begin with; wires never reached that far.

And not everyone has the internet.

Not everyone has high-speed or wireless. Not everyone has a computer, or a smart phone. Or a phone phone. The assumption of basic technology, even in the digital age, is just that: an assumption.

I’m fortunate to have internet at home (usually, when I can pay the bill), but living alone with a 5-year-old child means I don’t get to my freelance work at my computer until late at night, after he’s asleep and I’m exhausted.

Until recently, in order to email a W2—which I have to do regularly, to get paid—I had to drive 20 minutes into town to an office store, pay for parking, and pay a few bucks to print out the pages.

Then a friend gave me her old printer so I can print at home.  But I still have to drive across town to the library, which has a free scanner I can use to scan my W2s—and that’s not a process my son will wait patiently through. So I have to pay for a babysitter, and again pay for parking. The privilege of getting paid for my work costs me about $30 in all, and takes up several hours of limited, much-needed, child-free time.

Most people know about the practice of punishing those who are poor with further financial burdens: deposits for utilities, fees on check-cashing and bank accounts, payday loans. All of this is a kind of a poverty tax—it marks you as undesirable and it helps keep you poor.

But there’s a lesser known poverty tax on technology, and it’s paid with your time.

It takes a lot more time and ingenuity to access technology when you’re poor. It takes calling in favors from friends. It takes being at the mercy of parking and babysitters and business hours and irregular internet access at coffee shops and restaurants.

It takes shelling out a few bucks you don’t have for coffee or food for the privilege of sitting at a business with wireless. It takes feeling incredibly nervous that you’ve been there too long, that they’re going to kick you out or make you buy something else, or that the manager at Wendy’s is going to call the cops because you’ve been sitting in the parking lot for hours—as I have done—trying to use their internet for work.

Politicians talk about providing internet to rural, impoverished communities in grand, noble terms. But the reality is simple and harsh: We need the internet to access help.

I need the internet to get help for child support. I need the internet to search for work and apply for more jobs. Once my child starts school, he will need the internet for homework—a common struggle in my community, since children are required to do hours of homework online every night even though over 300 households in my county don’t have any internet access. Public libraries close a few hours after school lets out, and due to budget cuts, they are not open much on the weekend.

We need the internet to access help.

Most services for the poor are online. Job ads are online. Housing information is online. Information about food pantries, seed distribution, free meals, parenting classes, job fairs, shelters, health clinics, and free activities to do with children are online. Even accessing my bank account—to make sure I’m not overdrawn, to make sure I’m not racking up a low balance fee—needs to be done online. Every time I ask for a copy of my statement at the bank, I’m told: “Do you know you can do this online?”

Yes, I know. Do you know that not everyone has that luxury?  

Stop assuming that everyone has the same technology, the same new phone, the same fast laptop.

Maybe if you realize that, you will stop assuming everyone has other basics: like a hot shower, like a stove to cook a meal, like a fridge to store fruits and vegetables, like dental care, like money for much-needed medications.

What are taken as givens, including technology, are actually extravagances for many people. When you’re poor, applying for a job online, or finding a doctor, or simply answering an email, often takes extra money, time, and luck that you don’t have.

That steep, rocky climb I had to make to reach my friend’s house? I climb it, in so many ways, every day.

 

 

Related

Media and Politics

Paul Ryan Says the Catholic Charity Model Is the Solution to Poverty. Catholics Disagree.

Earlier this week, Speaker Paul Ryan and Senator Ron Johnson, both of Wisconsin, penned an op-ed stating—once again—their belief that charity and individual responsibility are the key to fighting poverty.

“This is how you fight poverty: person to person,” they write.

To illustrate their point, they tell the story of The Joseph Project, a job assistance program run by the Greater Praise Church of God in Christ in Milwaukee. Ryan and Johnson praise The Joseph Project for providing vans that drive Milwaukeeans to Sheboygan County, where they can earn $15 an hour working a factory job. In Milwaukee, by contrast, these workers would likely earn just $8 or $9 an hour.  The drive is an hour commute each way, but Ryan and Johnson assert: “That van represents the difference between poverty and opportunity.”

While it’s important that The Joseph Project is assisting these folks, it’s disingenuous for the Speaker and the Senator to lift up this kind of program as the key to fighting poverty—and even a justification for overhauling our safety net.

The reality is that supporting an adequate minimum wage could also be the difference between poverty and opportunity for these workers. By supporting a minimum wage raise, Ryan could help put an end to poverty wages and save those same workers the two hours they spend each day riding in that van—giving them back some of the family time that Ryan cherishes so much in his own life.

To help the Speaker understand why his take on fighting poverty is so flawed, I suggest he return to the source he often cites as inspiration for his anti-poverty proposals: Catholicism.

In Sunday school classrooms across the country, young Catholics are taught the simplest versions of the Catholic Church’s complicated theology: God’s love is represented by loving parents, Bible stories are boiled down to picture books, and stewardship of creation is taught by tending to one’s own little plant.  And one Sunday school classic, “The Two Feet of Love in Action,” makes it clear that larger systemic solutions are integral to fighting poverty.

“There are two different, but complimentary, ways we can walk the path of love,” the United States Conference of Catholic Bishops explains. “We call these ‘The Two Feet of Love in Action.’” One foot is charity: direct service to help meet the immediate needs of individuals. The other foot is social justice: structural change to end the root causes of poverty.

The van is charity; the minimum wage hike is social justice.

The van is charity; the minimum wage hike is social justice.

Like Ryan, the Catholic Church values charity and applauds the commitment of faith communities like Greater Praise Church that provide direct assistance when people are in need. But, with its commitment to social justice as well, the Church might have some questions about why Ryan is trying to step with just one foot to end poverty. The bishops might even ask why the Speaker hasn’t joined a living wage campaign—one of the examples of social justice on their Two Feet flier.

It serves Ryan’s politics (and budgets) to let charity and other local efforts subsume broader anti-poverty initiatives, to diminish the work of the federal government in curbing poverty, and to pretend we can make meaningful change without making systemic change. But when people who are struggling turn to WIC, the EITC, or SNAP, that’s not dependence—it’s interdependence.

Giving from those who have more to those who have less on a person to person basis is charity, and it’s good. Giving from those who have more to those who have less on a systemic level—making changes to ensure our tax code is fair, passing laws to increase the minimum wage, and ensuring our anti-poverty programs are more robust, not less—is justice, and it’s necessary.

We need charity and social justice to end poverty. Any Sunday school student could teach Speaker Ryan that.

 

Related