Podcast: Deep Poverty Reaches Record High Nationwide

October 12, 2010

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In this podcast we will discuss “deep poverty,” and how it affects families. I’m Shannon Spillane and I’m joined by Arloc Sherman, Senior Researcher in the Center’s Welfare Reform and Income Support Division.

1. Arloc, last month we talked about what you were expecting to see when the Census released its data on poverty for 2009. As it turned out, the increase in poverty – though significant and troubling – wasn’t as bad as you thought it might be.

That’s right, Shannon. That’s in large part because of the temporary expansions in unemployment insurance benefits provided by the Recovery Act. In 2009 unemployment benefits kept 3.3 million Americans out of poverty. The majority of the increase in those benefits came from the Recovery Act. 

2. Today, we’re taking a closer look at what the data tell us about “deep poverty.” Can you explain what that is?

Sure. The poverty line is the income level below which a family is considered poor. Last year it was roughly $22,000 for a family of four. When we say “deep poverty” here, we mean annual income below half the poverty line. For example, an individual who brings home less than about $5,500 per year is living in deep poverty. And a family of four is living in deep poverty if they are earning less than $11,000 a year.

It costs about that much on average just to rent a modest two-bedroom apartment, let alone put food on the table, and pay health care costs. So, clearly these are folks who really are struggling just to meet basic needs.

3. We know from the recent Census data that the recession is driving a sharp increase in poverty. Has the recession had the same effect on deep poverty?

Yes. Since the start of the recession began three years ago, the number of people in deep poverty has risen 22 percent.

In fact, the number and percentage of people in deep poverty hit a record high in 2009, with the data going back to 1975. Nineteen million people were living in deep poverty in 2009, up 2 million from 2008.

4. Do these numbers include benefits that are often referred to as “non-cash benefits” like food stamps and housing assistance?

That's an important point. These are official poverty numbers and they do NOT count food stamps and housing assistance, which we know are very effective against deep poverty. And food stamps in particular grew a lot last year.

So when we get more complete data for 2009, we may see the impact of food stamps keeping deep poverty from rising quite so much.

5. What does living below half the poverty line mean for families with young children?

Deep poverty has a particularly strong effect on the education and development of young children. Even relatively small changes in incomes among low-income young children are associated with significant changes in school achievement. For example, consistent evidence from several antipoverty programs shows that every additional $1,000 of income raises the school achievement of low-income young children significantly.

6. In light of the troubling impact deep poverty has on families, what can we do to alleviate it?

The most basic question in the near term is what to do about all those lost jobs. 8 million jobs were lost in 2008 and 2009.

The Recovery Act created a very successful subsidized jobs program called the TANF Emergency Fund, and it was very popular with small businesses and workers. It employed more than 200,000 low-income people but unfortunately it expired on September 30th. So that’s something Congress should revive and expand.

In addition, there are other steps for the coming year, like renewing the Recovery Act's temporary expansions in unemployment benefits and the child tax credit, as well as maintaining and even expanding housing vouchers that have proven so successful in keeping families who receive them out of deep poverty.

Thanks for joining me, Arloc.

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