The headline story in today’s Census Bureau report is the large jump in the poverty rate in 2009. But an exclusive Center on Budget and Policy Priorities analysis of the new survey data shows that unemployment insurance benefits — which expanded substantially last year in response to the increased need — kept 3.3 million people out of poverty in 2009.
In other words, there were 43.6 million Americans whose families were below the poverty line in 2009, according to the official poverty statistics, which count jobless benefits as part of families’ income. But if you don’t count jobless benefits, 46.9 million Americans were poor.
Unemployment insurance benefits usually keep more people out of poverty during recessions than during expansions, partly because recessions swell the ranks of jobless workers seeking help and because the government typically offers extra weeks of help in a recession. But they had a much bigger poverty-fighting impact in this recession than in the previous three recessions:
- From 2007 to 2009, the number of people that unemployment insurance kept out of poverty rose by 2.8 million or 581 percent.
- In the previous two recessions (in 2001 and the early 1990s), the number protected from poverty never rose more than 1 million or 209 percent.
Why? Total unemployment benefit payments increased by fully $78 billion (154 percent) in 2009, reflecting both a massive influx of laid-off workers qualifying for help and temporary changes made to the program in the 2009 Recovery Act and other legislation. The Recovery Act raised jobless benefits by $25 per week (the increase expired June 2) and, together with other legislation, gave additional weeks of benefits to long-term jobless workers.
We’ll have more soon on the Census Bureau’s new health insurance data.