We sat down with Arloc Sherman, Senior Researcher, to discuss what to look for in the Census Bureau’s upcoming release of data on poverty in 2009.
Arloc, tomorrow, the Census Bureau will release official data on national poverty, income, and health insurance coverage in 2009. Let’s focus on poverty. How does the Census Bureau define poverty?
The official poverty definition accounts for cash income before taxes. So it includes earnings and government cash benefits like unemployment benefits for jobless workers. It does not include tax credits or noncash benefits (such as public housing or food stamps). In 2009, a family of four was considered below the poverty line – or officially “poor” – if their cash income was less than about $22,000.
What do you expect the poverty data for 2009 to show?
We expect a large increase for 2009 in both the number of Americans in poverty, and the share of the population that were living in poverty. This is a reflection of the effects of the severe recession and the unusually large amount of long-term unemployed workers. The longer people are out of work, the more likely they are to fall into poverty. The increase in poverty may even be among the largest single-year increases in many years.
Earlier, you mentioned that the poverty definition excludes non-cash income like food stamp benefits. Weren’t those significant parts of the Recovery Act of 2009 that were intended to lessen the harmful effects of the recession? How do we regard the Census poverty data if it’s missing a large share of the government's anti-poverty efforts?
You're right. The Census numbers released on Thursday will leave out tax credits and non-cash assistance, which make up the majority of the help to families under the 2009 Recovery Act. However, a broader definition of poverty is due out at the end of the year. It’s called the Supplemental Poverty Measure, and Census plans to unveil a preliminary version of it, and it will include tax credits and food stamps and other non-cash benefits. The new measure will do a better job of showing how the Recovery Act has helped mitigate the true rise in poverty over the course of the recession.
Will this new measure show that poverty in the country isn’t really that dire?
Actually, it is still quite dire. It’s just that poverty hasn’t necessarily risen as much as the official numbers will show. Moreover, there is an even darker cloud looming on the horizon: The Recovery Act provisions that have proven so successful in shielding people from deeper poverty levels are set to expire at the end of this year. That means this extra help will evaporate, and assuming the labor market is as troubled as the predictions forecast, poverty could go even higher.
What should policymakers do?
Congress can take three key steps:
- One: Extend the unemployment benefits for the long-term unemployed, which are due to expire November 30
- Two: Extend the child tax credit for lower-income working families with children. The Recovery Act broadened that to cover more families, so don't let that run out.
- Three: Extend a highly successful little jobs program called the TANF Emergency Fund, which has placed a quarter of a million people in jobs and is set to expire at the end of September.