2011 Poverty Statistics Shed Light on Ongoing Economic Hardship

The U.S. Census Bureau released 2011 estimates from the Current Population Survey today that show the national poverty rate remains the same as 2010. The new report shows that that more than one out of every seven Americans lived in poverty during 2011. As the Census press release notes, “after three consecutive years of increases, neither the poverty rate nor the number of people in poverty were statistically different from the 2010 estimates.” While poverty remained roughly the same, incomes were down in 2011, compared to previous years. “Real median earnings of both men and women who worked full time, year-round declined by 2.5 percent between 2010 and 2011,” the press release notes. The poverty threshold for a family with two adults and two children in 2011 was $22,811, while median household income was at $50,054. That means half of American households are getting by on less than $50,000 annually, and over 46 million are surviving on less than half of that.

As was the case with the recently released food insecurity data from the USDA, the new Census data show stark and persistent disparities in the poverty rates of different demographic groups. Over a quarter of black and Latino households lived below the poverty threshold in 2011, compared with 12.8% of white households. Children are much more likely to be poor than older adults: 21.9% of kids under 18 are poor compared to 8.7% of adults older than 65. The report also looks at a measure of income inequality, known as the Gini Index. By this measure, inequality increased from 2010 to 2011 by 1.6% in what is the first annual increase since 1993.

As Jodie Levin-Epstein points out in this video from CLASP and the Economic Policy Institute’s (EPI) State of Working America report articulates, the high prevalence of poverty is not simply due to the recession and its aftermath. Long prior to the economic downturn, many people struggled in low-wage jobs without benefits and found it difficult or even impossible to afford housing, childcare, food, and adequate medical care on such low incomes. The recession extended these struggles up the income ladder and threatened the relative stability of many in the “middle class.”

However, many communities have experienced decades of disproportionate poverty, unemployment, underemployment, and lack of wage growth that have hampered their upward mobility into the middle class. For example, the gap between black, Latino and white poverty rate (shown in the EPI graph below) has been a constant presence of the last four decades, despite times of relatively strong economic growth. Upticks in our economy have regularly improved the economic prospects of all groups, but have also consistently failed to close this racial gap. Focusing on the newest data is key for making timely policy decisions, but we must not lose the historical context of these numbers.

The Center on Budget and Policy Priorities has a helpful document framing the new poverty data in terms of what isn’t included. Namely, the new data will not be able to generate a meaningful comparison to 1960s era poverty rates or be able to accurately reflect the role of the safety net in supporting families. As Rachel Black points out here, these poverty statistics don’t do a perfect job at reflecting the reality of life for struggling Americans. As she explains, the poverty measure is based on outdated assumptions about families’ expenditures, hasn’t kept pace with the shifting cost of housing, childcare, education and other big ticket items, and creates a binary that seems to suggest that either a family is poor or they are just fine. (The Supplemental Poverty Measure is another annual report from the Census Bureau that we can expect out in November, which aims to address some of these concerns and more accurately reflect the experience of poverty.)

As any asset building advocate or practitioner can tell you, relying on an income-based measure of poverty won’t tell you the full story. Knowing about the asset holdings of families can often provide a better picture of long-term stability than income alone. This is because asset ownership (having a savings account with a few thousand dollars, owning a home or a modest 401(k) account) can help families to mitigate the financial stress that comes from income loss or fluctuation. This information simply isn’t available through today’s Census data release. However, what we can gather from the latest numbers is a strong case for supporting policies that boost savings opportunities and raise incomes (such as EITC, SNAP, or unemployment insurance). (For analysis on the assets and wealth of families, check out this analysis of the Survey of Consumer Finances, which does include this type of data.)

More broadly, we need to step back and see that the persistence and prevalence of poverty are among the byproducts of our “normal” economy – that is, even during times of growth and relative economic stability, we’ve still seen high rates of poverty. Since 1980, the poverty rate for children has never been below 15%. In 2011, more than one out of every five American kids lived in poverty. Lisa Wade, a professor of sociology from Occidental College sums it up succinctly, when looking at recent poverty and SNAP caseload data:

“This kind of data inspires me to ask if this is what a functional economy looks like. We have policies […] that create a situation in which working full time doesn’t allow a single parent to support even one child. When we hear criticisms of people who receive benefits, then, we should be careful to remember that their economic crisis is not a straightforwardly personal characteristic, one that can be explained by a poor work ethic or disorderly personality. There are structural reasons that people end up in need.”

Ultimately, the latest data from the Census serve as a reminder of and opportunity to reflect on both the human and economic cost of widespread poverty. Addressing disparities without relying on stereotypes, supporting and improving public assistance programs without demonizing recipients, and examining root causes of economic insecurity are all part of moving this work forward.