Poverty of Opportunity

9.26.2013 | The US Census Bureau announced last week that, statistically speaking, the nation’s poverty rate and real median household income for 2012 were the same as the year before—stuck at 15 percent, and $51,000, respectively. Stuck and stagnant.

It’s a sign of our times that this is considered progress. Even so, the economic recovery is not reaching the middle or lower class. As Richard Fry of the Pew Research Center put it, “There is a sense that in middle-income America … they’ve been treading water for 15 years.”

There was a flurry of reaction to the news this week. Here’s a rundown.

Leading off, Sheldon Danziger, president of the Russell Sage Foundation, demolished the conventional method of measuring poverty by cash income alone. He also attacked the conservative stance, led by Paul Ryan, that social programs don’t work since poverty is the same today as it was thirty years ago, give or take. As Danziger points out, benefits from the Supplemental Nutrition Assistance Program (food stamps) and the Earned Income Tax Credit, and even Social Security, have kept millions out of poverty (or out of worse poverty). Without them, our poverty rates would surely be commensurably higher. His conclusion:

Lowering poverty means both recognizing the successes of safety net programs we now have and devising new policies that can spread the gains generated by economic growth. If we don’t, then we will continue to face poverty rates that are unacceptably high, and wonder why we can’t do anything about them.

At the Economic Policy Institute, Elise Gould, Lawrence Mishel, and Heidi Shierholtz said the numbers “are another reminder that the Great Recession continues to weigh heavily on U.S. households.” Gould and Hilary Wething followed up on Sept. 19 by noting that in light of the new numbers, cutting the SNAP program “would be irresponsible—indeed cruel and stupid.”

Naturally, the Republican-controlled House of Representatives voted that very day to cut the program by almost $40 billion over 10 years.

Before the Census Bureau released its data, Elizabeth Kneebone and Alan Berube, of The Brookings Institution, commented on the community-level results, concluding that they showed the Great Recession “raised poverty rates and reduced household incomes in the vast majority of metro areas” and that almost all large metro areas “ended the decade with lower median incomes than in 2000.” While the effects were first felt in “housing-bust and manufacturing-oriented metro areas,” they spread throughout the Southeast and West.

Moreover, the Great Recession “increased poverty rates in cities and suburbs by similar degrees” while “poor populations continued their decade-long shift toward suburban areas.” (Link in the original text.) In older northern regions—like Akron, Ohio; Baltimore; New Haven, Connecticut; and Rochester, New York— they write, increases in poverty were much larger in cities than in the suburbs. But in some southern and western regions like Oklahoma City, Seattle, and Orlando, Florida, poverty rates rose more in suburbs than in cities. As they write in their book, Confronting Suburban Poverty in America, few of these areas are well equipped to deal with the sudden rise in the number of poor families.

Other Brookings scholars’ comments on the numbers can be found here.

On the other hand, the libertarian Cato Institute tries to cast doubt on the idea that real income is down as much as everyone says it is, linking to this post at the American Enterprise Institute, while decrying the fact that median household income rose in Washington, D.C. (Somewhat ironic since one presumes that rise includes those employed by the D.C.-based Cato Institute.) The culprit for this is, of course, federal spending.

Rush Limbaugh stayed true to form, claiming: “Poverty in America Isn’t Poverty.” His kvetch being that poor people have cell phones, computers, TV sets, microwave ovens, and air conditioners.

Back in the reality-based world, Richard Fry, of the Pew Research Center, found four key indicators in last week’s data:

1. New data show that median household income has stagnated for the longest period since the government began       collecting such data in 1967. [Emphasis added.]
2. Households headed by those 65 and older are faring relatively better since the recession.
3. The income gaps between racial and ethnic groups have stayed pretty much the same in recent years.
4. The income gap continues to widen within the total U.S. population, and also within racial/ethnic groups.

Stuck and stagnant isn’t going to cut it for much longer.

Photo / Doug Kerr

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