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PORTSIDE  September 2011, Week 2

PORTSIDE September 2011, Week 2

Subject:

Rising Poverty Rate Shows Holes In Safety Net

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Date:

Tue, 13 Sep 2011 22:55:17 -0400

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Rising poverty rate shows holes in safety net

Stubbornly high jobless rate leaves more Americans in dire
straits

By John W. Schoen
msnbc.com
September 13, 2011 

http://www.msnbc.msn.com/id/44507675#

The worst economic downturn since the 1930s has left a record
number of Americans in poverty and created strains on the
government’s safety net not seen in decades, according to a
report issued Tuesday by the U.S. Census Bureau.

"Clearly the safety net has helped, but it’s got holes in
it," said Jared Bernstein, a senior fellow at the Center on
Budget and Policy Priorities and former White House
economist.

With the unemployment rate stuck stubbornly over 9 percent,
the poverty rate in the United States climbed to 15.1 percent
last year - the highest level since 1993 - as the number of
impoverished Americans swelled to a record 46.2 million, the
Census report said.

US incomes fell in 2010 as poverty rate rose.

The U.S. poverty rate remains among the highest in the
developed world. Among 34 countries tracked by the Paris-
based Organization for Economic Cooperation and Development,
only Chile, Israel and Mexico have higher rates of poverty.

The rate would be even higher without a variety of government
programs intended to blunt the impact of the worst recession
since the 1930s. The Census estimated that the extension of
unemployment benefits enacted in 2009, for example, helped
another 3.2 million remain above the poverty line, which the
government defines as an annual income of $22,314 for a
family of four. Last year, the Social Security helped some
20.3 million seniors and disabled working-age adults avoid
falling into of poverty.

Millions more households are collecting food stamps to
stretch household budgets far enough to keep food on the
table. Since the recession began in 2007, the number of
households receiving food stamps has nearly doubled to 21.4
million.

Still, millions have fallen through the cracks of the
government safety net. Tuesday's Census report found that the
poverty rate rose faster in 2007-2010 than in any three-year
period since the early 1980s, when households were battered
by rising energy prices, high inflation and soaring interest
rates as well as high unemployment. 

Number of families 'doubling up' rises, Census says 

The recession's lasting damage to the job market was a major
force driving families into poverty last year. President
Barack Obama sent a 155- page jobs bill to Congress Monday,
and Republicans have been busy coming up with
counterproposals.

The Census Bureau said median income fell 2.3 percent last
year, adjusted for inflation, while the number of Americans
without health insurance hovered near the 50 million mark.

"On every measure it seem as (if) this first full year after
the recession ended was more extreme than in previous
recessions both in terms of continuing unemployment and
declining income and earnings," said Christine Owens,
executive director of the National Employment Law Project.

The slow pace of employment growth has been compounded by a
concentration of job creation in lower-wage occupations, with
minimal growth in mid-wage occupations and net losses in
higher-wage occupations, according to a recent NELP analysis.
Since the recession began 2007, family incomes have fallen by
11.3 for those in the bottom 20 percent of the income ladder,
according to Census data.

The recession also has cut a wide swath through American’s
personal safety nets. Millions of families facing foreclosure
have burned through savings to avoid losing their homes. Tens
of millions of more owe more on their mortgage then their
house is worth.

The weak labor market also has left more families without a
steady paycheck. Since 2007, the number of men working full
time, year-round with earnings decreased by 6.6 million and
the number of corresponding women declined by 2.8 million.

'Work-based' safety net 

The current slow recovery has dramatically lengthened the
time jobs seekers spend without a paycheck. As of September,
some 43 percent of job seekers had been looking for work for
27 weeks or more, according to Labor Department statistics.
That’s more than double the levels seen in any recovery over
the past 50 years. As of the second quarter of 2011, some 14
percent of those out of work have been unemployed for 99
weeks or more. (That number doesn’t include workers who have
given up looking and are no longer part of the "official"
work force.)

"The longer you are unemployed, the worse it becomes because
you deplete any resources you had," said Sheila Zedlewski,
director of Urban Institute's Income and Benefits Policy
Center. "We’ve moved toward a work-based safety net with
assistance like unemployment insurance and tax credit tied to
paychecks. That’s are where most of the money is."

The link between a weekly paycheck and the modern American
safety net dates to the mid-1990s, when the Clinton
administration undertook a sweeping reform of the welfare
system, replacing the centerpiece with Temporary Assistance
for Needy Families, or TANF. The program succeeded in moving
millions of families off welfare rolls and back into the work
force.

But the program has been less successful when there are more
than four job applicants for every job opening, as there are
now. Even as the number of unemployed workers has more than
doubled since the 2001 recession, the number of people
enrolled in TANF has fallen.

"Welfare is a good example of a program that was reconfigured
to work much better when the economy is at full employment,"
said Bernstein. "TANF has been extremely unresponsive to
higher unemployment."

The remaining safety net is stretched thin. State-
administered programs like unemployment insurance and TANF
are under mounting strain as state governments repair
battered budgets. (TANF is funded by federal block grants and
administered by the states, many of which expanded the
program in the 2000s with their own funds when the economy
was booming.)

The Census report also shows that the number of Americans
without health insurance rose slightly to just under 50
million, as a weaker economy has chipped away at employer-
provided health coverage. Comprehensive health care reform
enacted last years doesn’t take full effect until 2014. Until
then, congressional Republicans have vowed to roll back much
of the plan, and the law faces several legal challenges
working their way through the courts.

As the recession has aggravated the forces that send families
into poverty, analysts say the impact will likely be felt
long after the economy recovers and the unemployment rate
falls. Because poor households have lower savings rates and
limited access to good secondary schools, children raised in
poverty are at much greater risk of become impoverished as
adults.

"This is the generation that’s going to be fueling the
recovery and the competitive position of the U.S. 20 years
from now," said Zedlewski. "The longer that a child stays in
a household with very low income or in poverty, the bigger
the effect later on in life."

© 2011 msnbc.com 

___________________________________________

Portside aims to provide material of interest to people
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and to change it.

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