By Cliff Montgomery – Nov. 25th, 2009
The Great Recession has shown an awful ability to drive hard-working Americans into poverty–and to makepoverty especially dire for those who already had nothing.
The Congressional Research Service (CRS) on Oct. 6th, 2009, released a short study entitled, Poverty in theUnited States: 2008.
CRS reports are unclassified, and are distributed to members of Congress. But the reports are not madeimmediately available to the public–you know, the bosses of all those lawmakers.
Yet CRS studies provide fine case studies of a particular social problem, in a format that is bothcomprehensive and easy to understand.
Below the American Spark provides numerous quotes from this study:
“In 2008, the U.S. poverty rate was 13.2%, accounting for 39.8 million persons as having income below theofficial poverty line. The 2008 poverty rate was up from 12.5% in 2007, and was at the highest level it has beenover the past 11 years.
“In 2008, 2.6 million more persons were counted as poor than the year before, and the number of poor in thatyear was the highest since 1960.
“The recent increase in poverty reflects the effects of the economic recession that began in December 2007,and has not yet ended. Given that poverty tends to follow the economic cycle, tending to rise when theeconomy is faltering and to fall when the economy is in sustainedgrowth, the poverty rate and number of poor are expected by analysts to be even higher in 2009.
“Over the course of 2008, the unemployment rate increased from 4.9% (January 2008) to 7.2% (December2008) – by September 2009 (the latest data available at the time of this report) the unemployment rate was9.8%. Estimates of poverty in 2009 will not be available until the latesummer of 2010, but given the most recent unemployment data, they will most certainly be higher than in 2008.
“Even after the economy begins to recover, poverty is expected to remain high, as poverty rates generally donot begin to fall until economic expansion is well underway.
“A strong economy during most of the 1990s is generally credited with the declines in poverty that occurredover the later half of that decade, resulting in a record-tying, historic-low poverty rate of 11.3% in 2000 (a ratestatistically tied with the previous lowest recorded rate of 11.1% in 1973).
“The poverty rate increased each year from 2001 through 2004, a trend generally attributed to economicrecession (March 2001 to November 2001), and failed to recede appreciably before the onset of the currentrecession. Given the depth and projected duration of the current recession, by some estimates, it may be adecade or more before poverty rates recede to their 2007 pre-recession level.
“The longer-term secular trend in poverty has been affected by changes in household and family compositionand by government income security and transfer programs.
“In 1959, over one-third (35.2%) of persons age 65 and over were poor, a rate well above that of children(26.9%). In 2008, the aged poverty rate was 9.7%—a rate statistically tied with the historic-low rate of 9.4% in2006. Social security in combination with a maturing pension system has helped greatly to reduce theincidence of poverty among the aged over the years.
“The poverty rates of children were cut nearly by half from 1959 to 1969, reaching an historic low of 13.8% in1969.
“Since reaching an all-time low, the growth in the number of single-parent families, which tend to have a highincidence of poverty, has contributed to higher rates of child poverty overall.
“Cash welfare programs that target the poor, including many poor single-parent families, tend to lift fewfamilies’ incomes above the poverty line, but in combination with other non-cash aid, such programs help toreduce the depth of income and material deprivation poor families incur.
“Changes in cash welfare programs implemented since passage of the 1996 welfare reform law (PersonalResponsibility and Work Opportunity Reconciliation Act (PRWORA), P.L. 104-193) continue to be assessed interms of their possible impacts on economically vulnerablepopulations.
“The welfare reform law ended the Aid to Families with Dependent Children (AFDC) program, replacing it withthe Temporary Assistance for Needy Families (TANF) program.
“Among other features, TANF sets a five-year lifetime limit on receipt of federally funded cash assistance(allowing lower limits at state option), imposes strong work requirements, and allows states to imposesanctions reducing or denying benefits to families who fail to comply with program requirements.
“Many forms of non-cash assistance, such as food assistance under the Supplemental Nutrition AssistanceProgram (SNAP, formerly called the Food Stamp Program), and tax benefits, such as the Earned Income TaxCredit (EITC) for working families and the Child Tax Credit (CTC), are not counted as income under the officialpoverty measure.
“Many believe that these and other benefits should be included in a poverty measure so as to better reflect theeffects of government programs on poverty.”
