TOPICS > Economy

49 Million Americans in Poverty, Census Calculates

November 7, 2011 at 12:00 AM EDT
The Census Bureau released a new unofficial count of poverty in America on Monday, showing about 16 percent of the population live at or below the poverty line. Ray Suarez discusses the new numbers with The Brookings Institution's Ron Haskins and the Institute for Women's Policy Research's Heidi Harrmann.
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RAY SUAREZ: Now a fuller picture of what it means to be poor in America.

For years, the Census Bureau’s official measurement of poverty has often been characterized as inadequate. One month after releasing official numbers, the Census Bureau offered a new unofficial count today that looked at the poor through a different lens.

It found there are approximately 49 million people living at or below the poverty line. That’s about 16 percent of the population, or roughly one out of every six people, and 2.5 million more than counted just last month. That’s just one of the changes. The government also assessed in a new way how income and living expenses affect all this.

We round out the picture now with Ron Haskins, co-director of the Brookings Institution’s Center on Children and Families, where, among other things, he follows poverty, inequality and welfare policy. And Heidi Hartmann is president of the Institute for Women’s Policy Research, a policy research organization focused on women and the economy.

And, Heidi Hartmann, for years, people have complained about the old poverty line and how we arrive at it, basically taking the cost of food and people’s incomes and coming up with a formula. This adds a lot more data into the determination. Is it a better picture of who is poor in the country?

HEIDI HARTMANN, Institute for Women’s Policy Research: Oh, absolutely. It’s definitely a better picture.

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For one thing, the new measure is counting the non-cash benefits that people receive from the government, such as food stamps, that wasn’t counted before. So you would expect that to decrease the poverty rate as measured. But this new measure increases the poverty rate. And that’s because of some of the expenses now that are being counted that were not counted before.

For example, for older Americans, we’re now counting medical expenses. Those are very high for older Americans. So in this new measure, we see more older Americans poor. We’re also counting work expenses, so if you’re a single mom who is working, you’re now getting some benefits that are being measured that weren’t being measured before.

But you’re also seeing your work expenses being counted, being deducted from your income. So, that’s working in the opposite direction. But it’s a fuller measure.

RAY SUAREZ: Ron Haskins, were you surprised that, when you did add in the value of the government benefits to the computation of people’s incomes, then took out the money they had to spend on various things, that you ended up with more poor Americans?

RON HASKINS, Brookings Institution’s Center on Children and Families: No, I wasn’t surprised. The Census Bureau has been publishing similar numbers, not as sophisticated as the ones they did today, for — since roughly 1995, they have had various what they called at the time experimental series.

So they’re a pretty good hint about what these numbers are going to show. And the poverty increase didn’t apply to every group. So, for example, children had lower poverty rates. And the reason they had lower poverty rates is they benefit disproportionately from the kind of programs that government enacts to support low-income families that were totally ignored in the previous poverty measure.

That was one of the strong criticisms, as Heidi has pointed out, because one of the things you want from a poverty measure is to give you an idea of how the government programs are helping families that are poor. And the answer is, they provide very, very substantial help, particularly to low-income working families, because our programs have now changed so that working families can benefit through the tax code, like the Earned Income Tax Credit, that we spend something like $60 billion that was totally ignored.

So this is a much better measure. And it’s not surprising what the results were. And it’s especially — it especially shows lower poverty rates among children.

RAY SUAREZ: Lower rates among children, Heidi Hartmann, but more elderly poor than we had previously known?

HEIDI HARTMANN: Yes, the elderly poor is due to the out-of-pocket medical expenses being very large for them. And that wasn’t counted.

But an interesting data that hasn’t changed is what our Agriculture Department reports on food and security. And there, the elderly have much less food and security than children. So even with this new poverty measure finding children so much less poor, we’re still seeing two to three times the amount of food insecurity among children than we see among elders, even though, in this new measure, the poverty rate of children and elders is now similar.

So I think that the new measure, as good as it is, may not be getting out all of the things we should be concerned about. Why? Hunger might still be high among children when other measures of their poverty are lower in this new measure. I’m not exactly sure. That is going to be something we’re going to have to do more research on.

RON HASKINS: And, Ray, can I…

RAY SUAREZ: Go ahead.

RON HASKINS: I want to add one thing to this.

Even though the poverty rate among the elderly goes up because of counting this out-of-pocket medical expenditures, their poverty rate is still lower than the poverty rate for children. So it’s inaccurate to say, as I have seen a headline today that said that poverty way up among the elderly. It’s still higher among children.

And you have to consider the way the Census Bureau — I don’t necessarily disagree with what they did. But the elderly, especially low-income elderly, are getting more benefits through the Medicare program than they’re earning in — than they have in income, including Social Security.

And yet that’s totally ignored. So we’re still spending billions and billions and billions of dollars on the elderly to help them with their medical problems. But because they still have out-of-pocket expenditures, it increases their poverty rate, and we ignore the Medicare that we’re spending on them, not to mention that we don’t say a thing about their wealth, which is, you know, probably 20 times greater than that of children.

So this is an inaccurate conclusion that the elderly are way worse off than children. It’s just not true.

RAY SUAREZ: This new report also sets a new peg for a family of four, $24,343 a year. It counts not only people who are at or below that, but people who are near it.

Can you conclude, after taking in all this new research, that it’s really government programs, one way or another, that are keeping millions of these people out of real destitution?

RON HASKINS: Yes, I think you can.

And I think you can also conclude that their work effort, which millions of them exert, and they work for low wages, they would be much worse off if it weren’t for government programs. So the most effective solution — and you can see this in all the data that the Census Bureau publishes — is for folks to work, even at low wages, and then government to support them, which we’re doing a much better job of since roughly the mid ’90s with the Earned Income Tax Credit, food stamps, child care, lots of programs that help low-income working families.

That’s the key, work, plus the government support.

HEIDI HARTMANN: Well, that does help. I mean, no question that government support helps if you have a low-wage job.

But I think what we need to keep in mind is that the stress of having to get to work, if you’re, say, a single mom who is a poor with a couple of kids wondering, will your kids be sick today, gee, if my kids are sick today, do I send them to school anyway, or do I risk losing my job because I’m going to stay home with them?

So, there’s an awful lot more insecurity and stress when we move our welfare system to a work-based system, as we have. And one of the things we have seen, of course, in the recession is that there aren’t jobs anymore for a lot of these low-wage workers. Not as many of them are working now as were working in 1998 or 1999. So we have had a decline in the number of jobs available to low-income people. And they can’t work as much as they used to.

But I think — and the safety net that we used to have for nonworkers, general assistance and TANF, which is what we call welfare reform, that’s not as available anymore. We didn’t see the TANF rolls go up in this recession, with all this joblessness. We saw food stamps go up. That was good. But we didn’t see TANF go up.

So, I think, compared to the old days, we’re really subjecting working families who are low-income to a lot more stress and anxiety about exactly how all of these packages are going to fit together, the job, the benefits, getting the kids to school, the day care. What if your car breaks down or just — or the bus is late? Too many variables that are just increasing stress and anxiety. And I don’t think we should lose sight of that.

RAY SUAREZ: Quickly, before we go, if you take a good look at what’s in these numbers, do you get, if you’re not poor, a better idea of what life is really like for those 49 million Americans?

RON HASKINS: It’s pretty hard to tell by looking at numbers.

But if you have an idea, which I think most Americans do, because many Americans have been in poverty in the past or know people who have been in poverty, and you look at the numbers of how many million Americans are poor, I think it’s very helpful for America to know that. But I think it’s more helpful for them to learn that the government programs make a big difference, and it’s helpful for the poor to know that, if they try to work, even if they make low income, they can do much better because of government programs.

So, to me, that’s the main message of this report, that government programs are effective in helping poor people, especially if they’re helping themselves.

RAY SUAREZ: Ron Haskins, Heidi Hartmann, thank you both.

RON HASKINS: Thank you.