JEFFREY BROWN: And finally tonight, another in our series on inequality. Judy Woodruff looks at some new and troubling numbers about its impact on the youngest Americans.
JUDY WOODRUFF: It's been widely reported that poverty levels rose during the recession. But a new report documents the magnitude of that rise among families, and finds that poverty rates among children rose substantially throughout the last decade.
The Kids Count study from the Annie E. Casey Foundation discovered that the official child poverty rate rose by nearly 20 percent from 2000 to 2009. And, in 2010, 11 percent of children lived with at least one unemployed parent.
Patrick McCarthy is the president of the foundation. And he's here to tell us more about those numbers and their effect on children.
It's good to have you with us. Thank you for being here.
PATRICK MCCARTHY, Annie E. Casey Foundation: Thank you for having me.
JUDY WOODRUFF: The Annie E. Casey Foundation every year looks at children through different indicators. This year, you looked, as we said, at the effect of the recession on children. What did you find?
PATRICK MCCARTHY: That's right.
We have tracked the well-being of children for 22 years. And this year, we decided to look at how the children have been faring as the recession has played out. We found some very disturbing statistics. As you said, the child poverty rate has gone up. It's now at 20 percent of all kids living in poverty.
Even more troubling in some ways is that the children who are on the edge of living in poverty, those children who live with families that are at 200 percent of the federal poverty level, we now have 42 percent of all children, 31 million children in the U.S., living at that level.
We like to think of it as two or three paychecks away from economic catastrophe.
JUDY WOODRUFF: Something like 31 million children, I saw, living below -- at or below $43,500 a year. It's a stunning figure.
PATRICK MCCARTHY: It is a stunning figure, especially when you consider what the research tells us what happens when children grow up in poverty or when they slip into poverty as a result of recession.
We know that kids who grow up poor are much more likely to end up being poor themselves. They're more likely to have children too early with teen pregnancy. They're more likely to become involved with the criminal justice system as they grow up. They're less likely to be employed. And they're less likely to fully use the talents that they're given.
What we have found most recently, though, is that even with children who slip into poverty for a period of time due to a recession are also facing long-term impact as adults on all of those variables.
JUDY WOODRUFF: So, even if they started out, say, at a middle-income level, the effects can still be devastating?
PATRICK MCCARTHY: That's right. We looked at research over the last four recessions, not counting this one, and for children who slipped into poverty as a result of one of those recessions, compared to a child who was at the same level of income before the recession, those kids who fell into poverty in fact were less likely to graduate from school, more likely to have school problems, more likely to have educational difficulty.
And even health was affected over the long term as those kids were followed into adulthood.
JUDY WOODRUFF: Patrick McCarthy, you also saw the effects of the housing crisis, of so many foreclosures, on children. How did that play out?
PATRICK MCCARTHY: Well, this is also a story that is not often told.
Between 2007 and 2009, 5.3 million children were directly affected by the foreclosure crisis, having to leave their homes. We don't have the figures yet for 2010 and 2011, but you add that to the 5.3 million children, and you get a much larger number.
We're talking about four percent of the children in this country being affected by a foreclosure crisis. There's another hidden fact here, though, and that is that the children who live in a rental housing, when the owner of that property goes through foreclosure, too often, that rental -- that family renting in that property is forced to move.
And we know a lot of about what happens to children when they have to move frequently. Again, their schoolwork suffers. They often have to change schools, which puts them behind. They're less likely to graduate from school. They're more likely to have behavioral problems. There's a whole list of problems that come about as a result of a foreclosure crisis.
JUDY WOODRUFF: Now, your organization, the Annie E. Casey Foundation, did this research, and then you have recommended some strategies for tackling some of this.
What are some of the more important strategies you're recommending?
PATRICK MCCARTHY: Well, we recommend a two-generation strategy.
We basically look at the research and say that children who grow up in poverty have a much tougher time. And now that we have so many children facing economic insecurity, we think it's very important to invest now in their families, so that they don't slip into poverty.
Specifically, unemployment insurance is a key protector of kids and families when unemployment is as high as it is. The earned income tax credit, the child tax credit, these kinds of things help to supplement wages and keep kids out of poverty.
The two-generation strategy means focusing on the parents, but also then investing early in children. We know from research that high-quality prenatal care, high-quality child care and pre-K, and especially education in the early years is critical to put children on a path towards opportunity.
JUDY WOODRUFF: Now, all of these things, however worthy, cost the government one way or another. And we're now in an environment where so much of the energy and the noise is around cutting spending. So how do you advance those ideas in this political environment?
PATRICK MCCARTHY: Well, that's -- that's actually a very important feature of what we have to look at.
When there's this kind of deficits that states have to deal with and the national debt, et cetera, it really is a time to focus. And we believe that what you need to focus on is what's most important, so every dollar is used in the best way, what's most cost-effective, and what can you do now, in 2011, that's going to shape what this country looks like in 2031, in 2041, and in 2051.
In fact, the crisis that we face right now is an opportunity to focus as sharply as we can on investing in the future.
JUDY WOODRUFF: And when you are met with resistance from those who say we just can't afford it, what is the answer?
PATRICK MCCARTHY: You know, the answer to me is that this country is great in part because we have certain core shared values.
And I think the most important shared value that we all have, regardless of our perspective on economics or politics, is that this is a country where we care about opportunity. We care that parents can tell their kids that, if they work hard and they use their talents, they're going to get ahead.
And if we don't invest in ensuring that that opportunity is really available for all of our children, we start to come apart as a country, and we lose one of our greatest strengths. So, I think this is actually a shared value. I should also point out that investing in children is not what's driving the deficit or the debt. In fact, children represent a small portion of our overall budget.
So, we ought to be investing smart, as well as recognizing we ought to deal with the problem today, but not in a way that's going to harm us in the future.
JUDY WOODRUFF: Well, it is a sobering report, and you have given us a lot to think about.
Patrick McCarthy with the Annie E. Casey Foundation, thank you very much for being with us.
PATRICK MCCARTHY: Thank you.