Stalled Progress on Poverty
The U.S. Census Bureau today reported that 12.5 percent of Americans—one in eight—were living in poverty in 2007. The increase since 2006 was not statistically significant, but the figures show that six years after the 2001 recession ended, there were 5.7 million more poor Americans last year than in 2000, when the nation’s poverty rate was 11.3 percent. In light of the economic downturn this year, there is much reason to expect that the numbers for 2008 will be worse.
These numbers remind us that poverty touches too many lives in this wealthy country. They are not “just statistics,” but rather an indicator that tens of millions of people lack the security and opportunities they need to thrive and contribute fully. Since the 2001 recession ended, our nation experienced economic growth in every subsequent year, yet a large share of Americans have not benefitted from that growth.
Since 2000, the risk of poverty has grown in America. In 2007, the official poverty line was $21,027 for a family of four. In many communities, the cost of making ends meet is twice that amount or greater. Thus, the numbers in poverty greatly understate the numbers of Americans who are struggling to get by. Nevertheless, these numbers are revealing. Specifically, in 2007:
- Eighteen percent of children were poor, compared with 16.2 percent in 2000.
- 10.9 percent of working-age adults (between the ages of 16 and 64) were poor, compared with 9.6 percent in 2000.
- 9.7 percent of the elderly were poor, compared with 9.9 percent in 2000.
- 13.8 percent of females and 11.1 percent of males were poor, compared with 12.6 percent and 9.9 percent, respectively, in 2000.
- Poverty rates in 2007 were higher than in 2000 for both native-born (11.9 versus 10.8 percent) and foreign-born residents (16.5 versus 15.4 percent).
- Poverty rates in 2007 were higher than in 2000 for white non-Hispanics (8.2 versus 7.4 percent), blacks (24.5 versus 22.5), and Asians (10.2 versus 9.9). For Hispanics, the poverty rate was 21.5 percent in both years.
The new data also tell us that:
- Average incomes for the bottom fifth of U.S. households were lower in 2007 than in 2000 ($11,551 versus $12,229), and average incomes for the next highest quintile were also lower ($29,442 versus $30,353).
- There were 5.7 million more Americans in poverty in 2007 than in 2000.
- The number of children in poverty has grown by 1.7 million since 2000, with the majority of the additional poor children (1 million) under age 6.
All signs point to the fact that poverty has increased and median income declined since this data was collected. A recent survey by the Alliance to End Hunger found that 28 percent of American voters either feared being hungry themselves in the coming months or knew someone who did. The next president and his administration will face a serious set of economic challenges, yet the historical record makes clear that the United States can cut poverty and make growth work for an expanding share of the population.
Between 1959 and 1973, poverty in the United States fell by 50 percent. More recently, in the seven years between 1993 and 2000, poverty fell by 25 percent, and child poverty fell by 29 percent. In both periods, a near full-employment economy was combined with federal, state, and local policies and efforts that expressly sought to address unemployment and poverty.
In contrast, the last seven years demonstrate that without such an effort, we face stagnation or worse. Our policy choices have a great deal to do with determining whether many win the benefits of growth, or only a few. To take one set of examples: If we raised the minimum wage to return to its historic levels, modestly increased the Earned Income Tax Credit, made the child tax credit available to low-income families as it is to others, and guaranteed help with the cost of quality child care for struggling families, then we could cut poverty by 26 percent, as well as help tens of millions of additional hard-pressed families.
Congress and the Bush administration should get started on the goal of cutting poverty in the remaining weeks of the upcoming legislative session. An expansion of the child tax credit that would help the families of 13 million children is teed up. They should make it law. Congress also should pass a real economic recovery package that strengthens unemployment insurance to provide more help for the rising numbers of unemployed Americans, and that puts money in the pockets of the people who need it to pay for food and heating bills—and who will spend it to keep the economy moving.
We need policies to recover from this downturn, and to shape the next expansion, which would right the balance, prioritize those with the greatest needs, and encourage growth that benefits everyone. Committing to the goal of cutting poverty in half in 10 years would put us back on a path of increasing prosperity for all. The Poverty Task Force report by the Center for American Progress and the Center for American Progress Action Fund’s Half in Ten campaign point the way forward.
Mark Greenberg is Senior Fellow and Director of the Poverty and Prosperity program at the Center for American Progress. Lisa Donner is Executive Director of the Half in Ten Campaign.
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