New Report Finds Poverty Spike Very Likely to Worsen

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January 11, 2012; Source: The Guardian | Between 2006 and 2010, poverty increased by 27 percent to include 47.2 million Americans—or 15 percent of the U.S. population. Now, a study released on Wednesday by Indiana University (done at the request of Tavis Smiley) predicts that poverty will continue to worsen in the wake of the recession. The report is based on 2010 poverty statistics, but a combination of factors led the authors to this conclusion. The United States now has the largest number of unemployed people since records started being kept in 1948, and four million of these Americans report being out of work for more than a year. The longer they are out of work, of course, the harder it will be for them to re-enter the workforce. If unemployment insurance benefits are cut before new jobs appear in the market, the numbers of “new poor” will likely swell accordingly.

In terms of support beyond unemployment insurance, government-funded safety nets are expected to remain very much at risk in a deficit environment, but the risk for people teetering on the edge of poverty is not equally distributed. There will be high variations by state, as the budget problems of the worst-hit states are expected to continue to affect social programs. The 10 states with the highest poverty growth in percentage points are Florida, Nevada, Arizona, Michigan, Indiana, Ohio, California, Connecticut, South Carolina, and Minnesota/North Carolina/Wyoming (tied for 10th). Additionally, the increase in poverty since 2006 has been greater among Hispanics and African Americans than among Whites, and higher among female-headed households than other households. And as NPQ has previously reported, there has been real growth in poverty among young adults ages 18 to 34.

Surprisingly, this report also takes on the scrutiny and defunding of anti-poverty programs, noting, “While history is rife with examples of mismanagement and abuse of public funds used for a variety of government purposes, anti-poverty programs may be particularly vulnerable to being placed under the microscope, and perhaps subsequently at risk for budget cuts.”

Finally, the authors of the report point out that the federal agreement to raise the debt ceiling requires two rounds of cuts in the growth of federal spending, and this puts some programs for low-income Americans in competition with defense expenditures. The pressure to contain federal spending may also cause Congress to reduce federal relief for the states, which will very likely trickle down to squeeze spending on state-funded social programs for low-income people.

All of this leads the report to conclude that the numbers of new poor are likely to increase in the near future.—Ruth McCambridge