In this analytical essay for Marguerite Casey Foundation’s Equal Voice News, Sasha Abramsky looks at poverty in America in 2019, the interpretation of data and the preferable focus to best reflect reality and make progress for all families in the nation.
In early September, the U.S. Census Bureau released data showing that the poverty rate in 2018 was 11.8 percent, half a percent down from 2017, and far off what it was at the height of the Great Recession. In fact, the 2018 rate was lower than before the financial crisis hit.
On the surface, the rate suggests we’re on the right track when it comes to tackling poverty. However, dig below surface numbers, and the story is far more complicated.
Do the lower poverty numbers mean people are actually struggling less because federal anti-poverty measures have become dramatically more effective in recent years? Not really.
Sure, during a period of strong economic growth and the low unemployment that accompanies it, a falling poverty rate nationally is largely inevitable. But the poverty rate also is dropping for two other reasons. States are getting smarter about tackling poverty, even as the U.S. government pulls back from anti-poverty efforts. And, less optimistically, the way the federal government measures and calibrates poverty has changed in a way that reduces the official poverty rate without lowering actual rates of economic insecurity. It’s at least in part a smoke-and-mirrors game.
Now states are pushing back. Faced with a stubborn federal resistance to improving the working conditions of low-wage workers, many states have chosen to go their own way on wage policy and have significantly raised their own minimum wages. They also have embraced a raft of other anti-poverty measures.
Anti-poverty experts say that change alone is hugely consequential when it comes to tackling poverty, especially in a time of low unemployment. The Economic Policy Institute has calculated that more than 5 million Americans saw their pay go up on January 1, 2019, following the implementation of minimum-wage increases approved by 19 states in 2018, adding in more than $5 billion of additional earnings to the bottom tier of the economy.
Many of these same states also have expanded their Earned Income Tax Credits, and some have passed paid family leave laws as well. Several have passed laws expanding access to loan-free higher education for low-income residents; others have, in recent years, moved to pass laws limiting the interest rates payday lenders can charge. In these states, a newly assertive effort is underway to rethink the state-level social contract, one that may increasingly draw down poverty numbers in those states.
By contrast, states throughout the U.S. South and in parts of the U.S. Southwest have resolutely rejected the idea of low-wage laws and are generally reluctant to legislate on these sorts of issues. Throughout those regions, poverty rates are near-double the national average, hitting 19 percent in Mississippi, Louisiana, West Virginia and New Mexico.
But even that doesn’t tell the full story of poverty and economic insecurity in many states. The basic poverty rate doesn’t include a person’s income non-cash benefits, such as food stamps. That means there are people, particularly children, who might be listed as poor despite their food needs being largely taken care of. But the reverse also holds true. Someone who’s just above the poverty line might lose food stamp eligibility because of criteria changes, but they still won’t show up in the federal poverty numbers because their income hasn’t changed. In other words, a slight increase in a person’s cash income might actually render that family hungry. However, in the government’s calculation, that doesn’t mean they have become poorer, and they don’t register in poverty data.
Increasingly, that’s what’s happening as the federal government reduces the income and assets threshold for program eligibility, and as more states attempt to implement workfare requirements for food stamps, Medicaid and other safety net programs (saying the requirements are needed to root out fraud). Enrollment in the Supplemental Nutrition Assistance Program (SNAP) is at the lowest level in more than a decade, and Trump administration proposals would cut another 3 million people from the program. The changes would be particularly hard-hitting in impoverished parts of Texas, Louisiana, Florida, Georgia and other southern states, which have benefited disproportionately from SNAP expansion in recent years. Yet, those losses would not show up using the traditional methods of calculating poverty.
These cuts will be further exacerbated if the federal government follows through on proposals to utilize new ways of measuring inflation. If used for calculating the poverty line, the new formula would reduce by several million the number of Americans considered to be in poverty. Fewer people in poverty means fewer people eligible for benefits, creating a downward spiral that could, over the coming decades, dramatically shrink the size of the country’s safety net programs.
Many conservative states already are stepping back from waivers to SNAP workfare requirements that were put in place during the Great Recession, arguing that poverty numbers are down and that any adult who is able and willing to work can earn enough at the moment to not need to rely on public assistance.
“They’re using the language of ‘welfare fraud,’ using an example of a millionaire who applied for and got food stamps,” says Jessica Bartholow, a policy advocate with the Western Center on Law & Poverty. “It reminds me of the ‘Welfare Queen’ myth that even Democrats participated in. They’re using the mythology of people out there gaming the system. It’s reminiscent of a kind of neo-liberal politics.”
In Kentucky alone, this has resulted in over 21,400 people being removed from the SNAP rolls just in the past year.
And, with Kentucky leading the way, conservatives are similarly making a push to link Medicaid eligibility to workfare – or, in Tennessee’s case, to convert Medicaid into a bloc-grant program. They’re also pushing to reduce the value of unemployment benefits a person can claim as well as the length of time they can use those benefits.
“It deepens the negative cycle of poverty,” says Anna Baumann, communications director for the Kentucky Center for Economic Policy. “It feels like an unprecedented attack on a system that has lifted millions of people out of poverty.”
In an era of low official poverty numbers, it’s politically pain-free to adopt more coercive welfare policies. In previous decades, administrations pushed to exclude drug felons from public housing and other benefits; today, federal officials are talking about drug testing workers who claim unemployment insurance.
Yet, even in a time of low unemployment, the real poverty picture is nowhere near as rosy as the headline data suggest, meaning the risk of such policies catapulting large numbers into poverty are higher than they might seem. And that holds even in many of the states with high minimum wages and generous state-level social programs – California and New York being cases in point. Those states, with high costs of living, still see huge levels of economic insecurity that standard poverty measures fail to fully capture. In fact, the Supplemental Poverty Measure, which takes account of regional cost-of-living criteria, as well as out-of-pocket health care costs and the like, has largely stayed constant during the Trump presidency. And that measure suggests that upwards of one-seventh of the population remains poor.
In California, where housing costs are particularly high, and in the Deep South, where many people lack health insurance, more nuanced poverty measures show even higher rates of economic hardship. The California Poverty Measure, developed in a collaboration between the Public Policy Institute of California (PPIC) and the Stanford Center on Poverty and Inequality, finds nearly 18 percent of Californians are in poverty, and another 18 percent of hovering just on the edge of poverty.
In an era of growing economic inequality, that band between the official poverty rate and the more accurate supplemental poverty measure is where many millions of Americans now languish. They are too poor to be economically secure, but not quite poor enough to qualify for many federal benefits.
Black and Brown Americans have always experienced higher rates of poverty than have White Americans, with less accumulated capital, less access to credit and higher rates charged on loans. Now, immigrants, as well as their U.S.-citizen children, also are having economic insecurity locked into place by federal regulatory changes such as the new “public charge” rules. The rules restrict access to SNAP, Medicaid, public housing and other benefits.
In some ways, this is simply an intensification of decades-old policy trends, particularly at the state level. Policies that targeted undocumented immigrants and that were championed a quarter-century ago in California and more recently in Arizona are now being pushed nationally.
“It’s not the first time attacks against poor people have been racialized,” says Bartholow. “Welfare reform [in the 1990s] was all about racialized cuts.”
Bartholow says the basic arguments for scaling back SNAP, Medicaid and other vital parts of the social safety net were laid down by administrations of both political parties over the past quarter century or so. Chief among these earlier changes were Bill Clinton’s welfare reform policies, which codified the idea of workfare and imposed lifetime limits for women accessing cash welfare. Two conservative organizations are pushing cookie-cutter state legislation on these issues – the American Legislative Exchange Council and the Foundation for Government Accountability.
The workfare principles at the core of these reforms have now been glommed onto by Kentucky and other states, mainly in the Deep South, which are attempting to expand them to Medicaid. For the past couple years, Kentucky has pushed for a 1115 Medicaid waiver, which would allow for workfare requirements. Twice the courts have blocked this. But, backed by the Trump administration, legislators will likely revisit the issue in the coming years. Other states also are pushing similar changes.
“At the federal level, the administration is doing everything it can to undermine anti-poverty efforts, from public charge to making it harder for people taken advantage of by for-profit universities to have their loans forgiven,” says Jesse Rothstein, director of U.C. Berkeley’s Institute for Research on Labor and Employment.
Rothstein worries that when the next recession rolls around, many vital safety-net programs will have been gutted, and regulatory and policy interventions that limit the impacts of cascading poverty won’t exist anymore.
For Dean Baker, senior economist at the Center for Economic and Policy Research, this means that already weakened safety-net systems are now being rendered even weaker.
“Our safety nets, leaving out Social Security and Medicare, really were bottom rung,” says Baker, who also is a research associate with the Economic Policy Institute. “And we’re going to make them worse.”
Baker says safety-net programs are under attack in two ways. First, their eligibility requirements are tightening up. But, more subtly, the administrative sides of these programs are being slashed as well, meaning fewer offices open in poor neighborhoods when people can enroll in programs. Baker says this began as part of the budget deal negotiated between Congress and President Barack Obama in 2011. Since President Donald Trump took office, the process has accelerated.
There have long been two distinct visions of how to tackle poverty in America. In the current era, these divisions are intensifying. There are now two welfare systems and two diametrically opposed visions of why people are in poverty – two ideas of how to craft policies to tackle poverty. There’s the current federal emphasis, mirrored in the more conservative states, on curtailing eligibility for safety net programs and tying benefits to work obligations. And then there’s the more inclusive vision, aimed at bringing the undocumented and other vulnerable groups under the safety net, that is being legislated into existence at a state and city level in places like California, New York, Oregon and Illinois.
The Trump administration is looking to restrict food stamp usage for adults to three months in a year, but these states are pushing back with more expansive policies. In Congress, representatives from these states are proposing bills that would fundamentally reshape America’s approach to tackling poverty. U.S. Rep. Barbara Lee, from Oakland, California, is pushing a bill to eliminate time limits codified in the 1990s welfare-reform legislation.
Jessica Bartholow says that this principle will become a vital part of any durable anti-poverty effort: “There should be no time limits on SNAP, unless there’s a time limit on hunger.”
Sasha Abramsky is a freelance journalist and book author. In January, he wrote the Equal Voice article, “Portraits of Muslim Families Show the Real America.” The United Nations cited his 2013 book, “The American Way of Poverty: How the Other Half Still Lives,” in its 2018 report about extreme poverty and human rights in the U.S. Equal Voice is Marguerite Casey Foundation’s publication featuring stories of America’s families creating social change. With Equal Voice, we challenge how people think and talk about poverty in America. All original and contracted content – articles, photos and videos – created specifically for Equal Voice can be reproduced for free, as long as proper credit and a link to our homepage are included.
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