More About Arloc Sherman

Arloc Sherman

Sherman is a Senior Researcher focusing on family income trends, income support policies, and the causes and consequences of poverty.

Full bio and recent public appearances | Research archive at

Safety Net Lifted 39 Million Americans out of Poverty in 2013

March 17, 2015 at 8:01 am

As the House Ways and Means Committee holds a hearing today on empirical evidence for poverty programs, it’s worth recalling that safety net programs cut poverty nearly in half in 2013, lifting 39 million people out of poverty.  The figures rebut claims that government programs do little to reduce poverty.

Our analysis of Census data shows that, in 2013:

  • Government policies cut the number of poor Americans by 39 million — from 88 million to 49 million.

    Of the 39 million people, “universal” assistance programs such as Social Security and unemployment insurance, which are widely available irrespective of income, cut poverty by 19 million. “Means-tested” benefits such as rent subsidies, SNAP (formerly food stamps), and the Earned Income Tax Credit (EITC), which target households of limited means, cut poverty by another 20 million.

  • For millions more people, government assistance makes poverty less severe: 34 million poor people were less deeply poor because of safety net benefits.

These figures use the federal government’s new Supplemental Poverty Measure (SPM), which — unlike the official poverty measure — accounts for taxes and non-cash benefits as well as cash income.  (The SPM also makes other adjustments, such as taking into account out-of-pocket medical and work expenses and differences in living costs across the country.) Because the SPM includes taxes and non-cash benefits, it gives a more accurate picture of the impact of anti-poverty programs than the official poverty measure.

Other analysts have recently used SPM data to show the strong impact of poverty programs.  For example,

  • Safety net programs lift thousands of children above the poverty line in every state, from 15,000 in Wyoming to 1.3 million in California, according to the Annie E. Casey Foundation’s Kids Count project.
  • Two tax credits for working families — the EITC and Child Tax Credit — combine to lift more than 9 million people in working families out of poverty, including more than 1 million each in Texas and California, according to the Brookings Metropolitan Policy Program.

If anything, these figures, understate the safety net’s impact. That’s because survey data miss a large share of safety net income due to underreporting by participating households, who often have trouble recalling benefits received months earlier or may feel embarrassed about receiving help.

Plan Would Cut Child Poverty by 60 Percent

January 29, 2015 at 11:51 am

America could reduce child poverty by 60 percent by investing another 2 percent of the federal budget each year in programs that boost employment and low wages and help meet children’s basic needs, a new Children’s Defense Fund (CDF) report shows.  By lifting 6.6 million children out of poverty, these steps would generate long-term benefits for those children and the nation as a whole.

CDF commissioned the Urban Institute to analyze how a package of policy proposals would affect child poverty.  The findings include:

  • Investing more in housing assistance for poor families with children so 2.6 million more families could afford safe, stable housing would reduce child poverty by 21 percent.
  • Raising SNAP benefits by 30 percent to cover a larger share of children’s nutritional needs would reduce child poverty by 16 percent.
  • Making the Child Tax Credit fully refundable would reduce child poverty by 12 percent.
  • Expanding subsidized minimum-wage jobs programs for older teens and adults would reduce child poverty by 11 percent.
  • Moderately raising the federal Earned Income Tax Credit (EITC) would reduce child poverty by 9 percent.  (Expanding state and local EITCs would also reduce child poverty.)

At an annual cost of $77 billion, these and the report’s other recommendations would directly benefit 43.3 million children — that is, most U.S. children — while lifting 6.6 million of them out of poverty, the Urban Institute found.

Reducing child poverty has widespread benefits, the report explains.  Children who grow up poor are less likely to graduate from high school and more likely in adulthood to be poor, suffer from poor health, and become involved in the criminal justice system; they also are less productive workers.  Such problems cost the nation half a trillion dollars a year.

Will Congress Shortchange the Census?

November 18, 2014 at 3:06 pm

A key question as Congress finalizes funding for this fiscal year is whether it will give the Census Bureau what it needs to prepare for the next census in 2020.  A House-passed funding bill from June fell far short, as we explained then.  In its final spending measure, Congress should acknowledge that the Census Bureau — as it has in past decades — must prepare early to get the nation’s head-count right.

As seven former Census Bureau directors from both Democratic and Republican administrations recently wrote Congress:

While the 2020 Census might seem far off . . . 2015 is a pivotal year for decisions that will determine the efficacy of promising, but complex, new initiatives [to improve quality and cut costs]. . . . These new initiatives show great promise, but they need to be tested thoroughly and in census-like environments to confirm their efficacy.

Much is at stake, including the quality of the data to allocate congressional seats, draw voting districts, allocate hundreds of billions of dollars a year in federal funding, and help businesses know where to open stores and towns know where to open schools.  The census is also the foundation for other household surveys, which give policymakers and the public vital data on issues from poverty to commuting patterns.

Congress markedly boosted Census funding in the fifth year before the 2000 and 2010 censuses to enable the Census Bureau to prepare.  (See graph.)  But the House funding bill for 2015, five years before the 2020 census, gives the Census Bureau $238 million less than it requested.  The Senate Appropriations Committee has approved a bill with more adequate funding, though roughly $62 million less than the Census Bureau requested.

Under pressure from Congress to cut costs, Census has committed to conduct the 2020 census for the same cost as the 2010 census, despite inflation, population growth, and the growing tendency of busy Americans to ignore surveys.  The Census Bureau says it thinks it can still conduct a successful census, but only if it can test new software, methods, and machinery before then.   Shortchanging this essential preparatory work would be penny wise and pound foolish.

Latest Census Data Strengthen Case for Helping Childless Workers

September 23, 2014 at 5:10 pm

Poverty and incomes worsened last year for childless adults while improving for children and their families, the new Census data show.  The new figures highlight the need to do more to help low-income workers not raising minor children, as both President Obama and House Budget Committee Chairman Paul Ryan, among others, have proposed.

  • The poverty rate for individuals not living in families (primarily people living alone and unrelated people who share a household) rose to 23.3 percent in 2013, the highest in over 30 years.  The poverty rate for childless families (childless couples, elderly couples, families whose children have moved away or turned 18, and other relatives who live together), while much lower at 6.2 percent, was also the highest in over three decades.  (See chart.)
  • Median income fell 1.4 percent ($949) for childless families in 2013.

Working families with children receive significant help from the Earned Income Tax Credit (EITC) and the Child Tax Credit, which together lifted 10.1 million people (including 5.3 million children) out of poverty in 2012, under the government’s Supplemental Poverty measure, which, unlike the official measure, includes these tax credits.  But poor workers without children receive little help in making ends meet.  In fact, childless families and individuals are the only group that the federal tax code taxes into (or deeper into) poverty.

That’s in part because the EITC for childless workers (and for non-custodial parents) is very small.  The average beneficiary receives about $270 from the EITC for workers without children, and workers with incomes of $14,340 earned “too much” to qualify at all in 2013.

A growing bipartisan group of policymakers — including House Budget Committee Chairman Paul Ryan and President Obama — as well as researchers and analysts from across the political spectrum have called for expanding the EITC for these workers.  An expansion could both reduce poverty among these workers and encourage more individuals to enter the labor force, as the EITC has done with parents.  A broad array of academic research has shown that the EITC has been highly effective at increasing parents’ employment and reducing poverty.

Last Year’s Drop in Poverty Only the Second Since 2000

September 22, 2014 at 4:43 pm

The decline in the official poverty rate last year from 15.0 percent to 14.5 percent is especially welcome because it follows a decade and a half of mostly rising or stagnant poverty rates, our detailed look at the new Census figures explains.  Before 2013, the official poverty rate fell only once since 2000 (see chart).  Still, at the current rate of progress — which was hampered in 2013 by slow job growth and austerity policies — poverty won’t return to its pre-recession level of 12.5 percent until about 2017.

Some 45.3 million Americans were poor in 2013, the Census figures show.

As in other recent economic recoveries, relief from poverty has been slow to arrive.  Last year was the fourth full year of the current recovery (which began in June 2009) but the first year in which poverty fell.

In the previous business cycle, poverty didn’t decline until the fifth full year of recovery, 2006.  In the recovery before that, poverty didn’t decline significantly until the third year, 1994.  By contrast, in the recoveries in the 1960s, 1970s, and 1980s, poverty started falling within two years of the recession’s end.

Two reasons why poverty didn’t fall more in 2013 were the lack of faster job growth and austerity policies that dampened the labor market’s recovery.

In 2013, the economy produced barely enough jobs to outpace population growth.   Only 67.4 percent of the working-age population (people aged 16 to 64) was employed that year, just slightly higher than in 2012 (67.1 percent), according to previously released Labor Department figures.

In response to low employment, policymakers could have created jobs, such as by expanding infrastructure investments or reinstituting the temporary Recovery Act funding that states used in 2009 and 2010 to place 260,000 low-income parents and youth into jobs.  Instead, they adopted austerity policies that constrained consumer spending and job growth, including sequestration budget cuts that cut most discretionary programs by 5 to 8 percent in 2013.  They also allowed a payroll tax holiday to expire after December 2012; for most workers, the expiration lowered take-home pay by 2 percent of earnings.  A third policy decision, to allow tax cuts for very-high-income individuals to expire at the end of 2012, mattered less for consumer demand, as their level of consumer spending is less sensitive to tax changes.

The Congressional Budget Office projected in early 2013 that, together, these measures would reduce economic growth over the year by about 1½ percentage points and lower employment by more than 1 million jobs.  Goldman Sachs similarly estimated that changes in government spending and taxes in 2013 cost the economy 1.1 percent of gross domestic product.