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 CBPP.org


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.

5 Facts to Help You Understand Next Week’s Poverty Figures

September 12, 2014 at 9:51 am

Our new report provides context for the official poverty and income figures for 2013, which the Census Bureau will release on Tuesday.  Here are the highlights:

  1. As in other recent recoveries, poverty has been slow to decline.  Over time, poverty rates tend to move roughly in tandem with economic indicators, which generally improved slightly in 2013.  Thus, the poverty rate — which jumped from 12.5 percent in 2007 to 15.1 percent in 2010 and remained essentially unchanged at 15.0 percent in 2011 and 2012 — may start to improve in 2013 as well, although the improvement might not be statistically significant.A return to pre-recession poverty levels is unlikely soon.  To replace the millions of jobs lost in the Great Recession anytime soon and keep up with population growth, the economy must create jobs faster than it has to date.  Although the economic recovery (which officially began in June 2009) is not uniquely disappointing in this regard, it is still problematic — and because the economic downturn was so deep, there is much more ground to make up.  Recoveries in the 1960s, 1970s, and 1980s featured quicker reductions in poverty (see graph).
  1. Austerity policies likely hampered progress against poverty in 2013.  The economy almost certainly would have improved more in 2013 had austerity policies not reduced the government’s contribution to the economy.  These included the “sequestration” spending cuts of the 2011 Budget Control Act and first implemented in 2013 and the expiration of the payroll tax holiday, which reduced most workers’ take-home pay by 2 percent of earnings.
  2. Unequal wage growth also slowed progress.  Between 2009 and 2013, inflation-adjusted hourly wages rose by 1 percent for workers at the 95th percentile (workers whose wage levels exceed those of 95 percent of all workers but are less than the remaining 5 percent), but fell by about 4 to 6 percent for workers in the bottom 60 percent of the wage scale, according to the Economic Policy Institute.
  3. Income inequality tied a record-high level in 2012.  The income gap between rich and poor as measured by the Gini index — the Census Bureau’s main summary indicator of inequality in pre-tax cash income — tied a record in 2012, with the data going back to 1967.  Other inequality measures also stood at or near record levels in 2012.
  4. Most poverty figures released on Tuesday won’t reflect non-cash benefits.  The Census figures will focus on the official poverty statistics, which are based on pre-tax cash income and omit support such as food assistance and rental subsidies as well as tax-based assistance such as the Earned Income Tax Credit (EITC).  An alternative Census Bureau poverty measure, the Supplemental Poverty Measure (SPM), includes these types of assistance, and experts generally consider it a more reliable tool for measuring changes in poverty over time as well as the safety net’s impact on poverty.  Unfortunately, Census will not release SPM figures for 2013 until later this year.  However, Census will release a table on Tuesday providing data on the poverty-reducing effects of certain programs, including SNAP (formerly food stamps) and the EITC.

Click here for the full report.

Fewer Poor Children Under Welfare Law, But More Very Poor Children

July 23, 2014 at 3:02 pm

There are fewer poor children in America but more very poor children since policymakers dramatically shifted low-income assistance from non-working families to working families in the mid-1990s, our new report explains.

We estimate that the share of children in deep poverty — with family income below half of the poverty line — rose from 2.1 percent to 3.0 percent between 1995 and 2005, after correcting for households’ underreporting of safety net benefits in Census surveys (see graph).  The number of children in deep poverty climbed from 1.5 million to 2.2 million.

These findings are consistent with other research, such as a study finding a significant rise in the number of households with children with monthly cash incomes equivalent to less than $2 per person per day — a standard of poverty more associated with developing countries.

The 1996 welfare law replaced Aid to Families with Dependent Children (AFDC), which had chiefly served families with little or no earnings, with Temporary Assistance for Needy Families (TANF), which offers less assistance and includes stricter work requirements and time limits.  At the same time, policymakers expanded assistance for moderate-income working families, such as by strengthening the Earned Income Tax Credit (EITC) and medical and child care programs and creating and later expanding the Child Tax Credit.

Some data sources don’t show a rise in deep poverty for children, but this appears to reflect their omission of a large share of the income from key public benefit programs.  Correcting for this underreporting reduces the deep poverty rate in any given year but reveals the increase in deep poverty over the decade as income from these programs — particularly public assistance (AFDC/TANF) — shrank.

Public assistance kept 2.4 million children out of deep poverty in 1995 but only about 600,000 children in 2005, after correcting for underreporting.

Policymakers need to take account of the significant rise in deep poverty among children as they consider proposals affecting support for poor families, including the poorest families with children.