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


Most Poor Children Live in Households with Major Hardships

November 20, 2012 at 12:40 pm

With Thanksgiving right around the corner, this is an appropriate time to look at some new figures on hardship.  New CBPP analysis of monthly Census data finds that more than half (58 percent) of poor children last year lived in households that faced one or more of the following:

  • difficulty affording adequate food (what the Agriculture Department terms “low food security”),
  • overcrowded living conditions (more than one person per room),
  • falling behind on rent or mortgage, or
  • having gas or power service cut off due to inability to pay bills.

That 58 percent is three times the 17 percent rate for households with incomes at or above twice the poverty line, as the graph shows.

Many of these poor children live in working households.  Two-thirds of the poor children lived in households where at least one person was working at the time of this survey, and these working-poor households experienced hardships at about the same rate (59 percent) as poor families with children overall.

The food security data cover only part of 2011.  Agriculture Department data for the year as a whole show that 45 percent of all poor households with children had difficulty affording adequate food at some point in 2011.

Fortunately, government assistance makes a big difference in fighting poverty and hardship.

The Census Bureau reported earlier this month that government assistance programs kept millions of Americans out of poverty in 2011, under a new measure (the Supplemental Poverty Measure) that takes both cash and non-cash income into account.  CBPP analysis finds that nearly twice as many people would count as poor in 2011 if one left out the income they received from assistance programs.

In addition, six recession-fighting initiatives enacted in 2009 and 2010, including expansions in the Earned Income Tax Credit and Child Tax Credit, kept nearly 7 million people out of poverty in 2010.  Unfortunately, those initiatives are expiring, many states have cut programs that help low-income families, and some budget-cutters in Congress are targeting such programs for further cuts.

Antipoverty Programs Having Big Impact, New Government Poverty Measure Shows

November 14, 2012 at 2:38 pm

The Census Bureau today released data showing that SNAP (food stamps), the Earned Income Tax Credit (EITC), and unemployment insurance kept millions of Americans out of poverty in 2011, using a new poverty measure that counts taxes and non-cash government benefits.

These figures are particularly timely given the looming expiration of two key measures that account for part of these programs’ large antipoverty impact:  federal emergency unemployment insurance and the 2009 Recovery Act’s improvements in refundable tax credits like the EITC.

Letting these measures expire at year’s end could push large numbers of families into poverty.

For more details, see our Commentary on the Spotlight on Poverty and Opportunity website.

Poverty Would Have Fallen Last Year if Jobless Benefits Hadn’t Shrunk

September 13, 2012 at 10:04 am

The poverty rate, which held steady in 2011, would have fallen if unemployment insurance (UI) payments hadn’t shrunk considerably last year, our analysis of yesterday’s Census Bureau data concludes.

Not counting UI income, the poverty rate fell from 16.2 percent in 2010 to 15.7 percent in 2011, a statistically significant decline.

UI benefits kept 900,000 fewer people out of poverty in 2011 than in 2010, the Census figures show (see graph).  Total UI benefits fell by roughly one-quarter as the 2009 Recovery Act’s temporary benefit increase expired, many jobless Americans exhausted their benefits before they found jobs, and (on a positive note) the unemployment rate edged down.

The economy showed modest improvement in 2011, as the number of private-sector jobs rose by 1.9 million.  But the UI decline — plus the loss of 386,000 public-sector jobs, mostly in state and local government — pushed poverty in the other direction.

Falling UI payments could slow the recovery’s progress against poverty again in 2012 — and especially in 2013, depending on what policymakers do in coming months.  Federal UI benefits will end entirely on December 31 if they don’t act.

Click here for our full statement about the new Census figures.

SNAP (Food Stamps) and Earned Income Tax Credit Had Big Antipoverty Impact in 2011

September 12, 2012 at 4:34 pm

The official poverty figures count only cash income, so they don’t reflect the antipoverty impact of some key safety net programs, such as the Earned Income Tax Credit (EITC) and SNAP (formerly food stamps).  But the Census data released this morning show that if you count these benefits, the EITC lifted 5.7 million people — including 3 million children — out of poverty in 2011, and SNAP lifted out 3.9 million people, including 1.7 million children.

See our statement for more details.

A Timely Reminder: Improvements in the Safety Net Have Dampened the Rise in Poverty

September 11, 2012 at 3:24 pm

When the Census Bureau releases its poverty figures for 2011 tomorrow, the official poverty rate could reach its highest point since 1965, as I discussed earlier this year.  Although private-sector employment improved in 2011, other factors that affect the poverty rate (such as the amount of unemployment assistance provided to jobless families, government employment, and real average weekly wages) fell.

But even if the comparison to 1965 proves technically true, it will be misleading.  That’s because the official poverty rate is based on families’ pre-tax, cash income.  It ignores all non-cash benefits (such as SNAP, formerly called food stamps) and working-family tax credits such as the Earned Income Tax Credit (EITC) and Child Tax Credit — the very parts of the safety net that have expanded substantially over the past half century and that have reduced the reality of poverty, even if the improvement doesn’t show up in the official poverty figures.

In 1965, cash programs that are included in the official poverty measure — Unemployment Insurance, Aid to Families with Dependent Children (since converted into Temporary Assistance for Needy Families), Supplemental Security Income for the low-income elderly and people with disabilities, and state and local general assistance programs — comprised more than 90 percent of the benefits provided by major federal income-support programs for low-income and jobless Americans.  By 2010, they accounted for only a little more than half of the benefits.

In other words, the official measure of poverty counts various means-tested cash assistance programs that have shrunk markedly, while ignoring key forms of “non-cash” assistance that have expanded substantially.  The result is that using the official poverty measure to compare today’s poverty rate to that of decades ago yields a distorted picture that obscures more than it illuminates.

The Census Bureau is developing alternative poverty measures that count the full safety net’s effect.  Its most complete and analytically sound measures — those that follow the poverty-measurement recommendations of the National Academy of Sciences (NAS) — go even further, also accounting for rising work expenses and out-of-pocket medical expenses, for example, and modestly updating the poverty line itself.

Under these measures, poverty rose slightly over the last decade, including during the recent downturn, but has been flatter than the official rate since 2000.  Census will release NAS-based poverty data for 2011 later this year.

Unfortunately, the NAS measures don’t stretch back to the 1960s or 1970s to allow a full comparison with the official poverty data.  But a cruder measure that I calculated myself — unlike the NAS measures, it’s not a complete and balanced measure of poverty — shows the growing importance of non-cash benefits in raising people out of poverty back to 1979 (see chart).

Under this measure, which counts taxes, the estimated value of food stamps, and housing assistance, poverty rose much more slowly in recent years than the official poverty rate.  It shows that in 2010, such “non-cash” assistance cut the number of people in poverty by more than 10 million, or 3 percent of the population.

Tomorrow’s Census data will likely underscore the very serious state of poverty in America.  But as we consider how to reduce the number of poor families, we shouldn’t get distracted by comparisons that fail to account for how effectively major parts of the safety net have fought poverty.