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


Why Deficit Reduction Must Protect Effective Low-Income Programs

March 11, 2013 at 3:58 pm

With President Obama and lawmakers of both parties vowing to achieve further deficit reduction, the stakes are high for low- and moderate-income Americans.  Moreover, as we explain in a new paper, if deficit reduction targets programs that provide supports and foster opportunity for low-income families, the adverse effects could be felt for decades — and not just by the low-income families and individuals who receive this assistance.

The economy’s future strength will depend in part on tapping the talents of as many Americans as possible.  If we shortchange investments that expand opportunity, the nation and our economy will be weaker than otherwise.  As recent data and research show, various key federal programs both ameliorate poverty in the short run and have important positive impacts over the long run.

Census data show that, as a group, programs that help families struggling to afford the basics are effective at substantially reducing the number of poor and uninsured Americans.

Overall, public programs lifted 40 million people out of poverty in 2011, including almost 9 million children (see chart).  While Social Security lifted the largest number of people overall out of poverty, the Earned Income Tax Credit (EITC) lifted the largest number of children.  Together, the EITC and Child Tax Credit (CTC) lifted 9.4 million people — including nearly 5 million children — out of poverty in 2011.

In addition, Medicaid provided access to affordable health care to more than 60 million people in 2009; thanks to Medicaid and the Children’s Health Insurance Program (CHIP), children are much less likely to be uninsured than adults.

Some leading researchers in the field have conducted a comprehensive review of the available research and data on how safety net programs affect poverty.  They found that the safety net lowers the poverty rate by about 14 percentage points (even after accounting for any potential negative effects on work incentives, which the research finds to be small).  In other words, one of every seven Americans would be poor without the safety net.  That translates into more than 40 million people.

Policymakers can make some money-saving changes in programs for low- and moderate-income individuals or families without unduly burdening those populations.  But the achievable savings through greater efficiencies in means-tested programs are modest.  In particular, the largest means-tested program — Medicaid — already provides health care coverage at a substantially lower cost per beneficiary than private coverage.

A more balanced approach to deficit reduction that includes adequate new revenues to complement additional spending cuts can further reduce deficits while maintaining the resources to invest in key building blocks of future prosperity, including effective services and supports for poor families and children.

We’ll take a closer look at how the safety net supports work and its positive long-term effects in future posts.

Click here to read the full paper.

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.