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


Tomorrow’s Poverty Data: Some Timely Issues to Look For

September 16, 2013 at 9:00 am

The Census Bureau will release the official figures tomorrow on the number of Americans in poverty in 2012, as well as data on the impact of various safety net programs.  The figures will show:

  • Changes in the official poverty rate. If the rate falls, it will be a sign that the recovery—which officially began in June 2009 — finally started to reach the poor in 2012.  Poverty has not fallen by a statistically significant amount since before the recession (see chart).

    This has been a troubling pattern of recent business cycles.  Economic growth has been slow to reach the poor.  In the recovery from the 2001 recession, in fact, poverty rose further and never retreated to its 2001 recession level.

    The poverty rate, which was 15 percent in 2011, would need to fall to 12.5 percent to reach the 2007 level (before the Great Recession) and 11.3 percent to reach the 2000 level.

  • The impact of SNAP, which Congress is considering cutting heavily, in helping families make ends meet. The official poverty figures don’t show the impact of SNAP, because those figures only include cash income.  But the information that the Census Bureau is expected to release tomorrow will include data showing the impact of SNAP on poverty when SNAP benefits are counted as income, as most experts favor (and as various alternative poverty measures from the Census Bureau do).  In 2011, SNAP lifted 3.9 million people, including 1.7 million children, out of poverty, when SNAP benefits are counted.

    House leaders plan to bring for a vote this week a bill cutting SNAP by $40 billion over ten years and dropping at least 4 million low-income people from the program.  SNAP participants already face a sizeable benefit reduction on November 1, when the 2009 Recovery Act’s temporary benefit boost ends.  The $40 billion in cuts would be on top of that.

  • The impact of unemployment insurance, which is set to shrink at the end of the year. Census is also expected to release data showing the poverty-reducing effects of some programs that the official poverty measure does count, such as unemployment insurance (UI).  UI benefits kept 2.3 million people out of poverty in 2011.

    Congress has already allowed federal UI benefits for the long-term unemployed to weaken (in February 2012, for example, it cut the number of weeks of benefits available from the Emergency Unemployment Compensation program), and these benefits will expire altogether in December unless Congress extends them, which now looks questionable.  Long-term unemployment remains a serious problem:  nearly two-fifths of the 11.3 million people who are unemployed have been looking for work for 27 weeks or longer, more than in any previous downturn on record.

What tomorrow’s official poverty figures will not show is a meaningful comparison between poverty today and in the 1960s. Some observers compare the official poverty rates then and now and conclude that the nation has made little progress.  This is a deeply flawed — and essentially invalid — comparison, as a new Center report explains, because the official poverty measure captures so little of the poverty relief that today’s safety net provides (through non-cash benefits such as SNAP and tax measures such as the Earned Income Tax Credit).

An apples-to-apples comparison shows that poverty today is much lower than it was throughout the 1960s, despite today’s weaker economy.

(By the way, don’t confuse the estimates of anti-poverty effects that the Census Bureau will release tomorrow with estimates based on the federal government’s new Supplemental Poverty Measure.  Those estimates, which Census will update for 2012 later this year, differ in technical details.  Because they use a more comprehensive measure of poverty, they tend to show even larger poverty reductions from non-cash benefits.)

Poverty Has Fallen Since the 1960s, But Official Poverty Measure Masks Progress

September 13, 2013 at 2:36 pm

The Census Bureau’s release next week of updated poverty figures may lead some people to compare today’s poverty rate to those of 1960s and conclude that the last half-century of federal efforts to alleviate poverty have largely failed.

But that’s simply not accurate.  Comparing today’s official poverty rate with those of the 1960s yields highly distorted results because the official poverty measure captures so little of the poverty relief that today’s safety net now provides, as our new analysis explains.

Most analysts recommend using a poverty measure that accounts for major non-cash benefits that the official poverty measure leaves out — namely, SNAP (the Supplemental Nutrition Assistance Program, formerly called food stamps), rent subsidies, and tax credits for working families.  Such a measure shows that poverty is considerably lower today than it was throughout the 1960s, despite today’s weaker economy.

This expanded poverty measure also reveals the strong anti-poverty effects of non-cash benefits.  Taken together, non-cash benefits and tax credits lifted 12.6 million people above the official poverty line and lowered the poverty rate for 2011 from 15.0 percent to 10.9 percent.  SNAP alone lifted 3.9 million people out of poverty.

Under this expanded measure, poverty trends since the 1960s are more clearly positive than they appear under the official poverty rate (see chart).

Similarly, an analysis of average incomes of the poorest fifth of Americans that counts non-cash benefits and tax credits also shows important progress.  Their average household income was more than 75 percent higher in 2011 than in 1964, when President Johnson announced the War on Poverty.  (That figure is adjusted for inflation and changes in household size.)

Despite these gains, income inequality widened after the early 1970s.  Income growth for households in the middle and lower parts of the scale slowed sharply, while incomes at the top continued to grow robustly.  Incomes of the poorest one-fifth of households grew just 19 percent, adjusted for inflation, between 1973 and 2007 (both years in which the economy was strong).

Safety net programs — although effective over the past 50 years — continue to face the strong headwind of persistently low wages for many workers and rising inequality.  Although we’ve made significant progress in fighting poverty over the last 50 years, it hasn’t been enough.  There is more work to do.

Click here to read the full paper.

The Safety Net: Supporting Working Families and Promoting Work

July 31, 2013 at 1:28 pm

A House Budget Committee hearing today is looking at how anti-poverty programs have worked over the last 50 years.  As I explained yesterday, safety net programs lifted 40 million people — including almost 9 million children — out of poverty in 2011, according to the Census Bureau’s Supplemental Poverty Measure.  Today, we’ll look at how these programs promote work and support millions of low-income working families.

Efforts to reduce poverty over the past three decades, have shifted so that programs like SNAP (Supplemental Nutrition Assistance Program, formerly food stamps), the Earned Income Tax Credit (EITC), Child Tax Credit (CTC), and Medicaid now do much more to promote work and support low-income working families whose earnings aren’t high enough to make ends meet, as our new paper explains:

Thirty years ago, the main assistance programs for families with children were the Aid to Families with Dependent Children (AFDC) program, Medicaid, food stamps, and a very small EITC.  AFDC provided assistance largely to single mothers during periods of joblessness; if a mother earned too much to qualify, she would lose not only income assistance but also Medicaid.  Medicaid generally covered only parents and their children as well as elderly and disabled people who received cash welfare benefits; the working poor did not qualify.  Far fewer households with children that received food stamps were working.  The EITC did little more than offset some of the payroll taxes that working poor families owed.

Today, the situation is very different.

  • SNAP: The number of SNAP households that have earnings while participating in SNAP has more than tripled over the past decade, from about 2 million in 2000 to about 6.4 million in 2011.  And, among families with children that receive SNAP and include an adult who isn’t elderly or disabled, 87 percent worked in the prior year or will work the following year.
  • EITC and CTC: The EITC and CTC both offset payroll taxes and lift a family of four with a full-time, minimum-wage worker from 61 percent of the federal poverty line to 87 percent, a significant improvement in that family’s economic well-being.  And, by boosting employment among single mothers, the EITC has produced large declines in the receipt of cash welfare assistance (see chart).

  • Medicaid: Most children covered by Medicaid or CHIP are in low-income working families.  Though many working-poor parents are currently ineligible for Medicaid, states that adopt health reform’s Medicaid expansion will be able to provide access to affordable coverage for nearly all of the working poor.

To be sure, not all the changes have been positive.  In fact, the safety net has weakened over time for the very poorest families with children, and poverty remains high, particularly compared to other wealthy nations.  We’ll be back with more about that in a future post.

Click here to read our new paper and here and here for 50-state data on the number of people that public programs lifted out of poverty in 2009-2011.

The Safety Net: Lifting Millions Out of Poverty

July 30, 2013 at 1:41 pm

A House Budget Committee hearing tomorrow will examine the progress we’ve made in fighting poverty over the last 50 years.  Extensive research shows that the set of supports the United States has developed to help low-income Americans make ends meet and obtain health care do, in fact, lift millions of people out of poverty, help “make work pay” by supplementing low wages, and enable millions of Americans to receive health care who otherwise could not afford it, as we explain in a new paper.

Federal assistance lifts millions of people, including children, out of poverty and provides access to affordable health care.  Public programs lifted 40 million people out of poverty in 2011, including almost 9 million children, according to the Census Bureau’s Supplemental Poverty Measure, which counts non-cash benefits and taxes (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.  SNAP (Supplemental Nutrition Assistance Program, formerly food stamps) is particularly effective at keeping children out of severe poverty — that is, out of living below half of the poverty line.  In 2011, SNAP lifted more children — 1.5 million — above half of the poverty line than any other program.

Similarly, Medicaid provided access to affordable health care to 66 million Americans in 2010.  Medicaid and the Children’s Health Insurance Program (CHIP) make children far less likely to be uninsured than adults.

These programs are effective in every state, as we illustrate in our paper through state-by-state data on the number of people — including children — that public programs lifted out of poverty in 2009-2011.

We’ll be back tomorrow with additional findings about how the safety net promotes work and supports low-income working families.

Click here to read the full paper and here and here for the 50-state data.

Get Ready for Unfounded Attacks on the War on Poverty

July 15, 2013 at 9:00 am

Next year, the nation will mark the 50th anniversary of the War on Poverty, which President Johnson proclaimed in his State of the Union address of January 1964.  Sadly, we should expect to hear a drumbeat of attacks claiming that, as President Reagan said long ago, we fought a war on poverty and “poverty won.”  Indeed, House Budget Committee Chairman Paul Ryan said recently of the anti-poverty effort, “We don’t have much to show for it.”

The truth is very different.  A number of anti-poverty programs — including some key efforts that have their origins in the War on Poverty and some that came later, often the product of bipartisan agreement — have an impressive record of achievement.  Together, programs such as food stamps (now known as the Supplemental Nutrition Assistance Program, or SNAP), the Earned Income Tax Credit (EITC), Medicaid, college financial assistance and broader based programs such as Medicare, have reduced poverty and malnutrition, expanded access to health care, and opened doors of opportunity for millions of people.  To be sure, poverty remains a serious problem in the United States and remains higher here than in many western industrialized countries.  And, not every program begun in the 1960s or more recently has been effective.  But, a bumper sticker analysis of the War on Poverty and today’s safety net that implies that “poverty won” misses the mark.

Take SNAP.  Chairman Ryan’s budget would cut the program by $135 billion over the next ten years.  Yet, the program is a prime example of a major national accomplishment.  Before food stamps and other nutrition programs were widely available, it was not hard to find large numbers of children in very poor areas of America with distended bellies or other indications of malnutrition.  That’s no longer the case.

A recent academic study looked back at the babies who benefited from the introduction and expansion of food stamps in the 1960s and 1970s and found that they grew up to be healthier and more likely to finish high school than their peers born in counties where the program had not yet been instituted.

Medicaid, created in 1965 as another core piece of the War on Poverty, also continues to make a major difference in people’s lives, improving health and reducing infant mortality and childhood deaths.  The program now provides health coverage to nearly 65 million low-income Americans, including children, parents, seniors, and people with disabilities.

Various newer programs also have been effective in reducing or alleviating poverty.  Consider, for example, the EITC, a program for working families created under President Ford and expanded under President Reagan and later presidents and congresses of both parties.  Not only does the program directly reduce poverty — this tax credit kept more than 6 million Americans above the poverty line in 2011, including more than 3 million children — but research has shown that it increases employment among single mothers and helps lead to better academic achievement among low-income children in participating families.

Those who claim that we don’t have much to show from anti-poverty programs often cite the fact that the poverty rate under the government’s official measure of poverty is similar now to what it was in the mid-1960s.  Such a comparison, however, is grossly misleading.  The official poverty measure counts only families’ cash income before taxes.  It fails to count food stamps, the EITC, rental subsidies, and the like.  As a result, it counts the forms of assistance that have shrunk dramatically since the 1960s such as cash welfare payments to poor families with children, while leaving out the key forms of assistance that were created or expanded during this period and have powerful anti-poverty effects.

That’s why analysts from a variety of political perspectives prefer the government’s newer Supplemental Poverty Measure (SPM), which includes both cash assistance and “non-cash” benefits such as SNAP, the EITC, and rental assistance, and which also nets out income and payroll taxes that people must pay.  The SPM shows that without the safety net, the percentage of Americans in poverty would be nearly double what it is:  29 percent of Americans would have been poor in 2011, rather than the 16 percent who were poor when safety net programs are taken into account.  SNAP alone kept 4.7 million above the poverty line (see chart).


As we approach the 50th anniversary of the War on Poverty, we’ll have more to say about anti-poverty programs.  Stay tuned.