Off the Charts Blog | Center on Budget and Policy Priorities

As a Center report explained last week, the new Census data for 2009 reflect the harsh impact of the recession, as poverty and the ranks of the uninsured grew considerably while median incomes among working-age households fell.

What’s gotten less attention is that these trends were not new. The recession followed an economic expansion in which the nation actually lost ground in all three areas.

The poverty rate was higher — and median income for working-age households lower — at the end of the 2001-2007 expansion than during the 2001 recession, as the table shows. Similarly, the number and share of Americans who are uninsured grew over the 2001-2007 period.

On some indicators, such as the child poverty rate and the percentage of Americans without health insurance, the adverse changes during the so-called recovery period of 2001-2007 were more than half as large as those in 2007-2009, during the worst recession since the Great Depression.

Such a dismal record during an expansion has never occurred since the federal government began collecting these figures, which in the case of the poverty data go back five decades.

In short, millions of Americans have suffered a one-two punch over the past decade, with the 2001-2007 recovery dragging people down even before the recession.

A major component of the “Pledge to America” legislative blueprint, which House Republicans issued this morning, is an earlier proposal from House Minority Leader John Boehner to cut domestic funding substantially.  You can find the Center’s analysis of the Boehner proposal here.

The TANF Emergency Fund has helped not just individuals and businesses but entire communities — especially those hit hardest by the recession.  These communities now face a return to more unemployment and hardship when the fund expires.  One example is Perry County, TN, the subject of a Tennessean article on Tuesday.  Here are some highlights:

A small rural community with about 7,600 residents, Perry County saw its unemployment rate soar to 27 percent after a local auto parts plant closed.  State and local officials and private employers worked together to put residents back to work by creating subsidized jobs, mostly in the private sector.

This initiative created jobs — many of which were funded through the Emergency Fund — for about 715 residents.  By July, the county’s jobless rate had fallen nearly in half, to 14.4 percent.  But hundreds of jobs will disappear when the fund expires, and unemployment is expected to climb back toward 20 percent.

One worker who will lose his job at the end of the month, a father of three young children who was laid off at a hardware store before the jobs program was created, said it was a success:  “I didn’t lose my house, and the kids didn’t go hungry.”

An employer who hired several workers through the program noted that as his company expanded, it spent more in local stores, boosting the community as a whole.  “It just snowballs,” he said.

Governor Phil Bredesen also praised the program, which “got jobs into the hands of people right away, so that they didn’t lose their house or car or get over their head in credit card debt.  It was direct, simple and efficient, and I’m very proud of that.  I wish we could do more of it.”

Tomorrow I’ll tell you about another worker who has benefited from the Emergency Fund.

As I mentioned yesterday, today begins our countdown to the September 30 expiration of the TANF Emergency Fund, a 2009 Recovery Act fund that states across the country have used to provide 250,000 Americans with subsidized jobs. Below, Amy Mullins explains in a letter to a county official how Colorado’s jobs program, Hire Colorado, has helped her medical testing business not only survive but grow and create permanent jobs despite the recession.

The reason I’m writing is to let you know what a blessing the Hire Colorado program has been for my company. From the time we instituted it to today, we have seen an increase in revenues of 31.6 percent. . . . I truly believe that my ability as an owner to get out and promote my business as well as hire a salesperson have been major contributing factors to our recent success. I was able to get out from underneath the minutia of everyday paperwork and go find customers. Because of this, I have 2 new employees that are going to be able to stay on with my company indefinitely. These are employees that in May, I would not have been able to hire on my own, nor possibly entertain keeping. For that I thank you, and your program.

Tomorrow I’ll describe what a rural county in Tennessee whose unemployment rate was cut nearly in half by the Emergency Fund has to say about how it has helped the community and what its end will mean for them.

Last week, we highlighted our analysis of the Census Bureau’s new poverty data, in which we found that unemployment benefits kept many Americans out of poverty and economic hardship in 2009. Food stamps helped, too. In fact, the increase in the number of Americans with income below the poverty line is nearly three times as great if you don’t count unemployment benefits and food stamps as if you do.

• If you count only people’s cash income minus their unemployment benefits, the number of people with incomes below the poverty line rose by 6.2 million, from 40.7 million in 2008 to 46.9 million in 2009.
• If you count people’s cash income including their unemployment benefits, as the Census Bureau’s official poverty measure does, the number of poor Americans rose by 3.7 million, from 39.8 million in 2008 to 43.6 million in 2009.
• If you count people’s cash income including unemployment benefits and add food stamp benefits, the number of poor Americans rose by 2.3 million, from 37.6 million in 2008 to 40 million in 2009.

Why did these programs have such a large impact? For one thing, the 2009 Recovery temporarily expanded food stamp benefits and unemployment insurance. For another, the sharp increase in unemployment during the recession made many more people eligible for these programs.

I’m not suggesting that merely adding food stamps to the current poverty definition would produce the ideal measure of poverty. For instance, child care costs and other work expenses also affect families’ ability to meet basic needs. But these figures do give you a sense of how hard government was pushing back against a rising wave of economic hardship in 2009. As it happens, it was pushing back pretty hard.