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New Poverty Data Demonstrate Necessity of Maintaining the Safety Net

The release of new poverty data this week naturally leads us to focus on the bad news: 46.2 million people in poverty in 2010, including 17.2 million women and 16.4 million children; record numbers of women and families living in extreme poverty (i.e., below half the poverty line, which is just $11,157 for a family of four); and the highest income gap ever recorded between those in the bottom tenth and those in the top tenth. But the new data also offers an opportunity to reflect on the positive impact that the safety net has had: Social Security alone prevented 20.3 million more people (including 1.1 million children) from falling into poverty last year.

According to the Census Bureau, unemployment insurance benefits kept an additional 3.2 million people out of poverty in 2010. Unemployment benefits are particularly important for women right now, as women have actually lost jobs since the recession ended in June 2009. These benefits include federal emergency unemployment insurance, which helps people who are long-term unemployed and have exhausted their state benefits (usually after six months). President Obama’s jobs plan calls for an extension of the federal benefits, which could prevent 2.6 million women from being cut off from assistance next year. The new poverty data also highlights a fact that should be common sense: unemployment benefits play an important role in fighting poverty not only for individual jobless adults but for their families as well, lifting 900,000 children out of poverty in 2010.

It is important to note that the poverty measure does not count tax credits and non-cash benefits as income. If it did, the number of people in poverty would be lower:

  • Accounting for the Earned Income Tax Credit (EITC) would lift 5.4 million people above the poverty line, including 3 million children.
  • If the value of food stamp benefits (SNAP) counted as income, 3.9 million fewer people would be counted as poor.

The 2010 poverty data show that the safety net plays a vital role in preventing even more Americans from falling into poverty.  These programs can also decrease hardship for those who live in poverty; for example, in 2010 the New York Times reported that 6 million Americans were living off of food stamps alone. But despite the clear need for safety net programs, they are in danger of being cut in order to reduce the deficit without making millionaires and corporations pay their fair share. Help us work to protect programs for low-income people and ensure a fair budget – contact your Members of Congress today!

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unemployment

this is all good except you know obama warps and distorts the unemployment figures... Financial Advisory

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