Some Encouraging News about Poverty—and the Role Of Government

If you follow our blog, you already know that the 2011 poverty data were released by the U.S. Census today. The data show that more than 46.2 million people, or 15 percent of all Americans, were considered poor in 2011. Notably, there was no statistically significant change in the poverty rate from 2010—meaning that, unlike the past few years, poverty did not rise in 2011. Poverty among women and children, though higher than poverty among men, was also essentially unchanged in 2011. While it is a relief that the rate hasn’t increased for most groups, poverty still remains historically high.

So what’s the encouraging part? Government programs are keeping people out of poverty. Social Security alone prevented more than 21 million people, including 1.1 million children, from falling into poverty last year—no small feat for a 77 year old program. It’s also important to remember that the Census data is based on incomes that do not include non-cash benefits like food stamps (SNAP) or tax credits like the Earned Income Tax Credit (EITC). If the value of SNAP benefits were counted as income in 2011, 3.9 million people would not have been considered poor, and accounting for the EITC would have lifted 5.7 million people above the poverty line.

In addition, unemployment insurance benefits kept 2.3 million people out of poverty in 2011. With unemployment still hovering around 8 percent more than three years after the recession officially ended, unemployment insurance (UI) has been especially important for Americans in recent years. However, in 2011, UI benefits kept 900,000 fewer people out of poverty than in 2010, in part because increased benefit amounts provided as part of the 2009 Recovery Act expired in late 2010, and some people exhausted their UI benefits before finding jobs. Even more worrying, the number of weeks of federal emergency unemployment insurance was cut back in 2012—and these benefits are set to run out at the end of this year.

While the 2011 poverty data can’t be called uplifting, they do show that federal and state programs work to bring people out of poverty. Women and their families disproportionately rely on these programs to meet their basic needs. What’s the biggest lesson to take from these data? The government programs in place are working, but they need to be strengthened—not cut. Policy makers will help determine whether this time next year, the news is more encouraging – or worse.