New Poverty Rate Only Tells Half the Story: Twice the Number of Americans Struggling to Get By

At this critical juncture, policymakers must avoid reducing the national debt on the backs of working families.
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This article was co-written by Brandon Roberts and David Altstadt on behalf of the Working Poor Families Project.

The latest poverty figures paint a grim picture of the Great Recession's deep and persistent impact on average Americans. Last year, more Americans were poor than ever before, as the poverty rate climbed to a 17-year high.

Yet as bad as that sounds, the number of Americans who are struggling to get by is doubly worse. And, many of them are working but still can't make a decent living.

On Tuesday, the Census Bureau announced that the nation's official poverty rate rose to 15.1 percent in 2010, up from 14.3 percent in 2009 to reach the highest mark since 1993. An additional 2.6 million people joined the ranks of the poor, bringing the total to 46.2 million -- the highest number since the government started tracking poverty in the 1950s.

A family of four earning up to $22,314 is counted as poor. But, anyone facing $4 a gallon of gas and rising costs for health insurance, food, and housing knows that you need to earn a lot more to meet your family's basic needs without getting mired deep into debt. Many experts now agree that families must reach twice the poverty level before achieving any semblance of income security.

By this measure, in 2010, 33.9 percent of Americans -- for a total of 103.6 million -- could not make ends meet. This is more than twice the number of officially poor. More than four in 10 children are low income, 32.5 million in all. (The tally of Americans living below 200 percent of poverty is published in Table 6 of the Census Bureau report.)

And, while the nation's stubbornly high unemployment has drawn attention to the millions of Americans who have lost their jobs in the economic downturn, the fact is that three out of four low-income families are gainfully employed. Despite their determination and effort, many are toiling in low-wage jobs that provide inadequate benefits and offer few opportunities for advancement.

The plight of these low-income families is worsening -- challenging a fundamental assumption that, in America, work pays. In 2009, 30 percent of working families were low-income, up from 28 percent in 2007, according to Census Bureau data analyzed by the Working Poor Families Project. These families totaled 45 million people, including 22 million children, an increase of 1.7 million people from 2008. We expect that when 2010 data becomes available soon this negative trend will have continued.

Not surprisingly, the ranks of the working poor have grown at a time in which the median household income has dropped sharply. According to the Census Bureau, the average household earned $49,445 in 2010, a 6.4 percent decline since 2007.

At this critical juncture, policymakers must avoid reducing the national debt on the backs of working families. Instead, policymakers should give priority to investing public resources and enacting public policies that are directed at:

  1. Expanding the number of low-wage adults who enroll in education and skills development programs and successfully obtain postsecondary credentials valued in the labor market.

  • Improving wages, benefits and supports for low-income working families and stimulating the creation of significantly more good jobs.
  • Regularly assessing the challenges faced by America's working families and the adequacy and success of government policies that facilitate their drive for economic advancement and security.
  • Pell grants, food stamps, unemployment insurance and the earned income tax credit, among other government programs, are vital for helping working families achieve economic security. We must act now to renew America's promise that work pays.

    Brandon Roberts manages the Working Poor Families Project (WPFP), and David Altstadt conducts research on the education, skill development, and employment needs of low-skilled adults.

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