[Dialogue] US Economy Leaving Record Numbers in Severe Poverty

[Harry Wainwright]

Published on Friday, February 23, 2007 by McClatchy Newspapers
<http://www.realcities.com/mld/krwashington>  

US Economy Leaving Record Numbers in Severe Poverty 

by Tony Pugh

 

The percentage of poor Americans who are living in severe poverty has
reached a 32-year high, millions of working Americans are falling closer to
the poverty line and the gulf between the nation's "haves" and "have-nots"
continues to widen. 

A McClatchy Newspapers analysis of 2005 census figures, the latest
available, found that nearly 16 million Americans are living in deep or
severe poverty. A family of four with two children and an annual income of
less than $9,903 - half the federal poverty line - was considered severely
poor in 2005. So were individuals who made less than $5,080 a year. 

The McClatchy analysis found that the number of severely poor Americans grew
by 26 percent from 2000 to 2005. That's 56 percent faster than the overall
poverty population grew in the same period. McClatchy's review also found
statistically significant increases in the percentage of the population in
severe poverty in 65 of 215 large U.S. counties, and similar increases in 28
states. The review also suggested that the rise in severely poor residents
isn't confined to large urban counties but extends to suburban and rural
areas. 

The plight of the severely poor is a distressing sidebar to an unusual
economic expansion. Worker productivity has increased dramatically since the
brief recession of 2001, but wages and job growth have lagged behind. At the
same time, the share of national income going to corporate profits has
dwarfed the amount going to wages and salaries. That helps explain why the
median household income of working-age families, adjusted for inflation, has
fallen for five straight years. 

These and other factors have helped push 43 percent of the nation's 37
million poor people into deep poverty - the highest rate since at least
1975. 

The share of poor Americans in deep poverty has climbed slowly but steadily
over the last three decades. But since 2000, the number of severely poor has
grown "more than any other segment of the population," according to a recent
study in the American Journal of Preventive Medicine. 

"That was the exact opposite of what we anticipated when we began," said Dr.
Steven Woolf of Virginia Commonwealth University, who co-authored the study.
"We're not seeing as much moderate poverty as a proportion of the
population. What we're seeing is a dramatic growth of severe poverty." 

The growth spurt, which leveled off in 2005, in part reflects how hard it is
for low-skilled workers to earn their way out of poverty in an unstable job
market that favors skilled and educated workers. It also suggests that
social programs aren't as effective as they once were at catching those who
fall into economic despair. 

About one in three severely poor people are under age 17, and nearly two out
of three are female. Female-headed families with children account for a
large share of the severely poor. 

Nearly two out of three people (10.3 million) in severe poverty are white,
but blacks (4.3 million) and Hispanics of any race (3.7 million) make up
disproportionate shares. Blacks are nearly three times as likely as
non-Hispanic whites to be in deep poverty, while Hispanics are roughly twice
as likely. 

Washington, D.C., the nation's capital, has a higher concentration of
severely poor people - 10.8 percent in 2005 - than any of the 50 states,
topping even hurricane-ravaged Mississippi and Louisiana, with 9.3 percent
and 8.3 percent, respectively. Nearly six of 10 poor District residents are
in extreme poverty. 

'I DON'T ASK FOR NOTHING' 

A few miles from the Capitol Building, 60-year-old John Treece pondered his
life in deep poverty as he left a local food pantry with two bags of free
groceries. 

Plagued by arthritis, back problems and myriad ailments from years of manual
labor, Treece has been unable to work full time for 15 years. He's tried
unsuccessfully to get benefits from the Social Security Administration,
which he said disputes his injuries and work history. 

In 2006, an extremely poor individual earned less than $5,244 a year,
according to federal poverty guidelines. Treece said he earned about that
much in 2006 doing odd jobs. 

Wearing shoes with holes, a tattered plaid jacket and a battered baseball
cap, Treece lives hand-to-mouth in a $450-a-month room in a nondescript
boarding house in a high-crime neighborhood. Thanks to food stamps, the food
pantry and help from relatives, Treece said he never goes hungry. But
toothpaste, soap, toilet paper and other items that require cash are tougher
to come by. 

"Sometimes it makes you want to do the wrong thing, you know," Treece said,
referring to crime. "But I ain't a kid no more. I can't do no time. At this
point, I ain't got a lotta years left." 

Treece remains positive and humble despite his circumstances. 

"I don't ask for nothing," he said. "I just thank the Lord for this day and
ask that tomorrow be just as blessed." 

Like Treece, many who did physical labor during their peak earning years
have watched their job prospects dim as their bodies gave out. 

David Jones, the president of the Community Service Society of New York
City, an advocacy group for the poor, testified before the House Ways and
Means Committee last month that he was shocked to discover how pervasive the
problem was. 

"You have this whole cohort of, particularly African-Americans of limited
skills, men, who can't participate in the workforce because they don't have
skills to do anything but heavy labor," he said. 

'A PERMANENT UNDERCLASS' 

Severe poverty is worst near the Mexican border and in some areas of the
South, where 6.5 million severely poor residents are struggling to find work
as manufacturing jobs in the textile, apparel and furniture-making
industries disappear. The Midwestern Rust Belt and areas of the Northeast
also have been hard hit as economic restructuring and foreign competition
have forced numerous plant closings. 

At the same time, low-skilled immigrants with impoverished family members
are increasingly drawn to the South and Midwest to work in the meatpacking,
food processing and agricultural industries. 

These and other factors such as increased fluctuations in family incomes and
illegal immigration have helped push 43 percent of the nation's 37 million
poor people into deep poverty - the highest rate in at least 32 years. 

"What appears to be taking place is that, over the long term, you have a
significant permanent underclass that is not being impacted by anti-poverty
policies," said Michael Tanner, the director of Health and Welfare Studies
at the Cato Institute, a libertarian think tank. 

Arloc Sherman, a senior researcher at the Center on Budget and Policy
Priorities, a liberal think tank, disagreed. "It doesn't look like a growing
permanent underclass," said Sherman, whose organization has chronicled the
growth of deep poverty. "What you see in the data are more and more single
moms with children who lose their jobs and who aren't being caught by a
safety net anymore." 

About 1.1 million such families account for roughly 2.1 million deeply poor
children, Sherman said. 

After fleeing an abusive marriage in 2002, 42-year-old Marjorie Sant moved
with her three children from Arkansas to a seedy boarding house in Raleigh,
N.C., where the four shared one bedroom. For most of 2005, they lived off
food stamps and the $300 a month in Social Security Disability Income for
her son with attention deficit hyperactivity disorder. Teachers offered
clothes to Sant's children. Saturdays meant lunch at the Salvation Army. 

"To depend on other people to feed and clothe your kids is horrible," Sant
said. "I found myself in a hole and didn't know how to get out." 

In the summer of 2005, social workers warned that she'd lose her children if
her home situation didn't change. Sant then brought her two youngest
children to a temporary housing program at the Raleigh Rescue Mission while
her oldest son moved to California to live with an adult daughter from a
previous marriage. 

So for 10 months, Sant learned basic office skills. She now lives in a
rented house, works two jobs and earns about $20,400 a year 

Sant is proud of where she is, but she knows that "if something went wrong,
I could well be back to where I was." 

'I'M GETTING NOWHERE FAST' 

As more poor Americans sink into severe poverty, more individuals and
families living within $8,000 above or below the poverty line also have seen
their incomes decline. Steven Woolf of Virginia Commonwealth University
attributes this to what he calls a "sinkhole effect" on income. 

"Just as a sinkhole causes everything above it to collapse downward,
families and individuals in the middle and upper classes appear to be
migrating to lower-income tiers that bring them closer to the poverty
threshold," Woolf wrote in the study. 

Before Hurricane Katrina, Rene Winn of Biloxi, Miss., earned $28,000 a year
as an administrator for the Boys and Girls Club. But for 11 months in 2006,
she couldn't find steady work and wouldn't take a fast-food job. As her
opportunities dwindled, Winn's frustration grew. 

"Some days I feel like the world is mine and I can create my own destiny,"
she said. "Other days I feel a desperate feeling. Like I gotta' hurry up.
Like my career is at a stop. Like I'm getting nowhere fast. And that's not
me because I've always been a positive person." 

After relocating to New Jersey for 10 months after the storm, Winn returned
to Biloxi in September because of medical and emotional problems with her
son. She and her two youngest children moved into her sister's home along
with her mother, who has Alzheimer's. With her sister, brother-in-law and
their two children, eight people now share a three-bedroom home. 

Winn said she recently took a job as a technician at the state health
department. The hourly job pays $16,120 a year. That's enough to bring her
out of severe poverty and just $122 shy of the $16,242 needed for a single
mother with two children to escape poverty altogether under current federal
guidelines. 

Winn eventually wants to transfer to a higher-paying job, but she's thankful
for her current position. 

"I'm very independent and used to taking care of my own, so I don't like the
fact that I have to depend on the state. I want to be able to do it myself."


The Census Bureau's Survey of Income and Program Participation shows that,
in a given month, only 10 percent of severely poor Americans received
Temporary Assistance for Needy Families in 2003 - the latest year available
- and that only 36 percent received food stamps. 

Many could have exhausted their eligibility for welfare or decided that the
new program requirements were too onerous. But the low participation rates
are troubling because the worst byproducts of poverty, such as higher crime
and violence rates and poor health, nutrition and educational outcomes, are
worse for those in deep poverty. 

Over the last two decades, America has had the highest or near-highest
poverty rates for children, individual adults and families among 31
developed countries, according to the Luxembourg Income Study, a 23-year
project that compares poverty and income data from 31 industrial nations. 

"It's shameful," said Timothy Smeeding, the former director of the study and
the current head of the Center for Policy Research at Syracuse University.
"We've been the worst performer every year since we've been doing this
study." 

With the exception of Mexico and Russia, the U.S. devotes the smallest
portion of its gross domestic product to federal anti-poverty programs, and
those programs are among the least effective at reducing poverty, the study
found. Again, only Russia and Mexico do worse jobs. 

One in three Americans will experience a full year of extreme poverty at
some point in his or her adult life, according to long-term research by Mark
Rank, a professor of social welfare at the University of Wisconsin, Madison.


An estimated 58 percent of Americans between the ages of 20 and 75 will
spend at least a year in poverty, Rank said. Two of three will use a public
assistance program between ages 20 and 65, and 40 percent will do so for
five years or more. 

These estimates apply only to non-immigrants. If illegal immigrants were
factored in, the numbers would be worse, Rank said. 

"It would appear that for most Americans the question is no longer if, but
rather when, they will experience poverty. In short, poverty has become a
routine and unfortunate part of the American life course," Rank wrote in a
recent study. "Whether these patterns will continue throughout the first
decade of 2000 and beyond is difficult to say ... but there is little reason
to think that this trend will reverse itself any time soon." 

'SOMETHING REAL AND TROUBLING' 

Most researchers and economists say federal poverty estimates are a poor
tool to gauge the complexity of poverty. The numbers don't factor in
assistance from government anti-poverty programs, such as food stamps,
housing subsidies and the Earned Income Tax Credit, all of which increase
incomes and help pull people out of poverty. 

But federal poverty measures also exclude work-related expenses and
necessities such as day care, transportation, housing and health care costs,
which eat up large portions of disposable income, particularly for
low-income families. 

Alternative poverty measures that account for these shortcomings typically
inflate or deflate official poverty statistics. But many of those
alternative measures show the same kind of long-term trends as the official
poverty data. 

Robert Rector, a senior researcher with the Heritage Foundation, a
conservative think tank, questioned the growth of severe poverty, saying
that census data become less accurate farther down the income ladder. He
said many poor people, particularly single mothers with boyfriends,
underreport their income by not including cash gifts and loans. Rector said
he's seen no data that suggest increasing deprivation among the very poor. 

Arloc Sherman of the liberal Center on Budget and Policy Priorities argues
that the growing number of severely poor is an indisputable fact. 

"When we check against more complete government survey data and
administrative records from the benefit programs themselves, they confirm
that this trend is real," Sherman said. He added that even among the poor,
severely poor people have a much tougher time paying their bills. "That's
another sign to me that we're seeing something real and troubling," Sherman
said. 

McClatchy correspondent Barbara Barrett contributed to this report. 

BY THE NUMBERS 

States with the most people in severe poverty: 

California - 1.9 million 
Texas - 1.6 million 
New York - 1.2 million 
Florida - 943,670 
Illinois - 681,786 
Ohio - 657,415 
Pennsylvania - 618,229 
Michigan - 576,428 
Georgia - 562,014 
North Carolina - 523,511 

Source: U.S. Census Bureau 

C 2007 McClatchy Washington Bureau and wire service sources

 

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