Working-age adults are the new face of U.S. poverty
The Associated Press
WASHINGTON — Working-age America is the new face of poverty.
Counting adults 18-64 who were laid off in the recent recession as well as single twenty-somethings still looking for jobs, the new working-age poor represent nearly three out of five poor people — a switch from the early 1970s when children made up the main impoverished group.
While much of the shift in poverty is due to demographic changes — Americans are having fewer children than before — the now-weakened economy and limited government safety net for workers are heightening the effect.
Currently, the ranks of the working-age poor are at the highest level since the 1960s when the war on poverty was launched. When new census figures for 2010 are released next week, analysts expect a continued increase in the overall poverty rate due to persistently high unemployment last year.
If that holds true, it will mark the fourth year in a row of increases in the U.S. poverty rate, which now stands at 14.3 percent, or 43.6 million people.
“There is a lot of discussion about what the aging of the baby boom should mean for spending on Social Security and Medicare. But there is not much discussion about how the wages of workers, especially those with no more than a high school degree, are not rising,” said Sheldon Danziger, a University of Michigan public policy professor who specializes in poverty.
Census numbers show that out of 8.8 million families who are currently poor, about 60 percent had at least one person who was working.
“The reality is there are going to be a lot of working poor for the foreseeable future,” Danziger said, citing high unemployment and congressional resistance to raising the minimum wage.
The newest poor include Richard Bowden, 53, of southeast Washington, who has been on food stamps off and on the last few years. A maintenance worker, Bowden says he was unable to save much money before losing his job months ago. He no longer works due to hip and back problems and now gets by on about $1,000 a month in disability and other aid.
“At my work, we hadn’t gotten a raise in two years, even while the prices of food and clothing kept going up, so I had little left over,” Bowden said. “Now, after rent, the utility bill, transportation and other costs, my money is pretty much down to nothing.
“I pray and hope that things get better, but you just don’t know,” he said.
The poverty figures come at a politically sensitive time for President Barack Obama, after a Labor Department report last Friday showed zero job growth in August. The White House now acknowledges that the unemployment rate, currently at 9.1 percent, will likely average 9 percent through 2012.
Obama is preparing to outline a new plan for creating jobs and stimulating the economy in a prime-time address to Congress on Thursday. The Republican-controlled House has been adamant about requiring spending cuts in return for an increase in the federal debt limit. Suggested cuts have included proposals to raise the eligibility age for future Medicare recipients or to reduce other domestic programs in a way that would disproportionately affect the poor.
According to the latest census data, the share of poor who are ages 18-64 now stands at 56.7 percent, compared to 35.5 percent who are children and 7.9 percent who are 65 and older. The working-age share surpasses a previous high of 55.5 percent first reached in 2004.
Lower-skilled adults ages 18 to 34, in particular, have had the largest jumps in poverty as employers keep or hire older workers for the dwindling jobs available. The declining economic fortunes have caused many unemployed young Americans to double up in housing with parents, friends and loved ones.
In 1966, when the Census Bureau first began tracking the age distribution of the poor, children made up the biggest share of those in poverty, at 43.5 percent. Working-age adults comprised a 38.6 percent share, and Americans 65 and older represented nearly 18 percent.
Douglas Besharov, a University of Maryland public policy professor and former scholar at the conservative American Enterprise Institute, says that expansions of the federal safety net including Social Security retirement and disability payments have been important in reducing poverty.
In 2009, for instance, the Census Bureau estimated that new unemployment benefits — which gave workers up to 99 weeks of payments after a layoff — helped keep 3.3 million people out of poverty. For 2010, Besharov said demographers on average expect an increase in poverty of roughly half a percentage point to nearly 15 percent, depending partly on the impact of unemployment insurance, which did not run out for many people until this year.
The current poverty level was set at $10,956 for one person and $21,954 for a family of four, based on an official government calculation that includes only cash income, before taxes. It excludes capital gains or accumulated wealth, such as home ownership, as well as noncash aid such as food stamps.
Taking noncash aid into account shifts the poverty numbers notably. Next month, the government will release new supplemental poverty numbers for the first time that will factor in food stamps and tax credits — which often benefit out-of-work families with children — but also everyday costs such as commuting that tend to have a bigger impact on working Americans.
Preliminary census estimates released this summer show a decline in child poverty based on the new measure and a jump in the shares of poor who are working age — from 56.7 percent to nearly 60 percent. In all, the child poverty rate decreases from 20.7 percent under the official poverty measure to 17.9 percent, according to estimates. But the senior poverty rate jumps from 8.9 percent to 15.6 percent after including out-of-pocket medical costs, and working-age adults see an increase in poverty from 12.9 percent to 14.9 percent.