Good News?

The U.S. Is Losing a Generation to Poverty

OK, the official poverty rate declined this week. But it’s worth remembering that millions who aren’t officially in poverty are still poor.

09.18.14 9:45 AM ET

When we devised the formula we use to determine poverty in the United States, it was 1964. President Lyndon Johnson had just taken a tour of communities in Appalachia without electricity, running water, or sewage systems. Indeed, even some urban neighborhoods lacked that basic infrastructure. There was no Medicare system—so the elderly were very poor and largely uninsured—and consumer goods for the middle class, like televisions and vehicles, were pretty new. Food took up much more of a family’s budget, and housing took up much less.

The world was incredibly different. But the way we measure poverty remains the same. We also still imagine poverty looks the way it did in 1964. In reality, economic hardship is much more commonplace, and its appearance is more subtle. Its effects, however, are no less devastating.

This week, when the United States Census Bureau released its poverty data for the year 2013, it showed the first significant decline in poverty since the Great Recession hit: down from 15 percent to 14.5. Greeted more cheerily by economic observers was the news that child poverty had made its biggest drop in years: down almost 2 whole percentage points. It was better news than observers expected.

It’s all relative, though, and enthusiasm was qualified. These numbers are still higher than they were before the recession. In a statement, Robert Greenstein of the Center on Budget Policy and Priorities, a left-of-center think tank in Washington, wrote that if current trends continue, it would take until 2020 for poverty to fall to its 2000 level.

The downward trend is good, as is the fact that fewer families dwell in the type of deep, intergenerational poverty that most of us might stereotype as “true” poverty. But even so, the experience of poverty is still a big problem. Why? For many reasons, but most of all because politicians on both sides of the aisle believe that while Americans should make most of their money from working, they don’t want to ensure that people make a livable wage when they do so.

More and more Americans have jobs since the economy started to rebound. But many of them are still poor. The 1990s were a time when employment was high, and we could cut welfare rolls and push people into work. The 2000s and 2010s, though, have been characterized by crappy jobs with paltry pay, and by a government ever more reluctant to spend any of its tax dollars on people at the bottom end of the income ladder. We’re losing decades, and a generation.

Overall, families with children are doing better than singles or childless couples, but nearly one in five children still lives in poverty. The number of children who are poor or near-poor is still higher than it was before the recession. “Near-poor” includes families whose incomes are less than double the poverty line, and it’s an important measure. The formula used to determine “absolute poverty” is defined as an income that allows for a basic level of sustenance. For last year, that was $23,550 for a family of four. It doesn’t account for how some expenses have changed dramatically over the years—for example, the cost of housing and transportation costs like gas take up much more of our incomes than it did then. Many states and localities provide services to families who fall under the poverty line and also in the “near-poor” category. The official poverty measure is also criticized because it doesn’t take into account the effect government supports like food stamps have on household incomes—in 2013, the program lifted 3.7 million families out of poverty. So, the measure underestimates both economic hardship and the aid families receive.

In total, 42.6 percent of children still live in families who are poor or near-poor, which means they are struggling economically. The rate of child poverty in the United States is higher than it is in other countries—for example, the UK rate 12.1 percent, and in France it’s 8.8 percent. Also, children are the poorest demographic group in the United States. Families that are only a little above the poverty line tend to dip below it frequently, when a parent loses a job or suffers a setback, so even families technically above the poverty line may experience periods of severe financial insecurity. Two-thirds live with at least one parent who is working at least part time. One-third live in a household with at least one parent working full time. “Getting into a job isn’t enough,” said Elizabeth Lower-Basch, policy coordinator for CLASP, a think tank in Washington that studies policies for low-income families. “It needs to be a job that’s consistent and needs to pay enough to get out of poverty.”

Poverty early in life can create obstacles to learning. Children who don’t get enough to eat may experience development delays. They tend to attend worse schools, which lowers their future earnings potential.

Another group more likely to be poorer than others is young adults aged 18 to 24. People in that age range are especially likely to experience poverty if they were poor as children themselves, or if they have children already. In fact, 40 percent of adults will dip below the poverty line at some point in their lives.

The fact that it’s especially so for the generation of children growing up today is what troubles policymakers the most. “People shouldn’t have in their minds only families with tons of problems,” says Olivia Golden, CLASP’s executive director. “They should understand how widespread the experience is.”