Anti-Poverty Programs Protected Millions in 2011

Sep 27, 2012

The Poverty, Income, and Health Insurance Coverage in the United States report is released by the Census Bureau every fall based upon data from the year before. This article is about the report released September 2012.

The U.S. Census Bureau released 2011 Poverty Data last week. According to the report, there were 46.2 million people living in poverty last year, an overall rate of 15.0 percent. Defying expectations that poverty would rise for the fourth consecutive year, neither the official poverty rate nor the number of people in poverty were notably different from 2010 data. Anti-poverty programs kept millions of people from falling under the official poverty line, and millions more were spared the worst injustices of poverty by federal assistance not included in the official numbers but recorded elsewhere in the report.

Highlights from the 2011 Census Poverty Report:

  • Poverty remained flat, despite expectations that it would rise.
  • People worked more hours, but made less money.
  • Fewer people would have lived in poverty if unemployment insurance had not been prematurely reduced.
  • 2011 was the first year since the Great Recession that more people had health insurance.
  • Two programs set to expire on December 31, with other forms of federal assistance, helped to keep tens of millions out of poverty.

Income Fell for Most People Living in the U.S.

Median household income fell $777 overall since 2010 and by $1,210 for working-age households. While the number of employed people did not change considerably, average hourly wages dropped 1 percent. Despite the fact that the number of hours worked per week went up last year, most people brought home significantly less money. The findings of a new job report by the National Employment Law Project (NELP) may explain this pattern.

NELP found that mid-wage jobs made up 60 percent of jobs lost to the recession, but only 22 percent of jobs gained during recovery. Lower-wage occupations made up only 21 percent of jobs lost during the recession but accounted for 58 percent of recovery growth. The majority of jobs lost in the Great Recession were middle income positions, but the vast majority of recovered jobs are low income positions.

Progress for Certain People

Poverty rates changed for the better for some groups, with fewer people below the poverty line among certain demographics. For example, Hispanics, men, people living in the South and people living in suburbs were all slightly less likely to be living in poverty in 2011 than they were in 2010. However, most other groups and regions had the same rate of poverty as the year before, keeping America’s overall poverty level effectively flat between 2010 and 2011.

What Could Have Been

Poverty in the U.S. would have fallen last year if unemployment insurance (UI) had not been reduced to a greater degree than unemployment fell. UI benefits were reduced by nearly 25 percent in 2011 because a temporary benefit increase begun in 2009 ended at the same time as many people’s benefits expired before they found jobs. However, the number of unemployed workers only fell 7 percent, leaving many still unemployed workers without this critical support to fall back below the poverty line. In fact, this disproportion between the unemployment rate and UI provisions meant that while UI kept 3.2 million people out of poverty in 2010, it only lifted 2.3 million out of poverty in 2011.

Turning the Tide: Health Insurance Coverage Rises

One clearly positive detail in the Census data is that 2011 was the first year since the Great Recession in which more people in the entire population had health insurance. In 2011, 1.4 million more people had health insurance than in 2010, raising the proportion of the population with health coverage from 83.7 to 84.3 percent. While more young adults and more seniors had health insurance, and more people joined public health insurance programs, the proportion of uninsured people in other demographic groups was not markedly different from 2010. In 2011 the number of non-elderly people with private health insurance remained steady, rather than declining, reversing the trend of over a decade in which fewer non-seniors had private insurance each year.

The percentage of young adults with health insurance increased by 2.2%, significantly more than any other age group, as more than half a million 19- to 25-year-olds gained coverage. This is likely the result of the new health reform provision allowing children to remain on their parent’s insurance plan up to age 26. In fact, recent independent studies like one by The Commonwealth Foundation suggest that as many as 6.6 million adults aged 19 to 25 stayed on their parents’ insurance plans in 2011, and could not have done so without the Affordable Care Act’s new provision.

The percentage of uninsured people over the age of 65 also significantly declined as the population aged into qualifying for Medicare. While 12.5 percent of 64-year-olds were uninsured in 2010, 2 million more people enrolled in Medicare in 2011 as the first baby boomers turned 65. Fewer than 2 percent of people 65 and older were without health insurance last year. This contributed to the large increase in the number and percentage of people with public health insurance. An additional 2 million people enrolled in Medicaid and the Children’s Health Insurance Program (CHIP) in 2011, as employer-based coverage continued to erode and the Affordable Care Act required states maintain their Medicaid and CHIP eligibility levels and enrollment procedures.

While 48.6 million people in the U.S. remain uninsured, that number should continue to fall over the next ten years as the Affordable Care Act’s provisions expand coverage to another 30 million people.

Social Security Protected 20.3 Million People

Another federal program, Social Security, lifted 21.4 million people out of poverty in 2011, as opposed to 20.3 million in 2010. Social Security is particularly important for seniors, who comprise 14.5 million of that total. Without Social Security benefits, the poverty rate among seniors would have been five times as high, and the total number of people in poverty would also have risen.

More to the Story

The official data, however, do not tell the whole story. Income and poverty estimates are just based on income before taxes and do not include the value of noncash benefits. Among these benefits are the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) and the Earned Income Tax Credit (EITC). If SNAP benefits were included in the Census data, 3.9 million fewer people would fall under the poverty line, including 1.7 million children. These benefits represent food security for millions of people who live in poverty. Counting the EITC would lift 5.7 million people, including 3.1 million children, above the poverty line. The EITC is a refundable tax credit that enables workers to pay less in taxes if their income is below a certain amount. It is especially helpful to low-income families because the credit is greater for each child dependent on the worker.

Critical Programs Expire in December

Both of these programs, SNAP and EITC, are currently at risk, as expansions to the EITC that aid 1.6 million people are set to expire at the end of 2012 and, though for now it is fully funded, a variety of recent proposals from Congress included turning SNAP into a block grant, which would greatly reduce the program’s flexibility to sustain so many people. Moreover, all federal unemployment insurance will expire on December 31, 2012 unless Congress votes to extend it. Because UI helps so many, this would send millions of families with an unemployed worker into poverty.

While poverty did not rise in the U.S. in 2012, unemployment insurance, nutrition assistance and tax credits for working families must all be protected if we want to avoid a dramatic increase in people living below the poverty line and in food-insecure households. These federal assistance programs are the key to lifting millions of people out of the worst conditions of poverty. To help protect these programs, ask your representative to support a fair, balanced budget in which the Pentagon shares the burden of cuts, rather than placing it all on these vital forms of assistance to our nation's most vulnerable.

About Us
Sign Up

Press Room »

Events »

Work at FCNL »

Programs for
Young Adults »

Email Options »

© 2016 FCNL | 245 Second St, NE, Washington, DC 20002 202-547-6000 | Toll Free 800-630-1330

© 2016 FCNL | 245 Second St, NE, Washington, DC 20002 202-547-6000 | Toll Free 800-630-1330