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Low Income Families Are Suffering From Federal Budget Cuts (From Every Child Matters Education Fund NH)

By Mary Lou Beaver,
New Hampshire Campaign Director, 

Every Child Matters Education Fund

 

Mary Lou Beaver

MaryLou Beaver

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Each year, to track the progress toward the goal of cutting poverty in half in 10 years, Half in Ten publishes an annual report that examines 21 different indicators of economic security and opportunity. On Tuesday, Half In Ten released their new report, Resetting the Poverty Debate: State of the States 2013.

Here are some excerpts from the report:

Poverty Rate

The percentage of people in poverty—defined as having an annual income below $23,492 for a family of four—did not change nationally from 2011 to 2012, remaining at 15 percent, or 46.5 million Americans. Similarly, the percentage of people with incomes of less than half the poverty line—sometimes referred to as deep poverty—remained at 6.6 percent in 2012. These measures do not account for the impacts of the Earned Income Tax Credit, nutrition assistance, and other noncash benefits on income.

To substantially reduce the share of Americans living below the poverty line, policymakers first need to immediately shift their focus from austerity to job creation and investment in people. The poverty rate remains high today due in large part to an excess of poorly compensated jobs. We need to turn bad jobs into good ones by increasing the minimum wage, supporting poorly compensated workers’ efforts to join unions, and ensuring that all workers have basic benefits such as paid sick leave.

Child Poverty Rate

Nationally, 21.8 percent of children ages 18 and younger were living below the poverty line in 2012. But children end up in poverty because their families are in poverty. When the incomes of the adults who reside with children—mainly parents—are not sufficient to meet the basic needs of the family, child poverty rates get worse. One considerable factor contributing to these high rates is family employment. Over the past several years, the rate of family unemployment has remained very high. While the family unemployment rate fell from 12.1 percent in 2011 to 10.1 percent in 2012, the share of families with at least one unemployed parent looking for work was still higher than the national average unemployment rate of 8.1 percent in 2012.

High School Graduation Rate

One of the national indicators that has shown improvement over the past several years is the on-time graduation rate for high school students, which measures the percentage of students that enter high school as freshmen and graduate within four years. The on-time high school graduation rate increased from 75.5 percent in the 2008-09 school year to 78.2 percent in the 2009-10 school year, its highest level since 1974.

Children who participate in state-funded prekindergarten programs are more likely to graduate from high school on time. Nationwide, total state funding for pre-K programs decreased by nearly $60 million in the 2010-11 school year. This is the second year in a row for which inflation-adjusted spending dropped, following a $30 million decrease in the 2009-10 school year. By contrast, Vermont had the best on-time graduation rate in the country and also maintains one of the best pre-K programs, increasing its enrollment by 25 percent in 2011.

Gender Wage Gap

Even though our economy has been growing slowly and steadily, women are among the groups that are still not sharing in its gains. In 2012, median annual earnings for women working full time and year round were $37,791, 76.5 percent of the median annual earnings—$49,398—of men working full time and year round.  The gender wage gap did not change significantly from 2011 to 2012, and there has been little progress in closing the gender wage gap since 2001.

Unequal pay means lower earnings for women and higher poverty rates for both married couples and female-headed households. In the 1990s, the Institute for Women’s Policy Research estimated that boosting women’s pay to men’s levels would cut the poverty rate in half for both single mothers and married couples and by even more for single women without children. Passing the Paycheck Fairness Act would reduce the gender wage gap. Policies such as increasing the minimum wage, expanding investments in child care, and improving pay for workers in female-dominated occupations such as care work would help narrow the gender wage gap.

Besides pay disparities, other work challenges also hold women back, such as paid sick leave.

Lack of Health Insurance Coverage

One of the biggest expenses that pushes families into poverty is out-of-pocket spending on medical expenses, usually due to a lack of health insurance. In 2012, 10.6 million people fell into poverty due to out-of-pocket medical expenses, according to the U.S. Census Bureau. Nationally, our recent investments in this indicator have shown improvement. The percentage of people without health insurance has gone down, falling from 15.7 percent in 2011 to 15.4 percent in 2012.  Since 2010, the number of people without health insurance has decreased by 2 million, in part due to provisions in the Affordable Care Act, or ACA, that have increased coverage among young people. As the full law goes into effect in 2014, further improvements in this indicator are expected.

In too many states, however, low-income nonelderly adults are not able to benefit from part of the ACA that was designed to help them—Medicaid expansion. They are much more likely than higher-income adults to be uninsured. They also fail to receive needed medical care and have problems paying medical bills. However, 24 states are refusing to implement the ACA’s option to expand Medicaid cover- age to most uninsured people with incomes of less than 138 percent of the federal poverty line.

Massachusetts has the lowest rate of residents earning 138 percent of the federal poverty line without health insurance. Only 7.6 percent of the state’s residents lack any kind of health care coverage due to its health insurance program. The state has also chosen to expand Medicaid.

Hunger and Food Insecurity

The food-insecurity indicator measures the share of total households that experienced difficulty providing enough food for all their members due to a lack of money or resources. In 2012, 14.5 percent of households—17.6 million households, to be exact—were food insecure. The change in food insecurity from 2011 to 2012 was not statistically significant.

Although food insecurity increased during the first year of the recession, it has essentially remained stable since then. This is likely due in large part to the effectiveness of the Supplemental Nutrition Assistance Program, or SNAP, formerly known as food stamps. Recent research found that in 2011 and 2012, SNAP contributed to reductions in food insecurity among families who obtained program benefits. Yet SNAP funding has suffered recently. In November 2013, a temporary boost to SNAP funding made available through the American Recovery and Reinvestment Act expired, cutting the average SNAP benefit for a family of three by $29. This expiration took effect in November 2013; those relying on the program now have, on average, $1.40 per person per meal.

On top of that, many lawmakers in Congress have demanded further draconian cuts—as much as $39 billion over 10 years—in a recent House proposal. Policymakers should reject proposals that would damage SNAP’s responsiveness to economic conditions by radically altering its structure, as well as moves to further cut benefits.

Affordable and Available Housing

Nationally, there were only 57 affordable and available units per 100 renter house-holds with very low incomes in 2011, the most recent year for which data are available, compared to 58 units in 2010. The number of renters with “worst-case needs” continued to increase in 2011.

Left alone, sequestration could cut housing vouchers for as many as 185,000 families by the end of 2014. These cuts are already seriously impacting the states. Congress should reverse the across-the-board cuts in housing that are part of sequestration and increase investments in rental-housing assistance and development.

The bottom line is this: Low-income families in states across the country are suffering from too many years of reckless efforts to reduce the federal deficit. Although many states need to improve local policies—especially those that hinder the ability of low-income families to access federally funded programs—the state- by-state results from our indicators show that the budget choices we make at the national level have consequences. The effects of sequestration will continue into next year and for many years thereafter. “It is like a slowly growing cancer,” says Steven Warren, vice chancellor of research and graduate studies at the University of Kansas. In 2014, sequestration will only get worse. The cuts will be deeper.

Many of this year’s cuts simply have not been implemented yet. And the one-time fixes that agencies made this year to mitigate sequestration’s impacts are no longer an option moving forward.

 

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About MaryLou Beaver

New Hampshire Campaign Director Every Child Matters Education Fund
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