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Granite State Rumblings: Cutting Poverty In Half In Ten Years

Since 2010, the Half in Ten campaign has tracked its progress toward achieving its goal of cutting poverty in half in 10 years by examining 21 different indicators of economic security and opportunity.

Here are the top 12 key indicators from this year’s report.

1. POVERTY RATE

About 45.3 million Americans lived below the poverty line last year. The percentage of people with incomes below the poverty line—$18,552 for a family of three in 2013—fell from 15 percent in 2012 to 14.5 percent in 2013. These measures do not account for the impact of the Earned Income Tax Credit, nutrition assistance, and other noncash benefits on income.  For example, if SNAP benefits had been counted as income, the U.S. Bureau of the Census estimates that about 3.7 million fewer people would have had income below the poverty line in 2013. For a measure of poverty that includes most of these benefits, subtracts certain expenses, and uses a somewhat different poverty threshold, see Indicator 2.

To substantially reduce the share of Americans living below the federal poverty line, policymakers need to focus on job creation, investment in people, and improving the minimum wage and other labor standards. 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 the efforts of poorly compensated workers to join unions, and ensuring that all workers have basic benefits such as paid sick leave. Finally, to increase economic security and strengthen our nation’s balance sheet, we need to make our tax system more progressive.

2. SUPPLEMENTAL POVERTY RATE

Using the Census Bureau’s supplemental poverty measure, the poverty rate was 15.5 percent in 2013, down from 16 percent in 2012. The supplemental poverty measure counts more benefits as income than the official poverty measure, subtracts some work-related and medical expenses, and uses an updated poverty threshold.

Social Security benefits, for example, made it possible for 27 million   Americans to live above the supplemental poverty line, including
1.6 million children. At the same time, commuting and child care expenses pushed 6 million Americans below the supplemental poverty line.

Shifting to the supplemental poverty measure produces a much lower rate of deep poverty overall and for most groups. The supplemental poverty measure is a reminder of the important role that work supports, such as the Earned Income Tax Credit, or EITC, and the Supplemental Nutrition Assistance Program, or SNAP, formerly known as food stamps, play in reducing poverty and the costs associated with working, particularly for parents caring for minor children. Alongside more jobs with better wages, work supports that reduce work expenses and supplement the wages of poorly compensated workers should be maintained and strengthened to reduce poverty over the next decade.

3. INCOME INEQUALITY

Income inequality remained high in 2013. The 40 percent of households with the lowest incomes received only 11.5 percent of overall income in 2013, a share not significantly different than in 2012. The top 5 percent of households took in 22.3 percent of overall incomes, about the same share as in 2011.

The real incomes of low- and middle-income households have yet to return to their pre-Great Recession levels and are also not much different today than in 1980. At the same time, higher income households—particularly those in the 5 percent of the distribution—have seen substantial gains since 1980.

As with poverty, reducing inequality will require a renewed commitment to full employment and tax fairness; the strengthening of labor standards, such as the minimum wage and the right to bargain collectively; and investments in people’s health and well-being.

4. ON-TIME GRADUATION RATES OF HIGH SCHOOL FRESHMAN

The on-time high school graduation rate measures the percentage of students who enter high school as freshmen and graduate within four years. Over the most recent 10-year period, the on-time high school graduation rate increased by 8.3 percentage points, rising from 72.6 percent in the 2001-02 school year to 80.9 percent in the 2011-12 school year. The on-time high school graduation rate has now increased for six straight years.

On-time graduation rates have increased for all racial and ethnic groups. But there continue to be substantial disparities by race in on-time graduation rates: Rates for whites and for Asian Americans and Pacific Islanders are substantially higher than for blacks, Hispanics, and Native Americans.

5. ECONOMIC INCLUSION OF YOUNG PEOPLE

In 2013, 5.89 million youth—15.1 percent—were neither in school nor employed. The percentage of youth not in school and not working increased for the first time since 2009. While there was a modest increase between 2012 and 2013 in the number of out-of-school youth who were employed, there was an even larger increase in the number of youth not enrolled in school.

To increase the share of youth in education, employment, or training, Congress should allow young workers who do not have children to receive the Earned Income Tax Credit, increase investments in summer and transitional jobs for youth, and adopt President Obama’s proposals to increase access and completion of postsecondary education and training, including his proposal for new College Opportunity and Graduation Bonus grants.

6. YOUNG ADULTS AGES 25 TO 34 WITH AN ASSOCIATE’S DEGREE OR HIGHER

The percentage of young adults ages 25 to 34 that have an associate’s degree or higher increased slightly by .7 of a percentage point between 2013 and 2014; it has increased by slightly more than 4 percentage points since 2008.

In October 2013, slightly less than half of 20- to 21-year-olds were enrolled in college. To further increase the educational attainment of young adults, Congress should expand access to higher education by increasing Pell Grant and Federal Work-Study investments and ensuring that working and nontraditional students are able to access financial aid.

7. UNEMPLOYMENT RATE

The unemployment rate continued to decline in 2014, falling from 7.2 percent in September 2013 to 5.9 percent in September 2014. Unemployment rates vary considerably by ethnicity, with blacks and Latinos much more likely to be unable to find work than whites and Asians.

Reducing unemployment needs to be Congress’s top priority. Policies that would create jobs and move us in the direction of full employment include ending harmful austerity policies, making immediate investments in public infrastructure, and creating transitional public jobs for youth and the most-disadvantaged workers.

8. EMPLOYMENT RATE OF PEOPLE WITH A DISABILITY

Among the 15.5 million people ages 16 to 64 with disabilities in 2013, about 4.1 million—26.8 percent—were employed, compared to 70.7 percent of people in the same age range with no disability. There was no change in the employment rate for working-age people with disabilities in 2013.

Adults with disabilities who are in the labor market are much more likely to be unemployed than adults without disabilities. For example, among people with a high school diploma but no college education, 11.3 percent of workers with disabilities are unemployed compared to 7.3 percent of workers with no disability. People with disabilities have much higher poverty rates regardless of whether they are employed or not.

9. PAY OF WORKERS IN SERVICE OCCUPATIONS

About 14 percent of U.S. workers work in one of the five categories of service occupations: health care support, protective services, food preparation, personal care and service, and building and grounds cleaning and maintenance. Median weekly earnings for full-time workers in these service occupations in 2013 were $493 or about $25,000 annually. Adjusted for inflation, there was little or no change in service occupation pay between 2012 and 2013. But since 2003, real median wages for service workers have fallen by about 3 percent.

Stagnant and falling wages for service workers have occurred despite ongoing gains in productivity. Policies that would help on this front include increasing the federal minimum wage to at least $10 per hour, encouraging greater union participation among poorly compensated workers, and halting attacks on the basic rights of workers.

10. SHARE OF POORLY COMPENSATED WORKERS WITH ACCESS TO PAID SICK LEAVE

Only about 34 percent of workers in the bottom quarter of the wage distribution had access to paid sick leave in 2014—the same as in 2013. Poorly compensated workers are much less likely to have paid sick leave than other workers. For example, workers in the second quarter of the wage distribution—between $11.75 and $17.64 per hour—are twice as likely to have paid sick leave as those in the bottom quarter.

Congress should ensure that all workers are able to earn paid sick leave. As an important step toward this goal, the proposed Healthy Families Act would ensure that all workers in the United States in firms with at least 15 employees are able to earn one hour of paid sick leave for every 30 hours worked. Nearly half of the 30 million workers who would be able to earn paid sick leave under the act are in the bottom 25 percent of wage earners.

11. SHARE OF POORLY COMPENSATED WORKERS WITH ACCESS TO AN EMPLOYER-SPONSORED RETIREMENT PLAN

Only about 41 percent of workers in the bottom quarter of the wage distribution—$11.75 an hour or less in 2014—had access to an employer-sponsored retirement benefit plan. The change between 2013 and 2014 was not statistically significant.

Poorly compensated workers who have access to retirement plans are much less likely to participate in them. To improve the retirement security of poorly compensated workers, Social Security should be strengthened for them, as well as adults who spent part of their working years caring for children or elderly parents.

12. GENDER WAGE GAP

In 2013, median annual earnings for women working full-time and year-round were $39,157. That figure is 78.2 percent of the median annual earnings of for men working full-time and year-round:

$50,033. The gap did not change significantly between 2012 and 2013. Moreover 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. According to the Institute for Women’s Policy Research, boosting women’s pay to men’s levels would cut the poverty rate for all working women in half, and the total increase in women’s earnings would amount to more than 14 times the current public spending on the Temporary Assistance for Needy Families, or TANF, block grant program. 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.

“We will not find agreement on every policy, to be sure, and debates about best approaches can and should happen. But people of all political stripes must recognize the national threat poverty poses and the unacceptable costs of inaction. Poverty is not a Democratic or Republican issue: it’s an American issue.”  – Senator Cory Booker

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About MaryLou Beaver

New Hampshire Campaign Director Every Child Matters Education Fund
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