Thursday, September 16, 2010

Poverty Numbers Are On The Rise - Do They Tell the Whole Story?

Today marks what has come to be known as "Poverty Day," the day when the newest statistics from the American Community Survey show the changes in the Federal Poverty Level. While the complete data will not be released until late September, reports indicate that over 1.37 million or 11.1% of people were living below the Federal Poverty Level (FPL) in Pennsylvania. Nationally the number stands at 43.6 million and is the largest population living below the FPL since poverty estimates began being published 51 years ago.

In just this last year the number of people living in poverty nationwide increased by 3.7 million and for the last two years that increase has totaled 6.2 million. While this Great Recession has hurt many families, it is clear now just how much worse it could have been. According to the Center on Budget and Policy, 3.3 million more individuals would have been living in poverty in 2009 without the expanded unemployment benefits. During this recession, the number of people that unemployment insurance kept out of poverty rose by 2.8 million, showing not only the need for these benefits, but also how far they reached and how many individuals and families the unemployment expansions kept out of poverty during a difficult time.

But as Carol Goertzel, President/CEO of PathWays PA, notes, “Although the numbers we are seeing today are startling, it is important to remember that the Federal Poverty Level is not the same as a measurement of all people who are struggling in the United States.” She continues, “In fact, it is likely that far more people in Pennsylvania and in the US are struggling without enough to make ends meet.”

The FPL was created in 1965 based on a food budget for families to prevent starvation on a temporary or emergency basis. The food plan was modified for different family sizes and multiplied by three, since one-third of household income was spent on food. However, food now consumes a much smaller share of a family’s budget than it did in 1965.

As seen in the Self-Sufficiency Standard for Pennsylvania 2010-2011, increased housing costs, not to mention child care and healthcare costs that were not part of a 1965 budget, have changed family spending to the point where three times the amount spent on food is not enough to cover all expenses. The Standard examines the cost of basic necessities including food, transportation, healthcare, childcare, and housing in every county in Pennsylvania for 70 different family configurations. For example, a self-sufficient wage for a family with two adults and two children in Delaware County is $67,238, which is 305% of the Federal Poverty Level.

What does this have to do with the poverty numbers? The number of people living in poverty in the US is 43.6 million or 14.3%, up from 13.2% in 2008. This number only shows the number of people living below the outdated FPL; in Pennsylvania in 2007 (before the recession took hold), about 9% of households fell below the FPL. However, according to Overlooked and Undercounted: Struggling to Make Ends Meet in Pennsylvania, 21% of households actually earned less than the minimum amount they need to support their families. Meaning that 14.3% actually underestimates the number of those earning less than what they need, which in turn undermines the ability to locate and serve families in crisis.

In other words, when looking at the poverty numbers, remember that there are also many families who are being overlooked that are in need.

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