New Poverty Numbers, Old Poverty Definitions

By Rachel Black 9-10-2009

Numbers released today from the U.S. Census Bureau confirmed what has become widely apparent: more people are living in poverty because of the economic recession. It's tragic but obvious. But what is more tragic is that even before this recession began, and even after it "officially" ends, millions of low-income people will continue to live lives punctuated by various household crises: job losses, medical emergencies, unexpected car or home repairs, or other destabilizing events that keep them stuck in poverty.

During the debate on the economic recovery package earlier this year, economists and advocates alike pushed for investments in programs that serve low-income people, such as the Supplemental Nutrition Assistance Program (formerly food stamps), unemployment insurance, and refundable tax credits. Because these resources flow right back into the economy, they do what a stimulus is supposed to do: increase demand for goods and services. Plus, helping people in need is the right thing to do.

These temporary investments are in place and are working. And while signs are emerging that the economy is turning the corner, we are far from a full recovery. Our challenge will be to add a new refrain to that argument: Investments in the economic stability of low-income families also contribute to the stability of the national economy. Estimates show that child poverty alone costs us almost $500 billion a year in areas such as lost productivity. Hunger alone is estimated to cost our country $90 billion annually in lost productivity, reduced educational outcomes, and increased health-care costs.

Defining poverty as we do now -- based on income alone -- gives us only a narrow snapshot of a person's life. This measurement fails to capture the panoramic view of conditions that keep people from breaking the cycle of poverty. Sustainable progress toward poverty alleviation requires us to address both stability and mobility; we need policies that bridge the gap between what people have and what they need in the short run along with policies that help low-income people build financial stability and move out of poverty in the long term.

For example, if a person lives in conditions where she can work only a part-time job because she doesn't have access to or can't afford child care; if she doesn't have access to health-care services or her employer doesn't provide health insurance; and if she lives in a community where there are no banks and has to pay twice the average rate for her mortgage, then both her economic security and overall well-bring are threatened. Support systems to help people out of poverty must address vulnerability and opportunity, not simply income.

To end poverty, we must come up with a comprehensive and holistic set of solutions that contributes to stability and mobility. Such a set of solutions might include access to health care; access to services such as transportation and child care that facilitate work; access to affordable and nutritious food; access to an education that provides both the academic and social foundations for success; and access to financial services that facilitate saving and protect against predatory products and practices. We must develop measurable targets for achieving each goal, and most importantly, we must make a national commitment that holds us all accountable for making progress toward the targets.

Preventing the next economic crisis is an essential part of dealing with the current one. We need to take this opportunity to make the systemic changes required to put our economy and families on a path to prosperity.

portrait-rachel-blackRachel Black is a Policy Analyst in the Government Relations department of Bread for the World. In her four years there, she has been responsible for a variety of issues in Bread for the World's domestic poverty portfolio, including rural poverty, tax policy, and asset building.

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