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The Who and Where of Great Recession Poverty

A couple weeks ago we got some bleak--though not unexpected--news from the U.S. Census Bureau: there are now more poor people in the United States than ever before recorded. The second year of the Great Recession saw an additional 3.7 million people slip into poverty, so that 43.6 million Americans (14.3 percent) were poor in 2009, including one in five children.

Today’s  release of the 2009 American Community Survey--which provides sub-state poverty figures--gives us our first detailed look at where and who faced rising poverty as the recession deepened and spread over the course of that year. We’re going to use this new information next week to analyze recession-era poverty trends in more detail, both within and across the nation’s largest metro areas (so stay tuned). But today let’s focus on that one-in-five number.

First off, we know that children are generally more likely to live in poverty than adults, and when poverty rises, kids often bear the brunt of those increases. The latest figures are no exception. Looking to the 100 largest U.S. metro areas, 18.6 percent of children lived in poverty--an increase of 1.6 percentage points over 2008. These rates are considerably higher than the overall rate of poverty in these metro areas, which rose from 12.2 percent in 2008 to 13.3 percent in 2009. Child poverty rose significantly in 45 of the top 100 metro areas, with only El Paso managing to bring their rate down (though their rate remains among the highest, as discussed below).

While these numbers are truly sobering, it’s important to note what they don’t reflect. The official poverty measure doesn’t take into account a number of important benefits and supports that help low-income families get by, like the Earned Income Tax Credit and the Child Tax Credit. Moreover, these numbers don’t reflect the boost ARRA gave to these programs to help working families whether this economically turbulent period.   

Thanks to ARRA, as regions like Chattanooga, Columbus, Jacksonville, and Milwaukee saw their child poverty rate increase by roughly 5 percentage points or more between 2008 and 2009 (see map below), they also saw potential EITC dollars increase by millions in their communities ($4.6 million, $18.5 million, $14.8 million, and $14.5 million, respectively). And areas like El Paso, Bakersfield, and Fresno--each of which had child poverty rates above 30 percent in 2009--were able to boost refunds for over 30,000 families to the tune of more than $18 million dollars in each region. Expansions to the CTC further increased the take home pay of working families, particularly those making $10,000 to $20,000 a year. Those families were eligible to take home another $753 in their refunds on average. These additional dollars add up to an important source of income support for working families continuing to struggle with the effects of the Great Recession.

With good reason then, the administration’s budget called to make these temporary changes to the EITC permanent after 2010, when they are set to expire. That’s a positive signal, but being in the budget is far from being a done deal in Washington. And thus far the larger debate around taxes--spurred by the impending expiration of Bush’s tax cuts, which could all but do away with the refundable CTC--has not shaped up to be a bi-partisan or constructive one. 

What’s the bottom line? Almost half of the country’s major metro areas saw childhood poverty rise in 2009. North or South, East Cost or West, Red or Blue, kids are feeling the burden of increasing economic hardship and insecurity. Yes, we need a stronger safety net in place to help those who can’t find work in a time of high unemployment. But policymakers should also make sure we don’t lose the programs already in place that support the efforts of low-income families who are working to support their kids and trying to make ends meet.