Forbes, April 16, 2008: Poverty Soars in Illinois, Report Finds

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CHICAGO, April 16 /PRNewswire-USNewswire/ — In another sign of the state’s slumping economy, the number of Illinoisans living in poverty surged by a whopping 19 percent in the past five years, according to a new report released Wednesday by Heartland Alliance’s Mid-America Institute on Poverty. The hefty increase boosts the total number of poverty-stricken Illinois residents to 1,539,033 — a population surpassing the size of the City of Philadelphia.

In its 2008 Report on Illinois Poverty — the only comprehensive analysis of poverty indicators in Illinois — Heartland also found that that increases in poverty pervaded most areas of the state, increasing in 74 of Illinois’ 102 counties.

“These numbers should dispel the myth that poverty is a problem confined to big cities and rural communities,” said Sid Mohn, President of Heartland Alliance for Human Needs & Human Rights. “Poverty crosses all boundaries, whether age, gender, race — or the city limits. It also violates our human rights. We look forward to working with Illinois legislators to lift all our neighbors out of poverty and restore the dignity of their human rights.”

A total of 22 counties were placed on the Poverty Warning List, an index of counties where key indicators signal that poverty trends are the most alarming in Illinois. Another 44 counties appeared on the Poverty Watch List, which accounts for counties where poverty indicators need to be monitored closely.

The lists were compiled based on an evaluation of four factors reflecting a county’s susceptibility to pronounced poverty: High school graduation rates, unemployment rates, teen birth rates, and poverty rates. Counties in Illinois are evaluated using a point system, with the higher number of points indicating a worse score.

Nearly 250,000 additional Illinoisans have succumbed to poverty since 1999, a 19 percent increase. Extreme poverty, living on an annual income of less than half of the poverty line (around $10,000 for a family of four), affects over 680,000 Illinoisans. Nearly half of them are children, seniors, or disabled, and are not expected to or may not be able to work.

“Illinois simply can’t afford to live with poverty,” said Rep. John Bradley, (D-Marion). “For every impoverished family, there is a child without the opportunity — from education, to housing to nutrition — to attain their full earning potential. When that happens, we all lose a valuable human resource for the State of Illinois. To protect our own economic security, we need a serious plan to combat poverty in the next 10 years. That’s the goal of establishing the Commission on Poverty Eradication.”

The report attributes the state’s poverty problem to a number of factors, including:

— Declining Incomes/Skyrocketing Costs. The report found that residents are caught in a vise between shrinking incomes and inflationary costs. Real weekly wages tumbled in 7 of 11 job sectors in Illinois; for example wages declined by $32 in the business service sector and $16 in the retail trade between 2001 and 2007. During the same period, prices of vital household necessities escalated exponentially: food costs increased by 15.4 percent, medical care by 31.2 percent, energy by 60 percent and gasoline by 92.7 percent.

— The Debt/Assets Trap. 15.4 percent of all Illinois households are saddled with zero or negative net worth, meaning they may owe more in debt than they own in assets. Households encumbered by burgeoning debt, including tenuous subprime mortgages, have little income remaining to retain and build savings and other assets, making them more vulnerable to convulsions in the economy. In Illinois, nearly 89,000 homes are projected to succumb to subprime foreclosures during 2008 and 2009.

— Regressive Tax System. When both state and local taxes are taken into account, Illinois’ poor families have an effective tax rate of 13.7 percent — nearly triple the share (5.1 percent) assessed on the top 1 percent of households in the state.

— Porous Public Safety Net. Supports designed to help struggling families often fail to make it into their hands. More than 75 percent of Illinois households eligible for TANF cash grants and housing assistance do not receive the benefit. Moreover, at $2,856, TANF cash assistance is equivalent to less than half the federal poverty line for any size family.

To alleviate the poverty crisis, the report recommends that state legislators:

— Establish the Commission on the Elimination of Poverty in Illinois so there is a formal entity to comprehensively address poverty in Illinois by developing a substantive, measurable plan to cut the number of people living in extreme poverty in Illinois in half by 2015.

— Improve the Payday Loan Reform Act to strengthen provisions that protect Illinois families from abusive predatory lending practices that can lead them down the path to financial ruin.

— Increase the Illinois Earned Income Tax Credit to put more dollars in the pockets of low-income Illinois families. This improves the likelihood that families will be able to meet basic needs and save money for the future.

— Increase the monthly Temporary Assistance to Needy Families cash assistance grant by 15 percent to help poor families with dependent children.

The report was presented to state legislators at the eighth annual briefing of the Illinois Poverty Summit, a bipartisan group that analyzes poverty trends in Illinois. The summit is staffed by Heartland Alliance’s Mid-America Institute on Poverty. Heartland Alliance is a service-based human rights organization that provides housing, health care, human services, and human rights protections to the most poor and vulnerable people in our society.

To obtain data on each of Illinois 102 counties please see pages 37 through 50 of the 2008 report on Illinois poverty:

SOURCE Heartland Alliance for Human Needs & Human Rights

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