Spotlight Exclusives

Sooner or Later, Most of Us Will Be Poor and on Welfare

Stephen Pimpare, University of New Hampshire Stephen Pimpare, University of New Hampshire, posted on

You can hardly blame Americans for seeing poor people as others. At least since the War on Poverty, we۪ve been encouraged to think of those struggling to get by as them, not us. As President Lyndon Johnson۪s 1964 Economic Report of the President observed: the poor live in a world “isolated from the mainstream of American life and alienated from its values.”

But we now know that poverty is actually a common experience in the US. Most of us will be poor, and most of us will be on welfare, too.

Here’s the evidence. The official Census Bureau measure shows a 2013 poverty rate of 14.5 percent that۪s 45 million people in households with gross annual income below the poverty line of $24,624 for a family of four.

But this counts only those whose total income ended up below that line by the end of the year, telling us nothing about how their income may have fluctuated over time. That۪s a problem.

Suppose you۪re supporting your partner and two young children on an annual salary of $50,000, but are fired mid-year and don۪t land another job by the end of it. Your gross income was $25,000 from January through June, but $0 from July through December (assume here that you weren۪t eligible or didn۪t apply for cash benefits). Even though you were unmistakably income poor for the second half of that year, the poverty rate doesn۪t include you because your annual income put you above the threshold.

The Census Bureau knows this, so they also publish a “dynamic” poverty rate that looks at movement in and out of poverty over time. This data show that 34.5 percent of the population were poor at least once for two months or more in the four-year period from 2009 to 2012.

Outcomes are even worse for some, of course. African Americans had an official poverty rate of 27.2 percent, almost twice the overall rate, and a 4-year dynamic poverty rate of 49.4 percent. It was 23.5 and 53.1 percent for those in the census۪ “Hispanic” category.

Poverty in the US is much more common than official data suggest.

This still understates the problem, however. If we step back even farther, and examine relative poverty rates from 1968-2011, more than 60 percent of Americans between the ages of 25 and 60 fell into the bottom 20 percent of the income distribution for at least a year (with more than 40 percent in the bottom 10 percent), and 25 percent were in the bottom quintile total of five years or more.

The boundary between being poor, low-income, and middle income is thin and permeable, and many of us are just an accident, illness, job loss, or newborn baby away from slipping into poverty. That shouldn۪t be much of a surprise: in a US Federal Reserve survey, when asked if they could get by for three months on just their savings, 58 percent said, “No.”

Precisely because so many of us lead such precarious economic lives, the use of anti-poverty programs is fairly widespread. In an average month in 2012, 21 percent of us benefitted from Medicaid, TANF, SNAP, SSI, and/or housing assistance, including 13 percent of those with incomes above the poverty line. And step back further again, and you discover that over the course of our adult lives, 65 percent of us will use one of these programs. Most of us will be on welfare. (And that۪s not even counting the programs of the “submerged state,” like the home-mortgage tax deduction, which subsidizes the housing expenses of many upper income Americans.)

Such widespread “dependence” is not necessarily a bad thingif not for public programs that step in when our usual dependence upon the private market is disrupted, the poverty rate today would be some 13 percentage points higher. (You can see the impact, program-by-program, by exploring Matt Bruenig۪s very useful Poverty Calculator).

While no modern economy is immune to the effects of global capitalism, most manage to better protect their citizens: Many Nordic and Western European countries have economies that generate even higher poverty rates than ours does, but they nonetheless end up with lower actual poverty (along with higher rates of mobility and well-being) simply because they use the power of government as a countervailing force.

Too often, when an economic “shock” hits an American family, it can’t count on public institutions to help, even though such crises are not only common, but increasing in frequency. We are more at-risk of poverty than our counterparts in other nations not because government here interferes too much in the market, but because it interferes too little.

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Stephen Pimpare
is the author of A People۪s History of Poverty in America and currently at work on a history of poverty and homelessness in the movies. He teaches US politics and public policy at the University of New Hampshire and the Simmons School of Social Work. Follow him on Twitter @stephenpimpare.

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