The high cost of being poor in the U.S.


September 20, 2016

Today, fresh off the new U.S. Census Bureau poverty numbers, we released The High Cost of Being Poor in the U.S., which explores challenges the 43.1 million adults and children still living in poverty face. These challenges include high costs in areas such as rent, food, child care and predatory lending.
A few highlights:

59 percent of U.S. households with annual incomes below $20,000 spend more than half of their income on rent alone – and child care accounts for another exorbitant expense.

Anti-poverty programs help many. Programs such as low-income refundable tax credits, SNAP, free or reduced-price school lunch and child care subsidies have helped lift tens of millions of Americans out of poverty.

But many anti-poverty programs don’t reach many who are eligible and other programs would do more good if their benefits were higher or if more people were eligible.

Poverty’s challenges exist for so many Americans, despite the recent, overall upbeat news that came out of the U.S. Census Bureau’s annual findings. Census statistics show that the poverty rate in the U.S. dropped significantly from 2014 to 2015, declining from 14.8 percent to 13.5 percent. That’s the biggest decline in poverty since 1999. In addition, median household income rose from $53,718 in 2014 to $56,516, the largest increase over the past 17 years.

“It is good news that the poverty rate is down, median household income is up, and more Americans are finally benefitting from an improved economy, coupled with federal programs that increase income or reduce expenses,” said Deborah Weinstein, Executive Director of the Coalition on Human Needs. “But the more troubling news is that the poor and near-poor live in a precarious situation. The simple fact is, it is expensive to be poor in the U.S.”

The High Cost of Being Poor in the U.S. found many ways in which it is expensive to be poor: Rents consuming huge proportions of income, higher food prices because of lack of access to markets, late fees for unpaid rent and evictions, poor housing conditions leading to health issues, which in turn lead to missed days of school or work; lack of paid sick days, paid leave, and unpredictable work schedules; and predatory lending practices such as pay day lending.

And yet: for every expense the poor encounter, policy solutions could exist to alleviate the plight of struggling Americans. “Low-income refundable tax credits in 2015 lifted more than nine million people out of poverty and another 2.5 million fewer people were poor because of housing subsidies,” Weinstein said. “Another 6.2 million people avoided poverty because of programs such as SNAP, school lunch and WIC. These programs are sound investments in America and in Americans. Like any sound investment, the more we put in, the more we get out.”

The report includes recommendations for reducing poverty even further for the 43.1 million adults and children who live at or below the poverty line. These recommendations include increasing federal funding for housing and child care subsidies; expanding the Earned Income Tax Credit and Child Tax Credit; increasing SNAP benefits and improving  Child Nutrition programs while reauthorizing them; expanding health care coverage to low-income Americans by drawing down federal Medicaid dollars in the 19 states that have not done so;  a strong rule finalized from the Consumer Financial Protection Bureau to stop predatory lending; and raising the minimum wage and helping workers get more paid hours through paid sick leave and more predictable hours.

The High Cost of Being Poor in the U.S. is available here.

If you’d like to join us in Twitter in helping publicize the report, here are some suggested tweets:

Programs such as #SNAP #SocialSecurity #EITC lift millions out of poverty but more needs to be done #PovertyCosts Talkpoverty

Nearly 1 in 5 children lived in poverty in 2015 & children of color are more likely to be poor than their white peers #InvestinKids #PovertyCosts #Talkpoverty

43.1 adults & children struggle to afford basic necessities w/ their current income #PovertyCosts #TalkPoverty @USCensusBureau

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