The story the new Census data tells

Jacqui Broughton

Today the U.S. Census Bureau released new data from the Current Population Survey which gives us a look at what happened to household income, health insurance and poverty rates in 2009. As expected, things were worse in 2009 than they were in 2008 on both the national and state level.

Nationally, the two-year (2008-2009) median household income was $49,945 which is a fall of 3.2 percent in one year and a drop of 4.5 percent from 1999-2000 (when put into 2009 numbers). The one-year poverty rate moved from 13.2 percent to 14.3 percent, an increase of 3.7 million people.

For Michigan, the numbers are not surprising. The state’s median household income fell and poverty increased. Between 2008 and 2009, the poverty rate moved from 13 percent to 14 percent. Median household income was $47,797, using 2008-2009 two-year average numbers. This is a decline of 7 percent from 2006-2007 to 2008-2009 and of just over 17.5 percent from 1999-2000.

Additionally, while Michigan is still below the national average in the percentage of people under age 65 without health insurance, this figure still increased to 14.4 percent, or 1.3 million people.

Today’s data release only confirms what we already knew and what so many families have been experiencing: income has been falling, fewer people have employer-based health insurance, and more people are struggling to afford day-to-day necessities. In addition, though Michigan’s rate of those with health insurance coverage is still much higher than the national average, more individuals and families are losing coverage due to unemployment. The increase in the number of those without health insurance further illustrates the need for federal health care reform and including the provisions that will take effect next week.

Despite the bad news, things could have been much worse without the federal Recovery Act which helped create thousands of jobs in Michigan and helped keep at least that many people out of poverty. With that in mind, Congress should act to support the extension of key Recovery Act changes that help low-income families, such as the expanded benefits for low-income, working families through the Earned Income Tax Credit (EITC) and preserving the refundable Child Tax Credit. Also, Congress should act to preserve funding for the Emergency TANF Contingency Fund which is scheduled to end on September 30.

Moreover, these new data should send a message to the Michigan Legislature that now is not the time to further decrease support for safety net programs, which help Michigan families make ends meet.

More detailed information will be coming on September 28 when the Census Bureau releases its 2009 American Community Survey data. These data, however, give us a preview of what is to come with that release.

-Jacqui Broughton

One in six

Jacqui Broughton

Just as the U.S. Census Bureau prepares to release poverty, income, and health insurance data for 2009, which may show a record one-year jump in poverty, a USA Today article in the Detroit Free Press sheds new light on just how many Americans are being caught by the frayed safety net.

The numbers are deeply troubling. One in six Americans, or roughly 16 percent of the population, receive assistance from programs designed to help people in tough economic times. Additionally:

• Over 50 million people are on Medicaid (1.9 million recipients in Michigan).
• Over 40 million people receive food assistance (1.8 million in Michigan).
• Nearly 10 million receive unemployment insurance benefits (387,000 in Michigan).
• Over 4 million receive cash assistance (225,000 in Michigan).

These numbers are most certainly dismal but, unfortunately, in the face of all of this, Michigan continues to hack away at funding for programs at a time when people need them most. Since the official start of the national recession in December 2007, Michigan has reduced General Fund spending in the Department of Human Services by 35 percent and in the Department of Community Health by nearly 27 percent.

Meanwhile, unemployment has increased, and caseloads for all safety net programs have increased with approximately one in four Michigan residents receiving some sort of assistance (food assistance, cash assistance, child day care subsidy, state disability assistance or Medicaid). Even still, the governor has stated in her revised budget plan that each department must reduce spending by 3 percent across the board with an additional $50 million in reductions in the Department of Human Services and the Department of Community Health.

Now is not the time to eliminate or further reduce spending on programs that so many families rely on just to get by day to day.

-Jacqui Broughton

Hardships hit children

Jane Zehnder-Merrell

The Michigan numbers in the just released national KIDS COUNT report reflected  a 36 percent increase in child poverty in the state between 2000 and 2008 and a ranking of 44^th (with 1 being the best) for the relatively large percentage of children living in families where no parent has a full-time year-round job. In response to this report, Michigan citizens and legislators might want to review the findings in a recent study about the impact of hard times on children.

Children in families suffering from multiple hardships, defined as inadequate food, inconsistent access to utility service, and unstable housing, sustain long-term harm to their health and well-being, according to the report Healthy Families in Hard Times. Children’s HealthWatch found that each of these hardships elevate the risk of poor health, hospitalizations, iron deficiency anemia, and developmental delay among children in these families. Children with severe hardship were at more than double the risk of developmental delay compared with children in families with none of these material hardships.

The ten-year study found that one-third of low-income families experienced no hardship while the majority (57%) suffered from moderate hardship, and 6 percent sustained severe hardship. Housing insecurity was the most pervasive—affecting roughly two of five low-income families compared with 27 percent with energy insecurity and one in five with food insecurity.

The impact of these hardships is real and profound for the affected children. Children who experience food insecurity were more likely to need special education services, mental health treatment, and remediation for low academic performance.

While the best solution for family economic security is a good job that can provide the income to meet material needs, roughly one-third of the state’s children lived in a family where no parent had a full-time year-round job in 2008. Children cannot wait for the economic engine; they are already on the road.

Until the economy rebounds, many families must depend on public programs to get through the current recession. The researchers found that many eligible families did not participate in available programs, but the health and development outcomes for children in those needy families who did were much better than for those who did not.

So in these hard times instead of cutting programs, curtailing outreach, and limiting access to programs the better approach might be to expand outreach, coordination, and access to programs that mitigate material hardship so that children who have been born during these hard times will have a chance to be ready for the new economy when it arrives.

Tax break for working poor

Peter Ruark

In a Factually Speaking post on Feb. 22, I wrote about the federal Child Tax Credit and how the American Recovery and Reinvestment Act lowered the minimum household income level from $10,000 to $3,000.

This change has helped many very poor families in Michigan qualify for the credit, and Congress must make the change permanent. Without such legislation, the minimum eligibility level for the Child Tax Credit will jump to $12,850 next year. 

The Center on Budget and Policy Priorities has just released a paper showing that failure to make the change permanent will result in a loss or reduction of the credit for the families of 477,000 urban and suburban children in Michigan and 106,000 rural children.

The reduction for some families comes about because the tax credit is phased in at the low end of the income eligibility scale. Currently, families with two children with household earnings between $3,000 and $16,333 receive a partial credit based on their income. Families who earn more than $16,333 (but less than $70,000 if they are one-parent families and $140,000 if they are two-parent) receive the maximum credit of $1,000 per child. 

If Congress does not make the $3,000 threshold permanent, families earning less than $12,850 won’t receive a Child Tax Credit at all, and families earning less than $26,183 won’t receive the full $1,000 amount.

As with the federal Earned Income Tax Credit, much of the money families get back for the federal Child Tax Credit gets spent in their own communities, helping local businesses and stimulating the economy. That is why this tax credit expansion was passed as part of the Recovery Act.

If you feel comfortable calling your representatives in Congress, you might want to pick up the phone and ask them to stand up for low-income working families in our state. You can find your representative’s office phone number here.

— Peter Ruark

Updating an outdated poverty measure

Jacqui Broughton

The U.S. Commerce Department recently announced the Census Bureau is developing a new, unofficial poverty measure to go alongside the current poverty measure.

This is a change advocates have been waiting to see for years as the current measure is far out of date.

The new measure will not replace the official measure calculated each year by the U.S. Census Bureau or the official poverty guidelines published each year by the U.S. Department of Health and Human Services, but it will be published annually along with the official measure.

The current poverty measure does not take into account the things it takes for a family to live. It only considers pre-tax cash income and is adjusted each year for inflation using the Consumer Price Index.

The current measure was developed in the 1960s and is based on the U.S. Department of Agriculture’s economy food plan. This food plan was the lowest estimate of what a family needed to feed themselves, but was not necessarily sufficient for long-term nutrition. At the time, it was estimated that the average family would spend approximately one-third of their total net income on buying food using this plan.

The supplemental measure, due to come out in the fall of 2011, is based roughly on a measure the National Academy of Sciences developed in 1995. This measure takes a lot more into account, such as:

• Assistance received from food assistance programs, housing vouchers, energy assistance and tax credits;
• foster children (the official measure only includes relatives by birth, marriage, or adoption);
• living expenses; and
• geographic differences in the cost of living.

Since this new measure looks at a lot more things, it is thought it will cause the percentage of people in poverty to go up since the amount a family must earn to not be below the poverty level will go up.

The new measure will not, however, impact program eligibility. This means, a family with income higher than the current poverty level may be in poverty by the supplemental measure, but still not qualify for assistance programs since a family will have to be even poorer to get help.

This overhaul is long overdue. While the current measure will remain the official poverty measure, it will be put in perspective by the supplemental measure. The current measure is severely outdated and fails to take into account the things that a family or individual needs to sustain a basic standard of living besides food–such as housing, utilities, clothes, and transportation.

So while the poverty rate will probably go up, this measure will give a clearer picture of what poverty really looks like in America.

-Jacqui Broughton