Growing inequality, lack of economic mobility and persistent poverty in this rich nation are driving the reemerging government interest in strategies to reduce poverty. CLASP offers technical assistance to governments, advocates, and service providers and promotes policies that provide opportunity for all. We also manage Spotlight on Poverty and Opportunity: The Source for News, Ideas and Action, a foundation-led initiative intended to ensure poverty reduction is part of the public discourse.

Sep 13, 2016  |  PERMALINK »

Strong Reduction in Poverty, Improvement in Health Insurance, But More to Do for Next Generation’s Families

View our Infographics about the 2015 Poverty Data.

Watch Olivia Golden's appearance on C-SPAN's Washington Journal to discuss the data.

Read Maintaining the Momentum to Reduce Child and Family Poverty: In-Depth Lessons from the 2015 Census Poverty and Income Reports

The Census Bureau’s annual report on poverty, income, and health coverage shows major economic improvement on a number of indicators, including a drop in poverty from 14.8 percent of Americans in 2014 to 13.5 percent in 2015.  The health coverage report shows the smallest share of Americans ever to be uninsured, with just 9.1 percent (29 million) of people without insurance in 2015, down by about 4 million people from 2014. Virtually all groups of Americans, including children, shared in the poverty reduction, with about one million fewer children living in poverty and the child poverty rate improving from 21.1 percent in 2014 to 19.7 percent in 2015. 

Yet disparities in economic security, while improved on some measures, remain substantial. America’s children and young adults—our next generation of workers and citizens—still have the highest poverty rates, and children and young adults of color, the soon-to-be majority of that rising generation, experience sharply elevated poverty even within that group.  Without additional policy interventions, high levels of poverty among these children and their families risk not only their future success in education and the workforce but also the nation’s success.

As the country prepares for a new president and Congressional leaders make plans for 2017, CLASP believes it is important to highlight the report’s good news about the effectiveness of several major national programs. Notably the report includes data quantifying the continued success of the Affordable Care Act, the Earned Income Tax Credit (EITC), and the Supplemental Nutrition Assistance Program (SNAP), among others, in helping large numbers of Americans.  For example, the Census Bureau’s special calculations to estimate the effects of the EITC and SNAP on poverty (necessary because these programs are not included in the regular poverty measure) finds that in 2015, the EITC and other refundable tax credits raised 9.2 million people out of poverty and SNAP raised 4.6 million.

But the data also show continuing disparities. America’s next generation of children and young adults continue to experience poverty at very high rates—of particular concern because research shows the lifelong consequences of poverty in childhood. Even with the 2015 improvement, the child poverty rate remained at one in five children, still above the rate before the Great Recession.  For young adults (ages 18-24), the 19 percent poverty rate was virtually unchanged from 19.6 percent in 2014.  Despite their particular vulnerability, young children (under age 5) continued to have the highest poverty rates among children (21.4 percent or 4.2 million children). More than four in ten children (and nearly half of young children) live in low-income families with incomes less than twice the federal poverty line—meaning that a typical childhood experience is living in or near poverty in a family that struggles to make ends meet. 

Parents in these poor and near-poor families are working: in 2015, about 70 percent of poor children and 84 percent of low-income children lived with at least one worker. Low wages and inadequate hours, not the failure to work, are the barriers holding them back from economic stability. For example, one quarter of workers who report working variable hours and almost half of part-time workers who would like to be working full-time are low-income. In fact, original CLASP analysis of the Census Bureau survey finds that about one quarter of adults under age 30 who are parents live in poverty—testimony to policy and labor market failures that make it extremely hard for many families to balance raising children with economic security on the job.

Today, children of color are already a majority among the youngest children and will become a majority of all children in the next few years. Yet despite some improvement in the disparity in 2015, children and young adults of color are far more likely to be poor than White children. About one third of Black children and about three in ten Hispanic children live in poverty, despite high levels of work effort in their households—with two-thirds of poor Black children and three-quarters of poor Hispanic children living with a working adult family member.  The poverty rate for White non-Hispanic children remained largely unchanged in 2015, at 12.1 percent. 

Today’s numbers shine a spotlight on the critical difference that public policy can make, particularly the historic improvements in insurance coverage due to the Affordable Care Act. To build on policy successes to date, five additional bold steps would go a long way toward turning around child and family poverty, tearing down systemic barriers that affect families of color, and enabling children and youth now living in poor families to achieve an economically secure future:

  1. Affordable and high-quality child care for all low-income families, so parents can work and children can thrive. Current investments reach only a fraction of eligible families.
  2. A substantial jobs agenda, providing opportunities for low-income workers to earn a living wage and gain skills on the job, and including a substantial federal investment for subsidized summer and year-round employment for youth and young adults.  
  3. Financial access to postsecondary education for all low-income students, including both youth and adults, so they can get the credentials they need to succeed at work—and also make ends meet for themselves and their families.
  4. Access for all workers (including low-income workers) to paid family and medical leave, earned sick days, and fair schedules, so parents don’t have to trade off their child’s health and wellbeing to succeed on the job.
  5. Improvements to the safety net that fill gaps and build on the proven success of the EITC and other programs, such as by extending help through the EITC to low-wage adults without dependents and young adults (including non-custodial parents and others who play a crucial role in children’s lives) and ensuring that young children everywhere in the country have at least a minimum income floor.

CLASP will be releasing a policy brief next week to provide more in-depth analysis of the Census data, along with further details on our policy recommendations for helping those living in poverty and with low incomes gain economic security.

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