Unemployment Benefits Kept 3.3 Million Out of Poverty in 2009

The devastating impact of Wall Street’s Great Recession was all too evident in the record surge in poverty reported recently by the Census Bureau for 2009.

From Elise Gould and Heidi Shierholz at EPI:

The poverty rate increased from 13.2% to 14.3% between 2008 and 2009, representing an additional 3.7 million people living in poverty for a total of 43.6 million in poverty in 2009. The poverty rate for children was 20.7% in 2009, representing 15.5 million kids living in poverty. In 2009, over one-third (35.5%) of all people living in poverty were children.

The poverty rate for working-age people (18-64 years old) hit 12.9% in 2009, the highest rate in nearly 50 years.

The official poverty threshold is defined as an annual income of $21,954 for a family of four (that’s $422 per week), or $11,161 for an individual. But, as Gould reports, the poor are getting poorer.

While 14.3% of all Americans were living in poverty last year, a record 6.3% were in so-called deep poverty, earning less than half the official poverty threshold, or subsistence rate, according to the new data on poverty released last week by the Census Bureau.

This sizable share of the American population falling below half the poverty line is particularly notable given that even the official poverty threshold – an annual income of $21,954 for a family of four – is widely considered insufficient to pay for life’s most basic essentials like food and housing. To fall below half the poverty line, a family of four would have an annual income of less than about $11,000.

How much worse would the poverty rates have been in 2009 without the expanded state and federal unemployment insurance programs? According to a report by the National Employment Law Project (NELP) (pdf):

The U.S. Census Bureau announced yesterday that during 2009, 3.3 million people, including 1 million children, were kept out of poverty with income support provided through unemployment insurance (UI). (emphasis added)

Number_Out_of_Poverty_UI
source: Center on Budget and Policy Priorities (CBPP)

In a related study, CBPP reports that a total of 6 million Americans were kept out of poverty by just seven of the provisions in the 2009 Recovery Act stimulus, including expanded unemployment insurance programs.

This analysis, which comes one day before the Census Bureau will release updated poverty figures (for 2008), examines seven of the recovery act’s provisions — two improvements in unemployment insurance, three tax credits for working families, an increase in food stamps, and a one-time payment for retirees, veterans, and people with disabilities — and finds that they alone are preventing more than 6 million Americans from falling below the poverty line and are reducing the severity of poverty for 33 million more. Those 6 million people include more than 2 million children and over 500,000 seniors.

Those numbers are conservative, says CBPP, and don’t include the impact of other Recovery Act programs such as the Temporary Assistance for Needy Families (TANF) emergency jobs programs, which employ 250,000 otherwise unemployed parents and youth. Those TANF programs are set to expire this week unless Congress acts to extend them.

Without the expanded state and federal unemployment insurance benefits, the number of Americans living in poverty in 2009 would have increased by 7 million — nearly twice the actual increase. And without other key provisions in the Recovery Act, that number would have been nearly 10 million. Yet, all of those programs are under assault, threatened by legislative expiration unless they are extended.

As the report from NELP concludes:

Given the important role of unemployment benefits in keeping working families out of poverty during the recession, it’s crucial that Congress keep the Recovery Act’s remaining measures in place. The current federal extensions are set to expire on November 30, 2010, ending income support for millions unless they are reauthorized. If we allow these programs to expire, millions will be subjected to preventable poverty—hardships that will have immediate and lasting impacts for families and children.
Yesterday’s bleak release, showing a rise in poverty over the course of the past year, is yet another piece of evidence pointing to the need for Congress to take action on expanded unemployment benefits as well as focused measures to create and grow jobs.

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