Tuesday, November 08, 2011

Poverty in a Volatile Economy—How it Affects all Generations

Since the Great Recession, our families and our society have become increasingly more vulnerable. Poverty, food insecurity, and hunger all go hand in hand. In the face of the current economic recession, rates of hunger and food insecurity have significantly increased. The poor economy has resulted in more families living in poverty and having to choose between paying the mortgage and buying groceries.

In September, the Census Bureau released new figures that show a large number of children and older adults living in poverty. The number of people in poverty in 2010 (46.2 million) is the largest number in the 52 years for which poverty estimates have been published.  Figures released yesterday from the supplemental poverty measure show that figure is actually more than 49.1 million when you take into account rising medical costs and other expenses.  The data confirm that millions of Americans continue to cope with the Great Recession’s enduring effects. It also shows the strength of our country’s safety net programs and argues against cutting these critical programs.

What is the effect of the Great Recession on children and older adults?
  • More than one out of every five children is living in poverty (16.4 million children)
  • One in six seniors is living in poverty.*
*According to official statistics, less than ten percent of the nation's 38 million seniors are living in poverty. But, once medical care and other costs of living are factored in, the number of people 65 and older living in poverty jumps to nearly 16 percent, according to the Census Bureau Supplemental Analysis.

Safety net programs give needy families a leg up when they fall on hard times.
One of the key programs that lowers the poverty rate among seniors is Social Security. Last year more than 14 million seniors were kept out of poverty because of Social Security, our nation’s most successful income protection program.

Unemployment insurance, which provides critical support to the jobless and stimulates economic activity, kept 3.2 million Americans out of poverty in 2010.

Medicaid provided health care to 48.6 million seniors, people with disabilities, and low-income children and families, many of whom would otherwise be without access to health care.

An alternative poverty measure that tracks the impact of the earned income tax credit shows that the EITC kept 5.4 million people, including 3 million children, from slipping below the poverty line last year.

How are families faring?
Though some families have decided to come together and live in multigenerational households to prevent poverty, the problems of a weakened economy still persist in our country. More families in poverty means fewer consumers for goods and services, greater unemployment, and a less-educated workforce.

Generations United urges Congress continue to protect these vulnerable populations by strengthening our social safety net programs that are helping to keep millions of Americans afloat. In order to emerge from the economic downturn, we must protect vulnerable populations and expand economic growth. The outcome of these investments will mean stronger families that have opportunities for success; a step towards breaking the cycle of poverty.

This article is the first installment in Generations United’s Blog Series on the Economy

For more on how families are faring in this tough environment, register to attend Family Matters: Multigenerational Families in a Volatile Economy on December 6, 2011.

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