Safety Net Fraying for the Very Poorest

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May 24, 2011 at 4:48 pm

I recently described a new study finding that public programs keep tens of millions of Americans out of poverty. The same study illustrates that after policymakers weakened certain elements of the safety net, deep poverty — that is, the share of the population with incomes below half the poverty line — rose sharply.

The study, which goes beyond traditional poverty data in a number of ways (such as by counting non-cash public benefits like food stamps and tax provisions like the Earned Income Tax Credit), finds that poverty fell over the past two decades but deep poverty rose.

The poverty rate declined from 15.3 percent in 1984 to 13.5 percent in 2004. (In 2004, the poverty line for a family of four was $19,307 a year or $1,609 a month; the study uses monthly rather than annual poverty data.)
Yet the deep poverty rate rose by nearly half during this period, from 4.5 percent to 6.6 percent.
Key to the rise in deep poverty was a weakening of the safety net for the most vulnerable. The average value of government assistance to people with virtually no other income plummeted between 1984 and 2004, falling by 38 percent for single parents and by 41 percent for families experiencing joblessness, after adjusting for inflation.

Those losses were part of a broad shift in the safety net. “Over time,” the study states, “we find that [public] expenditures have shifted toward the disabled and the elderly, and away from those with the lowest incomes and toward those with higher incomes.” Put another way, “there has been a double redistribution of expenditure in the U.S. . . . from the very poor to the less poor and near poor and, across groups . . . to the elderly and disabled.”

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