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U.S. recovery eludes many living below poverty level, Census suggests

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WASHINGTON — In July, President Donald Trump’s Council of Economic Advisers declared that the country’s five-decade war on poverty was largely over and called it a success.

On Wednesday, the Census Bureau released its 2017 annual report on the poor that offered a stark counterpoint, suggesting that the national recovery has bypassed many of the 40 million to 45 million Americans estimated to be living below the federal poverty level.

While median household income rose 1.8 percent last year, the national poverty rate remained stubbornly high at 12.3 percent. That was just a slight decrease from the previous year’s level of 12.7 percent, according to the federal government’s most comprehensive annual gauge of economic hardship.

The supplemental poverty measure for 2017, widely regarded by economists as more accurate, was even higher, 13.9 percent in 2017, essentially unchanged from the year before. That is an improvement from the recent high of 16 percent recorded in 2013. But economists and advocates for poor people say the relatively modest gains over the last few years are fragile, endangered by the Trump administration’s policies and vulnerable to a long-overdue economic downturn.

“If this is the best we can do, it isn’t good,” said Timothy Smeeding, a professor at the University of Wisconsin-Madison who studies poverty and economic mobility.

“Things really tapered off this year, after a serious drop in previous years,” he said. “In terms of the boom, the party has lasted a long time, a lot longer than we thought, but not everybody is getting invited — people who are working several jobs, taking jobs without benefits, kids who are growing up in poverty. The fruits of the recovery are not being spread around evenly.”

The report comes as the Trump administration seeks to curtail safety net programs, in part by playing down the severity of poverty in the country. The White House, bolstering its case for program cuts and new work requirements for recipients of federal aid, has gone so far as to question the validity of the government’s traditional calculations for poverty.

Trump has pressed Congress and his Cabinet to impose strict new work requirements on recipients of Medicaid and the Supplemental Nutrition Assistance Program, moves that could strip some beneficiaries of their benefits, and has supported new work rules in Republican-controlled states, like Arkansas and Kentucky.

In both of his budget blueprints, Trump has trimmed domestic spending on housing, education and food assistance. Such cuts have been restored by the Senate, but advocates say there is an overall bias in Washington against helping those in need that is hampering the recovery among low-income Americans.

“There’s a precariousness to the recovery and a fragility in the lives of poor people right now,” said Olivia Golden, executive director of the Center for Law and Social Policy, an advocacy organization based in Washington that opposed budget cuts.

While Wednesday’s report showed no statistically significant reduction in poverty during Trump’s first year in office, the strengthening economy could usher in bigger improvements next year. The economy grew at an annual rate of 4.2 percent in the second quarter of 2018, according to the Commerce Department, and average hourly wages in August increased 2.9 percent.

Unemployment, now at 3.9 percent, has decreased significantly for all age, gender, racial and ethnic groups, and 1.7 million workers saw wage increases last year, according to the Census Bureau.

But warning signs persist. Poverty rates among African-Americans and Hispanics have declined in recent years, but both remain above 20 percent, far outpacing the poverty rate of 9.8 percent for the white, non-Hispanic population.

And the poor are getting poorer. The poverty threshold in 2017 was $24,858 for a family of four. The percentage of families living on half that income, in constant dollars, has nearly doubled since 1975, to 5.7 percent from 3.5 percent, the report showed.

“The level of poverty for people with the lowest incomes seems to be on the uptick,” said Jennifer Jones Austin, chief executive of the Federation of Protestant Welfare Agencies, an anti-poverty advocacy group that represents 170 agencies operating in New York City. “The Trump administration says the war on poverty is over. That’s not reality.”

The Census Bureau’s official poverty measure, calculated at 12.3 percent last year, is widely viewed as an outdated formula.

Most economists consider the poverty number published concurrently in the supplemental report, which is 1.6 percentage points higher, to be a more precise measure because it factors in the cost of expenses like housing, child care and transportation, while estimating the positive effect of government benefits like Social Security, Medicaid and the earned-income tax credit.

David Brady, who runs a poverty research center at the University of California, Riverside, said the report Wednesday undermined a chief contention of conservatives: that the wide availability of work would, by itself, eradicate poverty.

Wages for low-income workers have not kept pace with the cost of living in high-expense states, including California, where rising housing costs have contributed to a 20 percent poverty rate that ranks the highest in the nation, Brady said. That has increased the need for safety net programs, especially housing assistance.

The report illustrated the role of government support in keeping the rate from rising higher, citing income data showing that 27 million people “were taken out of poverty” by Social Security benefits, with another 3.4 million Americans pushed above the threshold by federal food aid.

“The stagnation in the poverty rate is bad news,” Brady said. “It means that a low unemployment rate alone hasn’t solved the problem.”

By Glenn Thrush

The New York Times