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Here in southeast Michigan, and across the country, a growing group of people comprise the “near poor” those people living on the edge of poverty and financial despair, who are one car repair, one furnace replacement, one medical emergency away from disaster.
According to the U.S. Census Bureau’s new measures of poverty (see next page) which consider cash income, government benefits, and basic, nondiscretionary living costs 44 million Americans fall into this “near poor” economic band.
These households survive on incomes between 100 and 150 percent of the poverty threshold (the official poverty rate for a family of four is $22,350 or less a year, or a pre-tax monthly income of $1,863 or less).
Keeping these households afloat are safety net programs such as SNAP (Supplemental Nutrition Assistance Program), WIC, the HUD rental assistance program, and the National School Lunch Program. When earnings tip over the qualifying level for these programs, many families find themselves earning just enough to get by. Nondiscretionary expenses, like auto insurance, gasoline, bus fares, utilities, and prescription and over-the-counter drug costs, quickly add up when living paycheck to paycheck. Often families are in need of emergency or supplemental food because they don’t earn enough to meet all their expenses.
The new measures also reveal the fragile financial state of many elderly citizens. By factoring in medical expenses, the poverty rate among seniors nearly doubles to 15.9 percent from 8.6 percent. These seniors are one critical event away from financial crisis, and they require occasional support, like emergency food.
The new data explain why, despite a 3.5 percent dip in unemployment since 2009, Gleaners is being called upon to distribute more emergency food than ever a projected 45 million pounds in 2012. A week’s worth of food from a pantry can help a struggling family keep up with other living expenses. The much-needed food assistance can provide additional help so families don’t have to choose between eating a healthy meal and falling behind on mortgage or utility payments.
Last November, the Census Bureau released the Supplemental Poverty Measure to paint a fuller picture of poverty, incorporating items such as tax payments and work expenses in its family resource estimates. (The official poverty measure, designed in the 1960s, looks only at cash income.)
Thresholds used in the new measure are derived from the Consumer Expenditure Survey. This includes information on basic necessities (food, shelter, clothing and utilities), and adjusts for geographic differences in the cost of housing. It is designed as an experimental poverty measure, and, unlike the official poverty thresholds, the new thresholds are not intended to determine eligibility for government benefits. Instead, the new measure will serve as an additional indicator of economic well-being and will provide a deeper understanding of economic conditions and policy effects.
Here’s a sampling of what is missing from the official poverty measure, but that is being considered in the alternative measure: