Poverty What Has Changed, and What Has Not

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1 Poverty What Has Changed, and What Has Not Review of poverty data confirms what Community Action Agencies and others combating poverty across Kansas know from experience: poverty is changing in our state and, so, too, must our responses. The chart below illustrates broad trends in poverty rates over time; using a rather constant measure, the increase in poverty associated with the worsening economic conditions is evident, as is the short-lived progress we saw in reducing poverty during the 1990s. Indeed, on a variety of poverty-related indicators, Kansas lost considerable ground during the past decade. While the total Kansas population increased approximately 6% between 2000 and 2010, the size of the poverty population in the state increased by 31.7% 43. The percentage of children living in poverty increased particularly dramatically; in 2000, 11.5% of related children in households were poor, while in 2010, that figure was 18% 44. Figure 1: percent of Kansans living below the poverty line Author s calculation, based on comparisons of 2000 U.S. Census data and 2010 American Community Survey figures, both available from 44 U.S. Census Bureau. (September 22, 2011). 1-year ACS Estimates: 2010 (Table S1703) and 2000 U.S. Census data, both available from 45 U.S. Department of Agriculture, available from: 26

2 Figure 2: changes in Kansas unemployment rate, since the release of living on the edge in Based on Bureau of Labor Statistics source data for historical unemployment rates. Available from: 27

3 28 Figure 3: decade in review, official Kansas poverty rates

4 The recession officially ended in June 2009, although the effects continue to be felt in Kansas. The map below, showing job losses during the height of the recession, illustrates the breadth and depth of the devastation throughout the state and, therefore, the damage that must be undone as families and communities in Kansas recover. Figure 4: increase in unemployment in Kansas counties, June 2008-June Map created with BLS data and interface, September 12, 2011, data from Bureau of Labor Statistics, State and Local Unemployment, downloaded from: 29

5 Given the nature of state requirements for balanced budgets and recessionary effects on state revenues, funding for social safety net programs has declined simultaneously with the increase in demand stimulated by these poverty trends. In Kansas, the department of Social and Rehabilitation Services budget has been cut significantly over the past few years, resulting in millions of fewer dollars for community mental health centers that serve mostly low-income individuals, longer waiting lists for services for those with disabilities, greater distance to offices that can process eligibility for critical benefits, and vacant field and central staff positions throughout the state 48. Cuts to K-12 education, early childhood education, and medical assistance disproportionately affect low-income families and communities, as well, doubling the pain of declining economic positions. The data reveal, however, that while the recession is a starring player in Kansas poverty tragedy of the past several years, it is certainly not the whole story. Indeed, parts of Kansas have long grappled with the unemployment rates that are newsworthy now that they are statewide. For some Kansans, the recession was barely noticeable, as they are locked out of the labor market for structural reasons that have persisted, in some cases, for generations. Indeed, low-income single parents employment rate and hourly wages are not as dramatically affected during most economic downturns as other Americans 49 ; they start out low and stay there. As will be discussed below in relation to policy priorities, addressing the gaps and inequities in Kansas economic mobility infrastructure can simultaneously improve long-term economic security and increase Kansas ability to weather the next downturn. Poverty Across Kansas While we do not yet have poverty data for all of Kansas counties for 2010, we can use statistics for our four congressional districts to better understand the diffusion of poverty and other economic trends around our state. Table 3 compares each district on several poverty-related indicators 50. As shown below, in 2010, the official poverty rate for all individuals ranged from 11.3% in the state s easternmost third congressional district to 14.9% in the second. Child poverty was highest in the mostly rural first congressional, while the unemployment rate was highest in the fourth Congressional district, centered on Sedgwick County. A tumultuous young adult life led Jean to Mid-Kansas Community Action Program Inc. with little education and no resources. Frustration with long-term unemployment forced Jean to begin working on her GED through the Self Reliance program. This new support system provided the encouragement Jean needed to ALSO complete financial literacy classes, learn interviewing skills and begin resume preparation. Survival mode has given way to long-term planning, and with responsible determination, Jean can see her future as a full-time Nurse, and as a success. Mid-Kansas Community Action Program, Inc. 48 Kansas Department of SRS, and Governor s proposed budget for FY2012, author s calculations. 49 Lerman, R. (December 2002). Single Parents Earnings Monitor, Urban Institute. Retrieved March 30, 2011 from: 50 A map illustrating the boundaries of each of the congressional districts is available from the Kansas Legislative Research Department, available at: 30

6 table 3: poverty in Kansas by congressional district, Kansas Overall First Congressional District Second Congressional District Third Congressional District Fourth Congressional District Unemployment Rate 5.3% 3.9% 5.3% 5.2% 6.9% Poverty Rate (all persons) 13.6% 13.9% 14.9% 11.3% 14.4% Child Poverty Rate (under age 18) 18.4% 21.2% 19.5% 14.6% 18.9% Median Household Income $48,257 $43,367 $45,992 $60,507 $45,291 Uninsured Rate 13.9% 14.2% 12.5% 13.6% 15.3% Poverty Rate, Female Headed- Households with Children 41.3% 48.5% 46.2% 31.9% 38.9% Poverty Rate, % 7.9% 7.3% 7.5% 8.2% Extreme Poverty (less than 50% official poverty line) 5.9% 5.6% 6.5% 5.6% 5.9% Less than 125% Poverty Line 18.7% 19.8% 20.3% 14.9% 20.4% 51 All data come from the U.S. Census Bureau (September 22, 2011). 1-year ACS Estimates: Tables DP03 and S1703. Available from factfinder2.census.gov. 31

7 Figure 5: unemployment rates by county, July Map created using Bureau of Labor Statistics data and interface, September 12, 2011, data from Bureau of Labor Statistics, State and Local Unemployment, downloaded from: 32

8 Poverty in Kansas can also be understood as existing in both urban and rural communities, albeit in different manifestations and, in some cases, to different degrees. On the whole, official poverty is more severe in urban areas in Kansas than in rural ones, although, given the larger number of rural counties in the state, addressing persistent rural poverty must be part of Kansas anti-poverty strategy. Table 4: Comparisons of urban and rural poverty in Kansas, Urban Rural Overall Poverty Rate 15.4% 9.2% Child Poverty Rate (under age 18) 20.9% 12.6% Poverty Rate, persons % 6.9% Percent Children Uninsured 9.1% 6.2% Percent Renters Cost-burdened 44.1% 31.7% Percent Households Receiving SNAP benefits 10.0% 5.8% In 2010, our youngest children had some of the highest poverty rates of any group in the state. Among Kansas children ages 5 and younger, 48.2% of African Americans, 45.6% of Native Americans, 35.7% of Latinos, and 15% of white children were in poverty in Almost 10% of all Kansas children under age 6 lived in extreme poverty in 2010, with incomes less than 50% of the official poverty line. More than twenty-two percent of these youngest children were officially poor 56. These children, clearly dependent on adults to care for them, will be impacted for life by the legacy of their childhoods spent in poverty. The well-being of generations is intertwined, of course, in ways both indirect and very intimate. In 2010, 17% of Kansas grandparents responsible for care of their grandchildren were poor, a rate obviously far higher than for other seniors, largely due to their increased caregiving demands 57. Extreme poverty, defined as those living at less than 50% of the official poverty line, is alarming high for some groups in Kansas. In 2010, almost 8% of those under age 18 lived in extreme poverty, compared to approximately 2% of those 65 and older. Native Americans had the highest rate of extreme poverty of any racial group, at 17.2% 58. Again, these figures are particularly dire in the context of the already unrealistically low poverty thresholds, given that households can struggle to meet all of their basic expenditures even with incomes considerably higher than this official line. People in Poverty in Kansas Our discussion about poverty in Kansas is, at its core, a conversation about people who are hurting, and about how their struggles affect us all. These statistics represent the challenges faced by Kansans in every community, and they reveal patterns of disadvantage that are unacceptable. We know today that reducing poverty is not technically impossible; the comparatively low rate of poverty among Kansas adults ages 65 and older is a triumph of a social policy experiment that we now know as Social Security retirement benefits. Nationally, 14 million more adults 65 and older would have been poor without Social Security in 2010, which would represent a quintupling of senior poverty. In Kansas, the poverty rate for those 65 and older would have jumped in 2008 from 7% to 44.5% without the Social Security benefits on which thousands of Kansas retirees depend 54. Our poverty data, then, can be seen largely as evidence of the failure to make similar investments and provisions in the well-being of other populations in the state, a reflection which serves as a challenge and inspiration to us all. 53 All figures from the U.S. Census Bureau. (September 22, 2011). 1-year American Community Survey Estimates: Tables GCT1703, GCT1704, GCT1705, GCT2201, and GCT2515. Available from factfinder2.census.gov 54 Center on Budget and Policy Priorities. (August 11, 2010). Social Security Keeps 20 Million Americans Out of Poverty: A State-by-State Analysis. Downloaded from: Family status matters in determining one s poverty risk; in 2010, 33.2% of all single female headed-households, and 41.3% of such households with related children younger than age 18 present lived in poverty in Kansas 59. For many of these mothers, not even work is not a ticket out of poverty. In 2010, 27.8% of single female-headed households with children under age 18 had a householder who worked and yet, still, the family fell into poverty 60. In 12% of cases, these mothers were working year-round, full-time without being able to pull their families from poverty status, testament to the strains of low-wage labor and the difficult economics facing single parents raising children, particularly when they also experience the wage discrimination that still plagues female employment. The next table, then, illustrates how individual characteristics shape poverty risk and why it is important to shape policy responses that account for different populations particular experiences. 55 U.S. Census Bureau. (September 22, 2011). 1-year ACS Estimates: Tables B17001A, B17001B, B17001C, B17001I, Available from: factfinder2.census.gov 56 U.S. Census Bureau. (September 22, 2011). 1-year ACS Estimates: Table B Available from: factfinder2.census.gov 57 U.S. Census Bureau. (September 22, 2011). 1-year ACS Estimates: Table S1002. Available from: factfinder2.census.gov 58 U.S. Census Bureau. (September 22, 2011). 1-year ACS Estimates: Table S1703. Available from: factfinder2.census.gov 59 U.S. Census Bureau. (September 22, 2011). 1-year ACS Estimates: Table S1703. Available from: factfinder2.census.gov 60 U.S. Census Bureau. (September 22, 2011). 1-year ACS Estimates: Table B Available from: factfinder2.census.gov 33

9 table 5: officially poor in Kansas Poverty is a peculiar, insidious thing: a cause whose effects then cause the original cause, or an effect whose causes are caused by the effect. The Working Poor: Invisible in America, p Population Official 2010 Poverty Rate Total Kansas 13.6% Rural 9.2% Urban 15.4% African American 28.6% American Indian/Native American 29.7% Hispanic/Latino 25.4% Children under age 18 (all races/ethnicities) 18.4% Adults % Persons with disabilities 19.3% Single female headed-households 33.2% Single female headed-households with children under age 18 present 41.3% The differential poverty experiences of particularly vulnerable demographics and communities are especially significant in light of overall population trends that show the most dramatic population increases in some of these groups over the past decade. between 2000 and 2010, for example, Kansas Hispanic/Latino population increased 59.4%, compared to a 2.1% increase in the White, non-hispanic population 62. Clearly, then, failing to adequately address the higher likelihood of poverty experienced by some Kansas populations will result in a total increase of poverty in the state and limit the extent to which population growth can enhance Kansas future prospects. Similarly, child poverty, particularly in the increasingly-prevalent single-parent family 63, is both individually tragic and societally costly, given the longterm impact of living in poverty as a child U.S. Census Bureau (September 22, 2011). 1-year ACS Estimates: Tables GCT1703 and S1703. Available from factfinder2.census.gov. 62 U.S. Census Bureau (March 2011) Census Data. Accessed March 29, 2011, from: 63 Poverty can both follow and precede marriage dissolution; in either case, children bear the greatest consequences. See Lindsey, D. (2009). Child Poverty and Inequality. New York, NY: Oxford University Press, p Lindsey, D. (2009). Child Poverty and Inequality. New York, NY: Oxford University Press. 34

10 How Does Kansas Compare? by some measures, Kansas experiences with poverty are not as severe as those of other parts of the United States. Our unemployment, for example, while sustained and intense by historical comparison, does not match that of the hardest-hit regions of the country. Still, as the trends in poverty underscore, poverty is worsening in Kansas and is an increasingly grave problem demanding our collective action. This urgency is heightened with comparative analyses that highlight the ways in which Kansas poverty, or elements of it, equals or surpasses national indicators. And, finally, of course, the very real, lasting, and cruel consequences for any one individual or family mean that no level of poverty can be acceptable, and there can be no complacency until we have built an economy and social service infrastructure equal to the task of equipping all Kansans for economic security. Of particular concern is Kansas high rate of child poverty and the rate at which child poverty is increasing in the state, especially as compared to the rest of the country. Kansas experienced higher rates of growth in the population living in poverty in all demographic categories examined, as the next table indicates. Together, Kansans must examine the factors in the economic and social environments which contribute, not only to the higher rate of single female headed-households and children living in poverty, but also to the lost ground in the past year. The policy agenda that follows in this report identifies investments in early childhood education, family employment supports, and health care that would address some of the needs of these populations and, it is hoped, reverse these concerning trends. 35

11 Table 6: Comparisons of Poverty Rates, Kansas v. National, Kansas 2009 Kansas 2010 Percent Change, Number in Poverty Percent Change, Poverty Rate, U.S U.S Percent Change, Number in Poverty Percent Change, Poverty 66 Rate, Children under age 18 (all races) 18% 23.7% 23.5% 24% 20.7% 22% 6% 5.9% Adults % 6.7% 12% 4.5% 8.9% 9% 2.5% 1.1% Single female headed-households with children (all races) 42.7% 46.2% 16.2% 7.6% 39.9% 42.2% 8% 5.5% All Persons 13.7% 14.3% 5.1% 4.2% 14.3% 15.1% 5.7% 5.3% In Kansas, child care employs close to 15,000 individuals who work long hours, have few benefits, and are paid low wages and yet, they are responsible for the care and education of nearly 150,000 children birth to 5. In a recent study, we found that family child care providers have an annual earnings of $15,711 and many work over 50 hours per week! Young children need a safe, clean and engaging place where parents partner with trained professionals to nurture and develop their children intellectually, emotionally and physically. We know parents struggle to pay the increasing costs of child care, but the true burden of providing quality child care rests on the shoulders of the very individuals whose annual earnings are one of the lowest wages in Kansas. There is something very wrong with this picture! Leadell Ediger Executive Director Child Care Aware of Kansas 65 For comparison purposes, all data come from the Current Population Surveys, 2009 and Available from: These surveys use a different methodology and, so, therefore, arrive at slightly different totals than the American Community Survey 1-year estimates released in September 2011, mostly used throughout this report. 66 The percentage change in the number in poverty compares the total population figures falling into each category in 2009 and 2010, which, of course, includes natural population growth. The percent change in the poverty rate, then, while introducing the inevitable rounding errors, can be considered a measure, at least in part, of the extent to which the economic opportunities and public policy structures in each context have failed to keep pace with population demands. 36

12 Why Are People Poor? Across the nation, and in all economic climates, there are many, seemingly idiosyncratic reasons why a given individual may fall into poverty for a short time: sudden illness, family dissolution, voluntary lifestyle decisions, withdrawal from the labor market to pursue more education, or family emergency, among others. And there are both personal and structural explanations even for long-term poverty. Some individuals have physical or mental health conditions that make their work sporadic, others lack skills essential for economic mobility, others live in geographic areas with few job opportunities. There are certainly individual components to all of these situations, which help to explain why two people in apparently similar contexts can fare quite differently; there is an element of uniqueness that policy cannot completely predict and statistics do not adequately explain. Recent analysis by the U.S. Census bureau sheds light on both of these aspects of poverty, pointing to the short tenure in poverty of many, as well as the characteristics single female-headed household status, presence of young children that tend to increase one s stay 67. Still, inherent within each of the above iterations of causes of poverty are important truths that point to why some groups of people more commonly, and more persistently, experience poverty; why economic insecurity is reflexively associated with certain life events; and why mobility eludes some populations regardless of their individual exertion. Reviewing the data, it becomes clear that it is much easier to fall into poverty than to climb out. It is much more likely that a gap somewhere trips one up than that all of the pieces fall into place and stay there. The following discussion explores some of the most pervasive contributors to poverty in Kansas. From this analysis flow KACAP s recommendations for policy approaches to build a foundation for economic security. Since the problems that contribute to poverty are interlocking, so, too, must be the solutions. While poverty will likely never be eradicated, in a nation as fundamentally strong and potentially prosperous as ours, economic insecurity can and should be sporadic, random, and short-lived. Tackling these root causes moves us toward that vision. Recently I have gotten information from customers calling our office that even after contacting many agencies for assistance they were still not able to pay their entire utility bill because they and the agencies did not have enough money. If this is true, any further reduction of funds for agencies could mean even harder times for the customers we serve. It appears as though poverty continues to win. Julia Price Human Resources Director The Economic Opportunity Foundation 67 U.S. Census Bureau. (March 2011). Dynamics of Economic Well-being: Poverty, Downloaded from: prod/2011pubs/p pdf 37