Lecture 6:How poor are the poor?

Today’s Readings•Center on Hunger and Poverty, http://www.centeronhunger.org. Select the link, “Food Security Institute.”

•Edin and Lein, “Making Ends Meet at a Low-Wage Job,” eReserves

•Arloc Sherman and Isaac Shapiro, “Hardship Indicators Point to a Difficult Holiday Season: National Policy Response is Off Kilter,” http://www.cbpp.org/index.html

Today’s Topics

• Income to needs ratios

• Income Deficits

• Hunger in America

• Making Ends Meet--when earnings aren’t sufficient to cover needs

• Homelessness in America

Income to Needs Ratios

• The income to needs ratio is a family’s income divided by the poverty threshold appropriate for its size and composition

Poverty Thresholds, 2004

Income to Needs Ratios

• Recall that poverty thresholds are based on the USDA’s cheapest food plan--the economy food plan designed for temporary or emergency use when funds are low:– “families spending for food at the dollar cost level

of the economy food plan "had about an even chance of providing a fair or better diet for [the] family, but really only one chance in 10 of providing a good diet.” Mollie Orshansky

Income to Needs Ratios

• See Table 5, CPR P60-229, p. 14 for characteristics of people with income ratios below 0.50, between 0.50 and 1.00, and between 1.00 and 1.25.

People with Income Below Specified Ratios of Their Poverty Thresholds by Age

Source: U.S. Census Bureau

People by Income to Needs Ratio: 1997-2004

Source: U.S. Census Bureau

Income Deficits

• An income deficit is the difference in dollars between a family’s income and its poverty threshold.

• As its income deficit, a family’s inability to provide the basic essentials increases along with material hardships

Size Distribution of Income Deficits for Families in Poverty: 2004

Source: U.S. Census Bureau, CPR P60-229, Table 6

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

$8,000+ $5,000-$5,999

$2,000-$2,999

Under$500

All families (1000s)

UnrelatedIndividuals (1000s)

Hunger in America National Prevalence

• Nearly one in eight US households do not have access to enough food to meet their basic needs.

• Over 38 million people live in these food-insecure households, including 13.9 million children. ･

• More than ten million people live in households that go hungry; close to one-third of these are children.Source: Center on Hunger and Poverty, http://www.centeronhunger.org/facts.html

Hunger in AmericaNational Prevalence

• Over 40% of low-income children live in households that are hungry or at risk of hunger.

• One-third of female-headed households and more than 20% of Black and Hispanic households are uncertain of having, or unable to acquire, enough food to meet the basic needs of their members because of insufficient money to buy food.Source: Center on Hunger and Poverty, http://www.centeronhunger.org/facts.html

Hunger in AmericaEmergency Food Assistance

• In 2001, more than 23 million Americans sought emergency food assistance from food banks, church pantries, soup kitchens, meal sites, and shelters. On a monthly basis, this is 6 million more low-income people than are enrolled in the Food Stamp Program.

• Between 2001 and 2002, requests for emergency food assistance increased by an average of 19% in American cities, with 48% of requests coming from families with children.Source: Center on Hunger and Poverty, http://www.centeronhunger.org/facts.html

Hunger in AmericaEmergency Food Assistance

• Children make up nearly 40% of all emergency food clients.

• Another 20% are elderly Americans. • Nearly 40% of all households served by food

banks include someone who is working.

Source: Center on Hunger and Poverty, http://www.centeronhunger.org/facts.html

Making Ends Meet

• Based on the book, Making Ends Meet: How single Mother Survive Welfare and Low-Wage Work, by Kathryn Edin and Laura Lein, 1997

• Sample– 165 single mothers who worked at low wage

(< $8/hr) and did not receive welfare– 4 locations: Boston, Charleston, Chicago, and San

Antonio– Data refer to 1988-1992

Making Ends Meet

• How much did working mothers spend each month?

• How much income did they have at their disposal?

• How far did their income stretch?• What strategies did they use to fill the gap

between earnings and expenditures?• What hardships were endured?

Making Ends Meet

• How much did working mothers spend each month?– $1,243 on average (~$15,000 annually)

• Housing costs $341 27%• Food costs $249 20%• Other necessities $569 46%• Nonessentials $ 84 7%

Making Ends Meet

• How much income from earnings and government programs did they have at their disposal?– Earnings: $667-$892– Food Stamps: $10 to $130

(Varies by Location)

– EITC: Would be bigger today

Making Ends Meet

• How far did their income stretch?– Earnings covered only 63% of their

expenses– Food Stamps and the EITC covered

another 7%

Making Ends Meet

• What strategies did they use to fill the gap between earnings and expenditures? (percentages are percent of total budget)

– Work based strategies: 7% Network based strategies: 21%

• Family and friends : 5%• Boyfriends “pay and stay”: 5%• Absent fathers: 10%

– Agency based strategies: 3%

Making Ends Meet

• What hardships were endured?– 24% experience a food shortage– 8% went hungry– 15% went without winter clothing– 33% went without phone service– 17% had their gas or electricity shut off– 33-50% did not see a doctor when they needed one– 8% were evicted and 12% were homeless part of

the year– 24% doubled up with a friend or a relative

Making Ends Meet

• Conclusions– Single mothers must make hard choices

• Follow the rules and subject family to hardships• Break the rules

– off-the-books work– Circumvent Child Support Enforcement System– Exchange food stamps for cash

• Choose between necessities– Pay the utility bill or take a child to the doctor

Homelessness in America

• What is the definition of homelessness?• What reliable sources of information are available?• How many people experience homelessness?• Who are the homeless?• What hardships do they face?• Why are they homeless?• How has America responded to the homeless?• Are we solving the problem of homelessness?

Homelessness in AmericaWhat is the definition of homelessness?

• Definition according to the Stewart B. McKinney Act, a person is considered homeless who “lacks a fixed, regular, and adequate higt-time residence; and . . . Has a primary night time residency that is – A supervised publicly or privately operated shelter designed to

provide temporary living accommodations. . .– An institution that provides a temporary residence for

individuals intended to be institutionalized, or– A public or private place not designed for, or ordinarily used

as, a regular sleeping accommodation for human beings (cars, parks, public spaces, abandoned building, bus stations)

Homelessness in AmericaWhat reliable sources of information are available?

• National Alliance to End Homelessness– http://www.endhomelessness.org/back/index.htm

• National Coalition for the Homeless– http://www.nationalhomeless.org/ – http://www.naeh.org/back/MayorsReport2005.pdf

• 24 city survey– http://www.nationalhomeless.org/publications/facts.html

• National Law Center on Homelessness and Poverty– http://www.nlchp.org/

Homelessness in AmericaHow many people experience homelessness?

• Methodological Issues– Point-in-time counts vs. Period prevalence counts– The “hidden” homeless

• Estimates (p-in-t, 1996 survey of service providers)– 3.5 million people, including 1.35 million children

are likely to experience homelessness in a given year

– 1% of the U.S. Population– Homeless rates tripled between 1981-1989– The average stay in a shelter is 8 months.

Homelessness in AmericaWho are the homeless?

• By age– 39 % are less than 18 years– 25 % are between 25 and 34 years– 6 % are between 55 and 64 years

• By gender and family status– 41% are single men– 14% are single women– 40% are families with children (largest group in

rural areas

Homelessness in AmericaWho are the homeless? p. 2

• By ethnicity (varies by location)– 49 % African-American– 35% Caucasian– 13% Hispanic– 2% Native American– 1% Asian

Homelessness in AmericaWho are the homeless? p. 3

• Other characteristics– 22%-25% of women are victims of

domestic violence– 40% of single men are veterans– 23% of single adults suffer from severe

and persistent mental illness– 30% of single adults have addiction

disorders– 17% plus of urban homeless have jobs

Homelessness in AmericaWhat are the causes of homelessness?

• One the demand side:– lack of jobs that pay a living wage

• 46% of jobs with the most growth between 1994-2005 pay less than $16,000

– and declining value of minimum wage• Federal minimum wage remains unchanged for eighth

straight year, and fell to 56-Year low relative to the average wage

• In every state, more than the minimum wage is required to afford a one- or two-bedroom apartment at 30% of one full-time workers wage

Homelessness in AmericaWhat are the causes of homelessness?

• On the demand side:– Declining value and availability of public

assistance:• Maximum TANF benefit is less than half of the poverty

line• In 125 housing markets, rent for a one-bedroom

apartment exceeded recipients total SSI benefit• Welfare roles have declined 60% but the number of

families in poverty has increased• Inadequate supply of housing vouchers

– South Bend example; average wait 35 mo. In U.S.– Only 1 in 4 TANF families lives in public housing or

receives a housing voucher

Lynn Coleman, assistant to South Bend's mayor, tries to calm the crowd gathered Wednesday morning at the South Bend Housing Authority. They were waiting to add their names to the waiting list for Section 8 low-income housing vouchers.

South Bend Tribune,02/02/02

Homelessness in AmericaWhat are the causes of homelessness?

• On the supply side:– A lack of affordable housing units

• From 1973, 2.2 million low-rent units disappeared• In 1995, there was an estimated shortage of 4.4 million

affordable housing units• The number of housing units that rent for less than $300

fell by 1.3 million (19%) between 1996-1998.• Federal support for low-income housing fell 49% from

1980 to 2003.– 1.3 milion public housing units in the U.S. in 2006– http://www.hud.gov/renting/phprog.cfm

Homelessness in AmericaWhat are the causes of homelessness?

• Additional factors:– Mental illness and lack of needed services– Addiction disorders– Domestic violence– Prisoner re-entry– Lack of affordable health care

Homelessness in America

• What hardships do they face?– Hate Crimes– Hunger– Poor Health– Disrupted education– Family dissolution– Dislocation

Homelessness in America How has America responded to homeless?

• The Good News: Stewart McKinney Act, 1987– Congress funded six programs to provide

aid to the homeless • emergency shelter grants • emergency food programs • new housing demonstration projects • community health-care services • basic education, and • other services.

Homelessness in America How has America responded to homeless?

• Accomplishments of McKinney Programs: 1995-1996– assisted significant numbers of homeless persons

to regain independence and permanent housing and at reasonable costs.

– Given localities and states new tools for addressing the problem of homelessness

– represent innovative and effective efforts to improve access to health and health-related services for homeless people in the United States

Homelessness in America How has America responded to homeless?

• The Bad News: – Problems with McKinney Programs:

• inadequate funding clearly impedes the effectiveness

• it focuses on emergency measures -- it responds to the symptoms of homelessness, not its causes.

Homelessness in America How has America responded to homeless?

– In 2003, the federal government spent almost twice as much in housing-related tax expenditures and direct housing assistance for households in the top income quintile than on housing subsidies for the lowest income households.

Homelessness in America How has America responded to homeless?

• Criminalizing homelessness– making it illegal to perform life- sustaining activities

in public:– sleeping/camping, – eating, – sitting, – begging in public spaces, – criminal penalties as assessed for violating of

these laws. • http://www.nlchp.org/content/pubs/ADreamDenied1-11-06.pdf

Homelessness in America Are we solving the problem of homelessness?

• Homelessness shows no signs of abating • Between 2004 and 2005 requests for assistance

rose, – Requests for assisted housing by low-income families

increased by 86 %– Requests for emergency shelter increased 6% between

2004 and 2005

• But not all could be met– an average of 14 percent of overall emergency shelter

requests went unmet – 32 percent of shelter requests by homeless families

unmet

And then came Katrina. . .

• The number of people living on the streets threatens to grow as thousands of people are now homeless as a result of Hurricane Katrina.

• According to the Federal Emergency Management Agency, as of late November, approximately 50,000 hurricane evacuees remained in hotels and motels awaiting alternative housing options.