New Census Data shows increase in poverty in PA

Posted by on October 12, 2009

[posted from United Way’s What Matters Newsletter]

PA only one of 7 states with increasing poverty

Pennsylvania is among only seven states that saw an increase in the number of people thrust into poverty between 2007 and 2008, according to the latest community survey released by the US Census Bureau.

This uptick in poverty was recorded before the recession, and the worst of its economic fallout, including spiking unemployment, had occurred.

Pennsylvania’s overall poverty rate rose from 11.6 percent to 12.1 percent between 2007 and 2008, a statistically significant increase.

The Census Bureau unveiled the 2008 data collected through the American Community Survey in September.

Also of statistical significance, Pennsylvania’s rate of poverty among families with children under age eighteen – a rate that increased from 13.4 percent in 2007 to 14.1 percent in 2008.  Married couples living with children under the age of five also experienced an increase in poverty (rising to 4.4 percent in 2008 – a 1.4 percent increase over 2007.

The rate of poverty among children increased to 16.4 percent in the Commonwealth, but did not represent an increase that can be deemed significant (the national rate was 17.8 percent in 2008).

To be included in these poverty statistics  means that a family of four (with two children) had a family income below $21,834 and for a family of three (with two children) recorded household income under $17,346 or $17,330 for a family of three where there is one child in the household.

The City of Reading posted an overall poverty rate of 34.4 percent and more than 48 percent of the city’s children were among the ranks of the poor.  Other cities posted overall poverty rates above 20 percent (20.4 for Allentown, 24.2 for Erie, 24.1 for Philadelphia, and 21.2 for Pittsburgh).  In Pennsylvania cities, the child poverty rates included  28.7 in Allentown, 37.1 in Erie, 31.2 in Philadelphia, and 27.4 in Pittsburgh.

The data illustrates that poverty remains a Pennsylvania problem, and not one confined to its cities.

According to ACS data, twenty-two counties recorded a higher family poverty rate than the state rate of 14.1 percent, with Fayette at 34.4 percent, Crawford at 25 percent, Clearfield 22.6 percent, Cambria 22.0 percent, Mercer 20.7 percent and Lycoming at 20.6 percent.

Most observers say that the census data understated actual poverty levels, not only because the survey was conducted prior to the full impact of the economic downturn.  In the 1960s when the poverty threshold was established it assumed that families spent about one-third of their after-tax income on food.  So the poverty threshold was established based on the 1961 Economy Food Plan developed by the United States Department of Agriculture using data from the Household Consumption Survey in 1995.

In simple terms the poverty threshold resulted by taking what was considered the minimally adequate food costs at that time and multiplying it by three.  In 2008, Americans spent just under ten percent of their disposable income on food costs according to the USDA Economic Research Service.

The poverty threshold also does not factor in the costs of housing, health care or work-related expenses like child care.

Ground is being gained on better measuring the extent to which poverty impacts Americans by considering as a foundation the 1995 National Academy of Sciences’ Panel on Poverty and Family Assistance  recommendations.

The NAS Panel advocated that a modernized poverty measure should:
— include food, clothing, shelter (with utilities) and “a small additional amount to allow for other needs (e.g., household supplies, personal care, non-work-related transportation)”;
— use “actual consumer expenditure data” and should reflect changes in actual costs over the previous three years;
— reflect the “needs of different family types” and housing costs that would vary based on geography; and that
— define family resources “as the sum of money income from all sources together with the value of near-money benefits (e.g., food stamps) that are available to buy goods and services in the budget, minus expenses that cannot be used to buy these goods and services. Such expenses include income and payroll taxes, child care and other work-related expenses, child support payments to another household, and out-of -pocket medical care costs, including health insurance premiums.”

Adapted from a report in The Advocate’s Agenda. © 2009 The Advocate’s Agenda, Cathleen L. Palm, Publisher.

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