A new report on the national poverty rate highlights the urgent need to address persistently low wages nationwide and to strengthen the social safety net, according to the University of California, Davis, Center for Poverty Research.
Today, the U.S. Census Bureau reported that a total of 13.5 percent of Americans lived in poverty in 2015. Children were affected at even higher numbers, with nearly 20 percent living below the poverty line. While these levels of poverty seem to persist year after year, research at UC Davis shows a path forward.
“The official poverty rate is a valuable measure of how well we as a nation ensure opportunity for those who earn the least,” said Ann Huff Stevens, professor of economics at UC Davis, and director of the Center for Poverty Research. “However, just as important is understanding why the poverty rate has not changed, how it affects the poor and what policies can make a difference.”
Why the rates persist
Part of the reason the poverty rate is so persistent despite a growing economy, she said, is stagnant wages for those at the bottom of the earnings scale. While U.S. unemployment declined 1.6 percentage points from 2014 and 2015, the bottom fifth of U.S. workers still do not earn higher than $24,000 annually, the poverty threshold for a family of four. This is true even if they work full time for the entire year.
Another reason, according to the center, is how little safety-net programs support those who cannot work. As of 2014, in every state the combined support from Temporary Assistance to Needy Families and the Supplemental Nutrition Assistance Program, two major anti-poverty programs, amounted to annual incomes no higher than 20 percent below the poverty line.
“These limitations have consequences that reach across generations,” said Marianne Page, fellow economist and deputy director of the UC Davis Center for Poverty Research. “Child poverty is of particular concern because chronic poverty during childhood often leads to adult poverty.”
A path forward
Stevens and Page point to emerging research by UC Davis psychologists that illustrates how poverty can disrupt physical and cognitive development. One study co-authored by Paul Hastings, a psychologist and interim dean of the UC Davis School of Education, shows that neighborhood affluence during childhood or adolescence is the single strongest predictor of biological risk for health problems in adulthood.
Research continues to show the significant impact the additional income from safety-net programs makes in the lives and outcomes of the poor, even if the impact is not reflected by the official poverty measure. UC Davis economists have shown that both the WIC program and EITC expansions reduced the incidence of low birth weight, which is a key indicator of infant health.
“This means that despite the apparent persistence in the nation’s official poverty rate,” Stevens said, “we can still make big strides on increasing upward mobility for millions of economically vulnerable children and families.”