MEDIA RELEASE: Poverty Rose in North Carolina and the Nation as a Whole in 2009, But Federal Assistance Helped Millions

Federal Assistance Lessened the Blow, Kept Millions Out of Poverty

RALEIGH (Sep. 16, 2010) -- The year 2009 brought an increase in national poverty, with poverty rates jumping to 14.3 percent from 13.2 percent in 2008, new Census Bureau data show.  The Census Bureau also released preliminary state-level data showing that poverty rose in North Carolina to 16.9 percent from 13.9 percent, although the difference is not statistically significant given the small sample size of the survey at the state level.  On September 28, the Census will release estimates of state and local poverty as well as additional health insurance data from a different survey, the American Community Survey. 


“Without the federal Recovery Act, the pain for working families would have been dramatically worse,” said Alexandra Forter Sirota, policy analyst with the NC JusticeCenter’s Budget & TaxCenter. “Now is precisely the time to re-invest in American communities, to ease that suffering and get the economy going again.”


The poverty rate would have risen even further had it not been for key public benefit programs and the expansions made to them under the 2009 Recovery Act. (The official poverty measure reflects the impact of some benefit programs that the Recovery Act temporarily expanded, such as unemployment insurance, but not other such programs, such as food stamps and tax credits.)  Unemployment insurance benefits alone kept 3.3 million individuals out of poverty in 2009, according to analysis by the Center on Budget and Policy Priorities of the Census Bureau numbers.


Surprisingly, the poverty rate among older Americans actually fell to 8.9 percent the lowest levels on record– a credit, analysts say, to Social Security. The number of elderly Americans in poverty would have risen by 14 million in 2009 if Social Security was excluded from the money income used to determine poverty status.


“Social Security has been wildly successful at protecting older Americans from poverty, even during the worst economic crisis since the Great Depression,” said Sirota. “This is a wake-up call for the Deficit Commission, and for all Americans – Social Security is working and needs to be protected for generations to come.”


If Recovery Act assistance disappears before the job market and family incomes rebound, more people could fall below the poverty line. Stubbornly high unemployment bodes poorly for improvements to measures of poverty and health insurance coverage in 2010 and 2011.


Expansion of several Recovery Act provisions for middle- and low-income households are also necessary, she said. Congress should invest in unemployment insurance benefits and the improvements made to the Earned Income and Child Tax Credits under the Recovery Act should be extended or made permanent. Otherwise, many more families will be pushed into poverty by the Great Recession. Congress should also extend the TANF emergency fund, which offers states a way to create jobs and spur growth in local economies.


North Carolina leaders also have an important role to play, Sirota said, by investing in the public structures that support working families in tough economic times.


“State leaders must take a balanced approach that includes revenue to maintain vital education, health, and public safety programs and services,” said Sirota. “Those investments are more important now than ever, to our economy and our people."

 

FOR MORE INFORMATION, CONTACT: Alexandra Forter Sirota, 919.861.1468, alexandra@ncjustice.org; Jeff Shaw, director of communications, 503.551.3615, jeff@ncjustice.org.



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