Director of W&L Poverty Program Discusses Latest Poverty Figures
This past August, Harlan Beckley, the director of W&L’s Shepherd Poverty Program, told a group of entering Washington and Lee University students headed out to volunteer in impoverished communities that the U.S. poverty rate would soon rise above 15 percent.
So Beckley was not surprised when the U.S. Census Bureau reported this week that 15.1 percent of the U.S. population, or 46.2 million Americans, fell below the poverty line in 2010.
“But this did not take any great insight. I’m not clairvoyant,” he said. “Anybody who knows about poverty predicted it would go to this level.”
Beckley, who helped create W&L’s innovative program in poverty studies, said that data consistently show that in the first year after a recession, the poverty rate continues to rise.
“After the last recession, the poverty rate went up for several years after the recession was over. It’s simply following a pattern we’ve had in the past,” he said. “It may go up again next year, because the expansion after this recession has been so weak and the kinds of policies that might help bring people out of poverty have not been put into effect.”
As bad as the figures are, Beckley pointed to one program that has protected the working poor from going below the poverty line but which is excluded when the bureau calculates the poverty figures: the earned-income tax credit.
“When we figure whether a person or a household is above or below the poverty line, we do not include either tax or in-kind assistance,” he noted. Consequently, food stamps and school lunch programs are not counted, and payroll taxes are not subtracted.
“Very few people in the country are aware that the earned-income tax credit is about twice as large, in dollar figures, as TANF, or temporary assistance to needy families,” Beckley said. In a household with two children, where the head of the household works 2,000 hours a year and makes a relatively low income, he or she can get a $4,300 tax credit at the end of the year.
“That doesn’t count in terms of whether or not they come above the poverty line. But that $4,300 is just as good as cash in terms of that family’s disposable income.”
The census report also demonstrated the continuing trend that those individuals in the fifth, or highest, quintile of earners see their incomes grow, while the incomes of those in the lower three quintiles remain flat. That increasing inequality between those in the middle class and the highest income earners is, said Beckley, especially problematic.
“Some people will draw the conclusion immediately that you just have to take money away from the highest quintile and give it to the lowest quintile,” Beckley said. “But the problems are much more dramatic. Somehow we have to change the culture and the policies, so that those who are least skilled and in the middle area have more resources and more opportunities to do better relative to the most well-off in society. We are not in a position now where a rising tide lifts all boats. We’ve got to change that somehow.”
And changing the trend will not be simple, said Beckley. He does point to four areas that have to be addressed – the labor market, healthcare, education and family stability.
“We want to be careful not to jump to the conclusion that there is some simple way to make that change. But we have to address it,” he said. “We can no longer continue to allow that fifth quintile to go up, up, up and up while every other quintile is virtually flat.”
Jeffery G. Hanna
Executive Director of Communications and Public Affairs