One In Three Americans Lived In Poverty For At Least Two Months In Recent Years

Tyler Durden's picture

Yesterday's chart of the day was the stunning prevalence of poverty in Greece, which soaring to 44%, up from 14% a year ago, was too mindboggling to even comment on.

Today, courtesy of the Census Bureau, we get a glance at a just as disturbing aspect of poverty not in some country in depressed Europe, but in the US itself. The bad news: in the period from 2009 to 2011, 31.6% of Americans were in poverty for at least two months, "a 4.5 percentage point increase over the prerecession period of 2005 to 2007. What one assumes is the good news, is that poverty was a temporary state for most people. Still 3.5% of Americans were in poverty for the entire three-year period."

It is not exactly clear how that small number foots with the nearly 50 million Americans on foodstamps (whose benefits were just cut by a substantial percentage).

Then again, one needs to read further in the report to realize that even the good news is not all that good: "poverty was a persistent condition for many; among the 37.6 million people who were poor at the start of the period — January and February 2009 — 26.4 percent remained poor throughout the next 34 months." And once again there are good and bad news:

The many people escaped poverty: 12.6 million, or 35.4 percent, who were poor in 2009 were not in poverty in 2011.  That's the good.

As some moved out of poverty, others moved into it. About 13.5 million people, or 5.4 percent, who were not in poverty in 2009 slipped into poverty by 2011.  That's the bad.

Netting the "churn", nearly 1 million Americans dipped into poverty more than they dipped out of it. Along the lines of what one would expect in a New Normal "recovery."

Other highlights from the report include:

  • The percent of individuals experiencing a poverty spell lasting at least two months increased from 27.1 percent over the period of 2005 to 2007 to 31.6 percent from 2009 to 2011. Chronic poverty rates (poor all 36 months) also increased, from 3.0 percent over the prerecession period to 3.5 percent from 2009 to 2011.
  • For those who were in poverty for two or more consecutive months from 2009 to 2011, the median length of a poverty spell was 6.6 months, up from 5.7 months over the period from 2005 to 2007.
  • Approximately 44.0 percent of poverty spells occurring from 2009 to 2011 ended within four months, while 15.2 percent lasted more than 24 months.
  • While 35.4 percent of individuals who were in poverty in 2009 managed to escape poverty in 2011, approximately half (49.5 percent) continued to have income below 150 percent of their poverty threshold.
  • People 65 and older had lower annual poverty rates than children or working-age adults, but once the elderly entered poverty their median spell durations of 8.3 months were longer than both children and working-age adults.
  • People in families with a female head of household had longer median poverty spell lengths than those in married-couple families (8.4 and 5.6 months, respectively).
  • Hispanics were more likely than blacks to enter poverty over the course of 2009 to 2011, but also more likely than blacks to exit poverty. Hispanics also had shorter median spell durations, 6.5 months, while the median duration for blacks was 8.5 months.

The findings visually:

Monthly poverty rates, like episodic poverty rates, are higher than annual poverty rates because people are more likely to experience short-term income shortfalls than longer-term deficits. A family could be in poverty for a few months (based on monthly poverty thresholds and monthly family income) but have an annual income higher than their corresponding annual poverty threshold. Regardless of the definition, the upward trend is worrying- the monthly poverty rate increased by 3.5 percentage points, from 13.2 percent in December 2007 to 16.7 percent in May 2008.

At the broader population level,  over the 36 months from 2009 to 2011, 31.6 percent of individuals experienced a poverty spell lasting 2 or more months, an increase of 4.5 percentage points over the episodic poverty rate of 27.1 percent from 2005 to 2007. Broken down by ethnicity, Non-Hispanic Whites had a lower episodic poverty rate (25.4 percent) than Blacks and Hispanics, while Blacks had a lower episodic poverty rate (45.3 percent) than Hispanics (49.6 percent).

The chart below compares the population experiencing either chronic or episodic poverty over the 2009 to 2011 period to the total population. While children made up 25.2 percent of the total population, they represented 32.4 percent of those who were poor for at least 2 months, and 42.4 percent of those who were poor for the entire 36-month period from 2009 to 2011. Similarly, Blacks were 12.6 percent of the entire population, 18.1 percent of the population poor at least 2 months, and 31.0 percent of the chronically poor. People in female-householder families composed 14.9 percent of the population, 25.0 percent of those with at least 2 months in poverty, and 42.8 percent of the chronically poor. People in married-couple families made up 64.0 percent of the total population, 47.8 percent of the population with at least 2 months in poverty, and 25.7 percent of the chronically poor.

Finally, the chart below shows the distribution of poverty spell lengths for the total population over the course of 2009 to 2011. The distribution of spell lengths indicates that most individuals experience relatively short spells of poverty. Over the period from 2009 to 2011, approximately 44.0 percent of poverty spells lasted between 2 and 4 months, 18.7 percent of spells lasted between 5 and 8 months, and 9.4 percent of spells lasted between 9 and 12 months. Cumulatively, 72.1 percent of all spells lasted 1 year or less, while 15.2 percent of all poverty spells continued for more than 2 years. Of course, if one is in poverty, rises above it for a month, then goes back in, we fail to see how even the most naive optimistcs can call the optimistic, but then again some still consider this a "recovery."

The full Census Bureau report can be found here.