The number of households who survive on $2 or less per person each day has increased by 159.1 percent since 1996, growing from about 636,000 to about 1.65 million by mid-2011, according to a new analysis from H. Luke Shaefer and Kathryn Edin in Stanford’s Pathways Magazine. Families living in this state of extreme poverty now make up 4.3 percent of all non-elderly families with children. The federal poverty line comes to at least about $17 per person each day, while “deep poverty” is considered to be about $8.50 a day, more than four times higher than the $2 a day mark.
The sharp increase is ameliorated by some public assistance programs, although it doesn’t go away. When the Supplemental Nutrition Assistance Program (SNAP, or food stamps) is taken into account, the increase is reduced to 80.4 percent since the mid-90s and the number of extreme poor households jumps from 475,000 to 857,000. When tax credits like the Earned Income Tax Credit or Child Tax Credit and housing assistance are added to the mix, “thus generating our most conservative measure of extreme poverty,” as the authors write, the increase in people living on $2 a day is still 50 percent, from 409,000 households to 613,000. That means under this most conservative measure, 1.17 million children lived in extreme poverty in mid-2011. “The simple but important conclusion is that a growing population of children experience spells with virtually no income,” they write.
The starting point in 1996 is no accident. That’s the year that President Clinton signed welfare reform into law, which implemented work requirements for cash assistance, changed the program to a block grant where states get a fixed amount of money from the government, and made other changes. Before reform, welfare “had a substantial effect” on reducing extreme poverty, the researchers find, lifting 1.15 million households above that level. But that impact declined substantially through the 90s and stayed flat in the early 2000s, so that by mid-2011, Temporary Assistance for Needy Families, or what welfare is called today, lifted just 300,000 families out of extreme poverty.
The researchers also find that extreme poverty has hit those who were mostly likely to be affected by welfare reform, single mothers and people of color, the most. In 2011, about 51 percent of households in extreme poverty were headed by a single woman, compared to just 37 percent headed by a married couple. Single women saw a 230 percent jump in extreme poverty over the last 15 years. Meanwhile, 46 percent of these households are headed by African Americans or Hispanics (the groups can’t be separated out because the sample sizes are too small), compared to 47 percent headed by white people — far more than their share of the general population. People of color experienced a 186 percent increase in extreme poverty.
“The bottom line is that extreme poverty has grown sharply since welfare reform,” the authors conclude. “And though means-tested public programs have much to stem the tide, growth in extreme poverty is still substantial even after accounting for major federal means-tested transfers.”
Since reform, the share of families who would normally have gotten cash assistance has dropped dramatically. In 1996, it reached 72 percent of poor families with children. By 2012, that figure plummeted to 26 percent. The incentives in the program push states to find ways to cut their rolls. “One of the big problems with the program is that its goal is not poverty reduction, but caseload reduction,” Melissa Boteach, vice president of Half in Ten and the Poverty and Prosperity Program at the Center for American Progress, previously told ThinkProgress.
The amount of money that the federal government gives to states for welfare has also stayed frozen since 1996, losing 30 percent of its value to inflation, which has diminished the value of benefits for those who actually get them. For 99 percent of beneficiaries, they’re worth less than they were in 1996.