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America’s Shame: While economy ‘recovers,’ child poverty grows

Our friends over at the Wonkblog consistently have some of the best content on the web, but one post in particular caught my eye.

According to the St. Louis Federal Reserve, families in the United States appear to have recovered 91 percent of their wealth since the Great Recession, which has largely been as a result of rebounding housing values. This seems like a big win for the economy, and for families who need the good news.

But things get less rosy when the St. Louis Fed digs a little underneath those numbers.

If you account for population growth, the inflation rate over the past five years, and the unequal distribution of economic growth during the recovery, the average family has only recovered 45 percent of what was lost through the recession; hardly a recovery that families can celebrate.

This torturous economic rollercoaster has consistently left families with less and less income and has likely contributed to the persistently high rate of unemployment in this country – which has not been below 7.5 percent since January of 2009, near the high point of the recession.

These trends in household income and adult unemployment, however, are direct drivers of something Next Generation cares about very deeply: the rising rate of childhood poverty

It’s starting to seem like a given fact – when it should be an outrage – but the child poverty rate today is the highest it has been in twenty years (today at nearly 22 percent of all children) and the sheer number of kids in poverty is higher than when the country launched a War on Poverty in 1964 (today over 16.1 million).

Without a shred of qualification, children are the poorest segment of our society and their ascent to this position has not slowed since the official end of the recession.

If you take a look at the interactive graphs below, you’ll see that in the United States as a whole – and in 22 states – child poverty has continued to climb, even while the overall poverty rate has fallen after the Great Recession.

The child poverty rate is distressingly a full 8 percentage points higher than the overall poverty rate and has grown by a rate of 15 percent since 2009 (the poverty rate for the total population, by comparison, has grown only half as fast). 

 

Source: Current Population Survey and Kids Count Data Center

Note: Numbers rounded to the nearest whole percent. 

 

The ‘recovery’ – as rising child poverty rates prove – has not been evenly distributed among families in this country, which means that right now a growing economy has not been enough to raise kids and their families out of poverty.

What’s more troubling is that countries similar to us economically, the ones that have gone through the very same global recession and recovery, have been able to maintain some of the lowest rates of child poverty in the industrialized world by investing in families.

If you’ve followed us on Facebook you’ll see we posted a shocking graph on global child poverty from a major UNICEF report on the subject that compared the relative child poverty rates in major industrialized countries. Not too surprising is that the United States ranks dead last on this list. Only Romania had a higher child poverty rate.

But something interesting happens when you compare that same list to the available data on family social spending by government sources (things like child care, child tax credits, and family income supports) from the Organization for Economic Cooperation and Development (OECD).

Not only does the United States fall completely flat in this regard – spending only 0.7 percent our Gross Domestic Product on support for families – you can see a neat correlation among many of the countries with lower overall child poverty rates and higher social spending on families.

That the United States has a weak social safety net is no surprise, but what many people overlook is that one of the surest ways to combat child poverty, and the intergenerational poverty that follows, is to enhance family income directly.

According to Urban Institute researchers, those who are “liquid asset poor” – or lacking access to spendable money – were two to three times more likely to be unable to pay their bills regularly or had to skip meals or routine health care.

And as the above report from the St. Louis Federal Reserve declares in spades, this household instability further damages economic growth by increasing the amount of family debt (largely through credit cards and payday loans), leaving more and more families at risk of falling back in to poverty and unable to save for the future or spend money in the present.  

In fact, sociologists, advocates, and researchers all suggest that the best way of achieving long-term economic stability is to support families so they can build savings.

This is why organizations as varied as the Academic Pediatric Association and Corporate Voices for Working Families support not only expanding the number of people who have access to social benefits, but also the number of employees who can access the Earned Income Tax Credit and Child Tax Credits that put money back in to the hands of millions of working families.

A booming economy for companies and stockholders has yet done little for children, which is why these efforts can have lasting impact on the incomes of families, and by extension their children.

In the coming weeks we’ll be talking about even more innovative ways families and businesses can assist in lowering child poverty, but what should be established from the outset is the fact that government – federal, state, and local – has a shared role to play by providing basic social assistance for families.

This is even more urgent given that children – who lack lobbying firms and interest groups – end up bearing the brunt of a slow national recovery.

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