Brookings Scholars Comment on Census Bureau Poverty Numbers

Brookings Senior Fellow Ron Haskins commented on today’s Census Bureau data showing that poverty in the United States remained at the same level as last year:

The poverty and income numbers are a metaphor for the entire economy. Everything’s on hold, but at a bad level: poverty and income did not change much in 2012. So child poverty is still too high and family income is still too low. The recession may be over, but try to tell that to these struggling families. Don’t expect things to change until the American economy begins to generate more jobs.

Brookings Senior Fellow Isabel Sawhill added:

Although the numbers didn’t improve much in 2012, I am optimistic that poverty rates will go down in the future because the unemployment rate is projected to decline in the future: if it drops to 5.4 percent in 2020, as CBO predicts, mean annual earnings for low-income households (households at or below roughly 200 percent of poverty) would increase by 15 percent. So as our economy slowly recovers from the Great Recession, the number of people leaving poverty should outnumber those entering poverty and poverty rates should fall.

Especially important for the goal of social mobility is the child poverty rate. Of individuals who spent more than half of their childhood in poverty, 45 percent were poor at age 35 (compared to 0.6 percent of individuals who spent no time in poverty as children). And poverty in early childhood is a particularly mobility-crushing experience, because the lack of resources and stresses of poverty limit development. In short, reducing the number of children growing up in poverty is strongly related to the broader goal of social mobility. Poverty may be politically and rhetorically unpopular. But it must remain firmly in the policy conversation if we are serious about opportunity and social mobility.

Fellow Elisabeth Jacobs writes that the new data “bode poorly for social mobility,” pointing to the “tight correlations between income and education.”

As the demand for skilled workers has outpaced the supply, wages for the most-educated Americans have risen sharply relative to those with less education. As a result, better-educated parents have relatively more income available for investing in their children’s acquisition of human capital as compared to parents with less education. Moreover, highly-educated parents are able to transmit social and cultural capital to their children, which in turn impacts the next generation’s ability to climb the economic ladder.

Today at 2:00 p.m., Haskins and Sawhill will lead the 11th annual Brookings Center on Children and Families briefing on the Census data. They will be joined by a panel of experts including: David Johnson of the Census Bureau, Lawrence Mead of NYU, and Michael Fletcher of the The Washington Post.