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Indiana University

Report shows America's poor are at risk during recovery from Great Recession

January 11, 2012
Bloomington, Indiana --

A large and growing number of Americans are poor, or at risk of becoming poor, as a result of the Great Recession of 2007-09, and many will continue to struggle during the recovery, according to a white paper released today, Jan. 11, by broadcaster Tavis Smiley and the Indiana University School of Public and Environmental Affairs.

Titled "At Risk: America's Poor During and After the Great Recession," the white paper was prepared at Smiley's request as a factual foundation for the national Poverty Tour conducted last summer by Smiley and Princeton University professor Cornel West.

Image of Tavis SmileyThe white paper reveals that the number of Americans living in poverty increased sharply during the economic downturn. The Great Recession produced not only high unemployment rates but also record levels of long-term unemployment, making it likely that these ranks of the "new poor" and "near poor" will continue to grow.

"Many of the 'new poor' are the former middle class," Smiley said. "Poor people are not moochers and welfare queens, as some would like you to believe. Our neighbors, colleagues and families are all struggling. It's a problem all of us need to solve together, right now."

From 6:30 to 9 p.m. Thursday, Jan. 12, Smiley will convene thought leaders and advocates for "Remaking America: From Poverty to Prosperity" at George Washington University in Washington, D.C. The event, sponsored by W.K. Kellogg Foundation, will be broadcast live on C-SPAN and rebroadcast for three nights on PBS' "Tavis Smiley" -- Monday, Jan. 16, through Wednesday, Jan. 18 -- as well as on "The Tavis Smiley Show" and "Smiley & West," both distributed from Public Radio International.

Panelists include West, also co-author of the upcoming title "The Rich and the Rest of Us"; Suze Orman, America's leading authority on personal finance; Academy Award-winning filmmaker Michael Moore; Barbara Ehrenreich, a prolific author whose works include "Nickel and Dimed: On (Not) Getting By in America"; Majora Carter, urban revitalization strategist; Roger A. Clay Jr., president of the Insight Center for Community Economic Development; and Vicki B. Escarra, president and CEO of Feeding America.

Image of Kristin SeefeldtThe panel will provide solutions to the problems laid out in the Indiana University white paper, which explores how the recession affected the size and composition of America's poor, examines the performance of safety-net programs, and highlights the impact of policies adopted to cushion the impact of the recession.

"Promoting sustained economic growth while at the same time protecting the well-being of the poor, the near poor and the new poor is the central challenge for the leaders of the United States," say white paper authors Kristin Seefeldt, assistant professor in the Indiana University School of Public and Environmental Affairs, and John D. Graham, dean of the School of Public and Environmental Affairs and a former senior official with the U.S. Office of Management and Budget.

They conclude that the Great Recession has inflicted long-lasting damage to individuals, families and communities and presents vexing challenges for policy makers.

Key white paper findings include:

  • Poverty has increased significantly. Some 46.2 million Americans lived below the official poverty level in 2010, about 15.1 percent of the population. The number of Americans living in poverty grew by 27 percent between 2006 and 2010, when the U.S. population increased by only 3.3 percent.
  • Image of John Graham
  • Increases in poverty were greatest among Hispanics and African-Americans, children, and households headed by women. Poverty also increased among working-age adults, especially people between ages 18 and 34. States with the highest poverty rates were in the South and Southwest, but states with the largest increases in poverty were scattered across the nation.
  • Safety-net programs had a mixed response to the recession. Entitlement programs, such as Medicaid, the Supplemental Nutrition Assistance Program and Unemployment Insurance, responded robustly, but programs that depend on discretionary spending were less effective.
  • The Great Recession's impact on the poor would have been even worse if not for the 2009 stimulus package, which included $250 billion aimed at protecting low-income Americans. But most of the stimulus funds have now been spent.
  • Federal deficits are creating pressures to control spending, which may adversely affect the poor. The 2011 debt ceiling legislation and the failure of the congressional "super committee" will trigger spending cuts. While entitlement programs are protected, that could change with some in Congress arguing that national defense deserves a higher priority.
  • States face their own fiscal problems, with the stimulus ending and state tax collections lagging. Some are cutting state spending on programs such as Medicaid and Temporary Assistance to Needy Families. More are likely to follow suit, especially if the strapped federal government pushes more responsibility to the states.
The paper is available online at www.indiana.edu/%7espea/pubs/white_paper_at_risk.pdf. Authors, in addition to Graham and Seefeldt, include Gordon Abner and Joe A. Bolinger, doctoral students in public policy, and Lanlan Xu, doctoral student in public affairs, of the IU School of Public and Environmental Affairs.

For additional information about "Remaking America," visit www.tavistalks.com/remakingamerica.

Tavis was on CNN Sunday, January 8th, click here to view the video clip.