Policy & Research INSIGHTS

Census Reports Poverty Stabilized Nationally in 2011, But Not For All States

by Anne Clark -  9/13/2012

First, the good news: the U.S. Census Bureau’s report Income, Poverty, and Health Insurance Coverage in the United States: 2011 released yesterday found that the worst of the economic downturn is finally over for America’s most vulnerable households. After increasing for three consecutive years, in 2011 the poverty rate stabilized at 15% nationally.

The poverty rate also held steady among all families (11.8%), families headed by single women (31.2%), and children (21.9%). The income inequality experienced by the nation’s most low-income households remained constant. Families earning less than $20,262 a year—the bottom fifth of households by income—still only held 3.4% of the aggregate national income. While low-income families are still worse off than they were before the Great Recession, hopefully these are indicators of an upcoming reversal in fortune.

State by state, though, the poverty rate was more varied (see figure 1 below).

Figure 1

The only five states—Iowa, Kansas, Nebraska, Oregon, and South Dakota—that didn’t see change in their poverty rates all had rates below the national average (figure 2, below). Influencing the lack of change nationally, the poverty rate both increased and decreased in 23 states (including the District of Columbia).

In general, poverty rates decreased in states with high rates and increased in states with low rates. However, Arkansas, South Carolina, and New Mexico—states with some of the highest poverty rates—actually witnessed increases. Conversely, the situation improved in three states with some of the lowest rates—Massachusetts, Minnesota, and North Dakota.

Falling poverty rates were concentrated in the southeast and in parts of the midwest, with Arizona and Nevada also experiencing decreases. Rising poverty rates were more common in the northeast, mountain, and west regions, although poverty also increased in Illinois, Missouri, and Wisconsin.

Figure 2

Presumably, this state-level variety can be found in the poverty rates for all families, families headed by single women, and children and in measures of income inequality. The Census Bureau will release corresponding state and local data from the American Community Survey next week.

The Census Bureau’s new report paints a picture of an economy that has stabilized, with poverty holding steady. However, since homeless families often exhaust their financial resources and double up before ending up in shelter as a last resort, we cannot expect homelessness to stabilize immediately. The homelessness system must brace itself for continued high demand, targeting those states where the economic recovery has yet to fully take hold. New Mexico, Montana, and the District of Columbia have already seen particularly high increases in the sheltered homeless family population since 2008. As the influx of $1.5 billion in homelessness assistance from the American Recovery and Reinvestment Act runs out this month, providers may become even more strapped for cash than they were at the height of the economic downturn. We must ensure that there is sufficient targeted funding to address the lagged homelessness effects that will continue to strain our shelter system.

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