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Overview of Extreme Poverty in Illinois Prepared for the meeting of the Commission on the Elimination of Poverty 10/28

Overview of Extreme Poverty in Illinois Prepared for the meeting of the Commission on the Elimination of Poverty 10/28/09. Muddy Waters: Definitions of Poverty. Official Federal Poverty Definitions. Extreme or Deep Poverty: living below 50% of the FPL.

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Overview of Extreme Poverty in Illinois Prepared for the meeting of the Commission on the Elimination of Poverty 10/28

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  1. Overview of Extreme Poverty in IllinoisPrepared for the meeting of theCommission on the Elimination of Poverty 10/28/09

  2. Muddy Waters: Definitions of Poverty

  3. Official Federal Poverty Definitions • Extreme or Deep Poverty: living below 50% of the FPL. • Low-Income or Near Poor: living between 100% - 200% of the FPL.

  4. Income types included in measure: Earnings- Unemployment compensation- Social Security- Supplemental Security Income- Public assistance- Veterans’ payments- Pension or retirement income- Child supportNoncash benefits (such as food stamps and housing subsidies) do not count.

  5. Shortcomings of Current Measure 1. No variation by geography 2. The level doesn’t keep up with costs of basic needs3. It doesn’t include non-cash and tax-based benefits4. It doesn’t account for spending on taxes, work expenses, and health care

  6. The Self-Sufficiency Standard shows what it takes to make ends meet Self-Sufficiency Standard for a single parent with a preschool and school-age child in Illinois: - $49,030 annually - $4,087 monthly - $23.22 hourlyThis is $30,720 higher than the federal poverty line for the same family size.

  7. What events cause poverty? • Loss of a job: nearly 20% of people enter poverty when the head of household loses a job. • Decline in earnings: half of poverty spells begin with the household experiences a decline in earnings. • No high school degree: households headed by someone without a h.s. degree are 6.4 times more likely to enter poverty than those with a college degree.

  8. What events cause poverty (cont.)? • Female-headed household: When a two-adult household becomes a female-headed household 20.1% entered poverty. • Having children: 8.6% of poverty entries happen when a child is born into a household. • Disability: when a head of household becomes disabled, 6.5% of households enter poverty.

  9. What contributes to these events? • Growth in low-wage work: one fourth of the workforce in the United States earns poverty level wages, particularly impacting women and minorities. • Discrimination: estimates suggest that discrimination against black men reduces the demand for their labor by at least 10 to 13%. • Wage declines for dropouts: high school dropouts earn less money than those with more education and their wages have declined considerably.

  10. What contributes to these events? • Violence: having experienced violence increases employment instability for some women, and leaving an abuser can render a woman without any income. • Teen births: half of all non-marital childbearing starts during the teen years which is associated with lower high school graduation and a 20% reduction in the girl’s adult income. • Not working full time: this is particularly prevalent for single parents and people with disabilities or parents caring for children with disabilities.

  11. What contributes to these events? • Increased incarceration experience: incarceration reduces wages by 10 to 20% and increases likelihood of unemployment, particularly for black men. • High poverty neighborhoods: segregation, discrimination, the decline in jobs, and the loss of positive role models constrain current opportunities and future aspirations for poor minority residents.

  12. Drilling Down: Extreme Poverty

  13. Understanding Extreme Poverty Exemplified by very low incomes:family of 3 $9,355 per yearfamily of 4  $11,025 per year Severe economic deprivation results in:- hunger and nutritional deficits - substandard housing and homelessness- poor health and untreated illnesses

  14. Extreme Poverty by the Numbers 667,026 Illinoisans live in extreme poverty. Illinois’ extreme poverty rate rose from 5.1% in 2000 to 5.4% in 2008.During the same time frame the extreme poverty rate held steady nationally.

  15. In Illinois…A disproportionate share of African Americans live in extreme poverty Children, youth, and young adults comprise 56% of the extreme poverty population

  16. Most in extreme poverty are native born Area of Origin: • 87.1% of people in extreme poverty are native born and 12.9% are foreign born • 8.2% of people in extreme poverty live in a linguistically isolated household

  17. County Extreme Poverty Rate Less than 2.5% 2.5 to 4.9% 5.0% or higher Geography of Extreme Poverty in Illinois

  18. 82.7% of Illinoisans in extreme poverty live in metropolitan areas

  19. Young Adults in Extreme Poverty • 123,731 young adults are in extreme poverty • 14.6% have at least one child • 6,414 have a disability • 57.8% are in school • 63.3% worked in past year • 17.1% are not in school and are not working

  20. Disability 16.2% of people in extreme poverty have at least one disability

  21. Families 1/3 of those in extreme poverty are single female-headed households and their children.60,379 people in extreme poverty are married. A total of 164,485 children live in extreme poverty

  22. Seniors • 31,056 seniors live in extreme poverty • 67.2% of them are women • 53.1% of them live alone • 2,020 head households with children • Half have a disability

  23. Educationlevels

  24. Work 178,493 people in extreme poverty worked in the past year1 in 10 worked at least half the year and 11,969 worked full time, year-round

  25. People in extreme poverty are... • Much less likely to be married • Much less likely to work the entire year • Much less likely to work even half the year • Much less likely to have a college degree • More likely to have a disability • More likely to live in linguistically isolated households • More likely to not speak English • More likely to have an incomplete kitchen or plumbing • More likely to live in older housing • Much more likely to be aminority • Much more likely to not have a vehicle …than those who are not extremely poor.

  26. Summary • The majority of those in extreme poverty live in metro areas across the state. • 53.7% of people in extreme poverty are children, people with disabilities and seniors – groups not expected to work. • 1/3 of those in extreme poverty are single female-headed households and their children. • 1 in 10 working age adults in extreme poverty worked at least half the year.

  27. Ripple Effects of Extreme Poverty:Struggling to Meet Basic Needs

  28. Transportation 78,082 households in extreme poverty do not have a car 86.1% of those car- less households live in a metro area

  29. 1 out of every 10 households in extreme poverty lives in housing with incomplete plumbing and/or an incomplete kitchen 1 of every 10 households in extreme poverty live in housing with incomplete plumbing and/or an incomplete kitchen 24% of all Illinois renters pay over half of their income in rent Housing

  30. Nearly one-third (31.4%) of people in extreme poverty are uninsured Health Half (49.1%) of working age adults are uninsured

  31. nutrition • 9.5% of Illinois households are food insecure • 25% of households eligible for Food Stamps are not receiving them • Over 900,000 Illinoisans get food from food pantries each year

  32. From 1995-2005 the Safety Net: Protected a smaller share of children from deep poverty than it used to. - In 1995, the safety net lifted 88% of poor children above 50% FPL.- By 2005, this percentage had declined to 76%.Protected fewer jobless workers from deep poverty than it used to.Among very poor unemployed workers looking for work in any given week:- In 1995, the safety net lifted 70% above 50% FPL.- By 2005, this percentage had declined to 60%.

  33. Spotlight on TANF and Food Stamps Temporary Assistance to Needy Families- In 1995, AFDC (which preceded TANF) lifted 62% of children above 50% FPL. - By 2005 this declined to just21% for the TANF program.Food Stamps- In 1995, the Food Stamp Program lifted 61% of children above 50% FPL. - By 2005 this figure had dropped to42%.

  34. Safety Net Supports in Illinois • The number of persons receiving TANF in Illinois has declined precipitously: • In June 2000 262,295 people received TANF • In June 2009 the number had dropped to 67,530. • The average annual TANF benefit received per household is $2,982. • The average annual SSI benefit received per household is $8,319.

  35. For more information On Illinois Poverty: www.heartlandalliance.org/povertyreportPoverty reports | Local data | Poverty dynamics On Self-Sufficiency in Illinois: www.ilselfsufficiency.org Illinois report | County fact sheets | Online calculator Amy Rynellarynell@heartlandalliance.org312-870-4943

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