A recent report published by the Center on Budget and Policy Priorities illustrates how the recent economic recession could affect the millions of Americans living in poverty. The study analyzes previous economic recessions and the subsequent increases in the number of Americans living in poverty, as well as provides a comparison between current social safety net programs and ones employed in prior recessions. The report also provides recommendations for policymakers in order to soften the impact of the recession.
The current recession is projected to increase unemployment to 9% by the end of 2009, which translates into an increase of 7.5 million to 10.3 million people in poverty and an increase of 2.6 million to 3.3 million children in poverty. The study projects these figures using data from previous recessions in the early 1980s, early 1990s and 2001.
In addition, the recession is hitting people of low incomes the hardest, with unemployment rates for workers over 25 years old without a high school diploma increasing to 10.3% by October 2008. Food stamp caseloads are also on the rise, increasing 9.6% from August 2007 to August 2008.
The author discusses the fact that the government safety net has weakened significantly since the 1980s, leaving many poor unemployed individuals without any programs to act as a basic cash assistance safety net. Today only 40% of eligible families actually receive cash assistance. This is the first recession in decades with both a weakened unemployment insurance system and a dramatically smaller cash assistance safety net.
The report, Recession Could Cause Large Increases in Poverty and Push Millions into Deep Poverty, can be found at: www.cbpp.org/11-24-08pov.pdf.