Poverty and Safety Net

Slightly more than half of the U.S. population experiences poverty at some time before age 65. Roughly half of those who get out of poverty will become poor again within five years. Who is more likely to enter poverty? How long are people poor? And what events are associated with falling into and climbing out of poverty? This fact sheet summarizes key findings from the poverty dynamics literature to describe how, why, and when people move in and out of poverty.

Today, the U.S. Census Bureau announced that the U.S. poverty rate reached 13.2 percent in 2008. Even this significant increase from the 12.5 percent rate in 2007 surely understates the share of Americans struggling to make ends meet today in September 2009.

High poverty rates, especially among African Americans and Latinos, threaten the well-being of neighborhoods as well as families. We can anticipate that the number of neighborhoods with dangerously high poverty rates is higher today than in 2000, representing a tragic reversal of the downward trend between 1990 and 2000. Historically, public policies played a central role in establishing and enforcing patterns of racial segregation, alongside discriminatory practices by the private sector and individuals. But no single causal process explains the persistence of residential segregation in America today. To ensure the well-being and sustainability of all neighborhoods, public policies must intervene to break the cycle.

To pay for college, many low- and moderate-income students and their families rely on financial aid and savings. But how students and families save—and in whose name—affects both the tax consequences and the impact of savings on financial aid. Not saving in a tax-preferred account can raise the out-of-pocket costs of college by thousands of dollars. Alternately, saving for college can result in tax penalties if families do not use tax-preferred savings for education.

This report summarizes the roundtable "Infants and Toddlers in State and Federal Budgets: Yesterday's Choices, Today's Decisions, Tomorrow's Options" conducted by the Urban Institute, with support from the A.L. Mailman Family Foundation, on March 30, 2009. The roundtable's focus grew out of the widely perceived mismatch between sharply limited public investments on infants and toddlers and an accumulated body of research demonstrating the significance of the earliest years of life. We describe the group's diverse perspectives and wide-ranging discussion of strategies to address this mismatch.

The Supplemental Nutrition Assistance Program (SNAP) provides essential help in purchasing food for most low-income Americans. Most families can qualify for benefits if their assets and income fall below minimum levels. SNAP caseloads are at an all-time high due to the recession and to program changes making it easier to receive benefits. The majority of working families that receive assistance are headed by single parents that work part time. SNAP benefits substantially reduce poverty, especially deep poverty, when benefits are added to cash income.

Low-income status in the United States varies significantly by race and ethnicity. Of the more than 13.4 million families with children living on incomes less than 200 percent of the federal poverty level, 30 percent are Hispanic, 22 percent are black or African American, and 6 percent are other nonwhites. This fact sheet provides statistics on racial and ethnic differences in family structure, work effort, nativity or immigration status, earnings, and education.

Many policy makers and scholars regard the HOPE VI Program as one of the nation's most successful urban redevelopment programs (c.f. Katz 2009; Cisneros 2009). But despite its very real accomplishments, the HOPE VI program's record in meeting the needs of the original residents who endured the worst consequences of the failures of public housing is mixed. With its proposed "Choice Neighborhoods" initiative, the Obama administration has the opportunity to build on the experiences of nearly two decades of experience with HOPE VI. Incorporating intensive case management and permanent supportive housing for the most vulnerable into Choice Neighborhoods and any other comprehensive redevelopment efforts is one way to ensure that these initiatives truly meet the needs of all public housing families.

As the director of the District of Columbia's Child and Family Services Agency, Olivia Golden led the turnaround of a troubled system. In her new book, Reforming Child Welfare, she draws on her expertise as a senior federal official, local administrator, and an academic to map out strategies for improving and revitalizing the last safety net for vulnerable children and families, the public child welfare system.

In this testimony, Mary Cunningham discusses different housing-based interventions that policymakers could adopt to end homelessness among veterans. Increasing HUD-VASH vouchers and tightly targeting them to high need veterans, as well as increasing rapid rehousing programs and affordable housing programs for low-income veterans who are homeless primarily for economic reasons are discussed.