NC Budget and Tax Center

Latest National Poverty Numbers Show Critical Role of a Social Safety Net

Among the findings from yesterday’s release of the national poverty data is that our investments in government programs aimed at fighting poverty are working and keeping millions of Americans out of poverty. The Earned Income Tax Credit and SNAP, formerly known as food stamps, are not officially counted in the poverty measure but if they were the number of people in poverty would decline by 5.7 and 3.9 million due to each of these policies respectively.  The Census data do capture the role of unemployment insurance and social security benefits in keeping people out of poverty and once again the figures released yesterday show that 2.3 million and 21.4 million were kept out of poverty through these social insurance programs.

The less told story is that falling UI payments likely contributed to the failure of the poverty rate to significantly decline.  The Census data show that UI benefits lifted 3.2 million Americans out of poverty in 2010, but only 2.3 million in 2011 — a reduction of more than one-fourth. Similar data are not available for North Carolina but in the state, as in the nation, unemployment benefit payments fell sharply in 2011 by 26 percent, even though the number of unemployed North Carolinians fell by only 3.1 percent.  That’s in part due to the expiration of a 2009 Recovery Act provision that gave an extra $25 per week to workers receiving unemployment benefits; that provision pumped $387 million into the state in 2010 but ended that year and provided nothing in 2011.

 

 

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