New Census Data Demand Action on Inequality and Poverty

The U.S. Census Bureau released data this week showing little to no improvement in poverty and family incomes in 2014, despite a falling unemployment rate.

This frustrating state of affairs is directly related to high levels of inequality and stagnant wages, which have kept poverty rates much higher than they should be given that we've had more than five straight years of economic growth. The problem is that despite workers' increased productivity and higher levels of education, the economic gains have concentrated at the top of the income ladder, leaving workers with flat or declining wages and chronic economic insecurity.

It's clear that we need more aggressive action on inequality and poverty. But, at the same time, the Census data also confirm the dramatic role that our social insurance and assistance programs play in protecting families from hardship and boosting economic security for low- and middle-income families.

For example, the Supplemental Poverty Measure, which takes into account a more comprehensive set of family resources and expenses, shows that last year Social Security lifted 25.9 million people out of poverty and the Earned Income and Child Tax credits kept 9.8 million people out of poverty. Similarly, the Supplemental Nutrition Assistance Program (SNAP) and affordable housing protected 4.7 million and 2.5 million people, respectively. Moreover, recent research shows that without our nation's social safety net, the poverty rate would be nearly twice as high--with nearly 30 percent of Americans living in poverty!

The safety net assists working-age people across all levels of education. The combination of these programs--ranging from Social Security and Unemployment Insurance to nutrition assistance and tax credits for working-class families--boosted the average income of the most vulnerable workers by 22 percent. For working-age people with a post-secondary education, average incomes increased by between 6 and 12 percent.

These policies don't just lift families above our meager poverty line. They boost long-term employment, educational, and health outcomes for children, and increase family economic security in an economy that is increasingly only working for the wealthy few.

In order to build on the successes of these programs we need to act now and implement policies that we know work: boost wages and labor standards for low-wage workers and promote full employment; invest in nutrition, education, affordable housing, healthcare, and tax credits like the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC); and remove barriers that keep people trapped in poverty such as our broken criminal justice system and predatory loans.

Thankfully, we're seeing progress on many of these fronts. We learned from the new data that last year the Affordable Care Act resulted in the largest drop in the uninsured rate since the Census Bureau began tracking it-- there were 8.8 million fewer people without health insurance than in the preceding year. There is now bipartisan momentum to reform the criminal justice system. Workers are organizing for a higher minimum wage in states across the country. Finally, a new overtime rule from the Obama administration would boost pay for millions of workers.

The bad news is that vital programs are at risk of cuts. Conservatives have already indicated that they will not make a routine fix to Social Security's funding formula without extracting a pound of flesh through cuts to critical programs for people with disabilities. Key provisions in the EITC and CTC are set to expire in 2017; if Congress fails to act, it would push 16 million Americans into poverty or deeper into poverty. The House and Senate Republican Budgets deeply slash SNAP and Medicaid. And the tight caps and cuts to annual funding levels caused by sequestration and the Budget Control Act of 2010 have left critical investments such as those in affordable housing and education vulnerable to even deeper cuts.

Basic economic security would be weakened by conservative budget proposals this year, despite the fact that no policymaker's district is immune from poverty. The tables below shows the poverty and child poverty rates in the districts represented by Members of the Senate Finance and House Ways and Means committees, which have jurisdiction over key antipoverty programs like Social Security, and the Earned Income and Child Tax credits.

The new Census data underscore that we still have a lot of work to do when it comes to reducing poverty and inequality. We know the good policies that we need right now. It's time to turn up the heat and call on all of our representatives to make good policy a reality.

House Committee on Ways and Means

Senate Committee on Finance