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Robust Economy Is Lifting People Out of Poverty, Census Bureau Reports

December 27, 2019
By Juliana Knot

Overall, more people are employed, and they are working more hours on the job, the Census Bureau reports.

Americans’ incomes rose again last year, and poverty rates are now the lowest on record for households headed by single mothers, particularly among blacks and Hispanics, the U.S. Census Bureau reports.

From 2017 to 2018, the median income of  U.S. households with a female earner and no spouse present increased by 5.8 percent, states a Census Bureau report released on September 10. In female-householder black and Hispanic families, the poverty rate decreased by 2.7 percent and 4 percent, respectively. Child poverty was reduced by 2.5 percent.

Overall, more people are employed, and they are working more hours on the job, the Census Bureau reports.

Strong Economy Reduces Poverty

The poverty rate is at its lowest in more than a decade, the Census Bureau reports.

“The official poverty rate in 2018 was 11.8%, a decrease of 0.5 percentage points from 2017,” the bureau states. “This is the fourth consecutive annual decline in the national poverty rate. In 2018, for the first time in 11 years, the official poverty rate was significantly lower than 2007, the year before the most recent recession. The number of people in poverty in 2018 was 38.1 million, 1.4 million fewer people than 2017.”

These numbers are primarily the results of a strong economy, says Sam Adolphsen, policy director at the Foundation for Government Accountability.

“There is no doubt that the incredible economy President Trump has helped to spur is largely responsible for this,” Adolphsen said. “Tax cuts and a business- friendly approach to regulations are helping employers grow and offer a record number of new jobs.”

Benefits of Welfare Reform

Reform policies that encourage work began with the 1996 welfare reform bill. The legislation passed during the Clinton administration replaced federal Aid to Families with Dependent Children with time-limited benefits under the Temporary Assistance to Needy Families program.

Time limits and work requirements implemented by the states using federal block grants encouraged beneficiaries to work, says Angela Rachidi, a research fellow in poverty studies at the American Enterprise Institute and founder of Rachidi Consulting.

“Very quickly, single mothers entered the workforce,” Rachidi said.

 The criticism of work requirements used today against current welfare reforms were leveled against the 1996 bill, Adolphsen says.

“This absurd line of prediction, that people get tossed off welfare and end up in the streets, is just plain wrong,” Adolphsen said. “We know from our recent, comprehensive studies—where we tracked hundreds of thousands of able-bodied adults who left welfare after work requirements—that welfare reform helps people get back to work, earn more income, and move out of poverty,” Adolphsen said.

‘Next Phase’ of Reform

Those who remain in poverty are people who have difficulty making the transition to independence, Rachidi says.

“The next phase of welfare is how to address those situations,” Rachidi said.

Juliana Knot (jjknot322@gmail.com) writes from Grand Rapids, Michigan.

Internet Info:

Jessica Semega et al., Income and Poverty in the United States: 2018, Report No. P60-266, U.S. Bureau of the Census, September 10, 2019: https://www.heartland.org/publications-resources/publications/census-bureau-income-and-poverty-in-the-united-states-2018

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Employment Economy