AND PUSH MILLIONS INTO DEEP POVERTY
Stimulus Package Should Include Policies To
Ameliorate Harshest Effects Of Downturn
By Sharon Parrott
Executive Summary
Like previous recessions, the current downturn is likely to cause significant increases both in the number of Americans who are poor and the number living in “deep poverty,” with incomes below half of the poverty line. Because this recession is likely to be deep and the government safety net for very poor families who lack jobs has weakened significantly in recent years, increases in deep poverty in this recession are likely to be severe. There are a series of steps that federal and state policymakers could take to soften the recession’s harshest impacts and limit the extent of the increases in deep poverty, destitution, and homelessness.[1]
Goldman Sachs projects that the unemployment rate will rise to 9 percent by the fourth quarter of 2009 (the firm has increased its forecast for the unemployment rate a couple of times in the last month). If this holds true and the increase in poverty relative to the increase in unemployment is within the range of the last three recessions, the number of poor Americans will rise by 7.5-10.3 million, the number of poor children will rise by 2.6-3.3 million, and the number of children in deep poverty will climb by 1.5-2.0 million.
Already there are signs that the recession is hitting low-income Americans hard. Between September 2006 and October 2008, the unemployment rate for workers age 25 and over who lack a high school diploma — a heavily low-income group — increased from 6.3 percent to 10.3 percent. Yet low-income workers who lose their jobs are less likely to qualify for unemployment benefits than higher-income workers, due to eligibility rules in place in many states that deny benefits to individuals who worked part time or did not earn enough over a "base period" that often excludes workers' most recent employment. keep reading
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