During this presidential election campaign season, candidates have stepped up their rhetoric regarding just how much support should be afforded to lower-income Americans. One of the more controversial issues has revolved around a presidential candidate's assertions that poor people have a safety net in place, and therefore do not deserve as much concern as the middle class. This begs the question: Do lower-income people truly have a "safety net" in place?
What Is "Poverty?"
Many people may identify themselves as "poor" simply because they cannot take that Caribbean vacation or eat at fancy restaurants more than twice per week. But the true definition of poverty is much more extreme than that. While there are several methods used to measure and identify poverty, one of the most widely-referenced definitions of poverty states that a four person household in 2011 earning $23,021 or less qualifies as poor, according to data provided by the United States Census Bureau. Using this definition, the "official" poverty rate of the United States was 15% in 2011, meaning that roughly 46.2 million people lived in poverty. This is significantly lower than the median household income from 2006-2010 of roughly $52,000 per year.
What Sort of Benefits Do Lower-Income People Receive?
Households that qualify as "living in poverty" are eligible for certain benefits and subsidies from the U.S. government. Indeed there are several programs in place to ease the burden of poverty. Some of the more familiar social programs include food stamps, as well as healthcare assistance through Medicare and Medicaid. While these are the largest government programs in place, they are not the only benefits available. Lower-income Americans are also eligible for subsidized housing, student financial aid and tax breaks such as the Earned Income Tax Credit.
Thanks to these programs, millions of people have been lifted out of poverty. In fact, if you were to treat food stamps as income, they would have lifted almost 4 million people out of poverty. If you were to consider the Earned Income Tax Credit as income, then almost 6 million people would be lifted above the poverty line. Despite the pundits, social programs such as food stamps and the Earned Income Tax Credit have improved the lives of many lower-income people.
Less Obvious Costs of Being Poor
Despite the "safety net" offered by social programs to help poor people make ends meet, lower-income families face many challenges that go beyond basic needs such as food and healthcare.
Finding work with a standard schedule is challenging for lower-income people. According to a survey conducted by the Urban Institute, roughly 40% of working parents held jobs with hours considered standard (i.e. weekdays between 8 a.m. and 6 p.m.). Nonstandard working hours may complicate childcare options. This survey also revealed that lower-income people feel as though they are limited in terms of employment opportunities; thus, they take any work they can find and they prioritize holding onto their jobs. This type of employment insecurity is very different from the concerns of higher-income households, which have a bit more flexibility when it comes to choosing how they spend their professional time.
Trouble Finding Affordable Childcare
Another obstacle faced by lower-income people is finding affordable childcare. Among families with young children living in poverty, roughly one-third of monthly income is spent on childcare costs, according to a study by the Carsey Institute. As mentioned above, there are childcare subsidies in place to ease this financial burden. A person who receives subsidies spends somewhere in the neighborhood of 14% of his or her income on childcare. A person with a higher-income spends only about 7% of his or her income on the same costs.
High-Quality Food May Be Harder to Come By
Access to high-quality nutrition is another cost to being lower income. Busy lifestyles combined with the lack of easy access to fruits and vegetables contribute to diets that are insufficient in vitamins and minerals. Many lower-income people need to work much harder to find fresh and healthy food that will meet their nutritional needs.
The Bottom Line
There are several social programs in place that give a boost to lower-income families. It is important, however, to remember that the true cost of poverty is much less obvious. Lower-income people often pay an intangible price for being poor, as they tend to have fewer employment opportunities. Childcare costs account for a large chunk of their budgets, and access to high-quality food may be limited.