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Unemployment Benefits and Food Stamps

• Posted by e2 on 03.06.09
• Tags Family Changes, Modern Family

The U.S. economic recession is in its second year and is now predicted to last at least another year. With rising unemployment, economic distress is spreading to more and more communities and families. The tide of rising joblessness is likely to carry millions more Americans into poverty, according to a recent study by the Center on Budget and Policy Priorities (CBPP).

At least 218,000 additional people may fall below the poverty line as the national unemployment rate increases. Rising poverty creates serious consequences for all states. The burden of poverty falls particularly hard on children, as the child poverty rate is typically higher than for the entire population. For example, Virginia’s overall poverty rate in 2007 was 8.6 percent, versus 13 percent for children.

Additionally, studies show that children who are pushed into poverty during a recession are 13 times more likely to remain in poverty as adults than individuals who do not experience poverty as children. Policies that bolster the safety net of public and private assistance for needy people could forestall the legacy of childhood poverty. Yet as unemployment worsens, people’s safety net programs are already straining under the increasing demands.

State and local budget cuts and reductions in not-for-profit programs could further weaken these programs at the very time the services are most needed. This is especially true in areas with chronically high unemployment and a preponderance of low-wage jobs. Official poverty estimates will not be available until summer 2009. Yet, rising demands for safety net services, especially unemployment benefits and food stamps, are reliable early warning signs of impending poverty rate increases.

In most recessions, an increase in unemployment precedes a rise in poverty. The CBPP has studied trends from the last three national recessions and offered estimates of the number of additional Americans expected to fall into poverty if unemployment continues to rise during the current economic downturn. CBPP finds that a national rise in unemployment to 8 percent would cause an additional 5.8 to 8 million Americans to fall below the poverty level. An increase in unemployment to 8.5 percent would increase the number of Americans living in poverty by 6.6 to 9.2 million. And, if unemployment rises to 9 percent nationally, as many economists expect, up to 10.3 million additional Americans could fall into poverty (a rate increase of 27 percent).