New Data Reveal Need For Bold Action to Promote Family Economic Security

The U.S. Census Bureau reported today that the official poverty rate fell to 11.8 percent, reaching pre-recession levels for the first time since the economic recovery began 10 years ago. According to the new data, 38.1 million people were living in poverty in 2018, down from 39.5 million in 2017, and the number of children living in poverty fell from 12.8 million to 11.9 million. This represents important progress, but it is not sufficient. Disparities by race, ethnicity, and immigration status persist, and the breadth of economic insecurity, and its depth for particular groups, is unacceptable in a nation with the United States’ resources and its aspiration to ensure opportunity for all. Research and experience have taught us how to effectively bolster economic security, and it is time to build on what we know works, and to take bold action, to promote the well-being of children and families.

Public policy plays a critical role in reducing poverty and should be evermore focused on addressing disparities and effectively promoting economic security. Unfortunately, the current administration is eroding basic protections, as the new Census data makes clear. Health insurance reduces economic instability and insecurity, but for the first time in ten years, the number and share of Americans who are uninsured has increased, as the administration undermines the Affordable Care Act and limits access to Medicaid by imposing new eligibility barriers such as work requirements. In 2018, 27.5 million people (8.5 percent of people) lacked health insurance, up from 25.6 million (7.9 percent of people) in 2017. The share of children who are uninsured increased .6 percentage points, to 5.5 percent in 2018. The data show significant declines in the share of people receiving health insurance through Medicaid and other public health insurance programs. These declines are particularly large for children, confirming fears that many of the more than 1 million children who lost health insurance through Medicaid and CHIP over the last year and a half have not gained insurance on the private market. Latinx children and families have seen the most significant declines in access to insurance, as the administration’s anti-immigrant rhetoric and policies such as the recently-released public charge rule lead many to withdraw from needed supports. According to the Census data, Hispanic children were the only group of children to see a large and statistically significant growth in the uninsured: 8.7 percent were uninsured in 2018, up from 7.7 percent in 2017. Hispanic children are almost twice as likely to be uninsured as White non-Hispanic, Asian, and black children.

In order to make real progress in promoting economic security for all families, we must build on what we know works. The Earned Income Tax Credit and the Child Tax Credit are the most effective programs at reducing poverty for families with children, supplementing income from work and making it possible for families to put food on the table, pay overdue bills, and save for a rainy day. As the Census data show, these refundable credits lifted 7.9 million people out of poverty in 2018, including 4.2 million children. But because the EITC and the CTC both require a Social Security Number to claim, some immigrant families are unable to access them. Ensuring that all families with low incomes are eligible for EITC and the CTC, and that they provide more robust benefits to the lowest-paid caregivers, would do much to reduce disparities and expand economic security for all families.

In addition to expanding proven strategies, we must innovate and fill the gaps created by the current system of supports. An agenda to promote family economic security and equity must prioritize families and promote their well-being:

  • Support caregiving—through paid family leave. Parents and caregivers are critical to a child’s healthy development and well-being, but they receive limited support as they fulfill their caregiving responsibilities. In fact, as a society we tell parents—through the policies in place—that we do not value their role as caregivers. The gender and racial inequities perpetuated by these policies are stark. Women continue to carry the weight of caregiving responsibilities, and are told they must both provide for and care for their children or risk having their children taken from them—especially if they are women of color or lower income women. Research demonstrates that policies that support caregiving, such as paid family leave, reduce poverty. All caregivers should have access to such programs, including those who— whether because of their extensive caregiving responsibilities, pursuit of education, or difficulty finding or keeping steady work—have limited formal work histories.
  • Promote early learning—through child care assistance. High quality child care and early education is critical to children’s development and to family economic security, but federal child care assistance currently only reaches one in six eligible children, and even fewer Latinx and Asian American children. A particular challenge for many low-paid caregivers is finding child care that is flexible and available outside of the traditional 9am-5pm work day. All caregivers should have access to affordable, center-based day care and after-school care options as well as support for family, friend, and neighbor care should that better meet their needs. Any program of child care assistance must make it possible to pay the early childhood workforce a livable wage, so that they too can make ends meet and afford early learning opportunities for their own children.
  • Provide an income floor. All families, regardless of whether caregivers are in the formal workforce, should have the means to meet their most basic needs. When the National Academies of Sciences modeled the anti-poverty effects of a number policy proposals, it found that a $3,000 child allowance would do more than any other single policy to reduce child poverty—and it would reduce deep poverty, or the share of children living under 50 percent of the poverty line, by half. We must invest in families. A new, or significantly expanded, income support must meet the needs of families with the greatest barriers, and embraces the values of supporting caregiving and promoting the health and well-being of children and families.

The poverty data show that fewer people are living in poverty this year, and that marks important progress. However, with 38 million people still living in poverty, it also indicates there is enormous work left to do. Small and incremental policy changes will not guarantee that all families are economically secure. It is time for bold action.