Why Isn’t Poverty Falling?

Weakening of Unemployment
Insurance Is a Pivotal Factor

Why Isn't Poverty Falling? The Center for Budget and Policy Priorities has released a new report examining why the poverty rate is not falling. The poverty rate remained unchanged at a high 15% in 2012, the third full year of an economic recovery that officially began in June 2009.

One key reason why poverty has remained virtually frozen despite continued economic growth is the weakening of unemployment insurance (UI).

If UI had not become less effective at reducing poverty among unemployed workers between 2010 and 2012, the poverty rate would have fallen over that period to 14.7%, Center for Budget and Policy Priorities (CBPP) calculations show. UI will become still less effective if Congress fails to extend emergency benefits for the long-term unemployed, which expire at the end of December.

UI benefits kept 1.7 million people — jobless workers and their families — above the poverty line in 2012, according to Census figures released in September. This was 600,000 fewer than in 2011 and 1.5 million fewer than in 2010.

Click here to view the full analysis.