Half in Ten’s 2012 report underscores growing inequality, effectiveness of work and income supports, and ability to cut poverty while tackling federal deficit
Washington, D.C. — As Congress looks to avoid the fiscal cliff, the Half in Ten campaign released a new report today that provides key insights into how America is faring on key indicators of cutting poverty and expanding opportunity for all. It tracks progress and backward slides from 2010 to 2011 as well as longer-term trends at the national level and for every state.
The report, “The Right Choices to Cut Poverty and Restore Shared Prosperity,” which includes a forward from Los Angeles Mayor Antonio Villaraigosa, also offers recommendations to move the indicators in the right direction and expand the middle class, even as we cut our long-term deficits. The accompanying website provides state data and rankings and emphasizes the state’s bottom-ranking data to focus attention on areas for improvement.
“Our economy works best when it works for everyone,” said Melissa Boteach, Director of Half in Ten. “By bringing people off the economic margins and investing in shared economic prosperity, we can significantly cut poverty, bring millions of Americans into the middle class, and accelerate economic growth. We have the resources to accomplish this goal even as we tackle our long-term deficits—it’s about policy choices.”
The data reveal that after years of decline, the overall U.S. poverty rate remained stable last year, and more workers found full-time employment. Wages, however, continued to fall or stagnate and income inequality widened as the gains from economic growth concentrated at the very top. The annual 2012 Half in Ten report shows that the nation’s investments in nutrition assistance and tax credits for working families kept millions out of poverty, and that more Americans also had health insurance coverage this year due to the early effects of the Affordable Care Act. Yet a premature pullback in unemployment insurance and cutbacks in child care assistance jeopardized the economic security of many working-class families.
It is in this context that Congress will be considering the fate of tax cuts for the wealthiest Americans and of critical health, nutrition, education, and income supports that provide a pathway to the middle class.
“As members of Congress consider key decisions on taxes, jobs, and deficit reduction, they should heed the findings of this report that reveal both widening income inequality and the effectiveness of federal investments in cutting poverty,” said Deborah Weinstein, executive director of Coalition on Human Needs, a Half in Ten partner. “These data should be a wake-up call that we must protect low-income people in deficit reduction and invest in jobs, education, and work and income supports to create greater economic opportunity for all.”
Key findings from the report include:
- As our economy grew, so did income inequality. While incomes in the top 5 percent grew in 2011, the poverty rate did not budge that year and middle-class incomes declined. The bottom 40 percent captured only 11.6 percent of all income last year.
- Stagnant service incomes underscore the need for an improved minimum wage. The rise of income inequality hit workers in service occupations especially hard. Median weekly earnings for a full-time worker in a service occupation in 2011 were $486, or about $24,300 annually.
- Unemployment insurance is a critical foundation to recovery. In 2011 unemployment insurance kept more than 2.3 million people out of poverty—fewer than in 2010, when 3.2 million people were lifted above the poverty line. Unfortunately, a premature pullback in unemployment insurance between 2010 and 2011 probably dampened the powerful antipoverty effects of this program.
- Tax credits and nutrition assistance are important for working families. Although the traditional poverty indicator held steady this year after several years of decline, it didn’t take into account some of the most important policy steps enacted by the Obama administration to alleviate hardship and provide a pathway back to the middle class for America’s families.
- Health coverage is on the rise due to early effects of the Affordable Care Act. One area where we saw some very promising progress was the health insurance coverage rate. The percentage of people without health insurance coverage went down this year, falling to 15.7 percent in 2011 from 16.3 percent in 2010. Signed into law by President Barack Obama, the Patient Protection and Affordable Care Act of 2010 significantly expanded health care coverage for low-income Americans.
“As the indicators report shows, now is the time to take a giant leap forward to ensure that prosperity is inclusive and shared—a notion that has always been at the core of the civil rights movement,” said Wade Henderson, president and CEO of the Leadership Conference on Civil and Human Rights, a Half in Ten partner. “Our economy has made steady progress, but we’re far from where we want to be, especially for communities that are too often on the wrong side of educational and income disparities.”
Read the report and executive summary here.
Related Resources:
- Download a summary of the national findings here.
- Access the state-by-state data and rankings on our interactive website here.
- Download a fact sheet for each indicator of progress here.
- See fact sheet on Latinos and Poverty, the first in a Half in Ten 2012 Demographic Series.
- Get quotes on the report from Half in Ten’s partners here.
- Access personal stories about programs mentioned in this report at our storybank.
To speak to experts on the issue, please contact Madeline Meth at [email protected] or 202.741.6277.
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Half in Ten was launched in 2008 to urge local, state, and national leaders to set a national goal of cutting poverty in half in 10 years, and to build the political and public will to advance legislation and programs that will help us to reach it. More information can be found at www.halfinten.org.