Pa.'s Poverty Rate Holds Steady Thanks to Unemployment Comp System

Still, state poverty remains high. Lawmakers should take action by forming poverty-fighting commission, passing unemployment compensation reforms

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Keystone Research Center

Sep 16, 2010, 01:21 ET

HARRISBURG, Pa., Sept. 16 /PRNewswire-USNewswire/ -- National poverty rates rose significantly in 2009, climbing to 14.3% from 13.2% in 2008, new Census Bureau data show.

In Pennsylvania, poverty rates remained essentially unchanged, going from 10.8% in 2006-07 to 11% in 2008-09. (The Census Bureau averages two years of survey data in order to improve the reliability of the state-level estimates.)

The poverty rate would have risen even further nationally and in Pennsylvania in 2009, had it not been for unemployment compensation extensions and other key provisions of the 2009 American Recovery Act that have helped middle-class and low-income families stay afloat.

The Census Bureau estimates that unemployment insurance alone kept 3.3 million Americans out of poverty in 2009, with Pennsylvania's share of all unemployed in 2009 being about 3.6%.

"Unemployment insurance benefits kept poverty from rising further this year, and as many as 120,000 people were likely kept out of poverty in Pennsylvania thanks to income from unemployment insurance," said Mark Price, Ph.D., Labor Economist with the Keystone Research Center.

"If we let the unemployment extensions and other Recovery Act provisions disappear before the job market and family incomes rebound, many more people will be at risk of falling into poverty," he added.

State Should Form Poverty Task Force

Pennsylvania's poverty rate remains well below the national rate, but it is high and has been growing over the past decade, even before the significant job losses that occurred in 2009. Pennsylvania's overall poverty rate has risen from 9% in 1999-2000 to 11% in 2008-2009.

These numbers add up to one thing, according to the Rev. Sandra Strauss, Public Advocacy Director for the Pennsylvania Council of Churches.

"All of us in our society must do better to care for our neighbors," Rev. Strauss said. "We simply cannot allow this level of poverty to exist and claim to be a compassionate people."

Strauss co-chairs the Coalition for Low Income Pennsylvanians, which is leading an effort to create a state level poverty task force in Pennsylvania to examine the causes of poverty and make recommendations to address it.

House Resolution 833, which directs the Joint State Government Commission to create the poverty task force, is currently positioned for a floor vote.

"The last recession showed us that addressing poverty requires a pro-active strategy; we can't just hope that things will turn around once the economy recovers," said Carol Goertzel, President/CEO of PathWays PA. "The longer we wait to take action, the longer that millions of families continue to suffer."

Reform Unemployment, Spur Economic Recovery

Pennsylvania state lawmakers should also address rising poverty by adopting House Bill 2400 to reform the state's unemployment compensation system.

Current law denies benefits to thousands of low-income workers. The law bases unemployment benefits on a year's worth of income but excludes more recent earnings.

The House bill would allow those earnings to count when necessary, opening the door to 30,000 Pennsylvanians, many laid off from low-paying jobs, who are denied benefits. It also would allow Pennsylvania to tap into $273 million in federal money to implement the change.

In the Keystone Research Center's annual State of Working Pennsylvania report, released over Labor Day Weekend, researchers found that, absent federal policy actions in response to the Great Recession, Pennsylvania and the nation would be looking at double-digit unemployment rates today.

For this reason, Congress should also extend several Recovery Act provisions for middle- and low-income households, such as the Earned Income and Child Tax Credits. Otherwise, many more families will fall through the cracks, and the fragile economic recovery will be set back.

Dr. Price, the Keystone Labor Economist, said Congress should also extend the TANF emergency funding that supports Pennsylvanian's "Way to Work" program, which helps employ low-income workers. The program has helped create an estimated 21,000 jobs in Pennsylvania, including 13,000 for adults and 8,000 for summer youth. Without Congressional action, this funding will expire September 30.

The Keystone Research Center is a nonprofit, nonpartisan research organization that promotes a more prosperous and equitable Pennsylvania economy. View the State of Working PA report at http://keystoneresearch.org/issues-guides/state-of-working-pa.

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SOURCE Keystone Research Center