The recession and its lingering aftermath helped drive an estimated 2.8 million additional American children into poverty, raising the nation’s share of poor children to one of the highest recorded in nearly 50 years. The increase in the child-poverty rate of four percentage points between 2007 and 2011 to 22 percent was the second largest four-year increase since modern recordkeeping began in 1959. The percentage of children living in low-income families—with incomes less than twice the federal poverty line—increased even more rapidly, from 39 percent to 45 percent. Strikingly, almost half of all children are poor or near poor in a nation boasting one of the world’s highest per-capita incomes. The child-poverty rate was unchanged in 2011, the latest year for which data are available, despite the fact that the recession nominally ended in 2009. In numbers, 16.1 million American children live in poor families, and 32.4 million live in low-income families.
Child-poverty rates rose for children in all major ethnic groups—white, black, Latino, and Asian—with the Latino rate rising the fastest at nearly six percentage points. The stubbornly high child-poverty rate is partly explained by persistently high unemployment during the weak and protracted economic recovery. Child-poverty rates closely track unemployment rates, and similar peaks in poverty occurred during the recessions of the early 1980s and 1990s. Conversely, following periods of strong economic growth and historically low unemployment rates, child poverty in the United States fell to historically low rates of 14 percent to 15 percent during the late 1960s and early 1970s and again to 16 percent in 2000.
The close association between child poverty and unemployment is also observed in recent trends in state-level poverty rates. States whose economies were among the hardest hit during the recession experienced some of the largest increases in child poverty during the 2007–2011 period. In Florida, the child-poverty rate jumped a staggering 7.8 percentage points to 25 percent—the largest increase in the nation. Thirteen additional states—including Arizona, California, Illinois, Indiana, Michigan, Nevada, and Ohio—and the District of Columbia saw child--poverty rates rise by five percentage points or higher. Overall, child-poverty rates rose by statistically significant margins in 39 states and fell in no state during the course of the recession. As has long been the case, states with the highest child--poverty rates tend to be in the South and West.
Poverty Reached into the Middle Class
Many Americans, including policymakers, remain unaware of the scale and scope of child poverty in the United States and are apt to think of it as a marginal phenomenon: a problem confined to inner cities and isolated rural communities. This inaccurate perception is further belied by evidence from the recession. These years reveal a striking increase in the probability of living in poverty or near poverty among children in families with characteristics traditionally associated with the middle-class mainstream: suburban residence, married parents, and at least one parent with some post-secondary education. The trends indicate that the high unemployment and housing foreclosures of the prolonged downturn drove significant numbers of formerly middle-class families into the ranks of the poor or near poor.
While child-poverty rates remain higher in central cities and non-metropolitan areas, the economic and housing crises appear to have accelerated a longer-term trend toward the suburbanization of American poverty. Indeed, the number of poor people in families with related children under 18 living in suburbs rose by 33 percent between 2007 and 2011 and by 66 percent between 2000 and 2011, much faster rates of growth than those for people living in central cities and those living outside metropolitan areas. More than 13 percent of suburban residents in families with related children are poor, up more than three percentage points since 2007 and more than five percentage points since 2000. The number of people in low-income families living in the suburbs also grew rapidly during the recent recession.
Families headed by a single parent are at high risk of being poor or near poor. Indeed, 70 percent of all children living with a single parent are in low-income families. During the course of the recession, however, the share of all children with married parents who live in low-income families rose by four percentage points to 32 percent in 2011—a phenomenon consistent with one or more parents losing a job or having work hours cut back. Notably, the share of all children with at least one parent working part-time or part-year who live in low-income families also rose four percentage points to 75 percent, suggesting that part-time/part-year employment became less remunerative, perhaps due to employers cutting work hours.
The value of a college education also eroded in the course of the recession. Child-poverty rates in the United States strongly correlate with parental education: The higher her parents’ education, the less likely a child will grow up in a poor or low-income family. But the mass unemployment wrought by the prolonged downturn struck workers with all levels of education. In 2011, 31 percent of children with at least one parent who had some postsecondary education lived in low-income families and 13 percent lived in poor families. These shares rose from 25 percent and 9 percent, respectively, in 2008. Indeed, although parental college education greatly reduces the likelihood that a family will be poor or near poor, the rapid growth in the share of the adult population with postsecondary education in recent decades has contributed to larger shares of poor and near-poor children having a parent with some college education. This trend continued through the course of the recession and its aftermath: In 2011, 47 percent of low-income children and 39 percent of poor children lived with a parent with at least some college education, up from 40 percent and 35 percent, respectively, in 2008. In the United States today, a postsecondary education is no longer a ticket to the middle class.
More Children Experienced Severe Deprivation
Taken together, these trends show that the recession made more middle-class children poor. At the same time, the economic crisis also took a harsh toll on children already living under severe deprivation. The share of all children living in extreme poverty—with family incomes under 50 percent of the federal poverty line—rose by two percentage points to 9.4 percent between 2007 and 2011. This represents almost 1.5 million children. The share of black children living in these families also rose by almost two percentage points to an astonishing 18.9 percent, representing about 800,000 children. The proportion of children living in extreme poverty also rose among whites, Latinos, and Asians. Income at half the poverty line amounted to $9,265 for a family of three in 2011. Living under conditions of extreme poverty is associated with a host of negative consequences for children, including poor mental and physical health and underperformance in school.
The share of children living in neighborhoods of concentrated poverty also appears to have risen during the recession, judging from the limited data available. A neighborhood of concentrated poverty is defined as one in which 20 percent or more of the residents are poor. In 1999, 17.5 percent of all children lived in neighborhoods (census tracts) with poverty rates between 20 percent and 40 percent, and 3.3 percent lived in neighborhoods with poverty rates of 40 percent or higher. These rates rose to 20.2 percent and 4 percent, respectively, during the 2006–2010 period (multiple years of data were required to achieve adequate sample size).
Concentrated poverty has also grown dramatically in a number of large cities, many of them former industrial hubs in long decline accelerated by the economic downturn. While only one city with a population of 200,000 or more—New Orleans—had a child-poverty rate as high as 40 percent in 1999, eight cities surpassed this rate in 2010: Birmingham, Buffalo, Cincinnati, Cleveland, Detroit, Richmond, Rochester, and St. Louis. Detroit’s poverty rate reached an astounding 50 percent—the highest in the nation among large cities—closely followed by Cleveland at 49 percent.
Research shows that living in a neighborhood of concentrated poverty is harmful to children, apart from whether their own family is poor. Children living in areas of concentrated poverty are more likely to experience high levels of stress, poor physical and mental health, food and housing insecurity, a lack of health insurance, and limited educational opportunities compared to children who live in less poor neighborhoods.
The Face of American Child Poverty Today
The share of American children living in poor families is extraordinarily high—far higher than that of any other high-income country, irrespective of the metric used for comparison. Moreover, the burden of child poverty is unevenly distributed, borne disproportionately by black, Latino, and Native American families. A child from one of these racial/ethnic groups is 2.6 to 3 times as likely as a white child to live in a poor family.
Nevertheless, because of the large size of the white population, almost one-third of all poor children are white, while one-fourth are black and 36 percent are Latino.
Increasingly, to be young in America is to be a child of immigrants. First- and second--generation immigrant children make up more than one-fourth of all children in the United States and are the fastest-growing segment of the under-18 population. Children of immigrant parents are much more likely than children of native-born parents to live in a low-income or poor family.
These disparities must inform public policy to reduce American child poverty. Our brief review of poverty trends suggests that policies encouraging strong job creation are likely to be effective in lowering the overall child-poverty rate relatively quickly. Developing effective policies to address the severe deprivation that more intensely harms communities of color is more complex and difficult. Children growing up in families experiencing extreme or persistent poverty, or living in neighborhoods of concentrated poverty, confront much more daunting obstacles to healthy development compared to children experiencing shorter poverty spells resulting from a temporary economic shock, such as parental job loss. Public policy—notably, the Earned Income Tax Credit—has kept millions of children in working families out of poverty. But the nation must do much more to break the intergenerational cycle of entrenched poverty.