The Official Modest Needs Blog

State by State Look at Recession Tolls

How has each state in the US fared since 1980, after which time two hard recessions rocked the nation? The Today Show website takes a look with an interactive map that shows some states rebounding, only to lose footing once again as the Great Recession took hold:

A new interactive map from The Associated Press shows in stark relief how some states gained ground in the fight against poverty, particularly during the economic boom times of the late 1990s and early 2000s, before backtracking over the past few years.

The graphic rendering of poverty data released by the U.S. Census last week also shows that some states are faring better than others when it comes to poverty. Still, not many states have escaped the recent economic malaise without some increase in the percentage of people struggling to make ends meet.

“There are very few places that haven’t been affected by the last two recessions,” said Scott Allard, associate professor at the University of Chicago School of Social Service Administration and an expert on poverty.

Allard notes that some of the states dealing with highest rates of poverty also are struggling with severe budget issues, which may make it harder to help those in need.

“Many of the states that have some of the highest levels of poverty (are) struggling with making some of the most severe cuts to social programs,” he said.

View the results of your own state at the Today Show website.

"They are men and women, they are young and old."

Writer Michele Catalano, telling it like it is at her Tumblr blog "in the fade," hits a homerun with this spot-on portrait of poverty that reads to be read and repeated far and wide. Here's just a part, but it's best if you go read the whole thing, because it is a pretty powerful piece of writing:

They are men and women, they are young and old. They wear suits and ties or dresses bought at Lord & Taylor when they once had money to spare. They wear hand me downs and rag tag clothing. They carry their papers in leather briefcases left over from that job they used to have or carry everything they own in a plastic WalMart bag. They are young mothers and senior citizens. They are families whose kids play soccer and make the honor roll and families whose kids don’t go to school because they are living in a fleabag hotel room at the moment. 

They are people who have lost once lucrative jobs, whose houses are in foreclosure, who can’t find work because they have no experience and can’t get experience because they can’t find work. They are fresh out of college, already drowning in debt, unable to make this month’s rent and terrified of the sheriff knocking on their door. They are former business owners who lost everything when the economy went to hell. They are single parents struggling to raise their kids while working two menial jobs and getting no support from the other parent. They are people who were suddenly widowed or otherwise left alone. 

[...]

I’m talking about people in need. People who need a hand. People who deserve a hand.

They had jobs. They had homes. They had uneventful lives. Then something happened to shatter those lives and they find themselves about to lose their homes, their cars, their sense of security.

This is reality. This is the new truth. Poverty is not something "you know when you see." Not always. It's important to keep this in mind so we can remember to really listen, to really keep our eyes open and be ready to lend a hand to those who just might sink without it.

Be sure to go read the rest of Michele Catalano's post. She deserves your clicks, and this piece deserves your time.

[Photo by Alfonso Surroca]

"Poor People Don't Have Microwaves" and other Myths

What does it mean to be poor? Certainly, the definition of poor is dependent on where it is being formed. Being poor in India is an entirely different experience than being poor in America.

So, what does it mean to be poor in America? A record number of people in this country right now can tell you. One argument making the rounds of late is that America's poor aren't really *that* poor. Perhaps you have heard this on tv news? It's a counterpoint to the staggering numbers of families and individuals in this country who now live at or below the poverty line. "So what if 22% of US children are poor? They have VCRs! How bad could it be?," they seem to say.

Well, a GOOD reporter did some research on how much it costs to buy such luxuries as a microwave or VCR that some say preclude one from being truly poor. And, maybe not surprisingly, it isn't that expensive at all.

This is a great rebuttal to the distracting argument that takes away from the relaities that being poor bring. Like inadequate health care. Like taking less medicine to afford food. It's risking job loss when your car breaks. Cheap microwaves don't change that.

Poverty Numbers Hard to Grasp, Unless You Are One of the Counted

The topic of poverty is in the news at the moment, by George, it ought to be. We have some staggering numbers here, people, and yet again, the news is not positive. Quite the opposite.

This amount is distressingly difficult to process. It's so many that it's hard to grasp. This number seems unbelievable:

 22 percent of all children living below the poverty line

Nearly one quarter of all children in the United States. And there seems to be no sign of that number receding. It's getting worse. People are going to Canada for work, those that are financially stable enough to be northwardly mobile. The rest try and try in vain, because it is no secret that being unemployed in and of itself means you are less likely to get work. And so this is happening:

The percentage of Americans living in poverty last year rose to the highest level since 1993, the Census Bureau reported Tuesday, fresh evidence that the disappointing economic recovery has done nothing for the country’s poorest citizens. 

Another 2.6 million people slipped below the poverty line in 2010, meaning 46.2 million people now live in poverty in the United States, the highest number in the 52 years the Census Bureau has been tracking it, said Trudi Renwick, chief of the Poverty Statistic Branch at the Census Bureau.

That figure represented 15.1 percent of the population, up from 14.3 percent in 2009, and 11.7 percent at the beginning of the decade in 2001. The poverty line in 2010 for a family of four was $22,113.

And in new signs of economic distress among the middle class, median household incomes adjusted for inflation declined by 2.3 percent in 2010 from the previous year to $49,400. That was 7 percent less than the peak of $53,252 in 1999.

The real-world evidence of this is at food pantries. Many of them long ago dried up. Non-profit resources and state programs have either been stretched too thin or eliminated altogether, and people--more people than in six-ish decades--are suffering. So many people tell us at Modest Needs that they've exhausted every avenue, and that they are lucky to have discovered the organization.

It is, indeed, a great way to reach out and give back and help a stranger--ease the plight of humanity one person at a time--and you don't even have to break the piggy bank to do it. Every little bit goes a long way to easing the plight of those who know these awful census numbers by heart, since when you are one of those numbers, you don't need a newspaper to tell you the truth.

[Photo by Sander van der Wel]

Could "Mi-Pads" Be a Rescue from the Recession?

We all know the toll the bursting of the housing bubble took on the American economy and thousands upon thousands of hard working, well meaning people. It was devastating to the financial markets, not to mention the lives of families, and its effects are still being seen today as the economy still struggles to recover.

Could the concept of "Mi-Pads" be a rescue from the recession? "Mi-Pads"  [not in love with this name, admittedly] are small, around 1,000 square foot homes, that employ features found on cruise ships such as fold away bunk beds and lockers instead of closets, and sometimes for under $90,000. Here's an excerpt from this story from the Milwaukee Journal Sentinel:

"They're contemporary in look," Hignite said. "They are little bit more in size than a garage. But they're extraordinarily compact, using cruise ship technology and cruise ship design architecture to create cabins instead of bedrooms. Some of the bedrooms are 6 feet by 9 feet and they sleep two."

While a far cry from the roomy McMansions that sprang up during the housing bubble of the last decade, Hignite's houses pack lots of amenities in a small space. One model includes a 10-foot-by-12-foot attic play loft for children. Master bedrooms are shaped to handle queen-size beds. High ceilings help to blunt the smallness of the homes, which, facing the road, are only 26.5 feet wide. Patios are out the back door.

[...]

"They are meant for people who have a no-car garage right now," he quipped. "There's a large marketplace in rentals that could segue into this for the same cost as rent."

Mike Ruzicka, president of the Greater Milwaukee Association of Realtors, said Hignite may be on to something.

"It sounds like he might fill a niche," Ruzicka said.

I'll be the first to say I love this concept. I've never been a huge fan of suburban sprawl, but certainly understand the desire to be a homeowner, though prices can be daunting. A home this size and at that price would be entirely desirable for someone who has never owned before, but doesn't have a quarter of a million dollars to spend.

Whether it is executed properly is another scenario altogether. Will they be built smartly and soundly? Will they be safe in event of natural disasters (or as safe as is reasonably possible)? What is the resale value for these homes? Will they depreciate in value? And of course, location, location, location.

Renters, home owners, lend us your voice. Leave a comment with your opinion on these "Mi-Pads" below. Love it? Hate it? Like the idea, but think it will fail? Wanna buy one today? Tell us what you think.

[Photo courtesy woodlywonderworks under Creative Commons License]

Just How Expensive Is It To Be Poor in the USA?

It's expensive to be poor. I know this to be true from experience, from reading and from working at Modest Needs with the working poor. It's a cold, hard fact, and it's one of the reasons it can be easy to slip into irreversible poverty if you live paycheck to paycheck. It's a fact that inspired the creation of Modest Needs Foundation.

But just how expensive is it? An article in the publication The Beast entitled, "America's Poverty Tax" set to find out:

Those with lousy credit also pay more for a car loan—much more. These days those with good credit can get a car loan carrying an annual interest rate of around 5 percent. The subprime customer, though, is hit with rates four or five times that amount, paying interest rates of 18 or 20 or 25 percent. 

The borrower saddled with an APR of 20 percent on a $10,000, five-year car loan pays $900 more in interest each year compared with the person paying an interest rate of 5 percent on that same amount. Auto insurance is also more expensive if you live in a lower-income community, according to a 2007 study by the Brookings Institution. 

At least with a car you can shop at the better supermarkets and discount stores like Costco. Otherwise, you’re hauling groceries on a bus, paying cab fare, or paying extra at the corner grocer that charges $3.99 for the gallon of milk you can get for $2.99 at the Safeway. The working poor often pay more to have their taxes done. Tax preparers like Jackson Hewitt and Liberty Tax Service that deliberately set up their offices in communities where the average person earns $30,000 or less typically charge two or three times the rate a customer would pay in a more prosperous neighborhood. Yet tens of millions of customers avail themselves of these instant tax shops each year, and that siphons off another $100 or $200 at tax time. 

Of course not everyone living on the economic margins is frequenting each of these types of businesses. There are plenty of people earning less than $30,000 a year with a checking account. There are plenty of people at that income level, despite the challenges of paying their bills on time, who maintain a good credit score. Thankfully, a good portion of the working poor never resort to a payday loan—and the payday lenders say they have plenty of customers earning more than $30,000 a year. 

So any attempt at figuring out the poverty tax is an imperfect art. 

What number did they come up with? Read the article in full to find out. The number might shock you.

Layaway To Save the Day: Wal-Mart Brings It Back

Most of us remember layaway, the option many retailers gave to shoppers to set an item aside and pay for it over time, charging only a nominal fee for the service. People would put big ticket items like TVs or appliances on layaway, or use it for back to school clothes or holiday gift buying. It was a very popular option for those who didn't want or qualify for credit cards. But in the past decade, layaway became a relic of times past.

But in a sign of the times of economic recession, Wal-Mart, the country's largest discount retailer, is bringing back its layaway program:

Wal-Mart said on Thursday that it planned to bring back its layaway payment plan for the holidays, an indication that shoppers at the nation’s largest retailer were feeling more and more strapped.

Wal-Mart had scrapped layaway in 2006, saying that so many customers were using credit cards or gift cards that the program was obsolete. Now, though, consumers are demanding it, said Duncan Mac Naughton, chief merchandising officer for Wal-Mart’s United States stores.

“It just tells us the customer’s still struggling, as they tell us about their concerns with energy prices, housing prices, the job security, that 9.2 percent unemployment — it tells us that this is a fragile economy and the customer needs our help,” Mr. Mac Naughton said.

What do you think of the news? Will you use the layaway plan that Wal-Mart will offer? Is layaway something you used in the past and are excited to see emerge again? Share your opinion in the comments.

[Photo by J E Theriot]

Low Income Americans at 50% Greater Risk for Heart Disease

There is some very disconcerting, but certainly interesting, medical news that relates directly to the working poor in the United States:

People with lower socioeconomic status are much more likely to develop heart disease than those who are wealthier or better educated, according to a recent UC Davis study. Published online in BMC Cardiovascular Disorders, the outcomes also show that this risk persists even with long-term progress in addressing traditional risk factors such as smoking, high blood pressure and elevated cholesterol.

"Being poor or having less than a high school education can be regarded as an extra risk when assessing a patient's chances of developing cardiovascular disease," said Peter Franks, a UC Davis professor of family and community medicine and lead author of the study. "People with low socioeconomic status need to have their heart-disease indicators managed more aggressively."

Using data from the Atherosclerosis Risk in Communities Study, authors of the current study included information on more than 12,000 people aged 45 to 64 years living in North Carolina, Mississippi, Minnesota and Maryland. Participants reported their education and income levels in 1987, and then over the course of 10 years were periodically evaluated for heart-disease diagnoses and changes in their risk factors, including cholesterol, blood pressure and smoking.

The results indicated that people with lower socioeconomic status had a 50 percent greater risk of developing heart disease than other study participants.

According to Franks, although it is known that people with low socioeconomic status have a greater risk for developing heart disease and other health problems, the reason is often attributed to reduced health-care access or poor adherence to treatments such as smoking cessation or medication. This study showed for the first time that the increased risk endured despite long-term improvements in other risk factors, indicating that access and adherence could not account for the differences.

"Low socioeconomic status is a heart-disease risk factor on its own and needs to be regarded as such by the medical community," Franks said.

50%?! That is outrageous. And what is interesting is the idea that socioeconomic status should be considered right off the bat when assessing potential heart disease. They may even give higher doses of cholesterol-lowering medicine to those with lower incomes.

This could, potentially, become a sticky issue. Treating people differently based on class has long been considered unfair, but in this instance it is in efforts to keep the poor healthy and safe.

What do you think about this study? We'd love to hear from you below.

[Photo by Tiffany]

How Many TVs Does It Take To Make You Not Poor?

If someone owns a small color television set that is a hand-me-down from her sister, does that mean that this someone is not poor?

What if this same person has two televisions, both color TVs--a big, color set your last roommate sold you for $100 so she wouldn't have to move it and the smaller hand-me-down, does that mean this individual can not be in poverty?

What if they only work she can find is part-time work, and even those few hours require child care costs and no health insurance means constant out-of-pocket costs for her kids' doctor visits and she is just barely scraping by, but she has those two TVs and even a $20 DVD player she picked up at Wal-Mart around Christmas time? Does that constitute too many "luxuries" to be classified as poor?

That's a lot of questions, so let's go to the article that inspired them:

Sixty-three percent (63%) of American Adults think a family that is adequately fed and living in a house or apartment that is in good repair is not in poverty. A new Rasmussen Reports national telephone survey finds that only nine percent (9%) disagree, with 27% more who are not sure.

Similarly, 51% believe a family that has two color TVs, a VCR and a DVD player is not living in poverty. Sixteen percent (16%) say a family like that is poor. Thirty-three percent (33%) are undecided.

Still, 73% of Americans believe poverty in the United States today is at least somewhat severe.  Twenty-three percent (23%) don’t think poverty in America is severe.  These figures include 31% who say it’s Very Severe and three percent (3%) who believe it’s Not At All Severe.

[You can read the article in full here.]

The questions I posed at the beginning of this posted are hypotheticals, but not far at all from the scope of possibility. Are TVs a good measurement of wealth? Is food and a roof all you need to avoid the classification of poverty?

I'll admit I was suprised by the the number of people who think a simple roof and enough food means you can't be considered poor or in poverty. People who cannot afford adequate health care--which we all know without insurance (or even with it) isn't cheap--are always on the brink of losing one or both of those things when they get sick or get hurt. And does some old used color TV really make that big a difference?

Let's hear what you think! We want your opinion on this story, and we want to know if the results surpised *you*. Please take a moment to share your thoughts on these survey results and anything else you might have on your mind.

[Photo by Jason Trim]

What Will Become of Them?

This country is still in the grips of the Great Recession, and despite that we've been battling for years, the end is no where is sight. Sadly, a new study shows that 1 in 5 American children live in poverty. Worse than that, coming of age in the midst of this recession could have long-term, hard-to-rectify impacts:

Across the nation, the research by the Annie E. Casey Foundation found that child poverty increased in 38 states from 2000 to 2009. As a result, 14.7 million children, 20 percent, were poor in 2009. That represents a 2.5 million increase from 2000, when 17 percent of the nation's youth lived in low-income homes.

In the foundation's first examination of the impact of the recession on the nation's children, the researchers concluded that low-income children will likely suffer academically, economically and socially long after their parents have recovered.

"People who grew up in a financially secure situation find it easier to succeed in life, they are more likely to graduate from high school, more likely to graduate from college and these are things that will lead to greater success in life," said Stephen Brown, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas. "What we are looking at is a cohort of kids who as they become adults may be less able to contribute to the growth of the economy. It could go on for multiple generations."

The annual survey monitored by policy makers across the nation concludes that children from low-income families are more likely to be raised in unstable environments and change schools than their wealthier peers. As a result, they are less likely to be gainfully employed as adults.

I hate to bring depressing news on a Friday afternoon, but sometimes that tragedies can't be avoided. Things are bad. Things have been bad. Things will continue to be bad. 

But you can throw families a lifeline in the meantime. Your contribution could be just the thing that keeps them out of poverty. It only takes a little to do a whole, whole lot.

[Photo by Anthony Kelly]