CLASP infographic on Census Data.

Washington, D.C.—Annual data out today from the U.S. Census Bureau on poverty and income in 2016—along with a separate report on health care coverage—point to meaningful gains in Americans’ economic security. The share of people in poverty decreased to 12.7 percent in 2016 from 13.5 percent in 2015, meaning that 2.5 million fewer people—and 1.2 million fewer children—lived in poverty. The number of people without health insurance dropped to another historic low of 8.8 percent (28.1 million people) in 2016, down by 914,000 people from 2015.

But these gains could be reversed in 2017 and beyond because of significant policy and budget upheavals that threaten to plunge people back into—or deeper into—poverty. For example, the Trump Administration’s unconscionable repeal of the Deferred Action for Childhood Arrivals (DACA) program would end employment and educational opportunities for hundreds of thousands of young people and their families. Threatened cuts to core programs such as the Child Tax Credit (CTC), the Earned Income Tax Credit (EITC), and the Supplemental Nutrition Assistance Program (SNAP) that stabilize families at work and help them make ends meet could greatly reduce the resources available to low-income families in the coming years. And proposed Federal budget cuts to programs that help low-wage workers get more education and move up on the job, support labor standards enforcement, and give young people a better future all increase the risk to workers and families.

The new data demonstrate the effectiveness of major federal programs at just the time that President Trump and Congress are placing them at risk. While the direct effects of core programs such as the CTC, EITC, and SNAP on income are not included in the basic poverty measure, a supplemental calculation by the Census Bureau finds that about 8.2 million people, including 4.4 million children were lifted out of poverty by the CTC and EITC and 3.6 million people, including 1.5 million children were lifted from poverty by SNAP. And the report finds continued improvements in health insurance coverage, particularly in states that took advantage of the Affordable Care Act’s Medicaid expansion option. Yet both the president and Congress have targeted these programs for deep cuts as part of the budget process. While Congress has so far kept the Affordable Care Act and Medicaid expansion intact, the administration’s threats to destabilize insurance markets could still undermine historic coverage levels.

“We are deeply concerned that the gains in this report will be sharply reversed in upcoming years, resulting in a rising poverty rate and reduced economic security for all Americans in general, and children and young adults in particular. Threats to stable employment for immigrants and their families and for youth and young adults of color could already be leading to child poverty increases. We will see these trends rise if Congress enacts President Trump’s deeply misguided budget proposals to cut public programs that lead to economic gains,” said Olivia Golden, the executive director of the Center for Law and Social Policy (CLASP).

While the poverty data show important progress in 2016, they also demonstrate how far the nation still has to go, particularly for the most vulnerable Americans. Children—especially young children—and families of color are more likely to struggle with making ends meet. Even though both research evidence and common sense suggest that children are the most vulnerable to lifelong consequences from growing up in poverty, they remain the poorest age group among Americans. Despite improvements from 2015, the 2016 poverty rate is 19.7 percent for young children (under age 6) and 18 percent for all children under 18—both above the rate of 12.7 percent for all Americans. Young adults ages 18 to 24   are also more likely to be poor (16.1 percent), with CLASP analysis of the data finding that young adults who are parents have an even higher poverty rate of 24.9 percent. Indeed, poverty is sharply elevated even when including adult parents in their mid-to-late 20’s, with the poverty rate for all adult parents under age 30 at 22 percent. Starting a family and achieving economic stability at work remain extremely difficult for these younger workers, many of whom may have started their careers during the Great Recession and who still struggle to balance low-wage jobs, difficult working conditions, and inadequate child care.

The 2016 data also highlight the role of parents’ low-wage work in child poverty—suggesting that threatened reversals in federal commitment to enforcing labor standards and improving earnings for low-wage workers could have damaging consequences. As in previous years, more than two-thirds of poor children—69.5 percent in 2016—live with at least one working parent. These working families live in poverty because of low wages, intermittent work, and inadequate hours. For example, original CLASP analysis of the new Census data shows that one in eight (12.1 percent) poor parents is working part-time involuntarily—they would prefer to be working full-time but can’t get enough hours.

And while almost all demographic groups showed reduced poverty rates in 2016, the disparities between communities of color and the rest of the American population remain stark, with children under 18 and young adults (18 to 24) of color far more likely to be poor than White children and young adults. Despite high levels of work in their households, about 3 in 10 of Black children and more than 25 percent of Hispanic children live in poverty—even though nearly two-thirds of poor Black children and three-quarters of poor Hispanic children living with a working adult family member. The poverty rate for White non-Hispanic children in 2016 is 10.8 percent.  

Improvements in families’ and children’s economic security in 2016 show that strong public policies and an improving labor market can make a real difference. But while crucially important, these improvements are fragile, particularly in today’s policy and budget climate. To sustain these gains, Congress and the federal government must build on success, not tear it down. Congress should reconsider proposed cuts in the federal budget to programs like SNAP, EITC, and others that support hard-working families; expand, not cut, support for children, young people, students, and low-wage workers moving up on the job; strengthen not destabilize the ACA and Medicaid; and fight back against administration actions that target the economic security and safety of low-wage workers, immigrant families, and families of color, such as the repeal of DACA.

When the country strengthens the crucial supports that help families meet their basic needs, including work supports, health insurance, child care, education, workforce development, and paid leave and fair work schedules, we ensure a better future for all Americans.