HOW THE GREAT RECESSION EFFECTED THE VERY POOR IN 2010
Although the Great Recession officially “ended” in 2009, according to economists, the unemployment rate in 2010 was at 15% (compared to 4.6% in 2007 before the recession). Margie’s struggle to find a job in this environment, especially with very little education, would be quite desperate. As people with more education and experience lost their jobs and turned to less competitive work to make ends meet, people like Margie were all the more likely to be pushed out of the types of jobs upon which they’d been dependent their entire careers. In fact, The Stanford study cited below shows that the poverty rate for those without a high school diploma (like Margie, who dropped out when she had Joyce) increased by 5.5%, to 33.6%, while those holding college diplomas only experiences a 1.1% increase raising it to 4.3%. I can attest to this from experience: I managed a women’s clothing store in Boston in 2010, and everyone on the seven person staff had college degrees, six had master’s degrees—all just to work in an hourly retail job. Whenever we put out a hiring sign, we’d get 20 or more resumes in a single day.
What do we mean by “poverty rate” in this context?
This is the number of people out of the total population who live below the poverty threshold, a line determined yearly and based on size of household as well as income. For Margie, a single woman with one dependent, it would mean making less than $15,000 per year (according to the US Census Bureau Poverty Threshold chart for 2010). Technically, if Margie managed to work at the Dollar Store for $9.70 per hour, 40 hours a week, every week of the year, she would have been able to stay just above this national measure by about $5,000 before taxes. However, it should be noted that the cost of living for Boston is significantly higher than the national average (even 25% higher than Hilton Head, which is above average itself, and 39% above Columbus Ohio which is close to average), so that $5,000 would not get her as far as it would in most other cities (the average monthly cost to rent apartment in Boston broke above $2000 last year, according to Boston Business Journal). Another factor to take into consideration is that Margie’s daughter Joyce has special needs and is no longer school age, which means daytime care is a particular challenge and expense for Margie.
In 2010 poverty rate according to the National Census Bureau was around 15% (16% according to the Supplemental Poverty Measure, which attempts to adjust for payroll and income taxes, out-of-pocket medical expenses etc.) That means between roughly 46 and 49 million Americans were living below the poverty line in 2010.
What does this all mean for Margie?
Margie is a representative member of what is popularly called “the working poor.” Indeed, she is a textbook example of a person who lives on the cusp of poverty, not because of a lack of work, but because her wages do not keep up with cost of living. The Stanford study notes that while the Great Recession did not see a statistically notable rise in nonworking poverty, it demonstrated a societal acceleration toward poverty in families with at least one working member of the household.
Margie’s lack of education combined with the responsibility of caring for a special needs family member make finding a job hard for her—especially in the particularly competitive job market of 2010—which is why she’s so afraid to lose her job at the Dollar Store and so willing to take a pay cut.
The high cost of housing in Boston (even during a recession) only increases the likelihood that once unemployed, she won’t be able to cover her rent. Once homeless, her ability to rent a new place is likely to become all the more challenging as she will find it harder to obtain and hold down a job, and have trouble saving up for a security deposit as well as the rent itself.
Sources:
Stanford University Center on Poverty and Inequality and The Russel Sage Foundation’s 2012 study by Sheldon Danziger of University of Michigan, Koji Chaved of Stanford University & Erin Cumberworth of Stanford University https://web.stanford.edu/group/recessiontrends/cgi-bin/web/sites/all/themes/barron/pdf/Poverty_fact_sheet.pdf (Accessed 12/20/2017)
United States Census Bureau: American Community Survey Brief for 2010-2010 by Alemayehu Bishaw https://www.census.gov/prod/2012pubs/acsbr11-01.pdf (Accessed 12/20/2017)
United States Census Bureau: Poverty Threshold Table 2017
https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-poverty-thresholds.html
Although the Great Recession officially “ended” in 2009, according to economists, the unemployment rate in 2010 was at 15% (compared to 4.6% in 2007 before the recession). Margie’s struggle to find a job in this environment, especially with very little education, would be quite desperate. As people with more education and experience lost their jobs and turned to less competitive work to make ends meet, people like Margie were all the more likely to be pushed out of the types of jobs upon which they’d been dependent their entire careers. In fact, The Stanford study cited below shows that the poverty rate for those without a high school diploma (like Margie, who dropped out when she had Joyce) increased by 5.5%, to 33.6%, while those holding college diplomas only experiences a 1.1% increase raising it to 4.3%. I can attest to this from experience: I managed a women’s clothing store in Boston in 2010, and everyone on the seven person staff had college degrees, six had master’s degrees—all just to work in an hourly retail job. Whenever we put out a hiring sign, we’d get 20 or more resumes in a single day.
What do we mean by “poverty rate” in this context?
This is the number of people out of the total population who live below the poverty threshold, a line determined yearly and based on size of household as well as income. For Margie, a single woman with one dependent, it would mean making less than $15,000 per year (according to the US Census Bureau Poverty Threshold chart for 2010). Technically, if Margie managed to work at the Dollar Store for $9.70 per hour, 40 hours a week, every week of the year, she would have been able to stay just above this national measure by about $5,000 before taxes. However, it should be noted that the cost of living for Boston is significantly higher than the national average (even 25% higher than Hilton Head, which is above average itself, and 39% above Columbus Ohio which is close to average), so that $5,000 would not get her as far as it would in most other cities (the average monthly cost to rent apartment in Boston broke above $2000 last year, according to Boston Business Journal). Another factor to take into consideration is that Margie’s daughter Joyce has special needs and is no longer school age, which means daytime care is a particular challenge and expense for Margie.
In 2010 poverty rate according to the National Census Bureau was around 15% (16% according to the Supplemental Poverty Measure, which attempts to adjust for payroll and income taxes, out-of-pocket medical expenses etc.) That means between roughly 46 and 49 million Americans were living below the poverty line in 2010.
What does this all mean for Margie?
Margie is a representative member of what is popularly called “the working poor.” Indeed, she is a textbook example of a person who lives on the cusp of poverty, not because of a lack of work, but because her wages do not keep up with cost of living. The Stanford study notes that while the Great Recession did not see a statistically notable rise in nonworking poverty, it demonstrated a societal acceleration toward poverty in families with at least one working member of the household.
Margie’s lack of education combined with the responsibility of caring for a special needs family member make finding a job hard for her—especially in the particularly competitive job market of 2010—which is why she’s so afraid to lose her job at the Dollar Store and so willing to take a pay cut.
The high cost of housing in Boston (even during a recession) only increases the likelihood that once unemployed, she won’t be able to cover her rent. Once homeless, her ability to rent a new place is likely to become all the more challenging as she will find it harder to obtain and hold down a job, and have trouble saving up for a security deposit as well as the rent itself.
Sources:
Stanford University Center on Poverty and Inequality and The Russel Sage Foundation’s 2012 study by Sheldon Danziger of University of Michigan, Koji Chaved of Stanford University & Erin Cumberworth of Stanford University https://web.stanford.edu/group/recessiontrends/cgi-bin/web/sites/all/themes/barron/pdf/Poverty_fact_sheet.pdf (Accessed 12/20/2017)
United States Census Bureau: American Community Survey Brief for 2010-2010 by Alemayehu Bishaw https://www.census.gov/prod/2012pubs/acsbr11-01.pdf (Accessed 12/20/2017)
United States Census Bureau: Poverty Threshold Table 2017
https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-poverty-thresholds.html