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The Interaction Between the Minimum Wage and the Federal EITC

November 13, 2018

In this fact sheet, authors Andrew Schaefer, Jessica Carson, Marybeth Mattingly, and Andrew Wink examine the interaction between the minimum wage and the federal Earned Income Tax Credit (EITC) to determine whether a minimum wage increase would produce gains in the sum of earnings plus EITC dollars for low-income workers. They report that for workers earning the minimum wage, an increase would result in higher income; none would experience a lower net income due to changes in the federal EITC credit (though this may be offset by loss of other safety net program benefits). For some family types, increased income would come primarily from a higher minimum wage; for others, gains would also come from the higher-value federal EITC triggered by their higher earnings.

Data Snapshot: Poverty Estimates for New Hampshire Counties

October 30, 2017

On October 20, 2017, the U.S. Census Bureau made available estimates of poverty and other indicators for 2016 for small geographic areas. In considering these data from the American Community Survey (ACS), it is important to pay close attention to the margins of error (MOE) before reaching any conclusions—especially when doing comparisons such as comparing poverty rates between counties and years.

Data Snapshot: 2016 Child Poverty Rate Sees Largest Decline Since Before Great Recession

September 14, 2017

Child poverty declined by 1.2 percentage points between 2015 and 2016, according to analyses of the official poverty measure (OPM) in the latest American Community Survey. By 2016, child poverty across the nation was still 1.5 percentage points higher than before the Great Recession. Child poverty remained higher in cities and rural places than in the suburbs. Across the nation there is substantial variability both in the level of poverty and in improvement since the start of the Great Recession—25 states have child poverty rates higher than those in 2007 (see what's happening in your state). Of course, the official poverty measure is only one indicator of economic challenge, and many families living above the poverty line still struggle to make ends meet. 

Employment, Poverty, and Public Assistance in the Rural United States

September 7, 2017

When asked to describe the rural United States, people usually mention serene and sprawling farmlands, rolling hills, open spaces, and safe, idyllic communities in which to raise children. Although there are a lot of acres in rural America, just 6 percent of rural workers depend on agriculture. Twenty-two percent depend on manufacturing, and the rest work in retail, sales, health care, construction, transportation, banking, services, tourist industries, and government—similar to their counterparts in cities and suburbs.

A Demographic and Economic Profile of Duluth, Minnesota, and Superior, Wisconsin

August 1, 2017

In this brief, we present a demographic and economic profile of Duluth, MN, and Superior, WI, with a specific focus on families with children. The cities, situated at the western point of Lake Superior, share a rich economic history as major ports for coal, iron ore, and grain. Each city is also home to numerous colleges and universities, including the University of Minnesota-Duluth and the University of Wisconsin-Superior.

Three in Ten Rural and Urban Medicaid Recipients Affected by Potential Work Requirements

July 6, 2017

About three in ten Medicaid recipients could be affected by a work requirement, a share that is similar in rural and urban places. Among Medicaid recipients potentially affected by a work requirement, the majority worked at least part of the previous year or were motivated to work but could not find a job, a share that is slightly higher in rural places than in urban (83.4 percent versus 78.7 percent).The Affordable Care Act in 2010 gave states the option to expand Medicaid access to adults with incomes up to 138 percent of the federal poverty level. Thus more able-bodied and working adults have become eligible for Medicaid. In addition, several states have petitioned the federal government to have the option to enforce work requirements for those receiving Medicaid in their state. Specific waiver requests vary by state, but could have broad implications for Medicaid recipients across the nation, and typically include a requirement of able-bodied, adult Medicaid recipients to complete a certain number of hours spent working, or in some kind of other approved activity, like job training or looking for work. Children under age 19, pregnant or recently postpartum women, people with disabilities, and sole caretakers of young children are typically excluded from these proposed work requirements. 

Gains in Reducing Child Poverty, but Racial-Ethnic Disparities Persist

April 18, 2017

In 2015, for the second year in a row, child poverty rates declined in the United States. However, familiar patterns in levels and characteristics of child poverty persist: more than one in five children are poor; children of color are at disproportionate risk for poverty; and rates are highest in the South and West and in rural areas and cities (Table 1).This brief uses data from the American Community Survey to investigate patterns of child poverty across race-ethnicities and across regions and place types. We also explore changes in child poverty rates since 2014 and since the end of the Great Recession in 2009. The estimates presented in this brief are based on the official poverty measure (see Box 1 on page 3). Native Americans, Alaskan and Hawaiian natives, and those reporting multiple racial-ethnic backgrounds are excluded from this update because such samples are too small for meaningful analyses.  

State EITC Programs Provide Important Relief to Families in Need

February 28, 2017

The federal Earned Income Tax Credit (EITC) is one of the largest anti-poverty programs in the nation, offering tax credits to low- and moderate-earning families. The amount of EITC benefits varies by earnings and the number of dependent children in a family, with considerably more generous benefits going to families with children. In addition to the federal EITC, as of 2015, twenty-six states and the District of Columbia provided additional EITC dollars. Most state EITCs are generally structured such that they offer credits equal to a proportion of the federal EITC, varying from 3.5 percent in Louisiana to 40 percent in Washington, DC.

A Profile of Youth Poverty and Opportunity in Southwestern Minnesota

February 14, 2017

Like many rural communities across the United States, Southwestern Minnesota (hereafter SW Minnesota; see Box 1) has an aging population, evidenced by a growing share of seniors and a declining share of children and young adults, particularly among the non-Hispanic white population. As the population ages, it is also becoming more diverse, as racial-ethnic minority population is far younger, on average, than the non-Hispanic white population and contains a disproportionate share of children and young adults. Much of the growth in diversity is driven by an expanding population of immigrants. These residents, typically in their young working-age years, often establish themselves in SW Minnesota and go on to have families of their own.

Demographic and Economic Characteristics of Immigrant and Native-Born Populations in Rural and Urban Places

October 6, 2016

In recent years, researchers have documented the changing demographics of rural areas, with a specific focus on changes in racial-ethnic composition and immigration patterns, particularly the increased migration of Hispanics to rural places. In spite of this attention to the changing demographics of rural America, surprisingly little is known about how rural immigrants compare to both their urban peers and native-born counterparts. In this brief we use American Community Survey (ACS) five-year estimates to document demographic and economic characteristics of the immigrant and native-born populations in the United States by metropolitan status. We focus on a wide range of demographic and economic indicators that relate to immigrants' ability to assimilate and thrive in rural America.

Overall Declines in Child Poverty Mask Relatively Stable Rates Across States

September 15, 2016

Earlier this week, the U.S. Census Bureau published its official poverty estimates noting a decline in poverty across the population. In this brief, we use additional Census data released today from the American Community Survey (ACS), the only regular source for estimating yearly child poverty rates at, and below, the state level. We examine child poverty rates across the United States by place type, region, and state (see Box 1). Child poverty decreased across the United States from 21.7 percent in 2014 to 20.7 percent in 2015 (see Table 1). Nationwide child poverty rates are still higher, however, than they were in 2009, at the end of the Great Recession. Child poverty has declined to 2009 levels in rural areas only, and remains above pre-recession levels in all place types (analyses not shown). Child poverty declined across all place types over the past year, as shown in Table 1. It remains lowest in suburbs and highest in cities, though rural areas are not far behind. Regionally, child poverty rates were highest in the South and lowest in the Northeast; yet, Northeastern cities have higher child poverty than cities in any other region. Child poverty fell in thirteen states and only rose in Mississippi—the only state with a child poverty rate over 30 percent. New Hampshire child poverty remains among the lowest nationwide at 10.7 percent, a significant decline from last year. See Figure 1.While these child poverty declines are promising and corroborated by results from the official poverty statistics published earlier this week, it is important to keep in mind that most states experienced no change between 2014 and 2015. Lower child poverty rates appear to be driven by higher median incomes over the past year.

Carsey Perspective: Is the Poverty Rate 1.1 Percent?

May 26, 2016

Poverty in the United States is a multifaceted problem with causes as diverse as the 46.7 million people who live in it and solvable only through a suite of solutions. Those 46.7 million people constituted 14.8 percent of the population of the United States in 2014, which both shocks the conscience for such a wealthy country and suggests a challenge of intimidating magnitude. On the other hand, while the number of people is daunting, the dollar amount involved is less so.We estimate that those living in poverty in 2014 in the United States were $192 billion short of the poverty line. In other words, the sum total it would take to raise all poor families to the poverty line is $192 billion. That isn't a small sum, of course. But it is only 1.1 percent of our nation's $17.3 trillion of national income in 2014. Thus, while 14.8 percent of the population lives in poverty, to raise them out of poverty would require raising their income by only 1.1 percent of total national income.That's not to say that there's a magic wand to make this happen. Proposals to address poverty have been put forward from many quarters. They all deserve consideration on their merits, but resignation to the inevitability of poverty because of the magnitude of the problem is not a reason for inaction. After all, most other economically advanced countries have lower rates of poverty than the United States. So poverty in otherwise well-off nations is not a foregone conclusion.One additional note: of the $192 billion in income increase that's needed, $160 billion is needed in metropolitan areas, $30 billion in rural areas.