Weathering the Recession (Mostly) on their Own: How the Poor Get By
Tamara*, a long-time nurses’ assistant, hurt herself at work and was told she would be let go if she could not do her job. To prevent a sudden income loss, she applied for Unemployment Insurance (UI), but was denied because she was still technically employed by the nursing home.
A week later she was fired, and, within a few months, reported that her car had been repossessed, and that she had been unable to pay her utility bills.
Despite the struggles of poor Americans like Tamara, the way the media portrays poverty in America is changing. Between headlines like “Bleak Portrait of Poverty is Off the Mark,” in The New York Times, and the recent release of the Census Bureau’s Supplemental Poverty Measure, a long-standing debate as to what constitutes poverty in the U.S. and how many people are truly poor has reemerged.
In particular, some argue that poor families’ standards of living have steadily risen over the last several decades, such that someone who is classified as poor today is likely to own a television or an X-box. Poor families’ consumption levels also tend to outpace their reported income levels, suggesting the poor have more resources available to them than expected, or that they systematically under-report their income.
Yet a study in which I’ve been involved for the past five years suggests that, regardless of where the official poverty mark is set, the lives of those living close to the poverty line are quite difficult, particularly during this economic downturn.
Since 2006, I have been interviewing a group of mostly single, African American mothers in their 30s and 40s living around Detroit, Michigan. Even during the best of economic times, female-headed households, particularly African American ones, tend to be one of the most vulnerable segments of our society.
During the recession, these women’s struggles have only worsened. The tough economy is partially to blame, but they have also had to find ways to weather the recession with minimal and unreliable assistance. Of the ways these women can seek support, none are very satisfying.
The first option is Unemployment Insurance (UI). When women like Tamara have lost their jobs, however, most do not qualify for UI. Some because of low earnings, others because the circumstances around their termination were complicated.
An alternative is the Temporary Assistance to Needy Families program (welfare). Early on, we asked women about experiences with the welfare office, and many chose not to receive these benefits during times of job loss because they did not want to be treated as if they were looking for a handout.
Given the benefits they could expect to receive, some women deemed the time and effort of dealing with a discourteous bureaucracy simply not worth it. Instead, they opted to receive food stamps only, which involves less interaction with the welfare office.
For women who decided to apply for benefits, the path was not much easier. In 2009, Nichelle*, another woman in our study, returned to Michigan when she lost her out-of-state job. Before moving back, she submitted an application online for assistance. Despite her planning, she waited more than a year for any benefits. She was first told her paper work was lost, and subsequently shuttled between various caseworkers.
Even the women who successfully apply for benefits struggle to maintain them. Take the example of Rhonda*, whose caseworker made a mistake when it was time for her food stamp case to be recertified, which happened every six months. During one of the recertification periods, Rhonda’s caseworker inadvertently closed the case and then Rhonda “couldn’t figure out how to get it straightened out.” It took four months for the mistake to be undone.
Regardless of their individual experiences, all of these women struggle with debt. Most choose to keep their gas and electricity connected, often by carrying large balances with the utility company. A few turned to credit cards during periods of unemployment or underemployment. With no other source of income, Nichelle used her credit card, as well as her refund from the Earned Income Tax Credit, to pay for a motel room with her children for nearly a year.
Food stamps, although necessary, will not pay for an overdue electricity bill or a required school uniform. While credit cards and debt accrual strategies may help families maintain a certain level of consumption, high interest rates mean even more debt, and a damaged credit score often follows.
Is this the kind of safety net we want? These women need better options to turn to without roadblocks every step of the way.
Kristin S. Seefeldt is an assistant professor for the School of Public and Environmental Affairs at Indiana University.
This commentary was originally published by Spotlight on Poverty & Opportunity. It is reprinted here with permission.