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 Research & AnalysisState of Working Maryland 2012Poverty     July 28, 2014  
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POVERTY

One in 10 Marylanders in Poverty


The federal poverty threshold for a family of four in 2011 was $23,021. This is the income level above which such a family should theoretically be able to meet all of its basic needs. It is estimated that more than one in 10 Marylanders lived below that income level (the poverty rate). While this was significantly lower than the national poverty rate of 15 percent, it still added up to an estimated 546,000 Marylanders, greater than the population of Maryland’s eleven smallest counties combined.16 17

The National Academy of Science’s Supplemental Poverty Measure offers an alternative poverty threshold that takes into account more factors than the federal poverty threshold, including geographic price differences, work and childcare expenses, and the effects of tax and transfer policies. This measure estimated 784,000 Marylanders facing poverty.18 When those individuals living below 150 percent of the poverty level are included, the number rises to 932,155 Marylanders. When including those living below 200 percent of the poverty level, it totals 1,239,847 Marylanders.19

Poverty Demographics

The poverty rate itself does not fully convey the situation of people who are living in poverty. The real story of poverty in Maryland can be found in the patterns and the people behind the numbers. Income varies greatly along racial lines. According to the 2011 American Community Survey, 6.4 percent of non-Hispanic whites in Maryland lived below the poverty level. Both African Americans and Hispanics were more than twice as likely to be living in poverty, at 15.2 percent and 15.3 percent, respectively.20

Education attainment is also a significant predictor of economic status. In families where the householder age 25 or older lacks a high school diploma, an average of 19.5 percent were below the poverty level in 2011. In contrast, only 10.6 percent of those with a high school diploma, 7.2 percent of those with some college, and just 2.3 percent of those with a college degree were below the poverty line.21


Poverty levels are also related to family living arrangements. Single-parent households headed by a female had a poverty rate of 20 percent, much higher than in married-couple family households (2.6 percent).22

Location and Poverty

Among all jurisdictions, Baltimore City had Maryland’s highest average poverty rate, where a quarter of the population was living below the poverty level. It continued to lead the rest of the state by a wide margin. After Baltimore City, the next nine highest poverty rates belonged to rural counties. Poverty rates in Allegany, Dorchester, Garrett, Kent, Somerset, and Wicomico counties all exceeded 14 percent.23 National studies show poverty in suburban areas exceeding poverty in urban areas, which can be particularly problematic as most social service infrastructures have been founded on the notion that poverty is a predominantly inner-city problem.24



Programs Are Providing Relief and Prevention

As policymakers debate how to reduce the federal deficit and close state budget gaps, it is essential that they keep in mind how many families are protected from poverty by government initiatives. Public assistance programs such as Supplemental Security Income, the state and federal Earned Income Tax Credits, cash public assistance income, and food stamp benefits have ameliorated the effects of poverty for thousands of low-income Marylanders. The effects of such programs are not reflected in the American Community Survey’s poverty data.

Also worth noting are the effects of the American Recovery and Reinvestment Act (ARRA) of 2009. ARRA featured three major pieces of income support — unemployment insurance, food stamps, and tax cuts — all of which provided financial relief to lower-income Americans. According to the Congressional Budget Office, the 3.4 million jobs created and saved by ARRA in 2010 staved off even more severe poverty figures.25 However, ARRA will expire at the end of calendar year 2012, though some spending may continue into 2013.

While the Supplemental Poverty Measure results report a bleaker picture in terms of poverty’s scope, they also demonstrate how public programs like refundable tax credits, the Supplemental Nutrition Assistance Program (SNAP), and housing subsidies protect people, particularly children and the elderly, and lift them out of poverty. None of these policies are directly accounted for under the official poverty measure. With income from the refundable tax credits, the percentage of U.S. children considered poor under the SPM was 18.1 percent. Without the refundable tax credits, it would have been 24.4 percent, or more than six percentage points higher. SNAP benefits (formerly food stamps) cut the percentage of children in poverty by three percentage points, nearly as much as the refundable tax credits, and reduced the percentage of elderly in poverty from 15.8 percent to 15.1 percent. Refundable tax credits such as the Earned Income Tax Credit (EITC) and SNAP were both expanded as part of the American Recovery and Reinvestment Act. The EITC expansions will expire at the end of 2012 and the SNAP expansion will end in November 2013, unless Congress extends them.26

The SPM also accounts for the impact of medical expenses, childcare costs, and other necessary expenses on poverty. Out-of-pocket medical expenses are a major contributor to poverty among both the elderly and children. Nationally, the poverty rate increased from 8 to 15.1 percent for the elderly and from 15.4 to 18.1 percent for children when medical expenses were factored in.27

Parental work expenses, including childcare costs, raised the child poverty rate by two percentage points. Without these work expenses, 15.9 percent of children in the United States would have been poor rather than 18.1 percent. These findings demonstrate the critical importance of programs like Medicaid, SCHIP, and childcare subsidies that lower these out-of-pocket expenses in reducing poverty.28



 
 













 
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