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Report shows nearly a third of Illinois residents poor or low-income

December 9, 2011

Online Staff Report

CHICAGO — Poverty, worse in Illinois today than during the recession, grew from pre- to post-recession by 16 percent, according to the 2011 Report on Illinois Poverty released Dec. 7. In fact, poverty is at its highest point in decades. Visit www.heartlandalliance.org/research to download the report and access county-level data.

Post-recession has seen no gains for struggling families. In the report, the Social IMPACT Research Center at Heartland Alliance documents hardship across a variety of indicators, including income, employment, housing and assets. Together, these indicators document the conditions faced by struggling families across Illinois.

Nearly one in three Illinoisans are now considered poor or low-income. Continuing the disturbing trend of the past decade, median household income has steadily declined in Illinois; it is currently $52,972, down 3.4 percent from the recession and 6.9 percent from before the recession.

For families at the bottom of the income spectrum, having limited resources results in families having to balance their budgets through short-term trade-offs with long-term consequences, such as deferring needed medical care or dipping into retirement savings.

Byron Dickens, a Chicago resident, illustrates the pressure of trying to make ends meet on a low income: “Working 40 hours a week in a minimum-wage job I don’t earn enough to cover my housing, food, transportation and all my medical expenses. And I don’t even have a family.”

Employment trends are particularly bleak. Unemployment in Illinois skyrocketed 82.3 percent during the recession, and since then, unemployment has held steady around 10 percent. The average length of time Illinois workers are unemployed has nearly doubled since 2007, with unemployed workers spending an average of nearly 37 weeks unemployed in 2010.

It is going to be a long uphill climb to renewed economic vitality: Illinois must add 528,844 new jobs to fill its job gap (number of jobs lost during the recession and the number of jobs needed for new entrants to the workforce).

These conditions of declining incomes and rising poverty and unemployment are ripe for growth in homelessness. Housing costs have long eaten up large portions of family budgets, and now, families have even less income to devote to housing.

The number of people, 241,093, living doubled up increased by 15 percent from 2008 to 2009, and one out of every four households in Illinois is now considered to be severely rent-burdened with housing costs comprising more than half their income.

Amy Rynell, director of the Social IMPACT Research Center, said, “These living arrangements are unsustainable in the long run and are the last step before homelessness for many.”

These conditions have also led to a considerable erosion of assets and mounting debts, increasing the economic vulnerability of families across Illinois for many years to come.

In 2011, the average debt of Illinoisans increased 37 percent over 2003 to $13,416, and the average amount of student loan debt among graduating seniors from four-year Illinois colleges is $23,885.

Low credit scores are also on the rise, which can greatly limit prime borrowing opportunities for car loans, credit cards and home loans: since 2007, the rate of Illinois consumers with credit scores below 620 has increased 22 percent.

Without government assistance, nearly twice as many people nationally would have experienced poverty. Unfortunately, not all of Illinois’ safety net assistance programs responded quickly and effectively to growing hardship. And even the most responsive programs have not grown commensurate with need.

The Supplemental Nutrition Assistance Program (food stamps) continues to respond to growing need: the number of households receiving assistance has steadily grown as incomes have declined, growing 64 percent from before the recession to the post-recession period, with 874,109 households now receiving assistance.

The Earned Income Tax Credit, a refundable federal income tax credit, has steadily reached more households in Illinois, growing almost 10 percent from pre- to post-recession. Over 1 million Illinois tax filers now receive the EITC.

The response of Temporary Assistance for Needy Families (TANF), which provides cash assistance to very low-income families with children, was undetectable during the recession. There was essentially no increase in the caseload from the year before the recession to the recession period. Since the recession ended, however, the caseload has grown 64 percent to 46,694 families.

The Unemployment Insurance program was, by far, the most responsive during the recession, growing more than 75 percent. Since then, however, while unemployment has stayed at the same level, the number of recipients has plummeted almost 30 percent.

Sid Mohn, president of Heartland Alliance for Human Needs & Human Rights, said: “Personal, social and economic costs of low family incomes are far too great, compromising Illinois’ economic strength, human capital, and future well-being. State policies and investments need to support an economy that works for everyone, promote work that pays a living wage, ensure that all have access to a quality education, and that families are able to access adequate income supports to help make ends meet.”

Download the report and obtain data for each of Illinois’ 102 counties at www.heartlandalliance.org/research.

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