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Louisiana’s poverty and child poverty rates remain high

Posted on September 18, 2014

More Louisianans than ever before are in the workforce and household incomes are rising slowly after years of stagnation. Yet the number of families struggling to make ends meet remained high last year and broad racial disparities persist, according to new data released Thursday by the U.S. Census Bureau.

Taken together, the latest numbers underscore the continued need for policies and investments that lift families out of poverty and help workers pay their bills, such as expanding the state Earned Income Tax Credit (EITC) and making high-quality child-care assistance available to working parents.

Louisiana continued to have the nation’s third- highest poverty rate in 2013, according to the latest figures from the American Community Survey (ACS). Nearly one in five Louisianans—888,019 people, or 19.8 percent of the population—lived below the federal poverty line last year ($11,670 for a single person and $23,850 for a family of four). That’s a slight improvement over last year’s 19.9 percent poverty rate, but still well above the national rate of 15.8 percent.

Poverty Blog Figure 1

Louisiana also continued to have the nation’s fourth-highest child poverty rate at 27.7 percent, and the third-highest rate of income inequality.

Perhaps most disturbing, the data shows a widening economic gap between white Louisianans and racial minorities. While the poverty rate for white Louisianans dropped from 12.4 percent to 11.9 percent last year, the rate for African-Americans held steady and the poverty rate for Latinos continued its upward trend since the start of the Great Recession. African Americans and Latinos in Louisiana are far more likely to experience poverty than whites, and do not appear to be benefiting as much from the state’s economic recovery.

Poverty Blog Figure 2

Regional disparities also persist. Cities in South Louisiana, where an industrial construction boom is underway, saw a decrease in poverty for children and adults, and Lake Charles and Houma now have poverty rates below the national average. But most of north and central Louisiana, particularly the Delta region, continue to struggle, and poverty in the Shreveport/Bossier area rose last year.

Poverty Blog Figure 3

The data includes some glimmers of good news for Louisiana. Median household income climbed 1.2 percent in 2013 to $44,164 (still well below the $52,250 national median and the inflation-adjusted $47,020 state median in 2008).

These low wages are making it difficult for many working families to pay bills. Nearly 45 percent of Louisianans who rent spend more than 35 percent of their income on housing, and more than one in six households—16.5 percent—struggle with hunger. Additionally, households trying to keep the lights on pay nearly twice as much of their income in taxes as wealthier households.

Making small investments in the lives of struggling individuals and families strengthens the economy for everyone. Fortunately, there are several strategies that policymakers can use to make it easier for families to move from poverty to opportunity:

  • Increasing take-home pay for working families by improving the Earned Income Tax Credit would help hundreds of thousands of households keep more of what they earn, which they would spend at local businesses in their communities. The credit only goes to those who work and has proven to transition families from welfare. It is the nation’s single most effective tool for combating child poverty, helping parents afford things like transportation and child care that make work possible.
  • Making college more affordable by enhancing the Louisiana Go Grant Program would remove barriers to graduation for thousands of students—especially those balancing work, classes and, in some cases, providing for a family. Go Grants are designed to help bridge the gap between federal Pell Grants and some of a student’s cost to attend college. But chronic underfunding and rising tuition has made it harder for students to stay in school. Reversing this trend would impact students’ incomes for the rest of their lives: A Louisiana adult with at least a bachelor’s degree earns $17,000 per year more than a person without one.
  • Providing infants and toddlers with quality early childhood education drastically increases the likelihood that they will graduate from college and get a high-paying job. It also benefits all Louisianans by lowering dropout rates and reducing crime. But Louisiana has cut its investments in early childhood education in recent years, with funding for the Child Care Assistance Program, for example, down 58 percent since 2009—even though the cost of providing full-time child-care in Louisiana is almost as much as tuition at a state university.

David Gray and Monica Bergeron contributed to this report.

 

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