Massachusetts is one of the wealthiest states in the nation. However, we have seen here the same pattern we see nationally: as the economy has grown over the past several decades, incomes have been stagnant or declining for most families, while the highest income residents have received a disproportionate amount of the benefits from our economic growth.1 As a Commonwealth, we are stronger when we do not allow poverty and a lack of opportunity to stand in the way of people, particularly children, reaching their full potential.
Today, more than 1 out of every 9 people in Massachusetts lives below the federal poverty threshold (which is roughly $24,000/year for a family of four).2 In comparison, in the U.S. as a whole, almost 1 in every 7 people lives below the poverty line.
Historically, poverty typically declines within a year or two following the end of a recession, but that hasn't held true for the two recessions since 2000. Poverty has not declined in any meaningful way in recent years and this reflects the ongoing economic difficulties our nation faces. The recent recession was, of course, the most severe since the Depression. In the wake of that severe recession our national government has failed to pursue sustained, aggressive expansionary fiscal policies (such as building and repairing roads, bridges and public transit, schools, and other public infrastructure) that could more rapidly put people back to work.3
The poverty rate is substantially higher than it was in 2006 (a similar point in the ups and downs of the business cycle, which allows for a better apples-to-apples comparison between the two years). The most current data available from the U.S. Census show that, currently, five years after the official end of the “Great Recession,” our statewide poverty rate remains elevated at 11.5 percent in 2015 (not a statistically significant change from the 11.6 percent level in 2014).
Many low-income people are working but simply cannot make ends meet; in 2014, over two-thirds (71.2 percent) of Massachusetts working-age adults living at or near poverty who do not have disabilities worked either full- or part-time (meaning they worked for at least some part of the year).4 For a variety of reasons, some of these part-time workers work very few hours, but about half of them worked at least 20 hours/week for more than half of the year. The share of poor people who are working is even higher among Black (75.8 percent) and Asian (78.3 percent) workers.
And, it’s not only people living in poverty who are struggling. Even though our economy has grown significantly over the past 40 years, wages for average workers have hardly grown at all. There are a number of policies at the state and federal levels—including those that move us towards full employment, directly raise wages, and improve working conditions, that can help working people build better lives for themselves and their children (see the Wages & Income section of this report, for more discussion).
Focusing on child poverty, we see that in Massachusetts, close to 200,000 children—or 1 out of every 7—was living in poverty in 2015. Children exposed to many years of poverty are far more likely to be poor as adults.5 For that reason, the more kids and families who prosper today, the stronger and more prosperous their lives and our economy will be in the future.
The official poverty measure—discussed and shown in the accompanying chart above—however, does not account for important elements of what it really takes for people to make ends meet. Recognizing the weaknesses of this traditional poverty measure, the Census Bureau has begun to calculate a second measure of poverty, the Supplemental Poverty Measure (SPM), which provides a more accurate estimate of families’ needs and finances. This alternate measure, for instance, factors in the higher cost of living in Massachusetts and accounts for public benefits received by low-income families, such as SNAP nutrition benefits (food stamps), the Earned Income Tax Credit (EITC), and Child Tax Credit (CTC). (For more on the difference between the Official and the Supplemental Poverty Measure and specific SPM rates, see Appendix A of this report.)
Examining poverty through the more refined lens of the Supplemental Poverty Measure, we see just how important these benefits and tax credits are in reducing poverty, particularly among children. From 2009 to 2012, these programs and credits together kept an average of 920,000 people in Massachusetts out of poverty each year, 200,000 of whom were children.6 More specifically, 140,000 and 150,000 people were lifted out of poverty because of SNAP benefits and the EITC and CTC, respectively (see chart, below). This trend holds true across the nation: for the overall U.S. population, these programs lifted 46 million people, including 12 million kids, above the SPM poverty line, on average, each year.
Federal and state policies that target poverty, boost wages and labor standards, and expand opportunities for low- and moderate-income families can and do have a large, positive effect. These policies improve the lives of millions of people throughout the Commonwealth and help lay the groundwork for a stronger, more prosperous economic future for all Massachusetts residents.
1Sommeiller, E.; Price, M. The Increasingly Unequal States of America: Income Inequality by State 1917 to 2012. January 26, 2015.
3Economic Policy Institute, Bivens, J. Why Is Recovery Taking So Long—And Who’s To Blame?. August 11, 2016.
4U.S. Census Bureau, American Community Survey and Puerto Rico Community Survey 2014 Subject Definitions. p. 127
5The National Center for Children in Poverty has a detailed report on Child Poverty and Intergenerational Mobility. Additional information on economic mobility is available at the Economic Policy Institute.
6Center for Budget and Policy Priorities analysis of U.S. Census Bureau's March Current Population Survey; Supplemental Poverty Measure public use files; and Urban Institute TRIM baseline microdata files. Impact of the Safety Net: State Fact Sheets