Poverty Brief: Unemployment and Situational Poverty

posted on Wed, Apr 4 2012 1:55 pm by Liz Peterson

Last month, Greater Twin Cities United Way published the Faces of Poverty 2012 report—an in-depth look at poverty both locally and nationally. We’re now releasing the first of four briefs based on the report. This first brief focuses on unemployment and situational poverty. Not surprisingly, unemployment is one of the primary triggers into poverty, and as everyone knows, the Great Recession led to a lot of unemployment.

But not all people are unemployed equally. In Minnesota (as in much of the U.S.), people of color are much more likely to be unemployed than are white people. In fact, a recent study by the Economic Policy Institute (EPI) found that in the third quarter of 2011, Minnesota had the highest unemployment rate for African Americans in the country, at a devastating 27.4%. That’s more than four times the white unemployment rate of 5.9% in the third quarter, and represents the largest black/white unemployment gap in the country. (Note: Only states with sufficient data by race were included in this comparison. Minnesota did not have sufficient data for a Latino analysis that was also included.)

A particularly nasty aspect of the Great Recession is the long-term unemployment that has resulted. Between 2007 and 2011, the number of Minnesotans unemployed for more than six months increased by 335%. Yes, that’s right: It more than tripled. In February of 2012, 40% of unemployed persons in the United States had been unemployed for more than six months. Long-term unemployment goes hand-in-hand with a host of related difficulties. According to a recent Kaiser Family Foundation report, significant numbers of long-term unemployed have:

  • Taken money out of savings or retirement funds to help pay bills (59%)
  • Been contacted by a collection agency (53%)
  • Sold personal belongings (51%)
  • Borrowed money from relatives or friends (51%)
  • Had trouble paying for housing (47%) or food (44%)
  • Changed their living situation, such as moving in with friends or relatives, to save money (33%)
  • Had their utilities turned off (23%)
  • Lost their home due to eviction or foreclosure (9%)

These are grim statistics, and it’s going to take years before long-term unemployment numbers return to their prerecession level. What can be done? Do you have a suggestion? A comment? A complaint? Join the conversation: Starting April 16, Greater Twin Cities United Way is hosting an online discussion at United Front around Unemployment and Situational Poverty. You have to register to view and participate in the discussion (we will not spam you or ask for money!).

Find out what others think, and what all of us can do, individually and collectively, to build pathways out of poverty.

blog comments powered by Disqus