Illinois poverty reaches highest point in decades, study reveals
January 6, 2012
A significant number of the region’s residents have low incomes or are living in poverty (Click image to enlarge).

By Jennifer Clary

Poverty in Illinois is higher now than it has been in decades. It grew 16% during the period from just before the recession to after the recession, according to the recent Report on Illinois Poverty released by the Social Impact Research Center at the South Loop-based Heartland Alliance. Post-recession has seen no gains for struggling families.

In the report, the center 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 now are considered poor or low income.

Continuing the trend of the past decade, median household income has declined steadily in Illinois; it currently is $52,972, down 3.4% from the recession and 6.9% from before the recession.

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

Byron Dickens, a local resident, illustrated 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,” Dickens said. “And I don’t even have a family.” Unemployment in Illinois skyrocketed 82.3% during the recession, and since then unemployment has held steady at around ten percent. The average length of time Illinois workers are unemployed has nearly doubled since 2007, with people spending an average of nearly 37 weeks unemployed in 2010.

Illinois would have to add 528,844 new jobs to return to the number of jobs lost during the recession and add 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 (families living with friends, relatives, or other families) increased by 15% from 2008 to 2009, and one out of every four households in Illinois now is considered to be severely rent-burdened, with housing costs taking more than half their income.

“These living arrangements are unsustainable in the long run and are the last step before homelessness for many,” according to Amy Rynell, director of the Social Impact Research Center. These conditions also have eroded assets and added debts, increasing economic vulnerability of families across Illinois. In 2011 the average debt of Illinoisans increased 37% 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 also are on the rise, which can limit prime borrowing opportunities greatly for car loans, credit cards, and housing loans. Since 2007 the rate of Illinois consumers with credit scores below 620 has increased 22%. Without government assistance, nearly twice as many people nationally would have experienced poverty.

The Supplemental Nutrition Assistance Program (food stamps) continues to respond to growing need: the number of households receiving assistance has grown steadily as incomes have declined, increasing 64% 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 reached more households in Illinois, growing almost ten percent from pre- to post-recession. More than one million Illinois tax filers now receive the EITC.

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

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

The Social Impact Research Center is the research arm of Heartland Alliance. Visit www.heartlandalliance.org/research to download the report.

Heartland Alliance is located at 208 S. LaSalle St., Suite 1818. For more information, call (312) 660-1300.