Poverty in Arizona

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ASU economist Tom Rex discusses his new report that shows Arizona poverty rates are higher than the national rates for all demographic groups except seniors.

Richard Ruelas: Poverty rates for the elderly were higher than any other group when records were compiled 60 years ago. Now the elderly have the lowest poverty rates and they are declining. Here to talk about that is Arizona State University economist Tom Rex. Tom, thanks for joining us.

Tom Rex: Thank you.

Richard Ruelas: Sounds almost if you look at it that way sounds like good news. Poverty rates for the elderly are dropping. Maybe the bad news later. What leads to the elderly poverty rate dropping since the '60s?

Tom Rex: Well, back in the '60s, the country decided to fight a war on poverty. Really. At least in terms of the elderly it won quite resoundingly. The rate was more than 30% back then. It's less than 10% now for senior citizens. That's remarkable improvement.

Richard Ruelas: Some of that must come from the entitlement programs --

Tom Rex: Medicare, Medicaid, Social Security were the ones that really benefited the senior citizens. There were a number of programs passed that benefited other age groups as well. But just Medicare alone. Social Security indexing it to inflation. Those sorts of things have had a huge difference for the elderly.

Richard Ruelas: And by reading your report, which is from Arizona indicators with the Morrison institute, looks almost like a teeter totter. As elderly rates have dropped we have seen a rise in the rates for children.

Tom Rex: Initially when the war was being fought on poverty the rates dropped for children, for all people really. They bottomed out way back 40 years ago and they have crept up since then. Yeah, when you look at the difference now, here in Arizona, the current poverty rate for senior citizens is less than 8%. It's 28% for children under the age of five. So our youngest children, more than one in four, is living in poverty.

Richard Ruelas: When we talk about what poverty is, what's the dollar figure on the annual income?

Tom Rex: It varies with the number of people in the family, but it's about $19,000 for a family of three. Personally, I can't conceive of a family of three living on 19,000, so the point being that you got an awful lot of people making more than 19,000 but not a lot more, and they are not in poverty. So you got more than one in four that's truly in poverty, then how many more that are close?

Richard Ruelas: Do we know how many impoverished families have children or are we talking about single people or married couples with no children that are impoverished?

Tom Rex: 28% figure is simply children under the age of five. It's not looking at their parents, but at them as individuals.

Richard Ruelas: And looking at the report in front of me, it looks like the poverty age in Arizona starts to drop after age 24, but from under five to 24, is there a pattern you're seeing? Impoverished children are growing up to be impoverished adults?

Tom Rex: A lot of it is young, young adults don't make much money yet but they start having children. So therefore having children just makes it worse. This have more expenses. Then as they get more experience their wages go up and they can pull themselves out of poverty. So it's very much an age related circumstance, yes.

Richard Ruelas: We show -- your report shows that Arizona has higher poverty rates than the rest of the nation and your report says Arizona's economy is more cyclical than the U.S. average. Explain how that affects us more.

Tom Rex: We are consistently higher on poverty rate than the nation. But we're more cyclical economy. We have really suffered a lot more during this last recession. So our poverty rate jumped up more than the national average did. So right now we're more than 2 percentage points higher than the national average on the poverty rate. More typical figure is one to two.

Richard Ruelas: It looks like even during what were the good times for Arizona, we didn't really gain a lot on this problem.

Tom Rex: No. We always have higher poverty than the nation. Like the nation, there's been no progress over 30 years on reducing poverty rates except among senior citizens.

Richard Ruelas: Your report breaks it down by county, Apache overwhelmingly the highest. It looked like Maricopa County, Phoenix, Pinal County sort of the adjacent County, Yavapai, Prescott seem to be similar to the national average. Is there a reason why Maricopa might escape harsher numbers?

Tom Rex: We have a broader economy here. Wages are somewhat higher here than they are elsewhere in the state. We have more people working here than elsewhere in the state. We don't have the same percentage of senior citizens, for example. That helps boost incomes. Yeah, it's pretty much true nationwide that the larger the metro area, everything else equal, the better they are going to do in measures like income and poverty.

Richard Ruelas: Our seniors according to the 2010 numbers in your report seniors 65 and over have lower incidents of poverty than the nation. Do we just get the richer seniors able to move to the sunny state?

Tom Rex: We have an awful lot of seniors that move here when they retire, and they tend on average to be fairly affluent, the types that move to Sun City, Grand, places like that, so they bump a lot of the statistics. If you look at the overall numbers it doesn't look like we're doing so bad for instance on work force issues, then you realize everything looks better because of the seniors, but they are not working. You just look at the working age population and the problem is worse than what it initially appears.

Richard Ruelas: Getting back to the children, the problem is so dramatically high I thought all politicians loved children and babies. What is it that keeps us -- you're not a politician, but what keeps us from addressing this?

Tom Rex: I have been mystified for a long time why our country has not been more concerned about the economic well-being particularly of children, but of adults in general. We fought the war once back in the '60s and we won for seniors, and we made real improvement for everyone else. The issue just got dropped. I don't understand why. I would think that everyone would perceive that one in four children living in poverty is just too much.

Richard Ruelas: We'll keep looking for the answers and trying to find solutions. Tom Rex, thanks for joining us.

Tom Rex: Thank you.

Tom Rex:ASU Economist

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