FIGURE 1-4 Effects of the proposed measure on the percentage of poor people in working families and families receiving cash welfare.

of poor people who are in families receiving cash welfare, AFDC and Supplemental Security Income (SSI), and to increase the percentage who are in working families; Figure 1-4.22 Largely because of the additions to income of the value of in-kind benefits, people in families receiving cash welfare account for just 30 percent of poor people under the proposed measure, compared with 40 percent under the current measure. In contrast, largely because of deductions from income of taxes, work expenses, and out-of-pocket medical care expenses, people in families with one or more earners account for 59 percent of poor people under the proposed measure, compared with 51 percent under the current measure. People in families receiving cash welfare still have a much higher poverty rate than the people in working families, but the difference is not as large under the proposed measure: the poverty rate for people in welfare families is 44 percent under the proposed measure and 59 percent under the current measure; the rate for people in working families is 11 percent under the proposed measure and 9 percent under the current measure.

Another effect of the proposed measure is to increase the poverty rate for people in families lacking health insurance coverage. They make up 36 percent of the poor under the proposed measure, compared with 30 percent under the current measure.

By age, children make up about the same percentage of poor people (39-40%) and have about the same, higher-than-average poverty rate (22%) under both the current and the proposed measures—because poor children live both in families receiving cash welfare and in families with one or more earners.

22  

Families receiving cash welfare and those with one or more earners overlap to some extent; people not in either group include some retirees, students, and others.



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