New Report: Illinois' Poorest Pre-Recession Hit First, Hardest by Economic Downturn; On Slowest Path to Recovery

State budget crisis threatens to erode vital human services at a time of unprecedented need

CHICAGO, May 5 /PRNewswire-USNewswire/ -- Illinois' poorest residents—those who had the least to start with before the recession—were hit first and hardest by the economic downturn and will recover the slowest, according to a new report released today by the Social IMPACT Research Center at Heartland Alliance (formerly the Heartland Alliance Mid-America Institute on Poverty).Workers in the lowest income group in Illinois had a 1930's-like unemployment rate of 27.0 percent in the 4th quarter of 2009 while Illinois' overall unemployment rate was 10.2 percent.

In its 2010 Report on Illinois Poverty–the 10th annual comprehensive analysis of poverty indicators in Illinois–the Social IMPACT Research Center documents challenges to economic security across a variety of indicators including health, education, and employment.

More than 1.5 million Illinoisans, 12.2 percent of the state's population, were living in poverty in 2008. An additional 16.0 percent—more than 2 million people—were on shaky financial ground with incomes between the poverty line and twice the poverty line. The magnitude of these poverty data, based on information from 2008, do not even fully capture the effects of the recession.

"The current recession has eroded economic stability for families across Illinois," said State Senator David Koehler of Pekin. "Providing help so that struggling families can meet their basic needs, children can succeed in school, seniors can age with dignity, and workers can rebound is for the good of everyone in Illinois today and down the road."

Signs of increasing poverty are seen throughout the state. The report found that poverty worsened in many areas of the state even before the worst of the recent economic crisis, increasing in 63 of Illinois' 102 counties. A total of 29 counties were placed on the report's Poverty Warning List, an indication that poverty trends in these counties are the most alarming in Illinois. Another 42 counties appeared on the Poverty Watch List, which accounts for counties where poverty indicators need to be monitored closely.

The lists were compiled based on an evaluation of four factors reflecting a county's susceptibility to pronounced poverty: high school graduation rates, teen birth rates, unemployment rates, and poverty rates. Counties in Illinois are evaluated using a point system, with the higher number of points indicating a worse score.  

The report includes other new data that indicate a protracted crisis for families and communities across Illinois:

Male, minority, younger, and less educated workers have been hit hardest by unemployment in this recession. In 2009:

• The unemployment rate for men was 11.1% compared to women's unemployment rate of 8.7%.
• The unemployment rate for black workers was 17.1% compared to 9.0% for white workers.
• Newer entrants to the workforce (ages 20 to 24) had an unemployment rate of 16.3% compared to rates of 9.7% and below for older workers.
• Workers with less than a high school diploma are 4 times more likely to be unemployed than workers with a bachelors degree.

Illinoisans have experienced a tremendous erosion of wealth as a result of the recession:

• 1 out of every 371 Illinois homes received a foreclosure filing in March 2010, and only 9 states were worse.
• 1 out of every 7 Illinois households has zero or negative net worth.
• Illinoisans' average debt from all sources is over $11,300.
• The increase in personal bankruptcy filings from 2006-2009 in Chicago region counties has been exponential: Cook +163%, DuPage +249%, Kane +266%, Lake +190%, McHenry +240%, and Will +191%.

Extreme poverty has worsened, with those in extreme poverty being subject to great hardship:

• 680,000 Illinoisans lived in extreme poverty in 2008 on an annual income of less than half of the poverty line (less than $11,000 a year for a family of four) – a considerable increase from 2000 when 619,240 Illinoisans lived in extreme poverty.
• Being in extreme poverty greatly increases a person's likelihood of being uninsured: 49% of adults ages 18-64 years old in extreme poverty are uninsured, versus 16% for those not in extreme poverty.
• Low-income people with disabilities face severe gaps between disability payment amounts, averaging $674 a month in Illinois, and average monthly rents for a 1-bedroom at $788 and even studio apartments at $690.
• Nearly 1 out of 5 working age Illinoisans in extreme poverty work at least half the year–but despite their work effort they struggled to make ends meet on extremely low earnings.

People relying on food pantries in Illinois report making untenable budget trade-offs:

• 50% report having to choose between paying for food and paying for utilities or heating fuel.
• 44% had to choose between paying for food and paying their rent or mortgage.
• 34% had to choose between paying for food and paying for medicine or medical care.
• 36% had to choose between paying for food and paying for gas for a car.

At this moment of unprecedented need in modern times, strong and responsive public benefits and human services are crucial to keeping families afloat until recovery reaches main street. Yet years of disinvestment in Illinois' safety net, combined with the effects of the recession and an antiquated state revenue system, have resulted in an erosion of human services across the state.

"Despite the continued challenges facing the economy, greater hardship, increased poverty and homelessness, and weakening financial security for the coming years are not inevitable," said Sid Mohn, President of Heartland Alliance for Human Needs & Human Rights. "State policymakers can create economic stability and promote future prosperity by enacting a responsible budget that includes new revenue and protects vital health and human services from catastrophic cuts, ensuring that Illinois families are protected from deepening hardship."

The Social Impact Research Center (IMPACT) at Heartland Alliance provides dynamic research and analysis on today's most pressing social issues and solutions to inform and equip those working toward a just global society. As such, IMPACT conducts research to increase the depth of understanding and profile of social issues and solutions; develops recommendations and action steps; communicates findings using media, briefings, and web strategies to influence a broad base of decision makers; and Impacts social policy and program decisions to improve the quality of life for poor and low-income individuals.

For more information: 312.870.4949 | [email protected] | www.heartlandalliance.org/research

Heartland Alliance for Human Needs & Human Rights helps people who are threatened the most by poverty or danger improve their lives and realize their human rights. For more than 100 years we have been providing solutions—both through services and advocacy— creating paths from crisis to stability and on to success. Our work in housing, health care, legal protections, and economic security supports more than 200,000 people annually, helping them build a better future

TO DOWNLOAD THE REPORT AND OBTAIN DATA ON EACH OF ILLINOIS' 102 COUNTIES, PLEASE VISIT WWW.HEARTLANDALLIANCE.ORG/POVERTYREPORT  

SOURCE Social IMPACT Research Center