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% in the 4th quarter of 2009 while Illinois' overall unemployment rate was 10.2%.

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.

The Chicago region has been particularly hard hit. The region's net job flow from 2008 to 2009 was negative (-113,579), representing 88% of the state's total job loss.

Nearly 1 million Chicago region residents (983,744), 11.8 percent of the region's population, were living in poverty in 2008. An additional 15.2 percent -- more than 1.2 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.

"Our communities are in the throes of dealing with job losses and foreclosures," said State Representative William Burns of Chicago. "State leaders must work to ensure that our families are able to weather this crisis and that our workers have training and educational opportunities to be prepared when the job picture improves."

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 in Illinois was 11.1% compared to women's unemployment rate of 8.7%.
• The unemployment rate for black workers in Illinois 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% in Illinois compared to rates of 9.7% and below for older workers.
• Workers in Illinois 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:

• 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%.
• In the Chicago region there were 41,602 foreclosure filings in the second half of 2009, compared to 31,679 in the second half of 2008.
• 1 out of every 7 Illinois households has zero or negative net worth.
• Illinoisans' average debt from all sources is over $11,300.

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

• 429,428 Chicago region residents 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).
• 52% of Chicago region residents in extreme poverty are not expected to work. This includes children, seniors, and people with disabilities.
• Being in extreme poverty greatly increases a person's likelihood of being uninsured: 49% of adults ages 18-64 years old in extreme poverty in Illinois 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.

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