Recession will be hardest for children

Children will be hardest hit by the current economic recession and rising unemployment rates, according to a new study released Tuesday by The Commonwealth Institute and the Voices for Virginia’s Children.

Michael Cassidy, executive director for The Commonwealth Institute, says anywhere from 122,000 to 218,000 more people could end up in poverty in 2009 should unemployment rates continue to rise, with children making up between 44,000 and 73,000 of the increase. John Morgan, executive director of Voices for Virginia’s Children, says 250,000 children are already in poverty statewide.

For a family of four, federal guidelines consider a family making less than $21,200 to be in poverty.

The report notes increases in food stamp caseloads, food bank demands, Temporary Assistance for Needy Families and Medicaid enrollment that it says are early indicators of economic vulnerability.

“The effects of the current economic downturn and rising poverty will be felt statewide, but obviously more deeply in regions already troubled by chronically high unemployment and poverty,” Cassidy said. “Additional families pushed into poverty will further strain local economies in our current safety net system in the state, which is already under significant pressure due to the faltering economy.”

While Waynesboro hasn’t had consistently high unemployment rates, January 2009 unemployment in the city reached a 15-year high of 7.9 percent.

Just 27 percent of unemployed Virginians collected unemployment insurance, which the study says is an indicator “that many unemployed Virginians are being left unprotected by the state’s inadequate UI system.”

Areas already feeling the pinch of poverty will feel it worse, Cassidy said, further straining local economies. He said the new report takes a look ahead at what’s to come, and helps identify “gaps and holes in our safety net programming.”

Morgan calls the numbers “pretty scary and pretty staggering.” He called it a “perfect storm” of economic distress, and says it could take several years for those in poverty to recover.

“Our concern is that prolonged poverty is particularly damaging,” Morgan said.

The study notes that Virginia’s poverty rate in 2007 was 8.6 percent, versus 13 percent for children.

The Blue Ridge Area Food Bank in Verona has called its situation a “crisis,” with the number of people seeking its assistance increasing from just more than 70,000 to 87,000 in 2008. It serves nine cities and 25 counties from the northern Shenandoah Valley to Bedford and Campbell counties to the south.

Food stamp use has also gone up in the Augusta County region – inclusive of Staunton and Waynesboro. According to the Virginia Department of Social Services, 4,532 total households, or 10,594 total people, were receiving food stamps in January 2009, up from 3,762 total households, or 8,642 people, in January 2008. It represents an increase from $761,039 to $1,082,348 in benefits paid out to recipients.

Meanwhile, DSS says Temporary Assistance for Needy Families – a program focused on welfare-to-work – has increased slightly from December 2007 to December 2008 in the Augusta County region, rising from 569 to 588 cases and from 1,075 to 1,196 people served. The amount people in the program have received remained virtually the same — $197,049 in 2007 versus $197,962 in 2008.

Enrollment in Medicaid and Virginia’s children’s health program, Family Access to Medical Insurance Security, has increased by 4.8 percent from December 2007 to December 2008.

Poverty, said Morgan, “is the most potent risk factor for a host of bad outcomes.”

The stimulus bill is expected to provide Virginia more than $800 million in Medicaid money, $355.8 million for food stamps (now known as the Supplemental Nutrition Assistance Program) and up to $189.6 million in unemployment insurance if the state fully enacts modernization incentives contained in the legislation.

Cassidy said the stimulus bill could fill some holes in safety net programs while keeping people from entering poverty. Morgan said that was important

“Somehow, if families can avoid poverty during a recession, then their kids are unlikely to ever experience poverty,” Morgan said.