Last night, President Obama delivered the State of the Union during which he spent considerable time discussing the nation’s economy. Growing economic disparities, the divide between “Wall Street” and “Main Street,” and the struggles of ordinary Americans were center stage during the speech as the president called upon Congress to come together to solve the financial problems facing the nation.
And while the President suggested changes in the tax code, higher education credits, and investments in small businesses as some solutions, he failed to address the needs of people who live in the furthest economic fringes of society – specifically, very poor and homeless people.
Late last month, the Associated Press reported that half of all Americans are poor or low-income. And in the Alliance’s latest report, the State of Homelessness in America 2012, we examine some of the economic indicators associated with risk of homelessness. Between 2009 and 2010, we found that indicators associated with homelessness, including unemployment, severe housing cost burden, average real income for poor workers, and uninsurance, went up.
Most striking is the increase in severely housing cost burdened individuals and families. From 2009 to 2010, the number of poor people paying more than 50 percent of their monthly income on rent increased by 6 percent. The data show that 38 of the 51 states had increases in severe housing cost burden and the median state change was an increase of 6 percent. Severe housing cost burden has risen steadily for since 2007 and now, more than 75 percent of poor households in America are severely housing cost burdened.
This finding clearly illustrates why some people experience homelessness: as housing costs eat up a larger and larger percentage of a household’s monthly income, there comes a point where housing itself becomes prohibitively expensive. Moreover, when housing consumes such an overwhelming portion of household income, there is very little left for other necessities: food, transportation, education, etc. Because of this, any unplanned financial obligation – a medical emergency, an unexpected bill, etc. – could jeopardize a household’s housing situation.
This situation is alarmingly real for a significant and growing number of American households. As more and more families struggle with their economic needs and obligations, their risk of homelessness grows. And as such, as the nation moves forward to address the debt and deficit crises, it will be essential to ensure that the needs of the most vulnerable people are prioritized in order to avoid increases in homelessness, suffering, and cost to the national community.