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Poverty
and Demography
According to the U.S.
Census Bureau’s Current Population Survey, Maine’s estimated
poverty rate (persons below poverty) was 11.6% in 2004. This was
an increase from the 10.1% reported in 2000, but remained below
the 2004 national rate of 12.7%. However, according to the Maine
State Planning Office (2005), Maine’s rate of "near
poor," those with incomes below 125%, 150%, or 200% of the
federal poverty level, is higher than the national average.
The most recent Census
poverty estimates for the county level in Maine are for 2003
(Map1 and Figure 1).
The highest rates of poverty are in
Washington County (16.1%), followed by Aroostook and Somerset
counties (14.3%), and Piscataquis County (13%); lowest rates are
in York and Sagadahoc counties (8.3%) and Cumberland County
(8.4%). The statewide individual poverty rate in 2003 was 10.7%,
which was almost two percentage points lower than the national
rate. However, five of Maine’s counties had poverty rates that
were higher than the national rate.
Over the four years
since the decennial Census (2000-2003), the individual poverty
rate in the United States and in Maine has been trending upward
( Figure
2). For the country as a whole, the poverty rate has risen
steadily from 11.3% in 2000 up to 12.5% in 2003. In Maine, the
poverty rate rose for the three-year period 2000-2002 from 9.9% to
11%, but declined slightly in 2003 to 10.7%.
The age distribution
of the population is an important factor in policy and planning
regarding poverty. Of particular importance is the proportion of
those classified as "young" and "old" relative
to those of working age. Having a higher proportion of the
population not in the labor force (termed the
"dependent" population) usually contributes to higher
poverty rates. An older dependent population is generally
considered to be more expensive than a younger one. Throughout the
United States, the aging of the "baby boom" population
(those born from the late 1940s through the early 1960s) is
expected to have a significant impact on the economy, including
poverty rates. Maine currently is ranked as the "oldest"
state in the country. In Maine, the impact of the aging population
has been exacerbated by the differential outmigration of younger,
working-age adults from a number of counties, which have seen a
shrinking overall population.
Recent population
estimates and projections from the U.S. Census indicate that Maine
may have reversed the outmigration trend, at least in many
counties, which may have a future impact on poverty rates. Maine
was one of only four states that shifted from being a net
outmigration state in the 1990s to a net inmigration state in the
five-year period from 2000 to 2004 (Perry 2006).
Table 1 shows
Maine’s population estimates for July 1, 2005, compared with
figures from the 2000 Census. All counties except Aroostook and
Washington have seen net population increases, with the greatest
rate of increase in several coastal counties: York (8.3%), Waldo
(6.7%), Sagadahoc (5.0%), and Lincoln (4.8%).
As shown in
Table
2, counties with
the highest proportion of the working-age population (18-64) are
Franklin (67%), Penobscot (66.1%), and Cumberland (65%). However,
the age distribution in Franklin and Penobscot counties may be
skewed somewhat by the presence of college student populations in
those counties. The "oldest" county in the state is
Lincoln, with 18.5% of the population age 65 or over. Lincoln
County continues to see inmigration of well-off retirees from out
of state. Other counties with a higher proportion of elders are
Washington (17.8%), Piscataquis (17.5%) and Aroostook (17.4%);
Washington and Aroostook are the two counties that saw net population declines from 2000 to 2005. Counties with
the highest proportion of children and youth (under age 18) are
Sagadahoc (22.6%) and Androscoggin (22.1%).
While we do not have
current figures for the overall age distribution of those below
poverty in Maine’s counties, in the 2000 Census, older persons
(age 65 and older) were represented in the below-poverty
population in greater numbers in Aroostook, Piscataquis, and
Washington counties than in the state as a whole. It is likely
that the same pattern still prevails.
In the U.S. as a
whole, in the state of Maine, and in all Maine counties, the proportion of children under the
age of 18 below poverty is higher than the overall individual
poverty rate (
Figure 3). While the relative position of most
counties is the same for the overall poverty rate and for the
child poverty rate, a few counties are somewhat worse with regard
to children’s poverty. For example, Waldo had the seventh
highest overall poverty rate in 2003, but was fifth highest in the
poverty rate for those under age 18. Sagadahoc was tied with York
for the lowest overall poverty rate, but had the third lowest
child poverty rate. On the other hand, Franklin had the fifth
highest overall poverty rate, but had a relatively better poverty
rate for children, ranking eighth compared with other counties.
One of the most
important population characteristics affecting economic well-being
is the level of educational attainment. While Maine has a somewhat higher
percentage of high school graduates than the national average, the
state does not stand so well with regard to higher education
attainment. In Maine, in the 2000 Census 68.9% of the population reported lacking a college degree (associate
degree or higher), compared with 61.3% in other New England states
and 69.3% nationally. As can be seen in
Figure
4, in several of
Maine’s counties, the population lacking a college degree is
close to or above 80%. These are among the counties with the
highest poverty rates and lowest median household income.
Income
Census-reported Money
Income. Maine’s median household income is below the national average, and Maine
is in the lower tier of states in that measure. The latest U.S. Census household income estimates
(U.S. Bureau of the Census 2005) for Maine’s counties are shown
in Figure 5. Information on household income is drawn from a
sample of the population. People are asked to self-report cash
income from various sources. According to Census analysts, income
is estimated to be higher than what is self-reported. Moreover,
for years in between the decennial census of the population,
smaller population samples are used, leading to larger margins of
error. Nonetheless, the income numbers shown in
Figure 5
are
useful in displaying the relative household income differences
between various parts of the state.
In 2003 as in the 2000
Census, there continued to be a wide range in median household
income across Maine’s counties. Median household income
represents the midpoint of incomes; half of the households have
incomes that are higher and half have incomes that are lower.
Three counties (Aroostook, Piscataquis, and Washington) had median
household incomes that were close to or more than 20% lower than
the state’s median household income of $39,212. The greatest
income disparity was in Washington County, where the 2003
estimated median household income of $28,311 fell 27% below the
state’s median household income. Washington County’s median
household income (lowest in the state) was 41% lower than
Cumberland County’s (highest in the state).
Personal Income.
As noted in the introduction to this report, the Bureau of
Economic Analysis measure of personal income is generally
considered by economists to be the most comprehensive measure of
actual income. It includes both cash and non-cash income of three
types: net earnings (from wages and self employment); income from
investments (dividends, interest and rent); and income from
transfer payments, which are payments by local, state, and federal
governments and by businesses for which no current services are
performed. Looking at the relative proportion of each of these
types of income can tell us a lot about the economic
characteristics of different parts of the state, particularly
about relative economic distress or well-being.
Nationally, in 2004
income from wages and self-employment was 69.5%; income from
investments (dividends, interest and rent) was 15.8%; and transfer
payments accounted for 14.7% of personal income. In Maine,
earnings account for a smaller proportion of total personal income
than in the nation as a whole, while income from transfer payments
and investments represents a higher proportion, due in part to
Maine’s older population.
Within Maine, there are marked
differences between counties both in the amount of per capita
personal income and in the relative proportion of income from
wages, from investments, and from
transfer payments.
Figure 6 shows the proportion of per capita
income by type for each county, and
Map 2 depicts the proportion
of personal income from transfer payments in each county.
The Maine State
Planning Office (2005) estimates that the ratio of earned to
unearned income is expected to decline even further as the
population of baby boomers moves into retirement. Counties with
the highest proportion of income from net earnings are Sagadahoc
(70%), York (70%), and Cumberland (69%). Differences in the
proportion of income from investments can be seen quite strikingly
in the coastal counties of Lincoln, Knox, and Hancock, which have
attracted large numbers of better-off retirees. In these counties,
investment income represents 20% or more of personal income, with
a high of 26% in Lincoln County (Figure 6). In all other counties,
investments are less than 20% of personal income.
In Maine as a whole,
transfer payments accounted for 19% of personal income in 2004.
Such payments were close to or greater than one-quarter of personal income in several counties. Washington was the
highest, at 34%, followed by Aroostook, Piscataquis, Somerset, and
Oxford counties (
Figure 6). Statewide, the per-capita amount of
transfer payments in 2004 was $5,706, with a high of $8,162 in
Washington County and a low of $4,626 in Sagadahoc County (U.S. Bureau of Economic
Analysis 2006).
Nationally, in Maine,
and in all Maine counties except Lincoln, government medical
benefits constituted the largest proportion of transfer payments
in 2004 (
Table 3). These medical payments are not received directly by
individuals and are not available to them for consumption
purposes, but rather are payments made to providers on behalf of
individuals. In several counties (Androscoggin, Aroostook,
Somerset, and Washington) government medical benefits accounted
for close to half or more of total transfer payments. More than
half of government medical benefits in the state as a whole, and
in every county except Lincoln, are in the form of "public
assistance medical benefits," largely Medicaid. In Washington
County, over two-thirds of medical benefits were of this type,
with close to two-thirds in Somerset County. Statewide, 59.4% of
medical benefits were public assistance medical benefits, 40% was
Medicare, and the small remainder was military medical insurance
benefits.
Retirement and
disability benefits (primarily Social Security) are the next
largest category of transfer payments in all counties except
Lincoln, where they are the largest category, ranging from 27.9%
of total transfer payments in 2004 (Washington County) to 43.8%
(Lincoln County). Contrary to popular perception, income
maintenance benefits such as TANF, food stamps, and SSI constitute
a relatively small proportion of transfer payments statewide
(8.2%) and in most counties. In 2004, the highest proportion of
income maintenance benefits was in Somerset County (10.7% of total
transfer payments), followed by Waldo County (9.7%).
Basic Needs Budgets
and Livable Wages. A
livable wage is the level that is estimated for a household to
maintain a basic needs budget and be self-sufficient from any
benefits or assistance. The amount required in a basic needs
budget for a household depends on household size; on household
characteristics, such as how many wage earners there are and how
many children; and on the cost for basic budget items in the area
where the household is located. For example, households with two
working parents or with a single working parent have costs for
child care and additional transportation costs that a household
with one stay-at-home parent would not have. There are also
variations in the cost of living between different parts of the
state that affect the estimates of basic needs budget levels. In a
recent analysis of livable wages by the Maine Center for Economic
Policy (Pohlmann and St. John 2005), the two items that accounted
for much of the difference in basic needs budgets for working
families from one part of the state to another were child care and
housing costs. Child care costs were highest in Lincoln County and
next highest in Cumberland County. Housing costs were highest in
Cumberland County, and even higher in the Portland metropolitan
area, and in Sagadahoc and York counties; highest housing costs in
the state were in the Portsmouth-Kittery metropolitan area.
Counties in the state with higher median incomes and lower poverty
rates, such as Cumberland and York, also have higher living costs
which are not considered in benefit calculations based on poverty
levels.
The Maine Economic
Growth Council notes that in Maine, the northeast, and the nation as a whole,
housing has become less affordable since 2000 (Maine Development
Foundation 2006). The report points out that low housing affordability creates
a drag on the economy, and forces people to commute long distances
when they cannot afford to live in the same communities where they
work.
There is a big gap between poverty
levels and basic needs budgets (livable wages) in all of Maine’s counties and
metropolitan areas (
Table 4). For example, for a four-person
household with two working parents and two children, the
difference between the poverty level and the annual livable wage
estimates ranges from just over $25,000 (Kennebec County) to over
$34,000 (the Portland and Portsmouth- Kittery metropolitan areas).
Even though households at or below the poverty level are eligible
to receive direct and in-kind benefits that are not included in
their cash income (e.g., housing and child care subsidies,
Medicaid, food stamps, free school lunch, and so on), these
benefits do not make up for the huge gap in what is needed for an
adequate living. Even households with incomes that are at the 200%
of poverty level are eligible for some benefits and are far from
self-sufficient (Pohlmann and St. John 2005).
The MECEP report (Pohlmann
and St. John 2005) notes that having increased household income
can lead to loss of eligibility for benefits, with the net result
that a household could actually be worse off than it was
previously: much more income is needed to cover the lost
government benefits (a phenomenon called a "cliff
effect"). Lost benefits might include subsidized health care,
the federal earned income tax credit, or state property tax
rebates. Cliff effects also can occur when an income increase
leads to a higher tax bracket, resulting in loss of available
income. The report provides an example of the cliff effect due to
a combination of regional variation in expenses and income tax
impacts (Pohlmann and St. John 2005: 9):
In Washington County
total required income for a family of two is estimated to be
$24,683…. In York County (excluding the metropolitan areas
around Portsmouth and Kittery) the same family needs $31,628.
…The family in York must make…an additional $6,945 per year
than the Washington County family. Approximately half of the
difference in this basic needs income between the two areas is
due to the cost differences of housing and health care in the
two regions plus what happens to taxes. The York County family
ends up in a higher state income tax bracket, driven by the
higher cost of living in that region (e.g., rent) and the
resulting loss of the federal Earned Income Tax Credit. The
family in Washington County owes only $1,247 in net taxes while
the York County family owes $4,172. Additionally, the higher
income (>200% poverty level) disqualifies the York County
family from receiving health care assistance (MaineCare) for
their children.
The report also points
out that in Washington, Aroostook, Kennebec, Oxford, Penobscot,
and Somerset counties, the livable wage is low enough that
families earning at that level also are eligible for a
considerable tax break and assistance with health care expenses.
Employment
Employment is
obviously a key factor in the poverty "picture." In
Maine, economic changes mirror those of the United States as a
whole, with a decline in once-prevalent manufacturing and natural
resource-based industries and jobs, and a shift to more knowledge-
and service-based jobs requiring a higher level of education.
Moreover, those with lower levels of education who previously
might have been able to have relatively well-paying jobs in
manufacturing industries find themselves having to accept
lower-paid service-industry positions such as retail, food
service, and so on.
In addition to the
changing work environment, Maine and the United States as a whole
have gone through a period of declining tax revenues and changing
government policies. Individuals are impacted not only by the
difficulty of finding adequately-paid employment but also by
cutbacks in state and federal services necessitated by declining
tax revenues and policy changes.
One of the most widely
used—and widely watched —measures of employment is the
unemployment rate. Determination of the unemployment rate is a complex process,
based primarily on information collected in the Current Population
Survey (CPS), a household survey administered monthly to a sample
of the population, combined with Current Employment Statistics (CES)
data and data from state unemployment insurance systems. The
unemployment rate is the percentage of the labor force (considered
as age 16 and over) that is unemployed and actively seeking work.
The unemployment rate methodology does not include discouraged
workers who have dropped out of the labor force after
unsuccessfully seeking employment, and counts part-time workers as
employed. The unemployment rate is, nonetheless, an important
measure that not only serves as a "barometer" of the
economy, but also has important policy ramifications in a number
of programs.
Maine’s monthly
average unemployment rate of 4.8% in 2005 was lower than the national
average of 5.1% (
Figure 7). Five counties, Cumberland, Knox, Lincoln,
Sagadahoc and York, had unemployment rates that were lower than
the state (
Figure 8).
Benefits
and Assistance
Poverty often is
assessed by analyzing the level and distribution of benefits
designed to serve the low-income population. A drawback to this
approach is that we are dealing with those who are already
receiving benefits, which does not allow us to estimate the level
of unmet needs. In this report, we combine data from benefits and
assistance programs with Census and other economic data. Comparing
poverty and income data from the Census and economic data from the
Bureau of Economic Analysis with information about the rate of
receipt of various benefits can give us at least an approximate
idea of possible service gaps and unmet needs. However, since some
benefit and assistance programs do not use the federal poverty
guidelines, and others use "multiples" of the guidelines
(e.g., 125% or 150% of the poverty level), this kind of comparison
serves only as a "proxy" measure of unmet need.
Food Stamps.
One of the most wide-reaching means-tested benefits in the United States and in Maine is the
food stamp program.
Map 3 depicts the proportion of total
households in each county that received food stamps in fiscal year
2005 (October 1, 2004-September 30, 2005). This is based on the
average monthly count of households receiving food stamps that
year. Statewide, 15.7% of all households received food stamps.
Washington, Somerset, and Aroostook counties had the highest
household participation rates, with more than 21% of all
households receiving this benefit. Hancock, Sagadahoc, and Lincoln
counties had 10% or less of the county’s households receiving
food stamps. Hancock County’s rate of 9.7% was the lowest in the
state for the 2005 fiscal year.
Figure 9 shows the
percentage of the total county population receiving food stamps,
calculated based on the average monthly count of individuals for
fiscal year 2005. Washington and Somerset counties each had over
19% of their population receiving food stamps, compared with the
statewide rate of 12.3%. Lowest rates were in Hancock, Sagadahoc
and York counties, where less than 9% of the population received
food stamps.
Over the four-year
period from FY2002 to FY2005, there has been a marked increase,
almost 50%, in the number of households in Maine receiving food
stamps (
Figure 10). Food stamp use also has increased nationally.
In the three years from 2002 to 2004, the caseload increased by
almost 26% nationally (and 31% in Maine in that time) (Llobera
2004).
A number of factors
have contributed to increased participation in the food stamp
program. First, more households probably became eligible for food
stamps, due to loss of employment and income. Even though Maine’s
unemployment rate was below the national average during this time
period, there continue to be many discouraged workers (who have
exhausted unemployment benefits), and many people who are
underemployed or working multiple low-paying jobs. Second, some of
the increase in food stamp use may be attributable to a greater
share of already eligible people choosing to participate for a
variety of reasons. Rising energy prices, especially for home
heating, have driven additional households to enroll in the food
stamp program. The 2002 federal Farm Bill had some options that
made it easier for eligible households, especially those with
working members, to obtain and retain food stamps (Llobera 2004).
Third, Maine was one of several states that initiated specific
pilot programs to increase the historically low participation of
eligible elder adults in the food stamp program.
Additionally, during
this period, the Maine Department of Health and Human Services (DHHS)
had several systemic changes that may have increased participation rates. DHHS replaced the
traditional paper food stamps with a card system, comparable to a debit card, which has benefit
dollars upon which the individual can draw. While there is no
concrete evidence, it has been suggested that having a card
reduces some of the stigma of receiving state benefits and
increases the willingness of some individuals to participate. The
new computer system implemented by DHHS also may have contributed
to increased participation rates, since it simplifies the
application process. If a person applies for any program under
DHHS (TANF, child care vouchers, etc.) there is a common
application that serves all programs, and the new computer program
automatically checks for eligibility for any other programs.
Low Income Home Energy
Assistance Program (LIHEAP).
The federal LIHEAP program exists to meet the immediate home
energy needs of low income households that pay a high proportion
of their income on home energy. Because the "pot" of
money is allocated anew to each state each year, with supplemental
funds in some years, all potentially eligible households may not
be reached each year, and the amount each household receives may
change from one year to the next. LIHEAP is therefore different
from other means-tested programs such as food stamps and TANF, or
from programs such as Medicaid and the social security
disability program that provide specified benefits to all eligible applicants.
Map 4 shows the rate
of participation by households in LIHEAP in fiscal year 2005.
Statewide, 8.8% of households participated in LIHEAP. This is
lower than the participation rate for food stamps that year
(12.3%) and less than the state poverty rate of 11.6% in 2004.
This is perhaps not surprising, given that LIHEAP funds are
limited and that disbursement of these funds must be prioritized.
LIHEAP household participation rates at the county level ranged
from under 4% (Cumberland County) to over 18% (Aroostook,
Franklin, and Washington counties). Franklin County’s rate of
19.6% was highest in the state, followed closely by Washington
County (19.2%).
The county profile section of this
report presents further details about the characteristics of
households that received LIHEAP in 2004-2005. Statewide, 46% were
single-person households, and 36% of applicants
were age 65 or over. In terms of income and benefits, 65% of
households had one or more members on Medicaid, 58% received
social security or Social Security disability payments, 20%
received SSI, and 57% received food stamps.
The number of
households receiving LIHEAP benefits varied somewhat from year to
year from FY2002 to FY2005 (
Figure 11). The number declined each
year from 2002 to 2004, but increased in 2005.7
Free and Reduced
School Lunch Program.
The National School Lunch Program is a federally assisted meal program
administered through the state’s
Department of Education, which operates the program through agreements with local schools.
Children from families
with incomes at or below 130% of the poverty level are eligible
for free meals, while those with incomes between 130% and 185% of
the poverty level are eligible for reduced-price meals. In order
to determine eligibility, schools each fall send home forms that
must be filled out and returned. Since only completed applications
can be screened for eligibility, there can be variation from one
school or school system to the next based not just on the local level of need but on how thoroughly the school
or school system tries to encourage completion
of the applications.
In Maine in FY2006,
over one-third of school-age children were eligible for the free
or reduced lunch benefit. In Washington and Piscataquis counties,
over half the children were eligible, while in Cumberland and York
counties, about one-quarter or less were eligible (
Figure
12).
The number of students
in the state eligible for free or reduced lunch increased somewhat
each year from FY2003 to FY2006 (
Figure 13). The number eligible
in FY2006 was about 8% greater than in FY2003.
Benefit Programs
Comparisons. There is a
varied picture when we compare participation in various benefits
and assistance programs across Maine’s counties, both in any
given year and over time. Looking at the state as a whole, a
larger proportion of households in FY2005 received food stamps
than LIHEAP benefits. However, in Franklin County, participation
in the LIHEAP program was greater than in the food stamp program;
in Aroostook, Hancock and Piscataquis counties, participation
rates in these two programs were quite similar; but in
Androscoggin and York counties, household participation rates in
the food stamp program were more than twice as great as in LIHEAP.
The free and reduced school lunch program had higher eligibility
rates statewide and in all counties than did the food stamp and
LIHEAP programs because of the different eligibility standards.
In terms of trends,
statewide the number of households receiving food stamps increased
greatly, almost 50% over the four-year period from FY2002 to
FY2005. While all individual counties experienced an increase in
food stamp use during this time, the magnitude of increase varied,
ranging from an increase of 25% in Aroostook County to over 60% in
Hancock and Knox counties. During this time period, the number of
households receiving LIHEAP benefits varied somewhat, and there
was no consistent trend for the state as a whole. Among individual
counties, only York and Waldo had an upward trend in the number of
households receiving LIHEAP benefits, while Hancock had a slight
downward trend. The number of enrolled students eligible for free
and reduced lunch statewide increased each year during this time
period, but the rate of increase was not as great as in the food
stamp program. All individual counties except Washington
experienced increases in FY2006 compared with FY2003. However, as
with food stamps, the rate of increase varied from one county to
another, ranging from less than 1% in Aroostook County to over 13%
in Androscoggin, Kennebec, and Somerset counties.
Individual county figures and
trends are shown
in detail in the following section of the report.
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