Like a virus, poverty can creep its way into a person’s life with startlingly little fanfare or warning.
For every homeless person in the U.S., there are hundreds more impoverished Americans so adept at blending in that you would never guess they shopped at food pantries in lieu of grocery stores or were one more late rent check away from the street.
In truth, one in three Americans has been poor for at least two months, according to a recent report by the U.S. Census Bureau.
“Look to your left and look to your right. One of the three of you is the face of poverty, ” Sheena Wright, president and CEO of the United Way of NYC, told Yahoo Finance. “There’s a little bit of everybody in that number.”
The Census draws the line for poverty for an individual under 65 years old at an annual income of $12,119 and $23,836 for a family of four. Their report tracked poverty rates for the first two years of the economic recovery, from 2009 to 2011, during which 6.1 million people lost their jobs.
But a story that begins with unemployment doesn’t have to always end in poverty. What’s been most troubling about American workers throughout the recession and subsequent recovery is how unprepared they are to confront unexpected hardships. The national savings rate in 2008, the year the financial crisis hit, was 5.4% – half as high as it was 20 years prior. And it’s only declined since then, topping out at 4.3% in fourth quarter 2013, according to the Bureau of Economic Analysis.
Rudele Alexis, 32, of New York City, was out of work for six months after she lost her job in the entertainment industry in 2012. Her unemployment benefits barely covered rent for her New York apartment, and she visited food pantries to stretch her budget. She found a new job with help from Dress for Success, a nonprofit that helps women in need.
“My unemployment covered my rent with about $50 left over,” she told Yahoo Finance. “I never thought I’d be one of those people who’d be backed up on their rent.”
Unexpected job loss is one of the main reasons financial planners advise consumers to tuck away enough to cover at least three to six months worth of expenses. Without that cushion, there are few places a person can turn when they’re in financial straits. Unemployment insurance is hardly meant to be a permanent solution, and you can only rely on the generosity of family and friends for so long. Unless you're Jay-Z or Beyonce, even credit cards have limits.
“Because the time people spent in poverty during this last cycle was short, people have short memories,” Wright said. “We changed our behaviors and our practices as a country [after the Great Depression]. We have to start learning those lessons [again] because otherwise this will just be a cycle.”