Study warns of rapid rise in poverty rate

If national unemployment rates reach 9 percent, 159,000 to 218,000 more Virginians will be pushed into poverty, according to a study released today.

As many as 73,000 children could be among the newly impoverished.

"Increases in unemployment lead to increases in poverty," said Michael Cassidy, executive director of The Commonwealth Institute, in releasing the report titled "Predicting poverty in the Commonwealth."

"This new information provides us a look around the corner to see what lies ahead for Virginia as the economy worsens."

The state has nearly 700,000 people living in poverty, according to the report, which predicts that Virginia poverty numbers would increase by 122,684 to 169,219 people if U.S. unemployment rates top out at 8 percent.

State social services programs are not well positioned to deal with sharp increases in unemployment, the report said. In 2007, only 27 percent of unemployed Virginians collected unemployment benefits. Lower figures were reported by only seven states in the nation.

The $787 billion economic stimulus package passed by Congress may prevent unemployment rates from reaching 9 percent and soften the impact by preserving more safety net services, Cassidy said.

Unemployment in Virginia has traditionally been lower than in the nation as a whole. The state unemployment rate was 5.4 percent in December, while the national unemployment rate rose to 7.6 percent in January.

During the last two years, however, Virginia's unemployment rate has grown at a faster pace than the national unemployment rate.

The Commonwealth Institute and Voices for Virginia's Children based their Virginia poverty projection on an analysis by the Washington-based think tank, The Center on Budget and Policy Priorities.

Contact Katherine Calos at (804) 649-6433 or .