1 in 7 in U.S. lives below poverty line
The recession and longer-term economic troubles have pushed the nation’s poverty rate to levels not seen in more than a decade, wiping out gains in the long-running War on Poverty and adding more financial strain to the lives of millions of Americans.
New Census Bureau data, released Thursday, also showed that the face of the poor has changed. Those falling below the poverty line today are more likely to be full-time workers who cannot earn enough to meet their needs or middle-class workers driven into the ranks of the poor by lost jobs or shrinking incomes.
The higher poverty level — 14.3%, or an increase of nearly 4 million people last year — means higher costs for government programs such as food stamps and unemployment compensation and potentially heavier tax burdens for the country as a whole.
Among those once more fortunate is Susannah Evans of Ventura, a 56-year-old single woman who until August 2008 had a good-paying job as a marketing coordinator for a law firm. Since getting laid off, she has exhausted unemployment benefits and downsized from a one-bedroom apartment to a rental room in a house.
“If it has to be that I live in my car, I accept it,” Evans said Thursday, breaking down in tears. “It’s reality.”
States such as California and Illinois are feeling particular strain because they have been hit harder by the recession, with above-average levels of unemployment and home foreclosures.
California’s poverty rate jumped to 15.3% last year, the highest in 11 years. Analysis by the California Budget Project showed that 2 million children in the state lived in families with incomes below the poverty line last year.
For the U.S. as a whole, the rise in the poverty level that began a decade ago and accelerated during the recession has wiped out all the gains made during the long run of economic growth and prosperity in the 1990s.
The Census Bureau said 43.6 million people lived below the poverty line last year, compared with 13.2% in the previous year and 11.3% in 2000.
The number of people counted as living below the poverty line last year was the largest number since the Census Bureau began keeping records in the 1950s, though the total U.S. population is also larger. When President Lyndon B. Johnson launched the War on Poverty in 1965, the poverty rate was 17% and quickly dropped to 14%.
Last year’s increase would have been greater without growth in Social Security payments and unemployment insurance benefits, which kept several million more Americans from falling below the poverty line. With the economy faltering, more people also began collecting the federal retirement benefit, adding to the financial pressures on the program.
The poverty threshold last year was $10,956 for one person and $21,954 for a family of four.
The rate for Latinos last year rose to 25.3% from 23.2% in the previous year, higher than other groups. The poverty figures for whites went up to 12.3% from 11.2%, and for blacks, to 25.8% from 24.7%. The poverty level for Asian Americans, 12.5% last year, wasn’t statistically different from 2008.
Economists and other analysts said the latest poverty figures and data on overall median household income, which declined 0.7% last year to $49,800, were better than they had expected given the severity of the recession and the massive job losses last year.
A key difference, they said, appeared to be the government’s much-derided Recovery Act that expanded unemployment benefits and Social Security payments, among other things.
“I was shocked” that the poverty rate didn’t approach 15%, said Sheldon Danziger, a professor of public policy at the University of Michigan and co-editor of the book “Changing Poverty, Changing Policies.” “It looks to me like the stimulus bill is the reason.”
But Danziger and other analysts worry that poverty levels will continue to climb in the coming years, especially with a divided Congress and many lawmakers in no mood to keep extending unemployment benefits or to continue programs such as the Recovery Act’s emergency fund to help low-income workers find work.
President Obama, commenting on the census report, credited the Recovery Act and other tax-relief and income support programs for keeping millions out of poverty last year.
He noted that there was little change in the share of those under 18 without health insurance as there was expansion of the government’s effort to cover children. And the new healthcare law, Obama said, “will build on that success.”
The figures on health insurance coverage are important, in part, because the cost of treating the uninsured is commonly passed on to those with insurance in the form of higher charges for their own care — a process that results in higher costs, rising insurance premiums and cutbacks in employer-provided medical insurance.
With poverty increasing and the incomes of many ordinary families showing a decline over the last decade, some lawmakers and scholars said it would be tougher for Republicans and others to support continuation of the Bush-era tax cuts for the wealthy.
“The numbers will make it harder to argue for tax cuts for the well-off,” said Bruce Meyer, a professor at the Harris School of Public Policy Studies at the University of Chicago. At the same time, he noted that “there’s a lot of resistance among the general public to attempts to redistribute income.”
The government’s official poverty measure, which has been criticized for years, does not count food-stamp benefits and low-income tax credits as income. If those programs were included, nearly 8 million people might have been counted as being above the poverty line.
At the same time, the poverty threshold doesn’t take into account regional cost of living differences or the growing costs for housing and medical care.
Families in need of assistance from the government have put pressure on an already strained social safety net. The number of households receiving food stamps nationally increased 55% to 19 million households in June 2010 from 12.3 million in December 2007.
Applications to Social Security’s disability insurance system grew 21% between 2008 and 2009.
Joblessness and poverty are forcing families to move across the country to seek employment, often relying on friends and family members for support. The census report indicated a sharp increase in the number of people “doubling up,” with an 8.6% jump in the last two years in the number of adults 25 to 34 living with their parents.
But when doubling up fails, many are checking into homeless shelters and sending children to stay with friends.
Sheila Richardson moved into a homeless shelter in early September because she had no money to pay rent. The 41-year old Brooklyn, N.Y., resident, who lost her job in late 2007 as an admissions office at a culinary school, has gone through her 401(k) and savings. Her 15-year-old son will stay with friends until she can get back on her feet.
“I used to cry, but I can’t cry anymore,” she said. “I just wait for it to get dark at night, so the creditors can’t call.”
For others who had known poverty before, the fallback has been painful as they remember wistfully the good times of a decade ago. They include high school graduates and lesser-educated workers who found daylight in the late 1990s when unemployment was 4% and employers were desperate for help.
Evadney Palmerston of Los Angeles, a high school graduate, started out at $10 an hour and worked up to $18 before quitting three years ago to take care of her mother. After getting another job, she recently was laid off.
“I’m working tooth and nail to find a job now,” the Belize native said. “I’m a quick learner. I can type, do calculations. I know how to file, how to do retail. There’s so much I can bring to the table.”