U.S. poverty totals hit a 50-year high
In a grim portrait of a nation in economic turmoil, the government reported that the number of people living in poverty last year surged to 46.2 million — the most in at least half a century — as 1 million more Americans went without health insurance and household incomes fell sharply.
The poverty rate for all Americans rose in 2010 for the third consecutive year, matching the 15.1% figure in 1993 and pushing many more young adults to double up or return to their parents’ home to avoid joining the ranks of the poor.
Taken together, the annual income and poverty snapshot released Tuesday by the U.S. Census Bureau underscored how the recession is casting a long shadow well after its official end in June 2009.
And at the current sluggish pace of economic growth, analysts don’t expect many of these indicators of economic and social well-being to turn better soon.
Census officials wouldn’t say definitively what caused the surge in poverty, but it was evident that the root of the continuing misery was the nation’s inability to create jobs.
The total number of Americans who fell below the official poverty line last year rose from 43.6 million in 2009. Of the 2.6-million increase, about two-thirds of the people said they did not work even one week last year.
Those with jobs were much less likely to be poor, but the recession and weak recovery have wiped out income gains of prior years for a broad spectrum of workers and their families. Inflation-adjusted median household income — the middle of the populace — fell 2.3% to $49,445 last year from a year ago and 7% from 2000.
“It’s a lost decade for the middle class,” said Sheldon Danziger, a poverty expert at the University of Michigan.
The number of poor children younger than 18 reached its highest level since 1962, said William Frey, a demographer at the Brookings Institution.
Poverty reached a record high for Latino children, who Frey said accounted for more than half the overall increase in poor children last year.
Blacks had the highest child poverty rate at 39%, up more than 3 percentage points from last year.
Overall, poverty was generally higher than the national rate in states with high unemployment and in the South. Mississippi had the highest poverty rate last year, at 22.7%, and New Hampshire had the lowest, 6.6%.
The share of Californians who fell below the poverty line rose last year to 16.3%, up a full percentage point from 2009.
The state’s median household income, meanwhile, plunged 4.6% to $54,459 — marking the largest single-year decline on record, according to the California Budget Project.
Christopher Noack, 25, had little choice last year but to move back into his parents’ home in the Central California town of Salida. The high school graduate tried to support himself on retail jobs and, for a while, lived in an apartment with a friend, even taking on extra household chores to pay a lower share of rent. But that wasn’t enough.
“It feels like life is on hold,” said Noack.
“Every now and then, I will see someone who I used to know in high school, who I know got a job. They will be having a business lunch or be on the way to the airport, and one out of 10 times I will get a twinge of jealousy because, just simply, I don’t know anybody who could get me on a path like that.”
Noack’s frustrations are shared by many others in his age group, including college graduates.
Overall, the number of 25- to 34-year-old men and women who were living with their parents last spring totaled 5.9 million — a 25.5% increase since the recession began in 2007.
Nearly half of this group would have been counted as among the poor had they been out on their own, according to Trudi Renwick, chief of poverty statistics for the Census Bureau.
“The next generation is going to be terribly punished if we don’t find more jobs,” said Timothy M. Smeeding, director of the Institute for Research on Poverty at the University of Wisconsin. Studies have shown the effects of recessions and job losses can hurt a worker’s earnings for many years into the future.
The census report, coming shortly after President Obama unveiled a proposed $447-billion package of tax cuts and spending to revive job growth and the recovery, was seen as intensifying the debate over the government’s role in helping the poor and unemployed at a time of budget deficits and painful cutbacks in public services.
Unemployment benefits, the Census Bureau said, helped lift about 3 million people above the poverty line, and Obama’s latest proposal includes continuing the aid.
The report “underscores yet again why these programs must be maintained to rebuild the economy,” said Christine Owens, executive director of the National Employment Law Project, referring to unemployment insurance and Social Security benefits.
But conservative groups expressed their concerns about Americans’ growing reliance on such programs, including government health insurance.
“It raises the issue of whether we can afford this,” said Nina Owcharenko, director of health policy studies at the Heritage Foundation. “These entitlement programs are unsustainable.”
The census report found more Americans again lost health insurance in 2010, continuing a decade-long erosion in coverage that pushed the percentage of uninsured to 16.3%, the highest ever recorded.
But the decline in health coverage slowed from 2009 to 2010 and was not statistically significant, according to census analysts.
The number of young people ages 18 to 24 who had insurance increased significantly, possibly reflecting the effect of the new healthcare law, which allows dependents up to age 26 to remain on their parents’ health plans.
The decline in insurance coverage was fueled largely by employers dropping health benefits as healthcare costs continued to rise, a trend that has reduced the percentage of Americans who get health benefits through work from a peak of 65.1% in 2000 to 55.3% last year.
During that period, the average annual premium for an employer-provided family health plan more than doubled to $13,770 from $6,438, according to surveys by the nonprofit Kaiser Family Foundation.
As Americans lost coverage through work, they have increasingly relied on government programs such as Medicaid.
“The real policy take-away is the importance of protecting the safety net,” said Families USA Chief Executive Ron Pollack, a leading consumer advocate. “Medicaid is the lifeline.”
By the Census Bureau’s latest measure, the poverty threshold last year was an income of $11,139 for one person and $22,314 for a family of four.
Lorenzo Williams, 25, of Hesperia is well below that threshold.
After his hours as a store clerk at the local Salvation Army had been cut twice, reducing his monthly earnings of about $1,500 to about $600, the high school graduate had to move from his one-bedroom apartment to a small two-bedroom unit to share costs with a roommate. With $166 a month in food stamps, he barely gets by.
Williams said he goes to job fairs, but the lines are long, the competition tough. He now plans to begin Bible studies next year and become a pastor.
The official poverty rate doesn’t count food stamp benefits and low-income tax credits as income
If those programs, which totaled about $150 billion last year, were included, millions more people would have been counted as being above the poverty line.
At the same time, analysts said, other factors understate the extent of people struggling to meet their basic needs.
Experts agree that the government’s poverty thresholds, designed in the early 1960s, don’t reflect people’s spending and living needs in today’s economy.
The Census Bureau is scheduled to release alternative measures of poverty in October.