Census: U.S. poverty rate hit 52-year high in 2010

McClatchy NewspapersSeptember 13, 2011 

WASHINGTON — Continued high unemployment drove the number of Americans living in poverty to a record high in 2010 and dragged down median household income for the third straight year since the Great Recession first darkened the nation's economy in 2007.

More than a year after the economic recovery officially began in June 2009, 46.2 million people had annual earnings below the poverty line last year, up from 43.6 million the previous year, according to new U.S. Census Bureau figures released Tuesday. That's the largest number in the 52 years for which poverty estimates have been published

The 2010 U.S. poverty rate of 15.1 percent was the highest since 1993, and it was up nearly a full percentage point from 2009. Poverty rates increased for all racial groups except Asians.

Government analysts say the problem is rooted in the 86.7 million working-age adults who were unemployed for at least a week last year, compared with 83.3 million in 2009.

That spike of 3.4 million people "might be the single most important factor contributing to the increase in the poverty rate," said Trudi Renwick, the head of poverty statistics at the Census Bureau.

The numbers reflect the sputtering labor market from 2009 to 2010, when payroll jobs fell by 600,000, unemployment rose to 9.6 percent and the share of people unemployed for six months or more grew from 31.2 percent to 43.3 percent.

That labor market decline also helps explain why median household income — the amount at which half of U.S. households earn more or less — continued to fall in 2010, while the number of Americans without health insurance continued to rise.

Census estimates show that median annual income dropped 2.3 percent, or $1,154, last year to $49,445. Average real hourly earnings fell from $10.34 in June 2009, when the recovery officially began, to $10.26 in July 2011, according to the Bureau of Labor Statistics.

Meanwhile, another 900,000 people lost health insurance last year, pushing the number of uninsured Americans to nearly 50 million, an all-time high. A continued decline in job-based health care helped drive those numbers.

"All of this deterioration in the labor market caused income to drop, poverty to rise and people to lose their health insurance," said Heidi Shierholz, an economist at the left-leaning Economic Policy Institute, who said the worst may be yet to come.

"There is no relief in sight," Shierholz added. "We can't expect any substantial improvement in the income and poverty numbers for a while."

Ron Haskins, an aide in the George W. Bush White House who's now a senior fellow at the center-left Brookings Institution, said likewise: "The main message of today's release from the Census Bureau is that if we don't like the way things are now, we better get used to it."

As the nation struggles to shake off the worst economic downturn since the Great Depression, the dismal census figures were more bad economic news for the Obama administration, which is pushing a polarized Congress to enact a series of measures to spur job creation.

A study by Stephan Goetz and David Fleming of Pennsylvania State University found that counties with larger concentrations of small, locally owned businesses had greater per-capita income growth, both before and after the recession struck.

"Other studies have shown that locally owned businesses are more reluctant to lay off workers because they understand the implications" on employees and their families, Goetz said. Larger companies with far-flung ownership generally have no such qualms, he added.

Of the 46 million Americans in poverty, about 20.5 million were in "deep poverty," with incomes below half of the poverty threshold. Households with annual earnings of less than $22,314 for a family of four were considered to be in poverty.

Of the 5.9 million 25- to 34-year-olds living with their parents, more than 45 percent would be in poverty if they didn't live at home.

Other findings from the 2010 annual report on income, poverty and health insurance coverage found:

  • Women who worked full time earned 77 percent of what their male counterparts earned. That's about the same as in 2009.
  • Since 2007, there were 6.6 million fewer men working full time and 2.8 million fewer women.
  • The poverty rate for children younger than 18 increased from 20.7 percent the previous year to 22 percent.

The numbers are sure to fuel the growing debate over whether to cut federal spending for unemployment insurance benefits, which have been extended to 99 weeks because of the recession. Jobless benefits pulled 3.2 million people out of poverty in 2010, but Republicans in Congress want them cut, along with funding for food stamps, because of concern about unsustainable growth in the program.

Under the Republican budget plan that the House of Representatives passed, the food stamp program would be cut by 20 percent next year and converted to a block grant in 2015 that would put a cap on program funding. Doing so would make the program unable to respond to large enrollment increases, which could force states to cut benefits or create waiting lists during times of hardship.

Marieka Klawitter, a public affairs professor with the West Coast Poverty Center at the University of Washington, said poverty rates wouldn't fall until the unemployment rate did. Until then, she said, conservative concerns about the federal budget deficit and the growth of government services are misplaced.

"If you keep your eye on those two things, you might miss the fact that there's an opportunity now to help families who are in real need and can't find jobs," Klawitter said. "So helping them by giving them income now could have a multiplier effect and drive growth in the economy."

ON THE WEB

Income, Poverty and Health Insurance in the U.S. 2010

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