Poverty rate is highest in 50 years

New data shows that the poverty rate has climbed to the highest levels since the 1960s:

The ranks of America’s poor are on track to climb to levels unseen in nearly half a century, erasing gains from the war on poverty in the 1960s amid a weak economy and fraying government safety net. . . .

The official poverty rate will rise from 15.1 percent in 2010, climbing as high as 15.7 percent. Several predicted a more modest gain, but even a 0.1 percentage point increase would put poverty at the highest level since 1965. . . .

Even after strong economic growth in the 1990s, poverty never fell below a 1973 low of 11.1 percent. That low point came after President Lyndon Johnson’s war on poverty, launched in 1964, that created Medicaid, Medicare and other social welfare programs. . . .

The analysts’ estimates suggest that some 47 million people in the U.S., or 1 in 6, were poor last year. An increase of one-tenth of a percentage point to 15.2 percent would tie the 1983 rate, the highest since 1965. The highest level on record was 22.4 percent in 1959, when the government began calculating poverty figures. . . .

Analysts also believe that the poorest poor, defined as those at 50 percent or less of the poverty level, will remain near its peak level of 6.7 percent. . . .

The 2010 poverty level was $22,314 for a family of four, and $11,139 for an individual, based on an official government calculation that includes only cash income, before tax deductions. It excludes capital gains or accumulated wealth, such as home ownership, as well as noncash aid such as food stamps and tax credits, which were expanded substantially under President Barack Obama’s stimulus package.

An additional 9 million people in 2010 would have been counted above the poverty line if food stamps and tax credits were taken into account.

So, by these definitions, out of every six Americans you see on the streets, one will be poor.  One in twelve (if I’m figuring that right) will be really poor.

Income vs. consumption

More perspective on the economy from James Q. Wilson:

Poverty in America is certainly a serious problem, but the plight of the poor has been moderated by advances in the economy. Between 1970 and 2010, the net worth of American households more than doubled, as did the number of television sets and air-conditioning units per home. In his book “The Poverty of the Poverty Rate,” Nicholas Eberstadt shows that over the past 30 or so years, the percentage of low-income children in the United States who are underweight has gone down, the share of low-income households lacking complete plumbing facilities has declined, and the area of their homes adequately heated has gone up. The fraction of poor households with a telephone, a television set and a clothes dryer has risen sharply.

In other words, the country has become more prosperous, as measured not by income but by consumption: In constant dollars, consumption by people in the lowest quintile rose by more than 40 percent over the past four decades.

Income as measured by the federal government is not a reliable indicator of well-being, but consumption is. Though poverty is a problem, it has become less of one.

via Angry about inequality? Don’t blame the rich. – The Washington Post.

So how can consumption go up while income goes down?  One answer is debt, which is bad.  The other answer is that prices of what were once luxuries have gone down, putting them within the reach even of people with low incomes.

Poverty rate soars to one in six

According to the latest census data, nearly one in six Americans are poor:

Amid a still struggling economy, more people in America fell below the poverty line last year, according to new census data released Tuesday.

The nation’s poverty rate rose to 15.1% in 2010, its highest level since 1993. In 2009, 14.3% of people in America were living in poverty.

“The results are not surprising given the economy,” said Paul Osterman, author of “Good Jobs America,” and a labor economist at MIT. “You would expect with so many people unemployed, the poverty rate would go up. It’s just another sign of what a difficult time this is for so many people.”

About 46.2 million people are now considered in poverty, 2.6 million more than last year.

The government defines the poverty line as income of $22,314 a year for a family of four and $11,139 for an individual. The Office of Management and Budget updates the poverty line each year to account for inflation.

via Poverty rate rises as incomes decline – Census – Sep. 13, 2011.

 

One out of seven is below the poverty line

The recession is officially over, with a quarter showing positive growth after 18 months. Hooray, hooray. Just like the war in Iraq is officially over. So why don’t we feel better? Meanwhile,
we get news like this:

In the second year of a brutal recession, the ranks of the American poor soared to their highest level in half a century and millions more are barely avoiding falling below the poverty line, the Census Bureau reported Thursday.

About 44 million Americans – one in seven – lived last year in homes in which the income was below the poverty level, which is about $22,000 for a family of four. That is the largest number of people since the census began tracking poverty 51 years ago.

The snapshot captured by the census for 2009, the first year of the Obama presidency, shows an America in the throes of economic upheaval.

Since 2007, the year before the recession kicked into gear, the country has almost 4 million fewer wage-earners. There are more children growing up poor. And for the first time since the government began tracking health insurance in 1987, the number of people who have health coverage declined, as people lost jobs with health benefits or employers stopped offering it.

With midterm elections less than two months away, the statistics bare the reality fueling much of the anger toward Washington.

via Poverty stats show the damage.


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