The US poverty rate rose to the highest level in almost two decades and household income fell in 2010, underscoring the lingering impact of the worst economic slump in seven decades.
Data released by the Census Bureau on Tuesday showed the proportion of people living in poverty climbed to 15.1 per cent last year from 14.3 per cent in 2009, and median household income declined 2.3 per cent. The number of Americans living in poverty was the highest in the 52 years since the Census Bureau began gathering that statistic. Those figures may have worsened in recent months as the economy weakened.
“Families are struggling to put food on the table, and they don’t have the purchasing power to help the economy recover,” said Isabel Sawhill, a senior fellow at the Brookings Institution in Washington.
Stagnating incomes and rising poverty will be at the heart of the 2012 presidential campaign that’s focusing on joblessness, and will give added urgency to debates in Washington and statehouses across the US over budget cuts to programs designed to protect families from hardship.
The ranks of people in poverty increased to 46.2 million from 43.6 million. The last time the poverty rate reached 15.1 per cent was in 1993. It climbed to 15.2 per cent in 1983. Median household income in 2010 was $49,445, down from $50,599 the year before.
HEALTH COVERAGE
The number of those lacking health insurance increased to 49.9 million from 49 million, or about 16.3 per cent of the population, a change the bureau said wasn’t statistically significant.
The income figures declined even as the US economy expanded three per cent in 2010. Growth has slowed this year to an annual rate of less than one per cent, raising concern that the financial struggles of families will continue to worsen and hamper the recovery.
US households have little to cheer about as job creation stagnated last month and hourly wages retreated. The unemployment rate has hovered at or above nine per cent for more than two years. Consumer confidence fell to the second-lowest level this year for the week that ended September 4.
“We would have hoped to have begun to climb out by now in terms of income and poverty rates, and that doesn’t seem to be happening,” said Sawhill, who was associate director of the White House budget office under President Bill Clinton.
THIRD STRAIGHT INCREASE
It was the third consecutive annual increase in the poverty rate, a trend that won’t reverse itself without “concerted action” on the part of policy makers, said Melissa Boteach, who leads a campaign to reduce poverty at the Center for American Progress, a Washington-based research group with ties to the Obama administration.
“The numbers should be a wake-up call to our elected officials that we need to act immediately to invest in job creation and protect vulnerable families,” she said.
Since the low point in the labour market downturn in February 2010, nonfarm payrolls have increased by 1.9 million, showing that without stronger growth, it will take years to recoup about 8.7 million jobs lost as a result of the recession that began in December 2007 and ended in June 2009.
The jobless rate rose to 9.6 per cent in 2010 from 9.3 per cent in 2009. Long-term unemployment, the per cent of those without a job for 27 weeks or longer, increased to 43 per cent from 31 per cent, according to the Washington-based Economic Policy Institute.
“The figures we are releasing on Tuesday are really important,” said Robert Groves, director of the US Census Bureau, on a conference call with reporters. “They tell us how the changing economic conditions have really impacted the American family.”
