September 17, 2013

Census: U.S. poverty stuck at 15 percent

Census data show Maine has a slightly better poverty rate, though its median income is lower than the nation's.

The Associated Press

WASHINGTON — The nation's poverty rate remained stuck at 15 percent last year despite America's slowly reviving economy, a discouraging lack of improvement for the record 46.5 million poor and an unwelcome benchmark for President Obama's recovery plans.

click image to enlarge

A group of boys walks past a partially collapsed row house in Baltimore. The nation's poverty rate stood still at 15 percent in 2012, the sixth straight year that it has failed to improve.

2013 Associated Press File Photo

More than 1 in 7 Americans were living in poverty, not statistically different from the 46.2 million of 2011 and the sixth straight year the rate had failed to improve, the Census Bureau reported Tuesday. Median income for the nation's households was $51,017. In Maine, 12.8 percent of the population lived below the poverty level, the Census Bureau said as recently as 2011. The median household income was $47,898.

Nationwide, the share of people without health insurance improved but only a bit, from 15.7 percent to 15.4 percent.

"We're in the doldrums, with high poverty and inequality as the new normal for the foreseeable future," said Timothy Smeeding, an economics professor at the University of Wisconsin-Madison who specializes in income inequality. "The fact we've seen no real recovery in employment and wages means we've just flatlined."

Mississippi had the highest share of its residents in poverty, at 22 percent, according to rough calculations by the Census Bureau. It was followed by Louisiana, New Mexico and Arkansas. On the other end of the scale, New Hampshire had the lowest share, at 8.1 percent.

The last significant decline in the national poverty rate came in 2006, during the Bush administration and before the housing bubble burst and the recession hit. In 2011, the rate dipped to 15 percent from 15.1 percent, but census officials said that change was statistically insignificant.

For the past year, the official poverty line was an annual income of $23,492 for a family of four.

On Monday, Obama called attention to what he described as economic improvements -- the nation's gross domestic product did rise by 2.8 percent last year -- and said congressional Republicans would reverse recent gains if they took uncompromising stands in connection with looming budget deadlines.

Some conservatives have been demanding a delay of Obama's new health care law as the price for supporting continued federal government spending. The House is also expected to consider a bill this week that would cut food stamps for the poor by an estimated $4 billion annually -- 10 times the size of cuts passed by the Democrat-controlled Senate -- and allow states to put broad new work requirements in place for recipients.

"This lack of improvement in poverty is disappointing and discouraging," said John Iceland, a former Census Bureau chief of the poverty and health statistics branch who is now a Penn State sociology professor. "This lack of progress in poverty indicates that these small improvements in the economy are not yet being equally shared by all."

Ron Haskins, a senior fellow at the Brookings Institution who specializes in poverty, agreed.

"Everything's on hold, but at a bad level; poverty and income did not change much in 2012," he said. "So child poverty is still too high and family income is still too low. The recession may be over, but try to tell that to these struggling families."

The official poverty level is based on a government calculation that includes only income before tax deductions. It excludes capital gains or accumulated wealth, such as home ownership.

As a result, the rate takes into account the effects of some government benefits, such as unemployment compensation. It does not factor in noncash government aid such as tax credits and food stamps.

David Johnson, the chief of the Census Bureau's household economics division, estimated that unemployment benefits helped keep 1.7 million people out of poverty.

 

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