Poverty Rate Holds Steady at Record Levels (and That's Good News)

Poverty rateBy HOPE YEN

WASHINGTON -- The ranks of America's poor remained stuck at record levels, although dwindling unemployment benefits and modest job gains helped stave off what experts had predicted would be the fourth rise in a row in the poverty rate.

With joblessness persistently high, the gap between rich and poor increased in the last year, according to two major census measures. Also, the median, or midpoint, household income was $50,054, 1.5 percent lower than 2010 and a second straight decline.

A Census Bureau report released Wednesday provides a mixed picture of the economic well-being of U.S. households for 2011, when the unemployment rate improved to 8.9 percent from 9.6 percent in the previous year. The numbers are coming out not long before the Nov. 6 election in which the economy is the No. 1 issue and President Barack Obama is trying to make the case that the labor market, while not fully healed, is on the right track.

The overall poverty rate stood at 15 percent, statistically unchanged from the 15.1 percent in the previous year. The rate was better than a consensus estimate of demographers who had predicted, based on weak wage growth, a gain of up to half a percentage point, to levels not seen since 1965.

For last year, the official poverty line was an annual income of $23,021 for a family of four. By total numbers, roughly 46.2 million people remained below the poverty line, unchanged from 2010. That figure was the highest in more than half a century when records were kept. The 15 percent poverty rate was basically unchanged from 1993 and was the highest since 1983.

Broken down by state, New Mexico had the highest share of poor people, at 22.2 percent, according to rough calculations by the Census Bureau. It was followed by Louisiana, the District of Columbia, South Carolina, Arkansas and Georgia. On the other end of the scale, New Hampshire had the lowest, at 7.6 percent.

"This is good news and a surprise," said Sheldon Danziger, a University of Michigan economist who closely tracks poverty. He pointed to a continuing boost from new unemployment benefits passed in 2009 that gave workers up to 99 weeks of payments after layoffs and didn't run out for many people until late 2011. Also, job gains in the private sector that helped offset cuts in state and local government workers.

"It would indicate the stimulus was even more effective than believed," he said.

Bruce D. Meyer, an economist at the University of Chicago, said it was disappointing that poverty levels did not improve. He described it as a sign of lingering problems in the labor market even with recent declines in unemployment. "The drop in the unemployment rate has been due in significant part to workers leaving the labor force, because they are discouraged, back in school, taking care of family or other reasons," he said.

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 official poverty rate takes into account the effects of some stimulus programs passed in 2009, such as unemployment benefits, as well as jobs that were created or saved by government spending. 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, attributed the better-than-expected poverty numbers to increases in full-time workers over the last year. He also estimated that expanded unemployment benefits helped keep 1.6 million working-age people out of poverty.

Social Security also lifted roughly 14.5 million seniors above the poverty line. Without those cash payments, the number of people ages 65 and older living in poverty would have increased five-fold, he said. Johnson also noted that that income inequality was widening. He said the top 1 percent of wage earners had a 6 percent increase in income over the last year, while income at the bottom 40 percent of earners was basically unchanged.

"A lot of the increase is driven by changes at the very top of the distribution," he said.

The share of Americans without health coverage fell from 16.3 percent to 15.7 percent, or 48.6 million people. It was the biggest decline in the number of uninsured since 1999, boosted in part by increased coverage for young adults under the new health care law that allows them to be covered under their parents' health insurance until age 26.

Congress passed the health overhaul in 2010 to address the rising numbers of uninsured people. During this election year, the law has come under increasing criticism Republicans, including presidential nominee Mitt Romney, who has pledged to push a repeal if he is elected. The main provisions of the health care law will not take effect until 2014.

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Did another Obama relative go on welfare?

September 13 2012 at 7:27 PM Report abuse rate up rate down Reply

Poverty is good when you are Obama touting class war fare. This guy needs to be in unemployment line like he has made so many Americans with his failed policies.

September 13 2012 at 2:05 PM Report abuse rate up rate down Reply

Poverty is good? Since when? This is the result of the disastrous effects of the Bush administrations and their policies. Obama is doing a thankless job...trying to keep us from going over the cliff completely while the dummies blame him for the problem! The number of people whose ONLY income is food stamps has more than doubled. Maybe the poverty rates are staying the same because you can't get blood out of a rock. The middle class is tapped out. The lower class is living on nothing. How can things get any worse? Oh wait... soaring prices...how could I forget?

September 13 2012 at 1:40 PM Report abuse +1 rate up rate down Reply

This is really a stupid subect By the governments own numbers released the amount of people in poverty has gone up a lot The middle class has lost 49% of its worth and is getting worse So believe what you want and all the promises you want to believe the facts our bad abd it looks like 97% of americans will be poor ans subjects of the state As we just learned from the demos "the government OWNS the people " They said it and thats a fact Welcome to cuba

September 13 2012 at 11:34 AM Report abuse rate up rate down Reply

Why shouldn't it stay level? All the dirty animals who make a career being on welfare get it all for free. They sit around in the air conditioned comfort of their free Section 8 housing, with free utilities, free Cable TV, free phones, free food and free Healthcare. They send their spawn (each from a different father) to school to get free breakfast, free lunch, free school supplies, and even free after school care. All the while the rest of us hard working saps have to tighten our belts and pay even more taxes, these pieces of human filth that contribute absolutely nothing to Society get it all, and more, for free.

September 13 2012 at 7:50 AM Report abuse -1 rate up rate down Reply
2 replies to ilm9p's comment

They should cut these bastards off and make them take the jobs the Mexicans came here to do. Oh, i forgot, MOST welfare people are too stupid to do anything.

September 13 2012 at 8:42 AM Report abuse -2 rate up rate down Reply

They should cut these bastards off and make them take the jobs the Mexicans came here to do. Oh, i forgot, MOST welfare people are too stupid to do anything.

September 13 2012 at 8:42 AM Report abuse -2 rate up rate down Reply

Things probably would have improved greatly if the Repugs hadn't stepped in in 2010 to protect their own bottom lines.

September 13 2012 at 6:27 AM Report abuse -1 rate up rate down Reply

Only the lowly and amateurish AOL would shout that poverty at any level is 'good'.

September 13 2012 at 5:57 AM Report abuse +2 rate up rate down Reply
1 reply to lifehub's comment

Their headline says it all:
"Poverty Rate Holds Steady at Record Levels (and That's Good News)"

Record levels of poverty is good news. What a ridiculous spin.

September 13 2012 at 8:17 AM Report abuse +1 rate up rate down Reply

It is a good thing.... but only for Democrats and Obama ... they are trying to create dependent voters.

September 13 2012 at 12:43 AM Report abuse +3 rate up rate down Reply

The rich deserve it! Fook the rest of us...remember we all need peasants!

September 13 2012 at 12:02 AM Report abuse +1 rate up rate down Reply

one thing i love about obama being in office ...according to the media things are always good.

September 12 2012 at 11:12 PM Report abuse -1 rate up rate down Reply
1 reply to rgscls1's comment

No no, that was Bush. Although we never heard much about anything that didn't include Lilo or Paris Hilton until it was too late to stop it.

September 13 2012 at 6:26 AM Report abuse rate up rate down Reply