US:Record poverty last year as household income dips

Median household income declines; families ‘doubled up’

 

By Ruth Mantell, MarketWatch

WASHINGTON (MarketWatch) — A record number of people were in poverty last year as households saw their income decrease, according to data from the Census Bureau Tuesday, demonstrating the weakness of the economy even after the official end of the recession.

The 46.2 million people in poverty in 2010 was the most for the 52 years that estimates have been published, and the number of people in poverty rose for the fourth consecutive year as the poverty rate climbed to 15.1% — the highest since 1993 — up from 14.3% in 2009.

Meanwhile, real median household income in 2010 was $49,445, down 2.3% from the prior year and below pre-recession levels.

“I would frame this report as giving us a look at whether the so-called recovery that started in June 2009 has had any widespread benefits for American families,” said Larry Katz, a labor economist at Harvard University.

Economists say the recession officially ended in 2009, but employment remained weak in 2010, with a national employment gain of only about 940,000 jobs — less than half the growth in the civilian population that’s outside prisons and the military. Also, the unemployment rate remained elevated, declining to 9.4% by the end of 2010 from a peak of 10.1% in 2009.

While the data released Tuesday paint a grim picture, the results could have been even worse without government benefits such as extended unemployment insurance that were “pretty good at plugging some holes in the safety net and preventing even more people from falling into poverty,” said Harry Holzer, a public-policy professor at Georgetown University.

Still, times are likely to be tough for a while, according to Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities.

“Looking ahead, poverty seems unlikely to improve because of the way the economy is going,” he said. “State and local governments are retrenching, cutting spending, which will slow economic growth.”

The Census report also noted a gain in “doubled-up households” — those formed by combining households with other families or individuals to deal with the tough economic times. This year, about 5.9 million adults between 25 and 34 live in their parents’ households, up 25% from 4.7 million before the recession. Between spring 2007 and spring 2011, the number of doubled-up households rose 2 million to 21.8 million.

The data on poverty come as Congress debates a jobs package President Barack Obama introduced last week that includes payroll-tax reductions, and as Republican presidential candidates and congressional lawmakers debate the best way forward for the economy.

Details

For 2010, the poverty threshold for a four-person family, including two kids, was about $22,000. The official definition of poverty excludes certain benefits, such as food stamps and housing assistance.

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Private insurance covered about 64% of people in 2010, down from about 64.5% in the prior year, with such coverage trending down since 2001. Those covered by employment-based insurance ticked down to 169.3 million from 170.8 million. Those covered by government insurance rose to 31% from 30.6%. In 2010, about 9.8% of children under 18 were not insured.

Real median income for family households fell 1.2% to $61,544 in 2010, while nonfamily households’ income dropped 3.9% to $29,730. By region, income in 2010 fell about 2.9% in the West, 2.5% in the Midwest, 1.9% in the South and 1.2% in the Northeast. By race, income fell 3.2% for black households and 1.7% for whites.

By sex, real median income fell 0.4% in 2010 for men who are full-time workers, compared with a gain of 0.1% for women. In 2010, women made about $36,931 — 77% of $47,715 for men.

Among children under 18, the poverty rate reached 22% in 2010, compared with 13.7% among those 18 to 64. In 2009, the poverty rate among kids was 20.7%, compared with 12.9% among those 18 to 64.

By race, the poverty rate among blacks was 27.4% in 2010, compared with 26.6% among Hispanics, 13% among whites and 12.1% among Asians. By region, the poverty rate was 16.9% in the South, 15.3% in the West, 13.9% in the Midwest and 12.8% in the Northeast.