American poverty levels hit record high

Reuters
guardian.co.uk, Wednesday 14 September 2011 05.07 BST


Numbers grow for a third year, to 15.1%, with 46 million people impoverished – the highest rate since 1993

The US has the highest poverty rate of any developed nation, according to the OECD. Photograph: Spencer Platt/Getty Images

A record 46 million Americans were living in poverty in 2010, pushing the US poverty rate to its highest level since 1993, according to a government report on the grim effects of stubbornly high unemployment.

Underscoring the economic challenges that face President Barack Obama and Congress, the US census bureau said the poverty rate rose for a third consecutive year to hit 15.1% in 2010. The number of people in poverty was the largest since the government first began publishing estimates, in 1959.

The report surfaces at a time when the economic straits of ordinary Americans are at the forefront of the 2012 election campaign.

Obama is suffering from low job approval ratings on the economy, and evidence of rising poverty could give popular momentum to the $450bn job-creation programme he unveiled last week.

The census data could also come into play in the deliberations of a bipartisan super committee in Congress, which has been charged with finding at least $1.2 trillion in budget savings over 10 years by 23 November.

The US has the highest poverty rate among developed countries, according to the Paris-based Organisation for Economic Cooperation and Development (OECD).

The poverty line for a US family of four, including two children, is an income of $22,113 (£14,062) a year.

The data showed that children under 18 suffered the highest poverty rate – 22% – compared with adults and the elderly.

In a sign of decline for middle-income Americans, the figures showed continued decline in the number of Americans with employer-provided health insurance, while the ranks of the uninsured hovered just below the 50 million mark.

Underlying the census data was a rate of economic growth too meagre to compensate for the loss of hundreds of thousands of jobs from 2009 to 2010, as the recession officially ended but the jobless rate rose from 9.3% to 9.6%.

"All of this deterioration in the labour market caused incomes to drop, poverty to rise and people to lose their health insurance," said Heidi Shierholz of the Economic Policy Institute thinktank. "One of the immediately obvious issues this brings up is that there is no relief in sight."

The numbers would have been worse, analysts said, but for government assistance programmes, including extended unemployment compensation, stimulus spending and Obama's health reforms, which appeared to have reduced the number of uninsured young adults.

In Obama's hometown of Chicago, Salvation Army Major David Harvey knows well the effects of grinding poverty on the city's south side, where he attended a food giveaway on Tuesday.

"There are more families falling into poverty," he said. "That's multiplied on the south side of Chicago, where there are pockets with 20%, or more, unemployment.

"You've got people crying for jobs. They move out of state to get jobs because employers are leaving because of the tax increases here."

The poverty rate increased for non-Hispanic whites, black people and Hispanics but did not differ significantly for Asians. Black people and Hispanics together accounted for 54% of the poor, with whites at 9.9% and Asians at 12.1%.

The south fared worst among US regions, recording the highest poverty rate, a significant drop in median income and the largest number of residents without health insurance.

Broken down by state, Mississippi had the highest share of poor people, at 22.7%, according to calculations by the census Bureau. It was followed by Louisiana, the District of Columbia, Georgia, New Mexico and Arizona. At the other end of the scale, New Hampshire had the lowest share, at 6.6%.

The administration was quick to seize on data showing a 2.1% drop in uninsured young adults aged 18 to 24 as evidence that families were benefiting from an Obama healthcare reform that allows parents to extend their coverage to children as old as 25.

The Affordable Care Act is the centerpiece of Obama's domestic policy agenda but it has come under fierce attack from Republicans, including presidential candidates who hope to challenge the president in the 2012 general election.

"We expect even more will gain coverage in 2011 when the policy is fully phased in," the health and human services secretary, Kathleen Sebelius, said in a blog posting.

REUTERS

Via: http://www.guardian.co.uk/world/2011/sep/14/us-poverty-levels-record-high