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U.S. Residents Poorer, Earning Less, and Less Insured in 2010

Amanda Wilson

WASHINGTON, Sep 13 2011 (IPS) - According to data released Tuesday by the U.S. Census Bureau, 2.6 million more people slipped into poverty in 2010, placing the number of U.S. residents living below the poverty line at 15.1 percent.

The data show how recession in the U.S. continued to cause “incomes to drop, poverty to rise, and people to lose their health insurance”, according to Heidi Shierholz, an economist with the Economic Policy Institute (EPI), a nonprofit research institute in Washington focusing on the impact of economic trends and policy.

“We do have an increase in the number of people who did not work at all,” Trudi Renwick, of the poverty statistics branch of the Census Bureau, said in a press conference Tuesday. “That might be the single most important factor increase in the poverty rate.”

Census data shows one million households went from having at least one household member working in 2009 to having nobody working at all in 2010. The number of people who did not work even one week in 2010 also increased to 86,776, up from 83,323 in 2009.

Official numbers show that last year the total number of U.S. residents living in poverty increased to 46.2 million people, up from 43.6 million in 2009, or 14.3 percent. The official poverty line is set at 22,314 dollars for a household of four and counts cash income before taxes. It does not include non-cash income such as food stamps.

In what Elise Gould, director of health policy research at EPI, Tuesday called “a very devastating number”, the percentage of people living in what the government labels “deep poverty”, or on an income at least half the official poverty line, was 6.7 percent in 2010, the highest rate since the last record high in 1993 when it hit 6.2 percent.

According to the Census report, “the poverty rate and the number of people in poverty increased in the first calendar year following the end of the last three recessions,” including recessions that ended in 1961 and 1975.

While the Great Recession officially ended last year and government stimulus funds from the American Recovery and Reinvestment Act of 2009 spurred some growth in 2010, Census Bureau data released Tuesday shows a continued downward trend in household incomes. With those in the midwest, south and west being hit hardest, real median household income in the United States was 49,445 dollars in 2010, 2.3 percent less than in 2009.

According to EPI, a reflection on Census data from the last 10 years shows that working-age households now earn on average 6,300 dollars, or 10 percent, less than a decade ago, with an increase in disparities between racial and ethnic communities.

“The last 10 years wiped out all improvements in earnings for blacks since 1996,” said Shierholz.

Assistance programmes, doubling up eased impact

The numbers could have been even more dramatic. Census data shows that without the government’s unemployment insurance programme, 3.2 million people would have fallen below the poverty line.

While the number of uninsured people rose slightly in other age groups under 65, the number of young adults between the ages of 18 and 24 who had health insurance increased by two percent, or half a million people.

Elise Gould, director of health policy research at EPI, said that change could be attributable to health care reform which allows young adults to stay on their parents’ work-sponsored health insurance plans until the age of 26.

The Census Bureau also said 45.3 percent of all adults age 25 to 34 who were living with their parents would have fallen below the poverty line had they lived alone. A total of 5.9 million people aged 25 to 34 lived in their parents’ homes in 2010, an increase of 25 percent since 2007, according to Renwick.

Increased unemployment rates have also seen an increase in the number of people who rely on government assistance programmes such as food stamps, or the Supplemental Nutritional Assistance Program (SNAP), up 74 percent since 2007. But the high cost of the programme, 68 billion dollars in 2010, means it might be targeted by lawmakers looking for budget expenses to cut, along with other government assistance programmes.

Liz Accles, an analyst with the Federation of Protestant Welfare Agencies, a membership agency of human service providers in New York City providing assistance mostly to people living in deep poverty, said her organisation was witnessing a massive increase in the need for government-funded assistance programmes, but said she feared they could be targeted for spending cuts.

Accles said assistance programmes such as welfare, food stamps, Social Security, and Medicare and Medicaid not only help individuals facing poverty – giving them the support they need to feed their children and get to work – but also the larger economy by helping indirectly to stimulate economic activity and job creation.

“There are arguments to be made that the well-being of the lowest income members of society has an impact on everybody,” Accles said, arguing that poverty was an issue for a whole society, not just the poor.

“Unless you can exist in a tightly enclosed bubble, the way people fare and people’s ability to work, it does have a direct impact,” she said.

“We are all interconnected,” she told IPS. “At a certain point the richest people feel the impact of the neglect of the poorest people.”