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Americas

US poverty rate hits record high

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Text by News Wires

Latest update : 2011-09-13

The US poverty rate has risen to 15.1 percent, its highest level in 27 years, according to a government report on Tuesday that highlighted the country's economic plight.

REUTERS - The U.S. poverty rate hit its highest level since 1993 last year with a record 46 million Americans living below the poverty line, according to a government report on Tuesday that depicted the grim effects of stubbornly high unemployment.

Underscoring the economic challenges that face President Barack Obama and Congress, the U.S. Census Bureau said the poverty rate rose for a third consecutive year to hit 15.1 percent in 2010. The number in poverty was the largest since the government first began publishing estimates in 1959.

The United States has the highest poverty rate among developed countries, according to the Paris-based Organization for Economic Cooperation and Development.

The poverty line for an American family of four with two children is an income $22,113 a year.

The data showed that children under 18 suffered the highest poverty rate, 22 percent, 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 meager to compensate for the loss of hundreds of thousands of jobs from 2009 to 2010, as the recession officially ended but the jobless rate shot up from 9.3 percent to 9.6 percent.

"All of this deterioration in the labor market caused incomes to drop, poverty to rise and people to lose their health insurance," said Heidi Shierholz of the Economic Policy Institute think tank. "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 programs including extended unemployment compensation, stimulus spending and Obama's health reforms, which appeared to reduce the number of uninsured young adults.

Salvation Army Major David Harvey knows well the effects of grinding poverty on Chicago'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 percent, 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," Harvey said.

The Census report coincides with Obama's push for a $450 billion job creation package, and deliberations by a a congressional "super committee" tasked with cutting at least $1.2 trillion from the U.S. budget deficit over 10 years.

Faced with deteriorating job approval ratings, the president is trying to convince Republicans in Congress to support his package.

Analysts said poverty-related issues have relatively little hold on politicians in Washington but hoped the new figures would encourage the bipartisan super committee to avoid deficit cuts that would hurt the poor.

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

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

The administration was quick to seize on data showing a 2.1 percent 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 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," Health and Human Services Secretary Kathleen Sebelius said in a blog posting.

Analysts agreed. "That almost certainly is coverage from mom or dad because this is an age group that obviously has been having trouble getting a job and because they're young, they're probably less likely to be getting jobs that also include health insurance," said Joseph Antos of the conservative American Enterprise Institute .

The United States has long had one of the highest poverty rates in the developed world. Among 34 countries tracked by OECD, only Chile, Israel and Mexico have higher rates of poverty.
 

Date created : 2011-09-13

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