Record number of Americans living in poverty

/ Source: msnbc.com staff and news service reports

The number of people living in poverty in America rose by nearly 4 million to 43.6 million in 2009 — the largest figure in the 51 years for which poverty estimates are available — the Census Bureau said Thursday.

The bureau said in a statement that the official poverty rate was 14.3 percent, or 1 in 7 of Americans, the highest proportion of the population since 1994.

It was the third consecutive annual increase, up from 39.8 million, or 13.2 percent, in 2008.

The bureau added that there were 8.8 million families living in poverty in 2009.

The poverty rate for under-18s rose from 19.0 percent in 2008 to 20.7 percent in 2009, but fewer people 65 and older were in poverty, with the percentage rate falling from 9.7 percent in 2008 to 8.9 percent in 2009.

The statistics cover President Barack Obama's first year in office, when unemployment climbed to 10 percent in the months after the financial meltdown.

In a statement, Obama said that "even before the recession hit, middle class incomes had been stagnant and the number of people living in poverty in America was unacceptably high, and today's numbers make it clear that our work is just beginning.

"Our task now," he added, "is to continue working together to improve our schools, build the skills of our workers, and invest in our nation's critical infrastructure."

The share of Americans without health coverage rose from 15.4 percent to 16.7 percent — or 50.7 million people — mostly because of the loss of employer-provided health insurance during the recession.

Congress passed a health overhaul this year to address rising numbers of the uninsured, but the main provisions will not take effect until 2014.

The median — or midpoint — household income was $49,777 in 2009, although the bureau said this was not "statistically different" from the 2008 median.

The report, called Income, Poverty, and Health Insurance Coverage in the United States: 2009, also found that:

  • Among the working-age population, ages 18 to 65, poverty rose from 11.7 percent to 12.9 percent. That puts it at the highest since the 1960s, when the government launched a war on poverty that expanded the federal role in social welfare programs from education to health care.
  • Poverty rose among all race and ethnic groups, but stood at higher levels for blacks and Hispanics. The number of Hispanics in poverty increased from 23.2 percent to 25.3 percent; for blacks it increased from 24.7 percent to 25.8 percent. The number of whites in poverty rose from 8.6 percent to 9.4 percent.
  • Child poverty rose from 19 percent to 20.7 percent.
  • The earnings of women who worked full time, year-round were 77 percent of that for corresponding men.
  • The real median earnings of men who worked full time, year-round rose by 2.0 percent between 2008 and 2009, from $46,191 to $47,127. For women, the corresponding increase was 1.9 percent, from $35,609 to $36,278.

Politically sensitive time
The new figures come at a politically sensitive time, just weeks before the Nov. 2 congressional elections, when voters restive about high unemployment and the slow pace of economic improvement will decide whether to keep Democrats in power or turn to Republicans.

The 14.3 percent poverty rate, which covers all ages, was a 16-year high but was lower than estimates of many demographers who were bracing for a record gain based on last year's skyrocketing unemployment. Many had predicted a range of 14.7 percent to 15 percent.

Analysts credited in part increases in Social Security payments in 2009 as well as federal expansions of unemployment insurance, which rose substantially in 2009 under the economic stimulus program.

With the additional unemployment benefits, workers were eligible for extensions that gave them up to 99 weeks of payments after a layoff.

Another likely factor was a record number of working mothers, who helped households by bringing home paychecks after the recession took the jobs of a disproportionately high number of men.

"Given all the unemployment we saw, it's the government safety net that's keeping people above the poverty line," said Douglas Besharov, a University of Maryland public policy professor and former scholar at the conservative American Enterprise Institute.

In 2009, the poverty level stood at $21,954 for a family of four, based on an official government calculation that includes only cash 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 in 2009, such as unemployment benefits as well as jobs that were created or saved by government spending.

But it does not factor in noncash government aid such as tax credits and food stamps, which have surged to record levels in recent months. Experts say such noncash aid tends to have a larger effect on lowering child poverty.

Beginning next year, the government plans to publish new, supplemental poverty figures that are expected to show even higher numbers of people in poverty than previously known.

The figures will incorporate rising costs of medical care, transportation and child care, a change analysts believe will add to the ranks of both seniors and working-age people in poverty.