US poverty set to reach highest level in 50 years
Census figures for 2011 will be released in the critical weeks ahead of the November elections.
The Associated Press surveyed more than a dozen economists, think tanks and academics both nonpartisan and those with known liberal or conservative leanings, and found a broad consensus: The official poverty rate will rise from 15.1% in 2010, climbing as high as 15.7%.
Several predicted a more modest gain, but even a 0.1 percentage point increase would put poverty at the highest level since 1965.
Poverty is spreading at record levels across many groups, from suburban families to underemployed workers to the poorest of the poor.
More discouraged workers are giving up on the job market, leaving them vulnerable as unemployment aid begins to run out.
Suburbs are seeing increases in poverty, including in such political battlegrounds as Colorado, Florida and Nevada, where voters are coping with a new norm of living hand to mouth.
“I grew up going to Hawaii every summer. Now I’m here, applying for assistance because it’s hard to make ends meet. It’s very hard to adjust,” said Laura Fritz, 27, of Wheat Ridge, Colorado, describing her slide from rich to poor as she filled out aid forms at a county centre.
Since 2000, large swaths of Jefferson County just outside Denver have seen poverty nearly double.
Ms Fritz says she grew up wealthy but fortunes turned after her parents lost a significant amount of money in the housing bust. Stuck in a $500,000 (€412,830) house, her parents began living off food stamps and Ms Fritz’s college fund evaporated.
She tried joining the army but was injured during basic training. Now she’s living on disability, with an infant daughter and a boyfriend, Garrett Goudeseune, 25, who can’t find work as a landscaper.
They are struggling to pay their $650 rent on his unemployment cheques and don’t know how they would get by without the extra help as they hope for the job market to improve.
In an election year dominated by discussion of the middle class, Ms Fritz’s case highlights a dim reality for the growing group in poverty. Millions could fall through the cracks as government aid diminishes.
“The issues aren’t just with public benefits. We have some deep problems in the economy,” said Peter Edelman, director of the Georgetown Centre on Poverty, Inequality and Public Policy.
He pointed to the recent recession but also longer-term changes in the economy such as globalisation, automation, outsourcing, immigration, and less unionisation that have pushed median household income lower.
Even after strong economic growth in the 1990s, poverty never fell below a 1973 low of 11.1%.
That low point came after president Lyndon Johnson’s war on poverty, launched in 1964, that created Medicaid, Medicare and other social welfare programmes.
“I’m reluctant to say that we’ve gone back to where we were in the 1960s. The programmes we enacted make a big difference. The problem is that the tidal wave of low-wage jobs is dragging us down and the wage problem is not going to go away anytime soon,” Mr Edelman said.
The analysts’ estimates suggest that some 47m people in the US, or 1 in 6, were poor last year. An increase of one-tenth of a percentage point to 15.2% would tie the 1983 rate, the highest since 1965. The highest level on record was 22.4% in 1959, when the government began calculating poverty figures.
The 2010 poverty level was $22,314 for a family of four, and $11,139 for an individual, 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 well as noncash aid such as food stamps and tax credits, which were expanded under President Barack Obama’s stimulus package.
An extra 9m people in 2010 would have been counted above the poverty line if food stamps and tax credits were taken into account.
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