U.S. poverty totals hit a 50-year high
Census Bureau's grim statistics show recession's lingering effects, as young adults move back home and 1 million more Americans go without health insurance.
By Don Lee, Noam Levey and Alejandro Lazo, Los Angeles Times | http://lat.ms/q7a8r1
California poverty rate rises in 2010 for fourth year in a row
Six million residents last year had incomes below the federal poverty line of $22,113 for a family of four. Nearly 1 in 5 California residents lacked health insurance in 2010.
By Alana Semuels and Duke Helfand, Los Angeles Times | http://lat.ms/pQUvvr
Men line up for free lunches at the Union Rescue Mission. Overall, poverty was generally higher than the national rate in states with high unemployment and in the South. (Luis Sinco/Los Angeles Times / September 14, 2011)
September 14, 2011 - Reporting from Washington — In a grim portrait of a nation in economic turmoil, the government reported that the number of people living in poverty last year surged to 46.2 million — the most in at least half a century — as 1 million more Americans went without health insurance and household incomes fell sharply.
The poverty rate for all Americans rose in 2010 for the third consecutive year, matching the 15.1% figure in 1993 and pushing many more young adults to double up or return to their parents' home to avoid joining the ranks of the poor.
Taken together, the annual income and poverty snapshot released Tuesday by the U.S. Census Bureau underscored how the recession is casting a long shadow well after its official end in June 2009.
And at the current sluggish pace of economic growth, analysts don't expect many of these indicators of economic and social well-being to turn better soon.
Census officials wouldn't say definitively what caused the surge in poverty, but it was evident that the root of the continuing misery was the nation's inability to create jobs.
The total number of Americans who fell below the official poverty line last year rose from 43.6 million in 2009. Of the 2.6-million increase, about two-thirds of the people said they did not work even one week last year.
Those with jobs were much less likely to be poor, but the recession and weak recovery have wiped out income gains of prior years for a broad spectrum of workers and their families. Inflation-adjusted median household income — the middle of the populace — fell 2.3% to $49,445 last year from a year ago and 7% from 2000.
"It's a lost decade for the middle class," said Sheldon Danziger, a poverty expert at the University of Michigan.
The number of poor children younger than 18 reached its highest level since 1962, said William Frey, a demographer at the Brookings Institution.
Poverty reached a record high for Latino children, who Frey said accounted for more than half the overall increase in poor children last year.
Blacks had the highest child poverty rate at 39%, up more than 3 percentage points from last year.
Overall, poverty was generally higher than the national rate in states with high unemployment and in the South. Mississippi had the highest poverty rate last year, at 22.7%, and New Hampshire had the lowest, 6.6%.
The share of Californians who fell below the poverty line rose last year to 16.3%, up a full percentage point from 2009.
The state's median household income, meanwhile, plunged 4.6% to $54,459 — marking the largest single-year decline on record, according to the California Budget Project.
Christopher Noack, 25, had little choice last year but to move back into his parents' home in the Central California town of Salida. The high school graduate tried to support himself on retail jobs and, for a while, lived in an apartment with a friend, even taking on extra household chores to pay a lower share of rent. But that wasn't enough.
"It feels like life is on hold," said Noack.
"Every now and then, I will see someone who I used to know in high school, who I know got a job. They will be having a business lunch or be on the way to the airport, and one out of 10 times I will get a twinge of jealousy because, just simply, I don't know anybody who could get me on a path like that."
Noack's frustrations are shared by many others in his age group, including college graduates.
Overall, the number of 25- to 34-year-old men and women who were living with their parents last spring totaled 5.9 million — a 25.5% increase since the recession began in 2007.
Nearly half of this group would have been counted as among the poor had they been out on their own, according to Trudi Renwick, chief of poverty statistics for the Census Bureau.
"The next generation is going to be terribly punished if we don't find more jobs," said Timothy M. Smeeding, director of the Institute for Research on Poverty at the University of Wisconsin. Studies have shown the effects of recessions and job losses can hurt a worker's earnings for many years into the future.
The census report, coming shortly after President Obama unveiled a proposed $447-billion package of tax cuts and spending to revive job growth and the recovery, was seen as intensifying the debate over the government's role in helping the poor and unemployed at a time of budget deficits and painful cutbacks in public services.
Unemployment benefits, the Census Bureau said, helped lift about 3 million people above the poverty line, and Obama's latest proposal includes continuing the aid.
The report "underscores yet again why these programs must be maintained to rebuild the economy," said Christine Owens, executive director of the National Employment Law Project, referring to unemployment insurance and Social Security benefits.
But conservative groups expressed their concerns about Americans' growing reliance on such programs, including government health insurance.
"It raises the issue of whether we can afford this," said Nina Owcharenko, director of health policy studies at the Heritage Foundation. "These entitlement programs are unsustainable."
The census report found more Americans again lost health insurance in 2010, continuing a decade-long erosion in coverage that pushed the percentage of uninsured to 16.3%, the highest ever recorded.
But the decline in health coverage slowed from 2009 to 2010 and was not statistically significant, according to census analysts.
The number of young people ages 18 to 24 who had insurance increased significantly, possibly reflecting the effect of the new healthcare law, which allows dependents up to age 26 to remain on their parents' health plans.
The decline in insurance coverage was fueled largely by employers dropping health benefits as healthcare costs continued to rise, a trend that has reduced the percentage of Americans who get health benefits through work from a peak of 65.1% in 2000 to 55.3% last year.
During that period, the average annual premium for an employer-provided family health plan more than doubled to $13,770 from $6,438, according to surveys by the nonprofit Kaiser Family Foundation.
As Americans lost coverage through work, they have increasingly relied on government programs such as Medicaid.
"The real policy take-away is the importance of protecting the safety net," said Families USA Chief Executive Ron Pollack, a leading consumer advocate. "Medicaid is the lifeline."
By the Census Bureau's latest measure, the poverty threshold last year was an income of $11,139 for one person and $22,314 for a family of four.
Lorenzo Williams, 25, of Hesperia is well below that threshold.
After his hours as a store clerk at the local Salvation Army had been cut twice, reducing his monthly earnings of about $1,500 to about $600, the high school graduate had to move from his one-bedroom apartment to a small two-bedroom unit to share costs with a roommate. With $166 a month in food stamps, he barely gets by.
Williams said he goes to job fairs, but the lines are long, the competition tough. He now plans to begin Bible studies next year and become a pastor.
The official poverty rate doesn't count food stamp benefits and low-income tax credits as income
If those programs, which totaled about $150 billion last year, were included, millions more people would have been counted as being above the poverty line.
At the same time, analysts said, other factors understate the extent of people struggling to meet their basic needs.
Experts agree that the government's poverty thresholds, designed in the early 1960s, don't reflect people's spending and living needs in today's economy.
The Census Bureau is scheduled to release alternative measures of poverty in October.
California’s unemployment rate averaged 12.4% in 2010. In July, there were 2.2 million unemployed in the state, and unemployment was at 12%. One-third of the unemployed — about 727,000 people — have been out of work for a year or more, and many have exhausted their unemployment benefits. Above, job seekers talk with recruiters during a job fair last month in San Jose. (Justin Sullivan, Getty Images / September 14, 2011)
September 13, 2011, 6:14 p.m. - The number of Californians living in poverty grew for the fourth straight year in 2010, more evidence that continued high unemployment and a struggling economy are weighing on the state's families.
About 6 million Californians had incomes below the federal poverty line of $22,113 for a family of four in 2010, census data released Tuesday show. That's 16.3% of the population, up from 15.3% in 2009.
Nearly 1 in 5 residents lacked health insurance last year, one of the highest rates in the nation. Median household income in the state, when adjusted for inflation, fell 4.6% to $54,459. That's the largest decline in a single year since record keeping began.
"The latest data show that the Great Recession had a very profound impact on California, particularly families with children," said Jean Ross, executive director of the nonpartisan research group California Budget Project. "We saw a very significant increase in poverty and a significant decrease in the purchasing power of the income of the typical California household."
Sluggish consumer spending is slowing California's recovery in the short term. But the consequences of poverty can reverberate for decades.
Children raised in poverty are less likely to go to college than children from wealthier families, and they often have more health problems throughout life, Ross said. That could have negative consequences for California's workforce, which already has a shortage of educated workers, according to a recent study by the Brookings Institution.
Also Tuesday, a law enforcement group called Fight Crime: Invest in Kids warned that rising child poverty rates could lead to higher crime rates in the future.
"Childhood poverty is a consistent risk factor for becoming a violent criminal or a victim of crime," said Miriam Rollin, the group's national director.
California's unemployment rate averaged 12.4% in 2010. In July, there were 2.2 million unemployed in the state, and unemployment was at 12%. One-third of the unemployed — about 727,000 people — have been out of work for a year or more, and many have exhausted their unemployment benefits.
Erik Navratil, 17, has spent the last four years in transition since his father lost his job as a mortgage broker. The teenager is staying with friends because his family lost their house. His mother, father and brother each are living in different places until they can scrape together enough money for rent.
"Our lives are in turmoil," Navratil said.
His mother, Catherine Navratil, said the separation has been hard on everyone. She said the worst was when Erik volunteered to drop out of school to help support the family. She refused to let him do it.
"It's horrible. I have minor children and I couldn't even be with them," she said. "It broke my heart. You want to be there to comfort them when they're sad and upset."
Food stamps have helped the family survive, she said. About 1.4 million Californians participated in the federal food stamp program in 2010, up from 1.1 million the year before.
Government cash assistance to low-income families with children was rolled back in the most recent state budget, said Ross of the California Budget Project. That reduced the amount of time families can receive aid to four years, from five. Grant levels were reduced 13% starting in June, she said.
"That's troubling given continued high unemployment," she said. "Even individuals that have a strong work history are having a tough time finding jobs."
As unemployment and poverty deepen in California, millions of people are also forgoing health insurance and basic healthcare that would keep them from becoming ill and landing in hospitals.
Poverty-stricken individuals and families wind up "living sicker, dying younger and being one emergency room visit away from financial ruin," said Anthony Wright, executive director of the consumer group Health Access California.
Without health insurance, Brooke Hesla has watched her health and her finances deteriorate.
The San Bernardino college student said she has endured two urinary tract infections in recent years, resorting to an unconventional if relatively inexpensive treatment — antibiotics for livestock bought at a local feed store.
To treat a scraped foot, the 27-year-old journalism student said she filled her bathtub with scalding water and bleach — a homespun remedy to kill infection.
"I pray to God that nothing makes me too sick that it puts me out of commission," she said.
Hesla said she ran up about $18,000 in medical bills for an emergency room visit during one of her infections and other medical care, but that she has no money to pay collectors. And there's no money for health insurance either.
"The income is just not there," said Hesla, who works part time as an auto mechanic.
In 2010, 19.4% of Californians had no insurance, the census reported. That equates to 7.2 million people.
California last year ranked eighth among states with the highest rates of people without insurance. Texas topped the list with 24.6% of its residents uninsured, followed by New Mexico (21.6%) and Nevada (21.3%).
Other numbers released Tuesday illuminated a gap in the region's economy and the state of its families. In various metropolitan regions throughout the state, gross domestic product grew in 2010, the Bureau of Labor Statistics reported. The Los Angeles metro area had the second-highest GDP in the nation last year, $735 billion, a 2.5% increase from the previous year, and the San Francisco metro area ranked eighth, with a GDP of $325 billion, a 2.3% rise.
Yet even as GDP grew, incomes decreased statewide last year. The census shows that California's 2010 median household income when adjusted for inflation fell 4.6% from 2009 and 9% from 2006.