The ranks of America's poor are on track to climb to levels unseen in
nearly half a century, erasing gains from the war on poverty in the
1960s amid a weak economy and fraying government safety net.
Census figures for 2011 will be released this fall in the critical weeks ahead of the November elections.
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 per cent in 2010, climbing as high as
15.7 per cent. 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 underemployed workers and suburban families to the poorest 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, Colo., 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.
Fritz says she grew up wealthy in the Denver suburb of
Highlands Ranch, but fortunes turned after her parents lost a
significant amount of money in the housing bust. Stuck in a half-million
dollar house, her parents began living off food stamps and Fritz's
college money 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 checks
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, Fritz's case highlights a dim reality for the growing group in
poverty. Millions could fall through the cracks as government aid from
unemployment insurance, Medicaid, welfare and food stamps 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 per cent. That low point came after
President Lyndon Johnson's war on poverty, launched in 1964, that
created Medicaid, Medicare and other
social welfare programs.
"I'm reluctant to say that we've gone back to where we were
in the 1960s. The programs 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," Edelman said.
Stacey Mazer of the
National Association of State Budget
Officers said states will be watching for poverty increases when figures
are released in September as they make decisions about the Medicaid
expansion. Most states generally assume poverty levels will hold mostly
steady and they will hesitate if the findings show otherwise. "It's a
constant tension in the budget," she said.
The predictions for 2011 are based on separate AP interviews,
supplemented with research on suburban poverty from Alan Berube of the
Brookings Institution and an analysis of federal spending by the
Congressional Research Service and Elise Gould of the
Economic Policy
Institute.
The analysts' estimates suggest that some 47 million people
in the U.S., or 1 in 6, were poor last year. An increase of one-tenth of
a percentage point to 15.2 per cent would tie the 1983 rate, the
highest since 1965. The highest level on record was 22.4 per cent in
1959, when the government began calculating poverty figures.
Poverty is closely tied to joblessness. While the
unemployment rate improved from 9.6 per cent in 2010 to 8.9 per cent in
2011, the employment-population ratio remained largely unchanged,
meaning many discouraged workers simply stopped looking for work. Food
stamp rolls, another indicator of poverty, also grew.
Demographers also say:
—Poverty will remain above the pre-recession level of 12.5
per cent for many more years. Several predicted that peak poverty levels
— 15 per cent to 16 per cent — will last at least until 2014, due to
expiring unemployment benefits, a jobless rate persistently above 6 per
cent and weak wage growth.
—Suburban poverty, already at a record level of 11.8 per cent, will increase again in 2011.
—Part-time or underemployed workers, who saw a record 15 per cent poverty in 2010, will rise to a new high.
—Poverty among people 65 and older will remain at historically low levels, buoyed by Social Security cash payments.
—Child poverty will increase from its 22 per cent level in 2010.
Analysts also believe that the poorest poor, defined as those
at 50 per cent or less of the poverty level, will remain near its peak
level of 6.7 per cent.
"I've always been the guy who could find a job. Now I'm not,"
said Dale Szymanski, 56, a Teamsters Union forklift operator and
convention hand who lives outside Las Vegas in Clark County. In a state
where unemployment ranks highest in the nation, the Las Vegas suburbs
have seen a particularly rapid increase in poverty from 9.7 per cent in
2007 to 14.7 per cent.
Szymanski, who moved from Wisconsin in 2000, said he used to
make a decent living of more than $40,000 a year but now doesn't work
enough hours to qualify for union health care. He changed apartments
several months ago and sold his aging 2001 Chrysler Sebring in April to
pay expenses.
"You keep thinking it's going to turn around. But I'm stuck," he said.
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
non-cash aid such as food stamps and tax credits, which were expanded
substantially under President Barack Obama's stimulus package.
An additional 9 million people in 2010 would have been
counted above the poverty line if food stamps and tax credits were taken
into account.
Robert Rector, a senior research fellow at the conservative
Heritage Foundation, believes the social safety net has worked and it is
now time to cut back. He worries that advocates may use a rising
poverty rate to justify additional spending on the poor, when in fact,
he says, many live in decent-size homes, drive cars and own wide-screen
TVs.
A new census measure accounts for non-cash aid, but that
supplemental poverty figure isn't expected to be released until after
the November election. Since that measure is relatively new, the
official rate remains the best gauge of year-to-year changes in poverty
dating back to 1959.
Few people advocate cuts in anti-poverty programs. Roughly 79
per cent of Americans think the gap between rich and poor has grown in
the past two decades, according to a Public Religion Research
Institute/RNS Religion News survey from November 2011. The same poll
found that about 67 per cent oppose "cutting federal funding for social
programs that help the poor" to help reduce the budget deficit.
Outside of Medicaid, federal spending on major low-income
assistance programs such as food stamps, disability aid and tax credits
have been mostly flat at roughly 1.5 per cent of the gross domestic
product from 1975 to the 1990s. Spending spiked higher to 2.3 per cent
of GDP after Obama's stimulus program in 2009 temporarily expanded
unemployment insurance and tax credits for the poor.
The U.S. safety net may soon offer little comfort to people
such as Jose Gorrin, 52, who lives in the western Miami suburb of
Hialeah Gardens. Arriving from Cuba in 1980, he was able to earn a
decent living as a plumber for years, providing for his children and
ex-wife. But things turned sour in 2007 and in the past two years he has
barely worked, surviving on the occasional odd job.
His unemployment aid has run out, and he's too young to draw Social Security.
Holding a paper bag of still-warm bread he'd just bought for
lunch, Gorrin said he hasn't decided whom he'll vote for in November,
expressing little confidence the presidential candidates can solve the
nation's economic problems. "They all promise to help when they're
candidates," Gorrin said, adding, "I hope things turn around. I already
left Cuba. I don't know where else I can go."
By
Hope Yen
Associated Press
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US poverty on track to rise to highest since 1960s
