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The Daily Wildcat

The Daily Wildcat

 

    “U.S. poverty rate climbs, bringing pain to millions and raising financial burden on whole nation”

    WASHINGTON — The recession and longer-term economic troubles have pushed the nation’s poverty rate to levels not seen in over a decade and close to what it was when President Lyndon Johnson launched the “”War on Poverty,”” bringing more straited lives to millions of Americans and adding to the financial challenge facing the whole country.

    And the face of the poor has changed ominously, new Census Bureau data released Thursday showed. No longer the old stereotype of the inner-city single mother collecting welfare checks, those falling below the poverty line today are likely to full-time workers who cannot earn enough to meet their needs or middle-class workers driven into the ranks of the poor by lost jobs or shrinking incomes.

    The higher poverty levels meant higher costs for government programs such as Food Stamps and unemployment compensation, potentially heavier tax burdens for the country as a whole, and more straited lives and financial pressures for millions of Americans — especially those who were previously more fortunate.

    Workers such as Susannah Evans of Ventura, Calif., a 56-year-old single woman who until August 2008 had a good-paying job as a marketing coordinator for a law firm. Since getting laid off, she has exhausted unemployment benefits and downsized from a one-bedroom apartment to a rental room in a house.

    “”If it has to be that I live in my car, I accept it,”” she said Thursday, breaking down in tears. “”It’s reality.””

    For the United States as a whole, the rise in the poverty level that began a decade ago and accelerated during the recession has wiped out all the gains made during the long run of economic growth and prosperity in the 1990s.

    The Census Bureau said 43.6 million people, or 14.3 percent of American residents, lived below the poverty line last year, compared with 13.2 percent in 2008 and 11.3 percent in 2000. The number of people counted as living below the poverty line in 2009 was the largest number since records began being kept in the 1950s, though the total U.S. population is also larger.

    The increase would have been greater without growth in Social Security payments and unemployment insurance benefits, which kept several million more Americans from falling below the line. With the economy faltering, more elderly people also began collecting the federal retirement benefit, adding to the financial pressures on the program.

    The poverty threshold in 2009 was $10,956 for one person and $21,954 for a family of four.

    The 43.6 million that the Census Bureau counted as living below the poverty line in 2009 is the largest number since records began being kept in the 1950s, though the total U.S. population is also larger.

    The rate for Latinos grew last year to 25.3 percent from 23.2 percent in 2008, higher than other groups. The poverty figures for whites went up to 12.3 percent from 11.2 percent in 2008, and for blacks rose to 25.8 percent from 24.7 percent. The poverty level for Asian-Americans, 12.5 percent in 2009, wasn’t statistically different from 2008.

    Economists and other analysts said the latest poverty figures and the latest data on overall median household income — which declined 0.7 percent last year to $49,800 — were better than they had expected given the severity of the recession and the massive job losses last year.

    A key difference, they said, appeared to be the government’s much-derided Recovery Act that expanded unemployment benefits and Social Security payments, among other things.

    “”I was shocked”” the poverty rate didn’t approach 15 percent, said Sheldon Danziger, a professor of public policy at the University of Michigan and co-editor of the book “”Changing Poverty, Changing Policies.”” “”It looks to me like the stimulus bill is the reason.””

    But Danziger and other analysts worry that poverty levels will continue to climb in the coming years, especially with a divided Congress and many lawmakers in no mood to keep extending unemployment benefits or continue programs such as the Recovery Act’s emergency fund to help low-income workers find work.

    President Obama, commenting on the Census report, credited the Recovery Act and other tax-relief and income support programs for keeping millions out of poverty last year.

    He noted that there was little change in the share of those under 18 without health insurance as there was expansion of the government’s effort to cover children. And the new health-care law, he said, “”will build on that success.””

    The figures on health insurance coverage are important in part because the cost of treating the uninsured is commonly passed on to those with insurance in the form of higher charges for their own care — a process that results in higher costs, rising insurance premiums and cutbacks in employer-provided medical insurance.

    With poverty increasing and the incomes of many ordinary families showing a decline over the past decade, some lawmakers and scholars said it will be tougher for Republicans and others to support continuation of the Bush era tax cuts for the wealthy.

    “”The numbers will make it harder to argue for tax cuts for the well-off,”” said Bruce Meyer, a professor at the Harris School of Public Policy Studies at the University of Chicago. At the same time, he noted that “”there’s a lot of resistance among the general public to attempts to redistribute income.””

    The government’s official poverty measure, which has been criticized for many years, does not count food-stamp benefits and low-income tax credits as income. If those programs were included, nearly eight million people might have been counted as being above the poverty line.

    At the same time, the poverty threshold doesn’t take into account regional cost of living differences or the growing costs for housing and medical care.

    Families in need of assistance from the government have put pressure on an already strained social safety net. The number of households receiving food stamps nationally increased 55 percent to 19 million households in June 2010 from 12.3 million in December 2007.

    Applications to Social Security’s disability insurance system grew 21 percent between 2008 and 2009.

    States such as California and Illinois are feeling particular strain as they have been hit harder by the recession, with above-average levels of unemployment and home foreclosures.

    California’s poverty rate jumped to 15.3 percent last year, the highest in 11 years and one percentage point higher than the national rate. Analysis by the California Budget Project showed that 2 million children in the state lived in families with incomes below the poverty line in 2009.

    Joblessness and poverty are forcing families to pick up and move across the country to seek employment, often relying on friends and family members for support. The Census report indicated a sharp increase in the number of people “”doubling up,”” with an 8.6 percent jump in the last two years in the number of adults 25 to 34 years old living with their parents.

    But when doubling up fails, many are checking into homeless shelters and sending children to stay with friends until the economy gets better.

    Sheila Richardson moved into a homeless shelter in early September because she had no money to pay rent.

    The 41-year old Brooklyn resident, who lost her job in late 2007 as an admissions office at a culinary school, has gone through her 401K and savings. Her 15 year-old son will stay with friends until she can get back on her feet.

    “”I used to cry, but I can’t cry anymore,”” she said. “”I just wait for it to get dark at night, so the creditors can’t call.””

    For others who had known poverty before, the fall back has been painful as they remember wistfully the good times of a decade ago. They include low-educated and other traditionally disadvantaged workers who found daylight in the late 1990s when unemployment was 4% and employers were desperate for help.

    Evadney Palmerston of Los Angeles remembers how easy it was for her to land a job as a medical billings clerk in the late 1990s. The high school graduate started out at $10 an hour and worked up to $18 in the middle of the last decade. But in 2007 she quit to take care of her mother, and recently she was laid off from an office assistant job at a property management company.

    She said she was now collecting $129 a week in unemployment benefits. Her adult daughter contributes to rent by working as a clerk typist, but Palmerston said her husband was unemployed.

    “”I’m working tooth and nail to find a job now,”” she said Thursday afternoon, taking a call from the downtown Los Angeles office at Chrysalis, a nonprofit group that works with many hard-core unemployed and other workers find jobs.

    “”There’s lots of work I can do,”” said the native of Belize. “”I’m a quick learner. I can type, do calculations. I know how to file, how to do retail. There’s so much I can bring to the table.””

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