Home > Uncategorized > LA Times – A snapshot of poverty in the U.S.

LA Times – A snapshot of poverty in the U.S.

September 16, 2012 Leave a comment Go to comments

A new Census Bureau report confirms that the slowly rising tide of the U.S. economy hasn’t lifted all boats. The 20% of Americans with the highest incomes captured an even larger share of the earnings in 2011, while the rest collected the same share or less. The widening income inequality is disturbing, but as the report shows, things could have been considerably worse. Without such safety net programs as unemployment benefits and food stamps, millions more families would have fallen into poverty.

The bureau’s annual reports on income, poverty and health insurance are like group photos taken from an extremely high altitude. The year-to-year comparisons offered don’t reveal anything about income mobility or the ability of people to move up (or down) the economic ladder. But they do show that the vast majority of Americans continue to see their fortunes slide. In 2011 the median income fell for the fifth year in a row, to $51,000 — a drop of 1.5%. It fell for all four ethnic groups tracked by the census (although only slightly for Latinos), and for women and men alike. The exception was in the top 20% of U.S. incomes, which held steady.

The result: The share of U.S. earnings collected by the highest-income Americans grew, while the share collected by the middle 60% fell. The bottom 20% saw no change, but the gap between the rich and poor was the largest on record. As long as the fruits of the recovery are modest and reaped mainly by the highest incomes, the median income will continue to drop and the poverty rate won’t go down.

The glimmer of encouragement in the report was that the poverty rate stayed at 15%, the same as in 2010, after rising for four years. (The rate is the percentage of households with incomes below the federal poverty line, which in 2011 was $23,200 for a family of four). That’s roughly where the rate was in the early 1980s and early 1990s; it falls during boom times and rises when unemployment surges. Part of the explanation for the leveling off was the growth in year-round, full-time employment among lower-income Americans. That’s a good-news, bad-news statistic; it reflects the fact that most of the jobs being created in the recovery are lower-wage jobs.

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