AP Study: Poverty Rates In US on Track to Hit Highest Level Since the 1960s

The Associated Press conducted a survey of more than a dozen nonpartisan, liberal and conservative economists, think tanks and academics, and found a broad consensus. The official poverty rate will continue to rise from 15.1 percent in 2010, to as high as 15.7 percent, and even if the gain is a much more modest one of 0.1% as some predict, it will still  increase the poverty rate to it’s highest level since 1965.

Some 47 million people in the U.S., or 1 in 6, were poor last year. In 1983 the poverty rate was 15.2%, the highest since 1965. The highest level on record was 22.4 percent in 1959, when the government began calculating poverty figures. Poverty is closely tied to joblessness. While the unemployment rate dropped from 9.6 percent in 2010 to 8.2 percent in 2012, the employment-population ratio remained largely unchanged, meaning many discouraged workers stopped looking for work. The number of those collecting assistance for food went up, which is another indicator of the growth of poverty.

Stacey Mazer of the National Association of State Budget Officers said state’s poverty rate increases will be one of the deciding factors in whether states expand their Medicaid coverage. 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.

Demographers also say:

-Poverty will remain above the pre-recession level of 12.5 percent for the foreseeable future. Peak poverty levels, 15 percent to 16%, will last at least until 2014, due to expiring unemployment benefits, a jobless rate persistently above 6% will accompany weak wage growth.

-Part-time or underemployed workers, who saw a record 15 percent poverty in 2010, will continue to rise.

-Poverty among people 65 and older will remain at historically low levels, buoyed by Social Security cash payments.

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 substantially under President 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.

 

 

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