Poverty Rates Highest Since 1997

Almost 40 million people in the U.S. lived in poverty last year — the first full year of the recession — putting the nation's poverty rate at its highest level in 11 years, according to new figures released Thursday by the Census Bureau.

The fact that poverty is on the rise is no surprise. Since the start of the recession back in December 2007, unemployment has been going up and incomes have been going down. The median income dropped 3.6 percent last year, and the poverty rate rose to 13.2 percent. That pushed an additional 2.5 million people below the poverty line. Many were children.

David Johnson, a senior statistician with the Census Bureau, says the increase is clearly linked to jobs.

"Children in nonworking families, children in female-headed households, children in families that receive food stamps, their poverty rate didn't change much," Johnson says. "Whereas children in earner households, the poverty was affected a lot. So you see a lot of it tied to the earnings change in 2007, 2008."

That makes a lot of people nervous. If things were so bad last year, what about now?

"These numbers are grim — grimmer than we expected," says Robert Greenstein, head of the liberal Center on Budget and Policy Priorities. He notes that joblessness continues to rise.

"This creates a very serious concern, that if we already were at just under 40 million Americans in poverty in 2008 — before the biggest increases in unemployment — poverty is going to go much higher than that in 2009 and 2010," Greenstein says.

In fact, he predicts that it could go higher than it's been in 50 years.

The view from Ron Haskins of the Brookings Institution isn't much brighter. Haskins, a Republican who was instrumental in the welfare overhaul of the 1990s, says today's numbers show the country is in the midst of an extended period of bad news.

"We're in an era, I think, of several years of fairly serious poverty levels," Haskins says. "And especially if you compare it with the late 1990s, because that was a wonderful time for poverty. Way more people worked, in part, because of welfare reform."

He says the problem now is that the jobs just aren't there, and the prospects for future job growth aren't good. Haskins notes that almost all segments of the population have been affected — except the elderly, who didn't experience a significant increase in poverty last year.

"All over the country, married-couple families, middle-class, low-income, single-parent families, except the elderly, poverty increased for almost every group," Haskins says. "It's a very widespread phenomenon."

The poverty rate did remain unchanged for blacks.

Johnson of the Census Bureau said it's not clear why, but he noted that blacks already had a very high poverty rate — almost 25 percent last year, compared with 8.6 percent for non-Hispanic whites. Poverty among Hispanics rose by 2 percentage points last year to more than 23 percent.

There has been criticism recently of how the government measures poverty, and Johnson says the Census Bureau will produce alternative statistics later this year. He says, for example, if food stamps are factored into the poverty numbers, more than 2 million fewer people would be considered poor. But by any measure, Haskins says, poverty is on the rise.

Of course, that isn't news to people on the front lines. George Jones, who runs Bread for the City in Washington, D.C. — a nonprofit organization that provides food, clothing and other services to the poor — says his lines keep getting longer and longer.

"When the economy really started to sort of falter, we were seeing an uptick of about 10 percent increase of food clients over the course of a 12-month period. So two consecutive years, we saw that level of growth," Jones says.

It's been the same across the country. What has Jones concerned now is that he's only beginning to see the next wave of the newly poor.

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