Recession Drives Millions of Americans Into Poverty

Census Bureau tallies bleak toll of Great Recession

By Bill Glauber of the Journal Sentinel Sept. 13, 2011 |(394) Comments

The U.S. Census Bureau provided a grim snapshot Tuesday of what hard economic times look like in America in the wake of the Great Recession.

Nearly one in six people – 15.1% – lived in poverty in 2010, the nation’s highest poverty rate since 1993, when the country was emerging from another recession.

In all, 46.2 million Americans lived in poverty in 2010, up from 43.6 million in 2009.

For a family of four, with two children, the poverty threshold was an income of $22,314.

“It’s really bad out there,” said Timothy Smeeding, director of the University of Wisconsin-Madison Institute for Research on Poverty. “I have never been so depressed. This report is the worst report I’ve seen in 30 years. We’re supposedly a year out of recession and things are still slipping.”

The rise in poverty rates cut across ethnic and racial lines. From 2009 to 2010, poverty among whites rose from 9.4% to 9.9%, for blacks from 25.8% to 27.4% and for Hispanics from 25.3% to 26.6%. The poverty rate among Asians remained at 12.1%.

For children, the poverty rate rose from 20.7% to 22%.

Preliminary state-level census data showed Wisconsin’s poverty rate was at 10.3% in 2009-’10 and remained stable, according to an analysis by the Wisconsin Council on Children and Families.

Median household income declined, the analysis showed. Wisconsin’s median household income in 2009-’10 was $51,303, a decrease of $3,608 from 2006-’07. Adjusted for inflation, median income in the state has fallen $7,119 since 1999-2000.

Next week, the Census Bureau is due to release detailed poverty and income data for cities and counties.

“While we’re relieved to see Wisconsin appearing to hold steady on poverty, far too many families are struggling economically, and it’s clear that Wisconsinites are losing ground over time,” said Ken Taylor, executive director of the Wisconsin Council on Children and Families. “Our response to widespread poverty will be a test of our values and priorities as a state and as a society.”

Joe Volk, executive director of Community Advocates, said the new national numbers are reflected on the streets of Milwaukee. His group provides services to and advocates for the poor.

“All anyone has to do is stop in my waiting room any morning and see that it’s overflowing with people,” he said. “They need housing assistance, help in paying energy bills and help with getting food.”

The national figures, contained in the report “Income, Poverty and Health Insurance Coverage in the United States: 2010,” provide stark detail about the toll the economy has taken on Americans. Real median household income declined, health insurance remained out of reach for millions and thousands of young adults returned home to live with their parents.

Last year, the real median household income in America was $49,445, a 2.3% decline from the 2009 median.

Since 2007, the year before the recession, there were steep declines in the number of men (6.8 million) and women (2.8 million) who were working full time and year-round for wages.

“The problem is middle-class income is falling,” Smeeding said. “The middle class has kids that can’t find jobs, has lesser pensions and higher premiums for health insurance. Welcome to the frustrated Middle America . . . ”

The tough economy has also seen a rise in young adults living with their parents. This spring, 5.9 million people aged 25 to 34 lived in their parents’ household, up from 4.7 million before the recession hit.

There were 49.9 million people without health insurance in 2010, up from 49 million in 2009. In all, 16.3% of people were without health insurance, virtually the same rate as in 2009.

In Wisconsin, an estimated 504,000 (10.6%) non-elderly people went without insurance in 2009-’10. That was an increase of some 31,000 since 2007-’08, when 9.8% were uninsured, the Wisconsin Council on Children and Families analysis showed.