x Abu Dhabi, UAETuesday 25 July 2017

Nearly one in six Americans in poverty, US census says

A record 46.2m Americans are out of work as the recession leaves millions still struggling, while the number without health insurance has reached 49.9m, the most in more than two decades.

People pick up lunch in the soup kitchen of the St Francis Centre in Los Angeles. Kevork Djansezian / Getty
People pick up lunch in the soup kitchen of the St Francis Centre in Los Angeles. Kevork Djansezian / Getty

WASHINGTON // The ranks of the nation's poor have swelled to a record 46.2 million, or nearly 1 in 6 Americans, as the prolonged pain of the recession leaves millions still struggling and out of work. And the number without health insurance has reached 49.9 million, the most in more than two decades.

The figures are in a Census Bureau report, released on Tuesday, that offers a sombre snapshot of the economic well-being of US households for last year when joblessness hovered above 9 per cent for a second year. The rate is still 9.1 per cent at the start of an election year that is sure to focus on the economy and President Barack Obama's stewardship of it.

The overall poverty rate climbed to 15.1 per cent, from 14.3 per cent the previous year, and the rate from 2007-2010 rose faster than for any similar period since the early 1980s. For last year, the official poverty level was an annual income of $22,314 (Dh81,892) for a family of four.

Measured by total numbers, the 46 million now living in poverty are the most on record dating back to when the census began to track in 1959. The 15.1 per cent tied the level of 1993 and was the highest since 1983.

The share of Americans without health coverage rose from 16.1 per cent to 16.3 per cent, according to Census Bureau revisions. The increase was due mostly to continued losses of employer-provided health insurance in the weakened economy.

The uninsured rate for adults 18 to 24 actually declined last year, from 29.3 per cent to 27.2 per cent, said Brett O'Hara, chief of the Health and Disability Statistics branch at the Census Bureau. That was the only age group that posted a decrease, and he said "the law change certainly could be a factor."

For last year, the median - or midpoint - household income was $49,445, down 2.3 per cent from 2009.

The poor include Nekisha Brooks, 28, of Fort Washington, Maryland, who lost her job as a customer service representative for AT&T several months ago in a round of layoffs. Raising five young children, she is now on food stamps and partly leaning on friends and family for help.

"It's hard on the kids," Ms Brooks said, describing how her family has had to cut back on clothing and restaurant outings. "I've been putting in job applications every day and calling around, from housekeeping to customer service to admin or waitresses, but nobody seems to be hiring right now."

Bruce Meyer, a public policy professor at the University of Chicago, said the worst may be yet to come in poverty levels, citing in part continued rising demand for food stamps this year as well as "staggeringly high" numbers in those unemployed for more than 26 weeks. He noted that more than 6 million people are in the category of long-term unemployed and more likely to fall into poverty, accounting for more than two out of five currently out of work.

The latest numbers, which cover Mr Obama's second year in office, offer political fodder for both parties as Mr Obama seeks to push a new $447 billion plan for creating jobs and stimulating the economy. The plan includes a proposed Social Security payroll tax cut and an extension of unemployment benefits.

Mr Obama is urging Congress to pay for the new spending largely by increasing taxes on the wealthy, which Republicans have emphatically rejected.

According to the report, the gap between the rich and poor widened last year, at least based on some measures. For instance, income fell for the wealthiest - down 1.2 per cent to $180,810 for the top 5 per cent of households. But the bottom fifth of households - those making $20,000 or less - saw incomes decline 4 per cent.

Other measures pointed to a longer-term widening of income inequality but with little change in 2010.

On Tuesday, the Census Bureau also noted the effect of government safety-net programmes on the poor. It estimated that new unemployment benefits passed in 2009, which gave workers up to 99 weeks of payments after layoffs, and did not run out for most people until this year, lifted 3.2 million above the poverty line. Social Security kept about 20.3 million, elderly people as well as working-age adults receiving disability payments, out of poverty.

"If these programmes are cut back in the future, poverty rates are likely to rise even more," Mr Meyer said.