The Census Bureau’s Shocking Poverty Stats

A record number of Americans are living below the poverty line. Ready for the worse news?

| Wed Sep. 14, 2011 6:05 AM EDT

It's no secret that the economy is in rough shape—but the latest poverty figures released by the Census Bureau on Tuesday are nonetheless shocking. The overall poverty rate has reached a record high and the number of people living in deep poverty—that is, below 50 percent of the poverty level, or $11,000 for a family of four—is the highest its been since 1975. Experts are predicting that things are only going to get worse in the years to come. (Scroll down to see the data.)

Some more lowlights: Median income has sunk lower than it was almost 15 years ago. The number of people living without health insurance is up slightly. The number of kids under the age of six living in extreme poverty is up to nearly 12 percent. The recession has been especially hard on women and people of color. The extreme poverty rate for women is more than 6 percent, the highest recorded in 22 years, and the poverty rate for black women is up a percentage point from 2009, to more than 25 percent.

Ron Haskins, a senior fellow at the Brookings Institution, had this grim assessment of the new data: "The main message of today's…income and poverty numbers from the Census Bureau is that, if we don't like the way things are now, we better get used to it."

Brookings scholar Isabell Sawhill, who crunched the numbers, estimates that by 2014, the "Great Recession" will have added an additional 10 million people to the ranks of the poor, six million of them children.

The takeaway for liberals, of course, is that the country is in dire need of more economic stimulus, regardless of the debt situation.

"These numbers confirm what millions of Americans have long felt," said Wade Henderson, president and CEO of The Leadership Conference on Civil and Human Rights in a statement. He added, "We cannot expect these trends to reverse themselves; concerted action is needed to create jobs and invest in vulnerable families if we are to ensure shared prosperity and opportunity for all."

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Sawhill estimates that President Obama's jobs plan, if passed by Congress, could prevent about 3 million people from falling into poverty next year, largely by keeping people working, but also by extending the payroll tax cut and unemployment benefits.

The census provides a good case for the passage of Obama's plan. The agency's data indicated that without unemployment benefits, another 2.3 million people would have been living in poverty in 2010. Without that so-called Ponzi scheme, Social Security, a whopping 14 million more elderly people would have been in dire straits.

Just as the numbers support more stimulus, they also offer a rebuke to congressional Republicans and former president Bill Clinton, who killed off one of the nation's oldest anti-poverty programs by passing welfare reform during the early 1990s.

Until 1997, welfare was an entitlement program that provided cash benefits to the most desperately poor people, primarily single mothers. Welfare spending expanded automatically when the economy got bad and more people needed help, without congressional intervention. The "reform" law turned welfare into a block grant, where states receive a fixed amount of money each year to provide benefits, regardless of the need. The idea was that the government should get women into the workforce rather than keeping them dependent on government handouts.

In the late 1990s, when unemployment was at a record low, conservatives declared the new law a huge success because millions of single mothers did indeed leave the welfare rolls. But the real test came when the economy went sour. Instead of serving as a critical part of the social safety net and a built-in stimulus program, the welfare, or TANF program (as it's now called), is doing virtually nothing to keep children out of poverty, as the new census data illustrates.

At $16 billion annually, the TANF block grant has remained unchanged since 1997, losing 30 percent of its value thanks to inflation. The disappearance of cash benefits may be one factor in why the poverty rate for single moms—the people welfare reform was supposed to help—is up to 40 percent, from 38.5 percent in 2009.

Given that Republicans in Congress even oppose continuing a payroll tax cut that might help some of the nation's neediest, it seems unlikely that they'll support giving poor single moms a cost of living increase. In 2009, Congress did use TANF to create an emergency fund that, among other things, subsidized jobs for about a quarter-million low-income parents and young people. But Congress killed it last September over the pleas of anti-poverty advocates who could see the looming crisis. As Haskins said, things are bad. We should just get used to it.

Data on median household incomes from the US Census Bureau:

Region 2009 (in 2010 dollars) 2010 Percent change in real median income
US $50,599 $49,445 -2.3
Northeast $53,949 $53,283 -1.2
Midwest $49,684 $48,445 -2.5
South $46,368 $45,492 -1.9
West $54,722 $53,142 -2.9
Race/Ethnicity 2009 (in 2010 dollars) 2010 Percent change in real median income
White $52717 $51846 -1.7
White, not Hispanic $55360 $54620 -1.3
Black $33122 $32068 -3.2
Asian $66550 $64308 -3.4
Hispanic origin $38667 $37759 -2.3
Nativity 2009 (in 2010 dollars) 2010 Percent change in real median income
Native-born $51337 $50288 -2
Foreign-born $44648 $43750 -2
Naturalized citizen $52833 $52642 -0.4
Not a citizen $36685 $36401 -0.8
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