February 26, 2024

Poor Are Still Getting Poorer, but Downturn’s Punch Varies, Census Data Show

And so it does. But not evenly.

The Midwest is battered, but the Northeast escaped with a lighter knock. The incomes of young adults have plunged — but those of older Americans have actually risen. On the whole, immigrants have weathered the storm a bit better than people born here. In rural areas, poverty remained unchanged last year, while in suburbs it reached the highest level since 1967, when the Census Bureau first tracked it.

Yet one old problem has not changed: the poor have rapidly gotten poorer.

The report, an annual gauge of prosperity and pain, is sure to be cited in coming months as lawmakers make difficult decisions about how to balance the competing goals of cutting deficits and preserving safety nets.

Its overall findings — income down, poverty up — are hardly surprising in the worst economic downturn since the Great Depression. Of equal interest, with fiscal knives in the air, are the looks at who has suffered the most and who has largely escaped.

“Certainly in a recession we want to put resources where they’re most needed,” said Eugene Steuerle of the Urban Institute, who served as a Treasury official under Democratic and Republican presidents. “And in a recession, needs change dramatically from group to group.”

Perhaps no households have weathered the downturn better than those headed by people 65 and older, whose incomes rose 5.5 percent from 2007 to 2010. By contrast, household income for every other age group fell. Among people ages 15 to 24, it plunged 15.3 percent.

Partly that is because older Americans get more of their income from pensions and investments, so a job shortage hurts them less. Also, the generation now retiring has been the most prosperous in history, so as poorer Americans die off, the income of the age group grows.

Such data is likely to feed longstanding debates about generational equity, since the largest portion of safety net spending goes to those 65 and older, through Social Security, Medicare, and Medicaid.

“We are spending too much of our limited resources on the elderly, and not investing enough in programs for younger Americans, such as job training and education,” said Isabel V. Sawhill, a budget expert at the Brookings Institution.

Another noteworthy finding comes from the suburbs, which have traditionally had the lowest rates of poverty. Suburban dwellers experienced a sharp increase toward the end of the past decade. Nearly 12 percent of them were living in poverty in 2010, the highest level ever recorded, up from just 8 percent in 2001. (The rate in cities was 19 percent, but rose less sharply.)

“There’s been a suburbanization of poverty,” said Alan Berube, a Brookings demographer, who cited the growth of service, retail and construction jobs that lured low-income Americans to the suburbs before the recession. “The notion of poverty being only in inner cities and isolated rural areas is increasingly out of step with reality.”

Household income fell in every region of the country from 2007 to 2010. But it fell much less in the Northeast (3.1 percent) than in the South (6.3 percent), the West (6.7 percent) or the Midwest (8.4 percent). And the Northeast was the only region where household income did not fall last year.

The declines in the West have been fueled in part by the collapse of the housing industry, especially in Arizona and Nevada. And the Midwest has suffered idled factories. Its status as the hardest-hit region is likely to come into play next year as presidential candidates hunt such big Electoral College prizes as Michigan, Iowa, Wisconsin and Ohio.

“The big hurt has been in the manufacturing and construction industries, which were big in the Midwest and West,” said Timothy Smeeding, an economist at the University of Wisconsin, Madison.

The census findings present two competing stories of immigrants — a reminder of just how economically diverse that group has become. From 2007 to 2010, they have fared both better and worse than the native born.

Among people born in the United States, household incomes declined 6.1 percent. Among non-citizens, the decline was steeper — 8 percent. But for immigrants who had attained citizenship, the decline was only 3.9 percent.

That latter group may disproportionately include the highly educated professionals who increasingly fill the new Americans’ ranks. A recent study by Audrey Singer, a demographer at the Brookings Institution, found that the number of immigrants with college degrees now exceeds those who lack a high school education.

“The high-skilled people are starting to dominate,” she said

Two worrisome numbers in the report raise questions about the recent response of the safety net. Poverty has risen especially fast among single mothers. More than 40 percent of households headed by women now live in poverty, which is defined as $17,568 for a family of three.

That is the first time since 1997 that figure has been so high. Analysts attribute the rise in part to changes in the welfare system, enacted in the mid-1990s, which make cash aid much harder to get. Those changes were credited with encouraging recipients to work in good times, but may leave them with less protection when jobs disappear.

“The business cycle is going to hurt them a lot more than it used to,” said Robert Moffitt, a Johns Hopkins University economist.

Poor people not only grew more numerous — 46.2 million — but also poorer. Among the poor, the share in deep poverty (defined as having less than half the income to escape poverty) rose to the highest level in 36 years: 44.3 percent.

The census data may overstate hardship by failing to count some benefits the needy receive, like tax credits and food stamps. But it also may also understate their needs by failing to adjust for health care expenses and variations in the cost of living.

About 20.5 million people are in deep poverty, with food stamps increasingly replacing cash aid as the safety net of last resort. More than 45 million people get food stamps, an increase of 64 percent since January 2008. About one in eight Americans, and one in four children, receives aid. Using an alternative definition of income, the Census Bureau found that food stamps lifted 3.9 million people above the poverty line.

“Given that poverty and hardship are likely to continue for some time, it’s imperative that we protect the program,” said Stacy Dean, an analyst at the Center on Budget and Policy Priorities, which aids in food stamp outreach campaigns.

Article source: http://feeds.nytimes.com/click.phdo?i=c924c259a7af646d0db8a8dfb1b91782

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