The Poor Get Poorer, but the Severity of Decline Varies

The Census Bureau's report on poverty shows the poor are getting poorer, and that the degree to which people have been affected by the economic downturn has varied widely. According to a New York Times article on the report, between 2007 and 2010 median household income dropped in every region, but the decline was most severe in the Midwest (8.4 percent decline). Median household income absorbed the smallest losses in the Northeast (down 3.1 percent), with the South (6.3 percent) and West (6.7 percent) falling in between.

The Times attributes troubles in the West to the housing market's collapse and those in the Midwest to "idled factories." But there are changes within regions, too, as the poverty rate saw a jump in suburban areas. Roughly 12 percent of suburban residents were in poverty in 2010, the highest recorded percentage and an increase from the eight percent in poverty in 2001.

Households headed by individuals over 65 years of age have fared the best during the downturn; from 2007 to 2010, their household income actually increased 5.5 percent, while it declined for every other age group. The decline was most extreme among those aged 15 to 24, as their household income fell by over 15 percent during the period.

Concerning the disparity in household income change based on age, the Times writes: "Partly [it] 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." They also point out that " the largest portion of safety net spending goes to those 65 and older, through Social Security, Medicare, and Medicaid," suggesting that these new figures may raise new debate over how the government distributes its spending.

For example, there may be complaints that not enough money is going toward single women who are the heads of their households. Over 40 percent of such women are now below the poverty line ($17,568 for a family of three), the highest percentage since 1997. The Times writes: "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 decline in household income between 2007 and 2010 was not equally distributed by race, either. Although income fell among whites (-5.4 percent), Hispanics (-7.2 percent) and Asians (-7.5 percent), the drop was steepest for blacks, who saw their household incomes decline 10.1 percent.

Perhaps most worrisome is that those who are already poor are getting poorer. The share of those in poverty who are in deep poverty (those with incomes less than half the income to escape poverty) was the highest in 36 years, checking in at 44.3 percent, or 20.3 million people.

SSDAN Office

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