WASHINGTON (AP) — The nation’s poverty rate remained stuck
at 15 percent last year despite America’s slowly reviving economy, a
discouraging lack of improvement for the record 46.5 million poor and an
unwelcome benchmark for President Barack Obama’s recovery plans.
More than 1 in 7 Americans were living in poverty, not
statistically different from the 46.2 million of 2011 and the sixth straight
year the rate had failed to improve, the Census Bureau reported.
Median income for the nation’s households was $51,017, also
unchanged from the previous year after two consecutive annual declines, while
the share of people without health insurance did improve, but only a bit, from
15.7 percent to 15.4 percent.
“We’re in the doldrums, with high poverty and inequality as
the new normal for the foreseeable future,” said Timothy Smeeding, an economics
professor at the University of Wisconsin-Madison who specializes in income
inequality. “The fact we’ve seen no real recovery in employment and wages means
we’ve just flatlined.”
The last significant decline in the national poverty rate
came in 2006, during the Bush administration and before the housing bubble burst
and the recession hit. In 2011, the rate dipped to 15 percent from 15.1 percent,
but census officials said that change was statistically insignificant.
For the past year, the official poverty line was an annual
income of $23,492 for a family of four.
The Census Bureau’s annual report offers a snapshot of the
economic well-being of U.S. households for 2012, when the unemployment rate
averaged 8.1 percent after reaching an average high of 9.6 percent in 2010.
Typically, the poverty rate tends to move in a similar
direction as the unemployment rate, so many analysts had been expecting a modest
decline in poverty.
The latest census data show that the gap between rich and
poor was largely unchanged over the past year, having widened since 2007 to
Obama called attention to what he described as economic
improvements — the nation’s gross domestic product did rise by 2.8 percent last
year — and said congressional Republicans would reverse recent gains if they
took uncompromising stands in connection with looming budget deadlines.
Some Republican conservatives have been demanding a delay of
Obama’s new health care law as the price for supporting continued federal
The House is expected to consider a bill that would cut food
stamps for the poor by an estimated $4 billion annually — 10 times the size of
cuts passed by the Democratic Senate — and allow states to put broad new work
requirements in place for recipients.
“This lack of improvement in poverty is disappointing and
discouraging,” said John Iceland, a former Census Bureau chief of the poverty
and health statistics branch who now is a Penn State University sociology
professor. “This lack of progress in poverty indicates that these small
improvements in the economy are not yet being equally shared by all.”
Ron Haskins, a senior fellow at the Brookings Institution
who specializes in poverty, agreed.
“Everything’s on hold, but at a bad level; poverty and
income did not change much in 2012,” he said. “So child poverty is still too
high and family income is still too low. The recession may be over, but try to
tell that to these struggling families. Don’t expect things to change until the
American economy begins to generate more jobs.”
The official poverty level is based on a government
calculation that includes only income before tax deductions. It excludes capital
gains or accumulated wealth, such as home ownership.
As a result, the rate takes into account the effects of some
government benefits, such as unemployment compensation. It does not factor in
non-cash government aid such as tax credits and food stamps.
David Johnson, chief of the Census Bureau’s household
economics division, estimated that unemployment benefits helped keep 1.7 million
people out of poverty.
If non-cash government aid were counted in the official
formula, the earned income tax credit would have lifted another 5.5 million
people above the poverty threshold. Counting food stamps would have boosted 4
million people, lowering the poverty rate to 13.7 percent.
The slight dip in Americans without health coverage meant 48
million people were without insurance. The drop was due mostly to increases in
government coverage, such as Medicaid and Medicare. The number of people covered
by employer-provided health insurance remained flat.
The decline in the uninsured was modest compared to a bigger
drop in 2011, which occurred due to increased coverage for young adults under
the new health care law.
Because the main provisions of the Affordable Care Act don’t
take effect until 2014, the latest census numbers offer a baseline number of
uninsured by which increased coverage and effectiveness of the law will be
measured. Many conservative Republicans remain committed to repealing the law.
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