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Number Of U.S. Poor Drops, But Median Income Stalls

Fri., Oct. 6, 1995, midnight

The percentage of Americans in poverty dropped under 15 percent last year to 38.1 million, the first year in a decade that both the rate and total declined. There were no signs the gap between rich and poor was closing.

The report, coming as Congress argues over cutting programs that aid the working poor, followed other recent signs of declining poverty, including a decrease in Americans collecting food stamps.

However, the total was still 5.6 million above 1989, when the poverty rate was 13.1 percent, Census Bureau statistician Daniel Weinberg said Thursday in releasing the report.

And administration officials said this is no time to cut back on programs they credited with helping pull millions of Americans out of poverty.

Poverty in America was defined as being below an income of $15,141 for a family of four.

The poverty rate went from 15.1 percent of the population in 1993 to 14.5 percent in 1994, according to the Commerce Department report, which was based on a Census survey of about 60,000 households.

The economy grew last year by 4.1 percent, the best showing in a decade. That strong growth helped to push the unemployment rate to a four-year low and played a role in lowering the poverty rate.

At the same time, median household income remained essentially unchanged at $32,264. The major exception was among black households, whose inflation-adjusted median rose from $20,032 in 1993 to $21,027 last year, an increase of 5 percent.

The very rich continued to grow richer while the very poor got poorer, or, as Weinberg put it: “The long-term trend in the U.S. has been toward increasing income inequality.”

The top 5 percent of the population earned 21.2 percent of all income while the lowest 20 percent earned only 3.6 percent in 1994. In 1989, the top 5 percent accounted for 18.9 percent of all income while the lowest 20 percent garnered 3.8 percent.

Isaac Shapiro, associate director of the liberal Center on Budget and Policy Priorities, attributed last year’s decline in poverty to the economic recovery that began in 1992.

“In any recovery, the folks who are reached last by the recovery tend to be those at the bottom,” he said.

Other findings included:

The number of people without health insurance coverage in 1994 was 39.7 million, or 15.2 percent of the population.thMarried-couple family households experienced a 1.8 percent increase in real median income between 1993 and 1994. Family households headed by women with no husband present experienced a 4.5 percent increase.

Children make up 40 percent of the poor although they are only 27 percent of the population. Their poverty rate was higher than any other age group - 21.8 percent.

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