September 13, 2012 in Nation/World

Gap between rich and poor grows

Census report: Poverty leveling off after recession
Don Lee McClatchy-Tribune
 
By the numbers

$50,054: Median household income in the U.S. in 2011

8.1 percent: Decline in median household income since 2007

WASHINGTON – The U.S. poverty rate leveled off last year for the first time since the Great Recession, but the halting recovery deepened the financial pain for middle-class families and pushed to a new high the income gap between the country’s richest and poorest citizens.

The number and share of people living in poverty was essentially unchanged from 2010 levels. That ended four straight years of increases, the Census Bureau said Wednesday.

There was no relief for the average American: The median household income, after adjusting for inflation, dropped 1.5 percent in 2011 from the previous year to $50,054. That is now 8.1 percent lower than in 2007, when the recession began late that year.

The biggest hit fell on the middle- and lower-income groups, while upper-end households saw their incomes essentially unchanged. That raised one common index of inequality in America to an all-time high.

The Obama administration cast the Census Bureau’s annual report as evidence that the president’s policies were taking hold after the deep recession. The report indicated that job growth in the South and in America’s suburbs helped keep the poverty rate steady last year, at 15 percent of the population.

“It is clear that had President Obama not taken swift and aggressive action to grow our economy and create jobs, today’s report would have shown much higher poverty rates, lower incomes and a greater share of the population without health insurance,” said Rebecca Blank, the acting U.S. secretary of commerce.

But the data on the continuing setback for average-income families give Obama’s critics fresh material to challenge the president’s dominant campaign message: that he is a defender of the middle class.

Even as payroll employment has been growing since early 2010, many of the new jobs are low-paying. And while those added jobs are helping lift some people out of poverty, for those who once had higher incomes, those jobs are all that they can find in a weak labor market.

“It’s the middle that seems to be struggling more than the poor,” said Sheldon Danziger, a poverty expert and public policy professor at the University of Michigan.

That last year’s poverty rate didn’t rise surprised analysts, who were projecting another tick up in the figure, given the still-high unemployment rate and significant layoffs at local government offices.

The share of people falling below the poverty line – $11,702 for a single person under age 65 and $23,201 for a family of four – had increased steadily since 2006, when the rate was 12.3 percent.

The census report said there were about 46 million poor people in the U.S. last year, essentially the same as in 2010.

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