The Great Recession supposedly ended in 2009 — but Americans continued to get poorer by a variety of measures in 2010, according to new U.S. Census data released yesterday.
The numbers show that more Americans lived in poverty in 2010 than at any time in the 52 years that records have been collected. Median household income fell last year to the lowest level since 1996 and a growing number of people lack health insurance.
Experts warned that the downward spiral may continue if high unemployment levels persist through next year, as predicted by the Congressional Budget Office.
“All of the numbers are pretty grim right now,” said Isabel Sawhill, a senior fellow at the Brookings Institution, a nonpartisan think tank. “It’s not like we’re at a peak, and we’re going to turn around quickly, because there is a lag ... between unemployment and the way poverty responds to it.”
An additional 2.6 million people became officially poor last year, raising the poverty rate from 14.3 percent in 2009 to 15.1 percent. It was the fourth year in a row that the ranks of the poor grew, and Sawhill predicts poverty rates will rise to 16 percent by 2014.
Poverty is defined as a pre-tax income of $11,139 for individuals, $14,218 for couples and $22,314 for a family of four, according to the U.S. Census Bureau. The poverty figures do not count some types of government aid, such as Medicare, Medicaid, food stamps and public housing.
The U.S. had the highest poverty rate among developed countries, according to the Organization for Economic Cooperation and Development, which sets the poverty line at households that earn less than 50 percent of the median household income, a different measure than the Census Bureau. Only Chile, Mexico and Israel had higher poverty rates among 34 countries the OECD tracks.
Not everyone agreed that the numbers showed a crisis. Robert Rector, a senior fellow at the conservative Heritage Foundation, argued that the Census Bureau’s failure to count food stamps and other government benefits as income paints an unrealistic picture of poor Americans facing Dickensian living standards. He pointed to another set of census data showing that many poor households have air conditioning, cable or satellite television and computers.
Still, median household income declined to $49,445 in 2010, a 2.3 percent drop from 2009 and 6.4 percent drop from the pre-recession days of 2007. The number of people without health insurance rose by nearly a million in 2010, largely due to the continued long-term erosion of employer-provided health care benefits.
Analysts broadly agreed that persistently high unemployment rates are to blame. Half of the 2.6 million people who fell into poverty in 2010 reported not having worked at all in the previous year.Katharine Abraham, a member of the President’s Council of Economic Advisers, said the long-term unemployed are exhausting their unemployment insurance benefits, which the Census Bureau estimated kept about 3.2 million people out of poverty in 2010.
Some policy experts interviewed yesterday worried that poverty levels could increase further if a congressional deficit reduction committee slashes programs such as food stamps or unemployment insurance.
The Census data showed that young people are moving back home to cope. In 2010, 26 percent more people between ages 25 and 34 lived with their parents than before the recession.
Of people between 25 and 34 living with their parents, 45 percent earned incomes below the poverty line.
Louis Peitzman, 24, moved back home a few weeks ago after struggling to survive as a freelance writer since graduating from the University of California-Berkeley in 2008. Peitzman said he made more than the poverty threshold last year, but not in 2009.
“The only way I can avoid panicking is to give myself a three-month window to move out,” Peitzman said. “Even though there is less of a stigma of moving home with one’s parents, it’s still not an ideal situation.”