U.S. Poverty Rate, at 14.5% in 2013, Drops Without Much Good News

U.S. Economy

The official U.S. poverty rate declined for the first time since 2006. Census Bureau data for 2013 show 14.5 percent of the U.S. population living in poverty, a slight drop from the 15 percent rate in 2012.

“I think the main reason we’re looking at for the drop in the poverty rate is the growth in year-round, full-time employment,” Chuck Nelson, a Census Bureau assistant division chief, told reporters during a Tuesday telephone call. Since the overall population has grown, the total number of U.S. residents in poverty remained roughly unchanged last year, at 45.3 million. Median household income in 2013 was also nearly static, at $51,939.

The data for 2013 portray persistent inequalities in U.S. poverty and income. Median income for full-time, year-round, female workers was 78 percent of that earned by male counterparts. The poverty rates for Hispanic and black Americans (23.5 percent and 27.2 percent, respectively) were more than double that of non-Hispanic whites (9.6). “Over the last 40 years, since 1973, income at the 10th percentile was not statistically different, while income at the 90th percentile increased by 37 percent,” Census Division Chief Victoria Velkoff told reporters. The cutoff point for the 10th percentile in household income last year was $12,401; for the 90th percentile, it was $150,000.

The official Census Bureau poverty measure, based on a standard formulated five decades ago, has come under frequent criticism from economists and activists. (The same is true of the related poverty guidelines used by the Department of Health and Human Services to determine benefit eligibility.) Among the criticisms: The poverty measure relies heavily on the cost of food, even though prices have risen much faster for other essential goods such as health care; it falls far short of what most Americans consider to be the cost of getting by; it doesn’t capture such costs as taxes or benefits such as housing subsidies; and it ignores variations by region. A 2010 report from the progressive Center for Economic and Policy Research estimated that  “most low-income American households who experience concrete forms of severe economic hardship–such as food insecurity and hunger–now have incomes that are above the current poverty line.”

In 2011, the Census Bureau began additionally releasing a Supplemental Poverty Measure, calculated differently, which has drawn criticism from both the left and right. Its figure for 2013 will be released next month.

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16 September 2014 | 6:12 pm – Source: businessweek.com


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