Rising poverty rate shows holes in safety net

http://www.msnbc.msn.com/id/44507675/ns/business-eye_on_the_economy/#.Tm_zT-yKJhk

By John W. Schoen
Sept. 13, 2011

The worst economic downturn since the 1930s has left a record number of Americans in poverty and created strains on the government’s safety net not seen in decades, according to a report issued Tuesday by the U.S. Census Bureau.

“Clearly the safety net has helped, but it’s got holes in it,” said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities and former White House economist.

With the unemployment rate stuck stubbornly over 9 percent, the poverty rate in the United States climbed to 15.1 percent last year — the highest level since 1993 — as the number of impoverished Americans swelled to a record 46.2 million, the Census report said.

The U.S. poverty rate remains among the highest in the developed world. Among 34 countries tracked by the Paris-based Organization for Economic Cooperation and Development, only Chile, Israel and Mexico have higher rates of poverty.

The rate would be even higher without a variety of government programs intended to blunt the impact of the worst recession since the 1930s. The Census estimated that the extension of unemployment benefits enacted in 2009, for example, helped another 3.2 million remain above the poverty line, which the government defines as an annual income of $22,314 for a family of four. Last year, the Social Security helped some 20.3 million seniors and disabled working-age adults avoid falling into of poverty.

Millions more households are collecting food stamps to stretch household budgets far enough to keep food on the table. Since the recession began in 2007, the number of households receiving food stamps has nearly doubled to 21.4 million.

Still, millions have fallen through the cracks of the government safety net. Tuesday's Census report found that the poverty rate rose faster in 2007-2010 than in any three-year period since the early 1980s, when households were battered by rising energy prices, high inflation and soaring interest rates as well as high unemployment.

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The Census Bureau said median income fell 2.3 percent last year, adjusted for inflation, while the number of Americans without health insurance hovered near the 50 million mark.

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Since the recession began 2007, family incomes have fallen by 11.3 for those in the bottom 20 percent of the income ladder, according to Census data.

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Since 2007, the number of men working full time, year-round with earnings decreased by 6.6 million and the number of corresponding women declined by 2.8 million.

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As of September, some 43 percent of job seekers had been looking for work for 27 weeks or more, according to Labor Department statistics. That’s more than double the levels seen in any recovery over the past 50 years. As of the second quarter of 2011, some 14 percent of those out of work have been unemployed for 99 weeks or more. (That number doesn’t include workers who have given up looking and are no longer part of the “official” work force.)

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