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U.S. Seeing Highest Rates of Poverty in 50 Years

The level of poverty in the United States has likely risen to levels not seen since President Lyndon B. Johnson initiated the War on Poverty in the 1960’s, according to an investigation by the Associated Press.

While the presidential candidates spend nearly all their time talking about the plight of the middle class, it is the plight of the poor that has many analysts particularly worried. In fact, many of the poor used to be members of the middle class until they lost their jobs. The social safety net has frayed, unemployment benefits are gone, and many are left to wonder what happened to their share of the American Dream.

Census figures for 2011 will provide the critical data to determine whether the poverty level will rise from the 15.1 percent it was in 2010. Most analysts think it will rise, perhaps even as high as 15.7 percent, according to the AP investigation. But even a rise of 0.1 percentage point will make it the highest it’s been since the 1960s.

The group with the highest poverty rate in 2010 was African Americans, at 27.5 percent below the poverty line, followed closely by Latinos at 26.7 percent.

The analysts’ estimates suggest that some 47 million people in the U.S., or 1 in 6, were poor last year. An increase of one-tenth of a percentage point to 15.2 percent would tie the 1983 rate, the highest since 1965. The highest level on record was 22.4 percent in 1959, when the government began calculating poverty figures.

The 2010 poverty level was $22,314 for a family of four, and $11,139 for an individual, based on an official government calculation that includes only cash income, before tax deductions. It excludes capital gains or accumulated wealth, such as home ownership, as well as noncash aid such as food stamps and tax credits, which were expanded substantially under President Obama’s stimulus package.

An additional 9 million people in 2010 would have been counted above the poverty line if food stamps and tax credits were taken into account.

Among the findings of the AP study:

Demographers also say:

—Poverty will remain above the pre-recession level of 12.5 percent for many more years. Several predicted that peak poverty levels — 15 percent to 16 percent — will last at least until 2014, due to expiring unemployment benefits, a jobless rate persistently above 6 percent and weak wage growth.

—Suburban poverty, already at a record level of 11.8 percent, will increase again in 2011.

—Part-time or underemployed workers, who saw a record 15 percent poverty in 2010, will rise to a new high.

—Poverty among people 65 and older will remain at historically low levels, buoyed by Social Security cash payments.

—Child poverty will increase from its 22 percent level in 2010.

Analysts also believe that the poorest poor, defined as those at 50 percent or less of the poverty level, will remain near its peak level of 6.7 percent.

“The issues aren’t just with public benefits. We have some deep problems in the economy,” said Peter Edelman, director of the Georgetown Center on Poverty, Inequality and Public Policy.

He pointed to the recent recession but also longer-term changes in the economy such as globalization, automation, outsourcing, immigration, and less unionization that have pushed median household income lower. Even after strong economic growth in the 1990s, poverty never fell below a 1973 low of 11.1 percent. That low point came after President Lyndon Johnson’s war on poverty, launched in 1964, created Medicaid, Medicare and other social welfare programs.

“I’m reluctant to say that we’ve gone back to where we were in the 1960s. The programs we enacted make a big difference. The problem is that the tidal wave of low-wage jobs is dragging us down and the wage problem is not going to go away anytime soon,” Edelman said.


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