Poverty at Highest Level since ’94; Income Remains Flat
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The Fiscal Times
September 16, 2010

The steep economic recession pushed 3.8 million more people into poverty last year and drove the nation’s poverty rate to its highest level since 1994, according to data released by the Census Bureau on Thursday.

In one of the first detailed snapshots of the recession’s financial impact on American households, the Census Bureau reported that 14.3 percent of the population was below the official poverty line in 2009 – up from 13.2 percent the year before.

Somewhat surprisingly, given the surge in unemployment, the median family income after inflation was essentially unchanged at $49,777. But that result masked big differences in how the recession has hit different segments of the population. People who kept their jobs and worked full time – which is most people – saw their real incomes go up about 2 percent. But the number of full-time workers shrank by 3.8 million, and on a household basis, real incomes fell for almost every category of family.

It was hardly a surprise that the recession took a heavy toll on millions of families. Perhaps more striking is that the last 10 years amount to a zero-sum decade: Real or inflation-adjusted median family income was 5 percent lower in 2009 than it was at the last peak in 1999. And while the most recent economic crisis accounts for much of that loss, median family incomes never actually recouped their losses after the relatively mild recession of 2001.

To be sure, many people flourished. Income inequality widened during the decade, with incomes of people in the top 10 percent climbing twice as rapidly as incomes of people in the bottom 10 percent.

The new Census report is chocked full of new data that will keep analysts busy for months. Among some of the other highlights:

• Households of Asian ethnicity continued to have a markedly higher median income – $65,388 – than families in any other ethnic category. Whites came in second with median household income of $55,319. Hispanic families had a median income of $37,769. Black families had income of $34,088.

• Median incomes of Asian families edged up in 2009, but incomes were either flat or down for all other ethnic groups.

• More than 50 million people, 16.7 percent of the population, had no health insurance in 2009. That was an increase of more than 4 million, the highest since the Census Bureau began measuring that number in 1987.

• Some parts of the country fared worse than others. Median family incomes dropped in the West and Midwest, but were stable in the Northeast and South.

• The recession hit women about the same as men. Working women earned about 77 percent as much as men in 2009, unchanged from the year before.