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1.3 Million More Drop Into Poverty : Economy: The officially poor total 39.3 million, Census Bureau says. Middle class loses ground as the richest grow wealthier.

October 07, 1994|SAM FULWOOD III and MELISSA HEALY | TIMES STAFF WRITERS

WASHINGTON — Despite a growing economy, another 1.3 million people fell below the federal poverty line last year and the economic divide between rich and poor Americans continued to swell, the Census Bureau reported Thursday.

Altogether, 39.3 million Americans, or 15.1% of the population, lived in poverty in 1993, up from 14.8% in 1992 and the highest rate since 1983, when the economy was emerging from its deepest recession since World War II.

The figures reveal the uneven impact of the economy's rebound as poor Americans have experienced severe setbacks and the middle class has continued to lose ground, while the nation's wealthiest 20% have grown substantially more affluent.

Bureau officials defined poverty in 1993 as an income of $14,763 for a family of four. They said that the 15.1% poverty rate was "not statistically different" from 1992, when 38 million, or 14.8%, were classified as poor.

In its annual income and poverty estimates, bureau officials also said that the number of Americans without health care rose 1.1 million last year. At a time when health care reform legislation dominated the political agenda, but failed to produce a consensus, the bureau said 39.7 million Americans, or 15.3% of the population, were without health insurance sometime during the year.

California was one of three states in which the poverty rate had a "statistically significant change," rising nearly 11%. In 1993, 18.2% of Californians lived below the poverty line, compared to 16.4% in 1992, officials said.

Daniel H. Weinberg, chief of the Census Bureau's Housing and Household Economic Statistics Division, seemed baffled as he tried to explain why two years after the government announced the end of the recession, the resulting recovery is not progressing according to the traditional economic pattern. Normally, the poverty rate spikes the year after a recession ends and begins to decline in the second year.

"This recession ended in 1991," Weinberg said. "One could expect a higher poverty rate in 1992. This (1993 rate) is unusual."

Middle-class households--60% of the population--commanded 48.2% of the nation's income in 1993, down 3% since 1988. Since 1968, the middle class has lost 9% of its share of income to the wealthiest Americans. The wealthiest 20% of Americans, meanwhile, increased their share of the nation's household income to 48.2%, up 4% since 1988.

In addition to the human toll behind the statistics, political analysts noted that the economic uncertainty reflected in the findings may have a powerful impact at the polls in November.

In a mid-term election that is being seen as a referendum on the Administration's economic policies, those numbers--combined with a pessimistic assessment of their economic well-being by many Americans--have created a frustrating crisis for Democratic politicians.

For example, a recent study by the Times Mirror Center for The People & The Press found that "the Clinton Administration and the economic recovery have failed to stem the tide of political cynicism. The discontent with Washington that gained momentum in the late 1980s is even greater now than it was in 1992" when Clinton was elected.

"These numbers are what lies behind the problems the Democratic Party is having with younger people and particularly with younger and less-educated blue-collar men," said Guy Molyneux, a senior analyst with Peter Hart Research, which polls largely for Democrats. "In particular, they are the ones who have lost the most ground in the last decade or more and that would also be true here. There's a lot of anger out there at government and these economic realities are underneath a lot of races that we're seeing."

Demographers said that the trends revealed in the Census Bureau's latest findings continue a longstanding trend that has seen a steady growth in disparities between rich and poor. That trend, they added, is being driven on one end by a steady increase in single-parent families, who tend to fall below the poverty line, and at the other end by two-career families in which college-educated women's earnings are bumping family incomes into higher brackets.

One expert on poverty issues noted that similar dismal figures helped undo President George Bush in 1992, in spite of strong signs that the economy was improving

"A very sizable majority was not experiencing this recovery in larger take-home pay," said Gary Burtless of the Brookings Institution. "They saw their earnings continuing to shrink and they interpreted that, rightly, as part of a very long-term trend that has reduced their living standards. Now, it's President Clinton's turn to suffer the consequences for this long-term trend."

Bureau officials cautioned that comparing the new poverty figures with those from previous years is tricky because the government made statistical adjustments to compensate for changes in the numbers of people undercounted during the 1990 census.

Statisticians also discovered counting discrepancies when the bureau stopped tabulating poverty data on paper and began to use computers.

Even so, officials were mystified by the jump in families living in poverty.

"They are unexpected changes and we don't have a good explanation for it," Weinberg said.

In absolute numbers, the new poverty figures represent the highest number of poor people in the country since 1962, when 39.6 million--or nearly 22% of the nation's population--lived in poverty.

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