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1 in 7 in U.S. lives below poverty line

Last year, nearly 4 million Americans joined the ranks of the poor. California's rate is highest in 11 years.

September 17, 2010|By Don Lee and Alana Semuels, Los Angeles Times

Reporting from Washington and Los Angeles — The recession and longer-term economic troubles have pushed the nation's poverty rate to levels not seen in more than a decade, wiping out gains in the long-running War on Poverty and adding more financial strain to the lives of millions of Americans.

New Census Bureau data, released Thursday, also showed that the face of the poor has changed. Those falling below the poverty line today are more likely to be full-time workers who cannot earn enough to meet their needs or middle-class workers driven into the ranks of the poor by lost jobs or shrinking incomes.

The higher poverty level — 14.3%, or an increase of nearly 4 million people last year — means higher costs for government programs such as food stamps and unemployment compensation and potentially heavier tax burdens for the country as a whole.

Among those once more fortunate is Susannah Evans of Ventura, a 56-year-old single woman who until August 2008 had a good-paying job as a marketing coordinator for a law firm. Since getting laid off, she has exhausted unemployment benefits and downsized from a one-bedroom apartment to a rental room in a house.

"If it has to be that I live in my car, I accept it," Evans said Thursday, breaking down in tears. "It's reality."

States such as California and Illinois are feeling particular strain because they have been hit harder by the recession, with above-average levels of unemployment and home foreclosures.

California's poverty rate jumped to 15.3% last year, the highest in 11 years. Analysis by the California Budget Project showed that 2 million children in the state lived in families with incomes below the poverty line last year.

For the U.S. as a whole, the rise in the poverty level that began a decade ago and accelerated during the recession has wiped out all the gains made during the long run of economic growth and prosperity in the 1990s.

The Census Bureau said 43.6 million people lived below the poverty line last year, compared with 13.2% in the previous year and 11.3% in 2000.

The number of people counted as living below the poverty line last year was the largest number since the Census Bureau began keeping records in the 1950s, though the total U.S. population is also larger. When President Lyndon B. Johnson launched the War on Poverty in 1965, the poverty rate was 17% and quickly dropped to 14%.

Last year's increase would have been greater without growth in Social Security payments and unemployment insurance benefits, which kept several million more Americans from falling below the poverty line. With the economy faltering, more people also began collecting the federal retirement benefit, adding to the financial pressures on the program.

The poverty threshold last year was $10,956 for one person and $21,954 for a family of four.

The rate for Latinos last year rose to 25.3% from 23.2% in the previous year, higher than other groups. The poverty figures for whites went up to 12.3% from 11.2%, and for blacks, to 25.8% from 24.7%. The poverty level for Asian Americans, 12.5% last year, wasn't statistically different from 2008.

Economists and other analysts said the latest poverty figures and data on overall median household income, which declined 0.7% last year to $49,800, were better than they had expected given the severity of the recession and the massive job losses last year.

A key difference, they said, appeared to be the government's much-derided Recovery Act that expanded unemployment benefits and Social Security payments, among other things.

"I was shocked" that the poverty rate didn't approach 15%, said Sheldon Danziger, a professor of public policy at the University of Michigan and co-editor of the book "Changing Poverty, Changing Policies." "It looks to me like the stimulus bill is the reason."

But Danziger and other analysts worry that poverty levels will continue to climb in the coming years, especially with a divided Congress and many lawmakers in no mood to keep extending unemployment benefits or to continue programs such as the Recovery Act's emergency fund to help low-income workers find work.

President Obama, commenting on the census report, credited the Recovery Act and other tax-relief and income support programs for keeping millions out of poverty last year.

He noted that there was little change in the share of those under 18 without health insurance as there was expansion of the government's effort to cover children. And the new healthcare law, Obama said, "will build on that success."

The figures on health insurance coverage are important, in part, because the cost of treating the uninsured is commonly passed on to those with insurance in the form of higher charges for their own care — a process that results in higher costs, rising insurance premiums and cutbacks in employer-provided medical insurance.

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