Squeezed by rising living costs, a record number of Americans — nearly half — have fallen into poverty or are scraping by on earnings that classify them as low income.
WASHINGTON — Squeezed by rising living costs, a record number of Americans — nearly half — have fallen into poverty or are scraping by on earnings that classify them as low income.
Census data depict a middle class that’s shrinking as unemployment stays high and the government’s safety net frays. The new numbers follow years of stagnating wages for the middle class that have hurt millions of workers and families.
“Safety-net programs such as food stamps and tax credits kept poverty from rising even higher in 2010, but for many low-income families with work-related and medical expenses, they are considered too ‘rich’ to qualify,” said Sheldon Danziger, a University of Michigan public-policy professor who specializes in poverty. “The reality is that prospects for the poor and the near poor are dismal. If Congress and the states make further cuts, we can expect the number of poor and low-income families to rise for the next several years.”
Congressional Republicans and Democrats are sparring over the renewal of a Social Security payroll-tax cut, part of a year-end showdown that also could trim unemployment benefits, freeze federal pay and reduce entitlement spending.
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Robert Rector, a senior research fellow at the conservative Heritage Foundation, questioned whether all people classified as poor or low-income actually suffer material hardship. While safety-net programs have helped many Americans, he said, they have gone too far, citing poor people who live in decent-size homes, drive cars and own widescreen TVs.
“There’s no doubt the recession has thrown a lot of people out of work and incomes have fallen,” Rector said. “As we come out of recession, it will be important that these programs promote self-sufficiency rather than dependence and encourage people to look for work.”
Mayors in 29 cities say more than one in every four people needing emergency food assistance did not receive it. Seattle Mayor Mike McGinn also cited an unexpected spike in food requests from immigrants and refugees, particularly from Somalia, Myanmar and Bhutan.
“People who never thought they would need food are in need of help,” said Kansas City, Mo., Mayor Sly James, who co-chairs a U.S. Conference of Mayors task force on hunger and homelessness.
Many middle-class Americans are dropping below the low-income threshold — roughly $45,000 for a family of four — because of pay cuts, a forced reduction of work hours or a spouse losing a job. Housing and child-care costs are consuming up to half of a family’s income.
States in the South and West had the highest shares of low-income families, including Arizona, New Mexico and South Carolina, which have scaled back or eliminated aid programs for the needy. By raw numbers, such families were most numerous in California and Texas, each with more than 1 million.
About 97.3 million Americans fall into a low-income category, commonly defined as those earning between 100 and 199 percent of the poverty level, based on a new supplemental measure by the Census Bureau that is designed to provide a fuller picture of poverty. Together with the 49.1 million who fall below the poverty line and are counted as poor, they number 146.4 million, or 48 percent of the U.S. population. That’s up by 4 million from 2009, the earliest numbers for the newly developed poverty measure.
The new measure of poverty takes into account medical, commuting and other living costs. Doing that helped push the number of people below 200 percent of the poverty level up from 104 million, or one in every three Americans, that was reported in September.
Children were most likely to be poor or low income — about 57 percent — followed by seniors older than 65. By race and ethnicity, Hispanics topped the list at 73 percent, followed by blacks, Asians and non-Hispanic whites.
Even by traditional measures, many working families are hurting.
After the recession that began in late 2007, the share of working families who are low income has risen for three consecutive years to 31.2 percent, or 10.2 million. That proportion is the highest in at least a decade, up from 27 percent in 2002, according to a new analysis by the Working Poor Families Project and the Population Reference Bureau, a nonprofit research group based in Washington.
Among low-income families, about one-third were considered poor while the rest — 6.9 million — earned income just above the poverty line. Many states phase out eligibility for food stamps, Medicaid, tax credit and other government aid programs for low-income Americans as they near 200 percent of the poverty level.
Most low-income families — 62 percent — spent more than one-third of earnings on housing, surpassing a common guideline for what is considered affordable. By some census surveys, child-care costs consume close to an additional 20 percent.
Paychecks for low-income families are shrinking. The inflation-adjusted average earnings for the bottom 20 percent of families have fallen from $16,788 in 1979 to less than $15,000, and earnings for the next 20 percent have remained flat at $37,000. In contrast, earnings for the top 5 percent of families have climbed 64 percent, to more than $313,000.
A survey of 29 cities by the U.S. Conference of Mayors, to be released Thursday, points to a gloomy outlook for those near the bottom of the income scale. Many mayors expressed particular concern about possible cuts to federal programs such as food stamps and WIC, which assists low-income pregnant women and mothers.