Official Figures Show Almost 40 Million People in America Live in Poverty

by Rajashri on Sep 13 2009 2:30 PM

Official figures have reevaled that nearly 40 million people in the United States lived below the bread line last year as the recession snuffed out jobs, dragged down incomes and boosted the poverty rate.

Last year's poverty rate of 13.2 percent was the highest since 1997, and its rise over 12.5 percent in 2007 was the first significant bump in four years, said the US Census Bureau's latest report.

"Real median household income declined by 3.6 percent between 2007 and 2008... and the decline was widespread," said the annual Income, Poverty and Health Insurance Coverage in the United States report.

The year 2008 "represented a period that was entirely within the recessionary period, which started in December 2007, so I think everyone expected an increase in the poverty rate," said David Johnson, head of the Housing and Household Economic Statistics Division.

The number of Americans who lived in poverty also rose last year, from 37.3 million people in 2007 to 39.8 million people in 2008.

In the United States, a person or family is considered poor if their income is less than the poverty threshold for their size of household.

The poverty threshold for one person in 2008 was just under 11,000 dollars, and for a family of four was 22,025 dollars.

Last year the median US household income -- the dollar amount which falls right in the middle of the earning spectrum -- dropped 3.6 percent to 50,303 dollars from 52,163 dollars in 2007, a fall that the report blamed on the economic crisis, the worst since the Great Depression of the 1930s.

The drop in median income was the largest annual decline in household income since 1991, Johnson said.

Falling incomes were directly tied to the rise in poverty, he added.

The poverty rate for children rose to 19 percent, and the number of children living in poverty hit 14.1 million, with more than half of children under the age of six who were being raised by a single mother living in poverty.

The number of children living in extreme poverty -- where a family of four has an annual income of less than 11,025 dollars -- also rose by around half a million to 6.3 million children.

"This is the biggest increase in child poverty since 1992, showing that the recession has had a deep impact on our country?s children," the Children's Defense Fund said in a statement.

"Each year that we keep children in poverty costs our nation half a trillion dollars in lost productivity, higher crime and poorer health," the CDF said, adding that it was "more important than ever to reweave our national safety net."

After the grim news of falling incomes and climbing poverty, the report had a slim silver lining: the percentage of people without health insurance held steady, at 15.4 percent, and the number of people with health insurance rose from 253.4 million in 2007 to 255.1 million last year.

But that still meant that 46.3 million people in the United States had no health coverage last year -- up from 45.7 million in 2007.

Health Secretary Kathleen Sebelius said in a speech given hours after the release of the Census Bureau report that "one in six Americans who had employer-based insurance in 2006 lost it by 2008."

The report was issued a day after President Barack Obama gave a rousing speech to Congress, urging lawmakers to stop bickering and reform the broken health care system in the United States.

"Our collective failure to meet this challenge -- year after year, decade after decade -- has led us to the breaking point," the president said, promising health care for the first time to the legions of uninsured Americans.

Nearly one in three Hispanics, one in five blacks and 17.6 percent of Asians were uninsured last year, compared with just under 11 percent of non-Hispanic whites, the Census Bureau report said.