US Poverty Rises to Highest Level Since 1994

From the Wall Street Journal | Sept 16, 2010 | By RUTH
MANTELL

The recession sent the U.S.
poverty rate higher.

The U.S. poverty rate
rose to 14.3% in 2009, the highest since 1994, as the recession weighed
on employment.

A record 43.6 million Americans were in poverty
last year, the Census Bureau reported Thursday. The rate increased from
13.2% in 2008.

Meanwhile, real median household income in 2009 was
$49,777, not statistically different from the previous year. Real
median income fell 1.8% for family households and rose 1.6% for
nonfamily households.

Economists have been concerned about the
persistently high unemployment rate, which rose 3.5 percentage points to
9.3% in 2009 from 5.8% in 2008, the largest increase since the Labor
Department started keeping comparable average annual data in 1947.

"The
deterioration in the labor market from 2008 to 2009 was the worst we've
ever seen," said Heidi Shierholz, a labor economist with the Economic
Policy Institute, a Washington think tank. "When you see a big
deterioration in the labor market, poverty rises. The vast majority of
people in this country depend on the labor market for their income."

The
number of employed civilians fell to about 140 million in 2009 from 145
million in 2008, and the number of unemployed rose to 14 million from
nine million, according to the Labor Department.

"Anyone who has
exposure to the labor market will be directly impacted," Ms. Shierholz
said. "The poverty and income numbers depend on the labor market."

Many
households continued to struggle despite economic growth in the second
half of last year, said Lawrence Katz, a Harvard University labor
economist.

"Most of that growth in GDP [gross domestic product]
has not been trickling down to the typical household," Mr. Katz said.
"GDP largely showed up in profits but didn't show up in earnings of
workers. Productivity went up, but those benefits didn't translate into
rapidly growing wages."

Also Thursday, the Census Bureau reported
that the number of Americans with health insurance fell to 253.6 million
in 2009 from 255.1 million in 2008, the first year that the number of
people with health insurance has decreased since 1987, when the
government started collecting comparable data. The number of uninsured
rose to 50.7 million from 46.3 million.

Private insurance covered
63.9% of people, the lowest level since comparable-data collection
started in 1987. The portion covered by employment-based insurance was
55.8%, also the lowest since 1987. Meanwhile, those covered by
government health-insurance programs reached 30.6%, the highest since
1987.

Ten percent of American children were uninsured in 2009.

Edwin
Park, co-director of health policy at the Center on Budget and Policy
Priorities, a Washington think tank, had expected employer-sponsored
coverage to erode.

"We have seen steady declines in
employer-sponsored coverage. The recession is significantly worsening
that trend," Mr. Park said. "The largest contributor would be fewer
jobs. Job-based coverage is the primary way that workers get coverage."

In
addition, some employers are increasing employees' costs for coverage.

"Some
employees may no longer be able to afford their costs," Mr. Park said.