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US Poverty Rate Rises for Fourth Consecutive Year

  • Stephanie Ho

The Census Bureau has released figures showing that 12.7 percent of the U.S. population is living in poverty. Meanwhile, median household income figures remain unchanged.

The Census Bureau's Charles Nelson says the U.S. poverty rate last year continued its upward climb.

"The number of people in poverty, 37 million people, increased by 1.1 million in 2004. And the poverty rate increased from 12.5 to 12.7 percent," he said. "Now, this is the fourth consecutive year in which the nation's poverty rate has increased. Past experience tells us it is not uncommon to have several years of rising poverty following a recession."

The increase in poverty came despite strong economic growth, which helped create 2.2 million jobs last year.

The Census Bureau defines poverty by determining money income thresholds that vary by family size and composition. So, for instance, a family of four with two children is considered to be living in poverty if the total annual household income is $19,157. For a family of two with no children, it is $12,649.

Meanwhile, Mr. Nelson said there was no movement in average U.S. incomes.

"The 2004 median money income for all households was unchanged from the year before, at $44,400," he said. "Now, this is the second consecutive year that households did not experience an annual change in real median income, after declining in real terms for two years, in 2001 and 2002."

Economic experts say they believe that in inflation adjusted terms, though, the newly released figures show that the situation for American workers is actually getting worse.

"But, if you compare the level of the median household's real income in 2004 to that of its most recent peak, which was in 1999, you'll find that it's down 1,700 or 3.8 percent in real terms," said Jared Bernstein, of the non-profit Economic Policy Institute. He adds that although the U.S. economy is doing well, the benefits are not trickling down to the average American.

"The economy is growing, but the fruits of growth are clearly not reaching middle and lower income families," he said. "Economic growth is increasingly concentrated at the top of the income and wealth scale. Yes, the economy looks great from 30,000 feet, but what these numbers afford you is an opportunity to see how people on the ground are doing, and it's not pretty."

Another issue is the growing poverty rate in the United States. Robert Greenstein, of the Center for Budget and Policy Priorities, called the poverty figures disappointing.

"There were 37 million Americans living in poverty, that's more than one in every eight Americans," he said.

Mr. Greenstein also disputed what he said was an impression created by the Census Bureau that poverty after a recession was normal. He said the only other time in the last 45 years that a recession was followed by several years of poverty in the United States was after a recession in 1990. Now, he adds, the Census Bureau figures show that the 2004 poverty rate was a full percentage point higher than in the most recent recession year, 2001.