By Cliff Montgomery – Oct. 7th, 2012
Last year the official count of U.S. residents living in poverty was the highest in the measure’s 53-year history, according to a study recently released by the Congressional Research Service.
The report is a tough, but necessary, discussion on poverty in this country. The American Spark provides quotes from the study below:
“In 2011, the U.S. poverty rate was 15.0%—46.2 million persons were estimated as having income below the official poverty line. Neither the poverty rate nor the number of persons counted as poor differed statistically from a year earlier.
“Since 2006, when the poverty rate stood at 12.3%, marking its most recent low, the number of poor has grown by 9.7 million persons. The 46.2 million persons counted as poor in both 2011 and 2010 are the largest numbers counted in the measure’s recorded history, which goes back as far as 1959.
“The 2011 poverty rate of 15.0%, statistically tied with the 2010 rate, is the highest seen in the past 18 years (1993). The increase in poverty since 2006 reflects the effects of the economic recession that began in December 2007.
“The level of poverty tends to follow the economic cycle quite closely, tending to rise when the economy is faltering and fall when the economy is in sustained growth.
“This most recent recession, which officially ended in June 2009, was the longest recorded (18 months) in the post-World War II period. Even as the economy recovers, poverty is expected to remain high, as poverty rates generally do not begin to fall until economic expansion is well underway.
“Given the depth and duration of the recession, and the projected slow recovery, it will take several years or more before poverty rates recede to their 2006 pre-recession level.
“The poverty rate increased markedly over the past decade, in part a response to two economic recessions. A strong economy during most of the 1990s is generally credited with the declines in poverty that occurred over the latter half of the previous decade, resulting in a record-tying, historical low poverty rate of 11.3% in 2000 (a rate statistically tied with the previous lowest recorded rate of 11.1% in 1973).
“The poverty rate increased each year from 2001 through 2004, a trend generally attributed to economic recession (March 2001 to November 2001), and failed to recede appreciably before the onset of the December 2007 recession.
“Over the course of 2008, the unemployment rate increased from 4.9% (January 2008) to 7.2% (December 2008).
“The unemployment rate continued to rise over most of 2009, peaking at 10.1% in October.
“From December 2009 to December 2010, the unemployment rate fell 0.5%, from 9.9% to 9.4%, and the poverty rate in 2010 increased over 2009.
“From December 2010 to December 2011, the unemployment rate fell 0.9%, from 9.4% to 8.5%, and the poverty rate remained in check.
“The seasonally adjusted unemployment rate in August 2012 (the most recent estimate available) was 8.1%, a full percentage point below the August 2011 rate, suggesting that poverty in 2012 may continue to stay in check, and perhaps begin to fall. Poverty estimates for 2012 will not be available until the late summer of 2013.
“The recession has especially affected non-aged adults (persons age 18 to 64) and children. The poverty rate of non-aged adults reached 13.8% in 2010, the highest it has been since the early 1960s. In 2011, the non- aged poverty rate of 13.7% was statistically no different than in 2010. The poverty rate for non-aged adults will need to fall to 10.8% to reach its 2006 pre-recession level.
“In 2011, over one in five children (21.4%) were poor, a rate statistically unchanged from the year prior, but significantly above its 2006 pre-recession low, at which time about one in six children (16.9%) were counted as poor. Child poverty appears to be especially sensitive to economic cycles, as it often takes two working parents to support a family, and a loss of work by one may put the family at risk of falling into poverty. Moreover, one- third of all children in the country live with only one parent, making them even more prone to falling into poverty when the economy falters.
“In 2011, the aged poverty rate (8.7%) was statistically tied with the previous year, and remained at a historical low of 8.7%, in spite of the recession.
“The longer-term secular trend in poverty has been affected by changes in household and family composition and by government income security and transfer programs. In 1959, over one-third (35.2%) of persons age 65 and over were poor, a rate well above that of children (26.9%). Social Security, in combination with a maturing pension system, as helped greatly to reduce the incidence of poverty among the aged over the years, and as recent evidence seems to show, it has helped protect them during the economic downturn.”
