Poverty rises; good growth surprises

Saturday, September 27, 2003

WASHINGTON -- Poverty rose for a second straight year in 2002 as 1.7 million more people dropped below the poverty line, according to Census Bureau estimates released Friday that provided fresh evidence of the struggling economy's effect on Americans' pocketbooks.

The poverty rate was 12.1 percent last year, an increase from 11.7 percent in 2001 even though the last recession ended in November 2001. That meant nearly 34.6 million people were living in poverty.

Before the two years of increase, poverty had fallen for nearly a decade to 11.3 percent in 2000, its lowest level in more than 25 years.

Bureau estimates showed poverty increased significantly for several segments of the population that could be crucial in the 2004 presidential election: blacks, married couples, suburbanites and people in the Midwest.

The bureau on Friday also reported a 1.1 percent decline in median household income between 2001 and 2002 to $42,409, after accounting for inflation. Income levels had risen through most of the 1990s, then were flat in 2000.

Median income is the point at which half of all households earned more than that amount, and half earned less.

Daniel Weinberg, who oversees the bureau's housing and household economic statistics, said trends between 2001 and 2002 were consistent with changes following past recessions.

The latest estimates are the government's official measures based on a survey of 78,000 households taken each March.

Many experts had predicted that rising unemployment and the still unsettled economy last year would increase poverty and lower income for most people, despite the end of recession two years ago.

Syracuse University economist Tim Smeeding worried that poverty levels could get worse because of more layoffs, especially in the manufacturing sector.

"Everyone's taking a bump down, and you haven't seen the worst of it," he said.

Jason Turner, a visiting fellow at the Heritage Foundation who served as welfare commissioner in New York City under Republican Mayor Rudolph Giuliani, called the rise in poverty between 2001 and 2002 minimal compared with previous post-recession periods. He said getting more work hours for poor families and increasing the number of children raised in two-parent families were keys to improvement.

In 2002, 12.1 million children were in poverty, or 16.7 percent of all kids, up from 11.7 million, or 16.3 percent, the previous year.

Of the 400,000 additional poor children, more than half were Latino, according to an analysis of the data by the advocacy group, the Children's Defense Fund.

The poverty threshold differs by the size and makeup of a household. The average poverty threshold for a family of four was $18,392 in annual income in 2002.

Comparing poverty rates and income for racial and ethnic groups was more difficult in 2002 because the Census Bureau for the first time allowed survey respondents to report if they were of more than one race.

For instance, the poverty rate for blacks in 2002 ranged slightly from 23.9 percent for those who identified themselves as being black and another race, to 24.1 percent for those who selected only black.

Measured either way, the bureau considered it a significant increase from 2001, when 22.7 percent of blacks lived in poverty.

Marc Morial, president of the National Urban League, a civil rights group, speculated that a loss in manufacturing jobs over the past two years spurred the increase in poverty among blacks and in the Midwest.

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