Poverty Dropped but Household Incomes Didn’t Rise, Census Bureau says
The nation’s poverty rate dipped slightly last year as more Americans shifted from part-time work to full-time jobs, but wages barely kept up with inflation so there was no significant change to incomes, according to Census Bureau statistics released Tuesday.
The new census figures reflect a nation that is still struggling to emerge from the severe recession that officially ended almost five years ago. Poverty, though in decline, remains high. The increase in jobs has not affected the degree of income inequality. And median wages have been stuck at the same level since 2009.
If there was a silver lining, it was in the poverty numbers.
The official poverty rate in 2013 was 14.5 percent, down from 15 percent in 2012. That was the first time the rate has declined since 2006, a year before the recession began. However, the number of people living at or below the poverty line, about 45 million, did not budge. The decline in the rate at a time of unchanging raw numbers was attributed to population growth.
The improvement was notable among families and, particularly, Hispanics. Their median household income jumped 3.5 percent last year. They were the only racial or ethnic group to show a sizeable change in either their income or their poverty rate, which fell more than two percentage points, to 23.5 percent.
As a result, they appear to be largely responsible for a drop in child poverty, which fell from 22 percent to 20 percent, its lowest level since 2008. Poverty among Hispanic children fell even more dramatically, though, down from almost 34 percent to 2012 to a little over 30 percent last year, the lowest level since 2007.
Poverty also was down among white and Asian children, but not for African American children. Caroline Fichtenberg, research director for the Children’s Defense Fund, said a disproportionate number of African Americans are among families considered profoundly poor, “so it’s harder for them to get out of poverty.”
A third of all poor people are children, and four in 10 poor children are Hispanic, so the disproportionate drop in the Hispanic poverty rate was bound to have an impact on the overall child poverty rate.
“Young Hispanic children are the people who are going to be our future,” said William Frey, a demographer with the Brookings Institution. “It’s still not as good as we want it to be, but it’s inching slowly in the right direction.”
Many Hispanic families have multiple wage earners, and the growth of full-time jobs could have had a significant impact on their household income, said Olivia Golden, executive director of CLASP, an organization that works on issues involving low income people.
“It’s good to go from a 34 percent poverty rate down to 30 percent,” she said. “But to think about 30 percent of children growing up in poverty is very distressing. It’s an important first step to get back to pre-recession levels of poverty. But our next step ought to be to try to reduce these levels.”
Robert Rector, a research fellow specializing in poverty at the Heritage Foundation, a conservative think tank, called the reduction in poverty an expected phenomenon of a post-recession recovery. But he said society has failed to find ways to more permanently trim levels of poverty.
“If you look at the last 40 years, this (poverty) line wiggles up and down 3 or 4 percentage points, and that’s all it ever does,” he said. “It really hasn’t changed much. The poverty rate today is essentially the same as it was in 1966, two years after Lyndon Johnson launched the War on Poverty.”
Another stubborn group of numbers in the Census Bureau statistics involved income.
Census economists said median household income in the U.S. last year was just under $52,000, roughly where it was in 2012 when the figures are adjusted for inflation. The median income is 8 percent lower than it was in 2007, the last full year of pre-recession economic well-being, and 11 percent below what it was in 2000.
Overall, the Census Bureau said, about 2.8 million more people had full-time, year-round jobs in 2013. Since 2010, the census has detected a gradual shift from part-time to full-time jobs, but the trend seemed to accelerate last year, economists said.
But neither men nor women experienced any significant rise in their median earnings, which have been essentially unchanged since 2009. The median for women was about $39,000, compared to $50,000 for men — meaning the median for women was 78 percent what it was for men.
“The good news is that more people are working full time,” said Sheldon Danziger, president of the Russell Sage Foundation, a New York-based social research group. “The bad news is, for the typical worker, wages are just keeping up with inflation.”
Danziger said the economic growth is disproprionately benefitting households at the top of the income ladder, a pattern that has been maintained for more than a decade.
“Through the Bush years and now the Obama years, through periods of economic growth and severe recession, the bottom half has continued to have difficulty moving forward,” he said. “It’s great that more people are working full-time. But if we really want to do something about poverty, inequality and the struggles of the middle class, economic growth on its own is not sufficient.”