CHICAGO - Statistics released today by the Census Bureau present a portrait of a stagnant economy with poverty remaining high and incomes sluggish four years into the recovery from the worst slump since the Great Depression.
The proportion of people living in poverty was 15 percent in 2012, while median household income was $51,017. Both numbers weren’t statistically different from the previous year. There were 46.5 million people living in poverty, the agency reported.
The data shows the economic expansion hasn’t broadened to all Americans amid rising stock prices and home values that have boosted the financial standing of more affluent people. Those on the lowest tiers of the economy continue to struggle amid relatively high unemployment and stagnant wages.
“The poverty rate is still very high by historical standards,” said Isabel Sawhill, a senior fellow at the Brookings Institution in Washington who studies poverty issues. “The good news is that it is likely to decline as the economy recovers over the next decade. The bad news is that it’s unlikely to get back to its 2007 level -- 12.5 percent -- until the middle of the next decade, according to our projections.”
The Census Bureau releases the nation’s official estimates of household income and poverty annually. The data comes from the Current Population Survey.
An updated research paper published earlier this month by University of California, Berkeley economist Emmanuel Saez found that the top 10 percent of earners -- those with household income above $114,000 -- collected more than half of the nation’s total income in 2012, the largest proportion since 1917 when the government started collecting such data.
The study, using preliminary 2012 data, also found that those with the top 1 percent of incomes saw their earnings grow 31.4 percent from 2009 to 2012, while the bottom 99 percent saw growth of just 0.4 percent.
President Barack Obama noted those trends in a speech yesterday marking the 5-year anniversary of the financial crisis triggered by the collapse of Lehman Brothers Holdings Inc.
“Even though our businesses are creating new jobs and have broken record profits, the top 1 percent of Americans took home 20 percent of the nation’s income last year, while the average worker isn’t seeing a raise at all,” Obama said. “Most of the gains have gone to the top one-tenth of 1 percent. So in many ways, the trends that have taken hold over the past few decades of a winner-take-all economy, where a few do better and better, while everybody else just treads water or loses ground, those trends have been made worse by the recession.”
Unemployment, which hovered at or above 8 percent for much of 2012, dropped to 7.3 percent in August. The slow and uneven recovery has left millions dependent on government assistance.
The U.S. Department of Agriculture reported earlier this month that food stamps were used by 47.7 million people in June, close to a record high and up 2.3 percent from a year earlier.
The program, because of both its rapid growth and fraud allegations, has become a target for Republicans in their fight with Obama and other Democrats over reducing federal budget deficits. Expenditures for what is formally known as the Supplemental Nutrition Assistance Program grew to $78 billion last year, more than double the amount when the recession started in December 2007.
Obama’s ability to alter such economic trend lines will be central to his legacy. How much the unemployment rate drops in the next year also will weigh heavily on November 2014 races that will determine control of Congress.
The Census Bureau data also show the number of Americans who lack health insurance declined to 48 million last year from 48.6 million in 2011, as many under the age of 26 took advantage of a provision in Obama’s 2010 health-care overhaul that allowed them to be covered under their parents’ plans.
Additional coverage provisions for what’s commonly called Obamacare take effect in January. The percentage of people without health insurance dropped to 15.4 percent from 15.7 percent in 2011.
Join PBN for the best networking event and party of the winter - January 15, 2015 - the Book of Lists Party at the Providence Public Library. Reserve your spot by December 31st and get a holiday gift from PBN!
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.