Poverty Rate Increases in Most States
By Kathleen Murphy, Staff Writer
The nations economic slowdown fueled an increase in the poverty rate in most states last year, with the greatest jumps in Utah and South Carolina.
U.S. Census data released Sept 24 showed the national rate rose from 11.3 percent in 2000 to 11.7 percent in 2001.
The number of poor increased also, by 1.3 million people, to 32.9 million in 2001.
Utah and South Carolina showed the most dramatic increases in poverty, up by 2.4 percent and 1.7 percent respectively. Utah's poverty rate in 2001 was 15.2 percent; South Carolina's was 13.1 percent.
Economists said the increases in both states could be tied to jobless rates and specifically, the loss of manufacturing jobs. South Carolina lost 20,000 manufacturing jobs in 2001. Utah's jobless rate actually climbed to its highest in a decade during 2001, at 5.2 percent.
In Utah, the economic boom didn't lift wages as much on the low end of the pay scale as it did in other states, said Jared Bernstein, a senior economist at the Economic Policy Institute, a liberal research group.
But four statesCalifornia, Delaware, Massachusetts and Nevadashowed statistically significant declines in the poverty rate. Although experts could not provide definitive answers as to why those states bucked the trend, the fact that California and Massachusetts had higher minimum wages may have kept a number of workers above the poverty line.
(The poverty rate is the percentage of the people in a given group whose income puts them below the poverty line of pre-tax income below $18,104 for a family of four).
Average poverty rates in 2001 ranged from 6.2 percent in New Hampshire (whose rate was roughly the same as Minnesota, Maryland, Connecticut and Iowa) to a high of 18.8 percent in New Mexico. Arkansas, Mississippi and Louisiana also experienced among the highest poverty rates, and the South had the highest increases in poverty of any region.
Median income actually rose in three statesArizona, Massachusetts and Pennsylvania. (Median household income is the level at which half of households earn more and half of households earn less). Twelve states saw declines in median household income: Illinois, Indiana, Iowa, Michigan, Wisconsin, Alabama, Florida, Mississippi, Tennessee, Maine Vermont and Washington.
The statistics come from the Census Bureau's Current Population Survey, a sample survey of about 78,000 households nationwide conducted each month for the Bureau of Labor Statistics. The data reflect conditions during 2001.
Greg Duncan, professor of education and social policy at Northwestern University in Evanston, Ill., said state poverty rankings haven't changed much over time. States such as Minnesota, where 6.5 percent of the people were in poverty in 2001, frequently report among the lowest poverty rates because of low unemployment rates and because of higher welfare benefit levels, Duncan said.
"Minnesota is much kinder in enabling families to keep receiving welfare payments even if they are working," Duncan said.
As Congress decides whether to continue funding the welfare reform program, experts caution that the poverty line doesn't tell the full story because it is based on an outdated assumption that food constitutes one-third of a family's budget and ignores rising costs of housing or extra expenses a parent might have for transportation, clothing and child care.
"It's not realistic," said Marianne Hill, senior economist with the Center for Policy Research, a state government economic research unit in Jackson, Miss. "It does not look at what a family needs to survive at a minimum standard of living."
As a result, while official poverty declined in the four previous years, other indicators, such as hunger and homelessness, suggested poverty was much deeper than realized, said Deepak Bhargava, director of the National Campaign for Jobs and Income Support, a collaboration of 200 grassroots organizations.
Using a definition of basic needs that includes expenses for food, housing, childcare, transportation, health care, and clothing, some economists have developed new estimates of what constitutes the poverty line. The estimates are called "basic needs budgets."
"The basic needs budgets get us much closer to the reality of what it takes for families to make it in today's economy," Bhargava said.
A basic needs budget for a Mississippi family of three, for example, was about $28,984 in 2001, Hill said. But the government's poverty threshold for a family of three last year was half that amount, $14,269.