Poverty Rate Jumps to 14.3 Percent for 2009

 
Nearly 4 million Americans joined the ranks of the officially poor last year, as the recession and joblessness pushed more family incomes below the federal poverty level, according to the U.S. Census Bureau's annual report on income, poverty and health insurance released Thursday (Sept. 16).

According to the report , the nation's poverty rate jumped to 14.3 percent in 2009, up from 13.2 percent in 2008, bringing the total number of people living in poverty to 44 million. In addition, the number of people without health insurance rose from 46.3 million in 2008 to 50.7 million in 2009, despite an increase in government subsidized insurance. Median family income fell to $49,777 in 2009, although the decline was not statistically different from the 2008 median.

However, when declines of the first two years of this recession are considered together, they wipe out all gains achieved earlier in the decade. "This is the first time in memory that an entire decade has produced essentially no economic growth for the typical American household," Harvard University economist Lawrence Katz told The New York Times.

Although the rise in poverty last year was dramatic, experts predict next year's Census report on 2010 poverty rates will be even worse as high unemployment persists and federal stimulus money aimed at creating jobs runs out.

The current formula for setting the federal poverty line — unchanged since 1963 — only considers the cost of putting meals on the table and does not take into account the rising cost of housing and health care. It also fails to account for most government safety net programs, making it difficult for policymakers to measure the effectiveness of social programs.  As a result, the Census Bureau will soon release adjusted poverty numbers using an updated poverty formula, as Stateline reported in July.
 
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