The new poor and the almost-poor: Will poverty rate climb more?
Government aid kept some Americans from sliding into poverty last year, some analysts say. The 2009 poverty rate of 14.3 percent is a big one-year leap in the ranks of the poor.
Call them the newly poor. They are the 4.8 million people in America who last year joined the ranks of people living in poverty – defined as having less than $22,000 in annual income for a family of four. They are people, probably, much like Reginald O'Neal and his family.Skip to next paragraph
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Mr. O'Neal and several family members were at the Dekalb County welfare department here on Thursday, trying to get help to turn the electricity back on at their house.
"If you were to see our house, you'd think we were middle class," says the 20-something Atlantan. "But that would be missing the point: Lately, we're poor."
These days, a lot of people are feeling worse off that they used to be. But it's the slice of Americans who hadn't quite reached the middle class, yet who were above the poverty line, that is now feeling poverty biting at their heels. With the US unemployment rate stuck well above 9 percent, it's the folks "just below the middle" who account for much of the hike in the US poverty rate, according to at least one poverty expert.
The Census Bureau reported Thursday that the US poverty rate last year hit 14.3 percent, up from 13.2 percent in 2008. Among working Americans, the poverty rate was also the highest its been – 12.9 percent – since 1965.
"Median income remained flat, and the poverty rate went up … which leaves a lot of room for people below the median but previously above the poverty threshold to have shifted downwards," says economist Jim Sullivan, a poverty expert at the University of Notre Dame, in South Bend, Ind. "Just below the middle, that's where a greater toll is being taken."
Paul Carter, maintenance worker who makes about $28,000 a year, is one who is perilously close to that poverty line. He blames food costs and a slow economy for the fact that he had two cars repossessed in the past year.
"Everybody wants people to start spending money again, but there ain't no money around to spend," he says. Though Mr. Carter himself does not take government subsidies, he brought the mother of his three children to the Dekalb County Department of Families and Children on Thursday so she could get help.
Some economists say the new poverty rate might have been higher. The 3.5 percent year-over-year increase in the unemployment rate should have produced an even larger spike in the poverty rate than the Census Bureau reported, they say.