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Posted September 11, 2009

National

Poverty Rate Rose in 2008, Census Finds

By ERIK ECKHOLM

In the recession last year, the nation’s poverty rate climbed to 13.2 percent, up from 12.5 percent in 2007, according to an annual report released Thursday by the Census Bureau. The report also documented a decline in employer-provided health insurance and in coverage for adults.

The rise in the poverty rate, to the highest level since 1997, portends even larger increases this year, which has registered far higher unemployment than in 2008, economists said.

The Census Bureau said 39.8 million residents last year lived below the poverty line, defined as an income of $22,025 for a family of four.

In another sign of both the recession and the long-term stagnation of middle-class wages, median family incomes in 2008 fell to $50,300, compared with $52,200 the year before. This wiped out the incomes gains of the previous three years, the report said.

Adjusted for inflation, in fact, median family incomes were lower in 2008 than they had been a decade earlier.

“This is the largest decline in the first year of a recession we’ve seen since the Census Bureau started collecting data after World War II,” said Lawrence Katz, an economist at Harvard University, referring to household incomes. “We’ve seen a lost decade for the typical American family.”

The share of American residents who said they lacked health insurance in 2008 remained steady, at 15.4 percent, or 46.3 million people. But the total masked some more worrisome trends that are helping to drive the debate over national health care reform.

Continuing an eight-year trend, the number of people with private or employer-sponsored insurance declined, while the number of people relying on government insurance programs including Medicare, Medicaid, the children’s insurance program and military insurance rose.

The share of children who were uninsured declined, to 9.9 percent from 11 percent in 2007, apparently because of the federal government’s special efforts to insure low-income children. But at the same time, the share of adults aged 18 to 64 without health insurance rose, to 20.3 percent in 2008 from 19.6 percent in 2007.

In a speech Thursday to promote his health reform plan, President Obama referred to the census survey and said that things had grown worse since September 2008. “Over the last 12 months, it’s estimated that the ranks of the uninsured have swelled by nearly 6 million people,” he said.

The accuracy of the census data, which are collected each spring for the previous year as part of the Current Population Survey, is subject to debate. Family incomes in the poverty area do not include the value of food stamps, money received through tax credits or unreported income. On the other side, the poverty threshold has not been adjusted over the years to reflect the rising relative costs of housing and medical care and does not take account of large regional differences in the cost of living.

Whatever the flaws, which remain similar every year, “we think the C.P.S. data present a very good measure of the trends over time,” said David S. Johnson, chief of the housing and household economic statistics division of the Census Bureau, in an audio news conference Thursday.

Because unemployment has climbed so much more sharply in 2009 —averaging 9 percent, compared with an average of 5.8 percent in 2008— “the real spike in poverty is going to be in the ’09 numbers, which we get next year,” said Sheldon Danziger, a professor of public policy at the University of Michigan and co-editor, with Maria Cancian, of the coming book “Changing Poverty, Changing Policies” (Russell Sage Foundation).

Copyright 2009 The New York Times Company. Reprinted from The New York Times, National, of Friday, September 11, 2009.

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