Census: New gauge shows high of 49.7M poor in US

Associated Press Modified: November 14, 2012 at 6:16 pm •  Published: November 14, 2012
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WASHINGTON (AP) — The ranks of America's poor edged up last year to a high of 49.7 million, based on a new census measure that takes into account medical costs and work-related expenses.

The numbers released Wednesday by the Census Bureau are part of a newly developed supplemental poverty measure. Devised a year ago, this measure provides a fuller picture of poverty that the government believes can be used to assess safety-net programs by factoring in living expenses and taxpayer-provided benefits that the official formula leaves out.

Based on the revised formula, the number of poor people exceeded the 49 million, or 16 percent of the population, who were living below the poverty line in 2010. That came as more people in the slowly improving economy picked up low-wage jobs last year but still struggled to pay living expenses. The revised poverty rate of 16.1 percent also is higher than the record 46.2 million, or 15 percent, that the government's official estimate reported in September.

Due to medical expenses, higher living costs and limited immigrant access to government programs, people 65 or older, Hispanics and urbanites were more likely to be struggling economically under the alternative formula. Also spiking higher in 2011 was poverty among full-time and part-time workers.

As a result, the portrait of poverty broken down by state notably changes. California tops the list, hurt by high housing costs, large numbers of immigrants as well as less generous tax credits and food stamp programs to buoy low-income families. It is followed by the District of Columbia, Arizona, Florida and Georgia.

In the official census tally, it was rural states that were more likely to be near the top of the list, led by Mississippi, New Mexico, Arizona and Louisiana.

"We're seeing a very slow recovery, with increases in poverty among workers due to more new jobs which are low-wage," said Timothy Smeeding, a University of Wisconsin-Madison economist who specializes in poverty. "As a whole, the safety net is holding many people up, while California is struggling more because it's relatively harder there to qualify for food stamps and other benefits."

Broken down by group, poverty was disproportionately affecting people 65 and older — about 15.1 percent, or nearly double the 8.7 percent rate calculated under the official formula. That's because they have higher medical expenses, such as Medicare premiums, deductibles and drug costs, that aren't factored into the official rate.

While poverty rates for older Americans as a whole are higher, the new measure does show improvement in their income levels — about 15.1 percent were poor last year, down from 15.8 percent in 2010. Smeeding attributes that to a wave of more affluent, still-working baby boomers in dual-income households who are beginning to turn 65 and, as a result, are slowly raising overall income levels for seniors.

Working-age adults ages 18-64 saw an increase in poverty from 13.7 percent based on the official calculation to 15.5 percent, due mostly to commuting and child care costs.

In contrast, the new measure showed declines in poverty for children, from 22.3 percent under the official formula to 18.1 percent. Still, they remained the age group most likely to be economically struggling by any measure.

"These new numbers only reinforce what AARP and AARP Foundation hear from real people every day: older Americans are struggling to make ends meet," said Deb Whitman, executive vice president of AARP, an advocacy group. "Policymakers need to understand that not every senior is well off and the critically important role Social Security or Medicare plays as providing a safety net to keep even more older Americans out of poverty. As Washington debates what should happen during the lame duck, we cannot afford to undermine the current safety net that allows many to live with dignity."