Saturday, September 18, 2010

Poverty rises in times of crisis

The US Census Bureau* has published last Thursday (16 Sept.) a report on the impact of the recession on poverty. The economic crisis has brought four additional million of Americans in poverty in 2009, reaching in total 44 million, or one in seven citizens. The poverty rate climbed to 14,3%, the highest level since 1994. For a single adult, the poverty line was $10,830 in income (before tax) and for a family of four, $ 22,050.

Given the depth of the recession, some economists had expected an even larger rise in poverty. It has hold down because of unemployment insurance or other assistance. But millions of Americans are still struggling with poverty, in sharing homes with parents and even non-relatives. The Census report found a dramatic increase in the number of such multi-family households over the last two years. Another sign of the crisis is the rise in food stamp recipients, which affects nearly one in seven adults.

According to Lawrence Katz, a Harvard economist, if the two recession years are considered, the decline was 4,2 percent and median family incomes in 2009 were 5 percent lower than in 1999. This means basically no gains achieved for the average American household on an entire decade.

The number of US residents without heath insurance climbed to 51 million in 2009 from 46 million in 2008, although it is expected that these numbers will shrink as a result of the healthcare reform which begins to take effect.

There are, however, strong signs, that high poverty will continue to rise as unemployment remains stable and recovery weakens. the decline in incomes in 2008 had been greater than expected. Experts know that the poverty line is a flawed measure, and that poverty is a multi-dimensional phenomenon (as Sen called it in his works on poverty), but it remains a consistent measure of need for deprived populations and its variations reflect genuine trends.

Increase in poverty is intolerable in the richest country of the world, especially because it affects historically Black and Hispanic communities. This has a dramatic impact on the social life of the nation, its cohesiveness but also on the future of these young generations, who, for a large share of them, had never had a stable job and income.

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