Poverty Rates Remain Stubbornly High Despite Economic Recovery

Over 46 million people were living in poverty in 2012, three years after the recession was declared over

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Patrick Semansky / ASSOCIATED PRESS

In this April 4, 2013 picture, children play kickball on a vacant lot alongside a blighted row house in Baltimore. The U.S. Census Bureau estimates that 21.8 percent of American children are impoverished.

The poverty rate and the number of people living in poverty haven’t budged since 2011 despite the slowly improving economy, according to a report released early Tuesday.

46.5 million people were living in poverty in 2012, according to new data from the U.S. Census Bureau’s 2012 Income Poverty and Health Insurance report. That translates into a national rate of 15% of Americans below the poverty line. Before the last recession began in 2007, the rate was 2.5 points lower and has been hovering around 15% since 2010.

Tuesday’s report represents the second consecutive year that neither the poverty rate nor the number of people living in poverty has shifted in statistically significant terms. In 2011, there were 46.2 million people living in poverty.

Some groups, however, have seen a turn for the worse in recent years. For the elderly, the number of people in poverty increased to 3.9 million in 2012, up from 3.6 million in 2011. The Economic Policy Institute estimates that without Social Security benefits, an additional 15.3 million people over 65 would have been living in poverty in 2012. That would move the elderly to the same level as children, 16.1 million of whom were impoverished in 2012.

For people in the South, the number increased from 18.4 million people living in poverty in 2011 to 19.1 million in 2012.

The numbers aren’t any more promising when it comes to Americans’ income. Over the past six years, earnings have dropped 8.3% from $55,627; since 1999, when the median income peaked according to the report, household income has fallen by 9%.

Given the slow decline in the unemployment rate over the past year, the stagnation in the poverty and income rates are not a surprise to experts. The Center for Budget and Policy Priorities estimates the job market has grown by an average of 162,000 jobs per month, over the past 3 ½ years, but the growth hasn’t been fast enough to bring the labor force back up to its pre-recession 2007 levels. The unemployment rate hovered at 7.3% in August, which is low compared to the rate of 8.1% during the same period in 2012 and 9.1% in 2011. But labor force participation is at its lowest level since 1978.