News > Recession affects poverty rates and income levels

printer friendly version
Recession affects poverty rates and income levels
Monday, September 29, 2003

For the second year in a row, the number of Americans living in poverty has risen while the median household income has dropped, the U.S. Census Bureau reported on Friday.

According to the annual Current Population Survey, the number of Americans in poverty rose to 12.1 percent in 2002 from 11.7 percent the year before. Representing 34.6 million people, the rate was coupled with a 1.1 percent drop in household income to $42,400.

Government officials attributed the numbers to the lingering effects of the recession, which officially began in March 2001 and ended in November 2001. "Alternative measures of income and poverty, which consider taxes and the value of noncash benefits, present a more mixed picture of the nation's economic situation," said Daniel Weinberg, chief of the Census Bureau's Housing and Household Economic Statistics Division.

American Indians and Alaska Natives weren't included in the two reports released on Friday. There wasn't enough of a sample size for the data to be accurate, the Census Bureau said.

But reports from the past two years put the poverty rate among Native Americans at about 25 percent, more than twice the national average. And the median household income for Native families is far below the national average.

In 2000, the Census Bureau for the first time reported poverty and income data for American Indians and Alaska Natives. Based on a three-year average, 25.9 percent, or 700,000 Native Americans, lived in poverty. The median household income was $30,784.

The following year, the Census Bureau reported a slight drop in poverty among Natives just as the country was entering the recession. The median income in Native households was $32,116, a slight increase from the year prior.

This year's reports showed that minorities were hit the hardest by the recession.The poverty rate among African-Americans rose to 24.1 percent from 22.7 percent a year earlier while their median income fell 3 percent.

The poverty rate for Asian-Americans hovered at about 10.0 percent while their income dropped 4.5 percent. Hispanic poverty rates also remained constant and their income also fell 2.9 percent.

In comparison, poverty rates among white increased only slightly while income fell 0.3 percent.

Historically, the data was in tune with the poverty over the last 50 years. Increases in the poverty rate are attributed to times of recession.

The poverty rate is defined as the number whose income falls below the poverty threshold. The threshold for a family of four in 2002 was $18,392 in annual income; compared with $14,348 for a family of three; $11,756 for a family of two; and $9,183 for unrelated individuals.

Census Bureau Reports:
Income | Poverty

Relevant Links:
Poverty, U.S. Census Bureau - http://www.census.gov/hhes/www/poverty.html