Poverty in America

Special Labor Day Issue

We recently cited 700,000,000 people in China as making less than $2 per day. But this day, in America, Labor Day, seemed like an appropriate time to illustrate that the Unite States can also do better. The poverty rate in the U.S.A. rose for a third straight year and the ranks of the uninsured swelled, according to the U.S. Census Bureau. The number of people living in poverty rose by 1.3 million to 35.9 million people, or 12.5 percent of the population, up from 12.1 percent in 2002.

The rise was more dramatic for children. There were 12.9 million living in poverty last year, or 17.6 percent of the under-18 population. That was an increase of about 800,000 from 2002. That should not be surprising considering programs such as the "leave no Child behind" program, that the government started, but then did not fund, sending the funds to Iraq instead. Based on the census numbers, real income has fallen by about $1,500 per household over the past three years, and the ranks of the uninsured have risen by more than 5 million, when 16.7 percent of all children were in poverty.

The poverty rate has risen from a recent low of 11.3 percent in 2000, meaning an additional 4.3 million people are living in poverty as defined by this Administration. The poverty threshold varies depending on age and family size. On average a family of four is considered to be living in poverty in the USA if its annual cash income is below $18,810, according to government guidelines. The threshold falls to about $14,680 for a family of three, $12,015 for a couple and $9,393 for an individual. The results were not completely unexpected given the slow pace of job growth in current recovery. Although the economy has added 1.5 million jobs over the past year, the economy was still shedding jobs as recently as the summer of 2003, and job growth has been slower than previous expansion periods.

To make matters worse, the Census Bureau said the number of Americans without health insurance coverage rose to 45 million or 15.6 percent of the population, up 1.4 million from 2002, when 15.2 percent of the population was uninsured. The increase, which mainly affected working-age adults across income brackets, was caused by a drop in the percentage of people covered by private, employment-based health insurance. The government Medicare and Medicaid programs expanded to cover an additional 3 million people.