-- Washington Post / Ranks of U.S. poor grow as household income falls / Steven Pearlstein Ranks of U.S. poor grow as household income falls Steven Pearlstein Eroding some of the social and economic gains of the late 1990s, the nation's poverty rate rose last year while the typical household's income went down, the government reported last week. Government and private researchers said the changes largely reflected the effects of the economic recession. In its annual report on income and poverty, the Census Bureau said that 1.3 million more Americans slipped below the government's official poverty line last year, the first increase since 1993. As a result, 11.7 percent of the population is considered to be in poverty, up from 11.3 percent in 2000. Unlike previous recessions, most of the increase in poverty was experienced by white households and in suburban and rural areas, particularly in the South. The poverty rate fell for Hispanics and increased marginally in black households. Still, while the poverty rates among blacks (22.7 percent) and Hispanics (21.4 percent) are at their lowest levels ever, they remain about twice those of the population at large. For a family of four, the government calculates the poverty line at about $18,000. On the income front, the Census Bureau reported that the median household income fell 2.2 percent last year to $42,228, after adjusting for inflation - the first drop since 1991. The decline in income was broad if not particularly steep, affecting all but the richest households and all regions except the Northeast. "This report signals a significant reversal of what had been a very positive trend in terms of income and poverty," said Jared Bernstein, senior economist at the union-backed Economic Policy Institute in Washington. But the $950 decline in cash income for the median household was still less than that experienced during the first years of the last two recessions. The Census Bureau found that the income of the typical black household fell 3.4 percent last year, more than double the rate of decline among whites (1.4 percent) and Hispanics (1.6 percent). Households headed by women also suffered bigger-than-average decreases. Geographically, income fell the most in the Midwest (3.7 percent) and the West (2.3 percent), reflecting the recession's heavy impact on manufacturing in the high-tech sectors. Household income increased 1.7 percent in the Northeast. For the first time, the highest-earning 20 percent of households earned more than half of the nation's income before taxes. The top 5 percent - with incomes above $150,000 - earned 22.4 percent of the national income, up from 22.1 percent in 2000. AFL-CIO President John J. Sweeney put the report in the context of recent corporate scandals. "It is a shameful commentary on this nation that, despite all its wealth and while executives cut deals to pay themselves millions in perks, severance and retirement, 11.7 million children and 3.4 million seniors continue to live in poverty." The Guardian Weekly 3-10-2002, page 32
