Money Matters - Simplified

Nearly 46mn Americans are poor -- US Census report

The Census report also points that the gap between the rich and the poor Americans has widened during the last year.

According to the Census Bureau report released Tuesday, the number of poor people in America has increased to 46.2 million in 2010, which is the highest in last two decades.

This means that now one out of every six Americans is living in poverty.

Rising poverty
The overall poverty rate is now at 15.1 percent which is considerably higher than the last year’s rate of 14.3 percent.

The poverty rate grew rapidly between 2007 and 2010 and it was only in the early 1980s that the poverty rate increased at the similar pace because of the energy crises which in turn led to rise in unemployment, inflation and high interest rate.

The Census report also points that the gap between the rich and the poor Americans has widened during the last year.

While 5 percent households with highest income suffered income of 1.2 percent, the bottom 20 percent households experienced 4 percent drop in income.

Decline in health coverage
The data also reported that the number of citizens without health insurance has increased to 16.3 percent compare to the last year’s figure of 16.1 percent. This is the highest since 1987 when the government started keeping record of the people with health insurance.

The rise in people without health insurance was mainly due to continuous fall in employer provided health insurance due to the economic slowdown.

Further, poverty has risen among all ethnic and racial groups except the Asians. Hispanics saw the poverty rate rise from 25.3 percent to 26.6 percent and the blacks saw it rise from 25.8 percent to touch 27.4 percent.

The rate remained unchanged at 12.1 percent for the Asians while among the whites it grew to 9.9 percent from the earlier 9.4 percent.

Census report could support jobs bill
The census report findings could help the Obama administration which is gearing up to pass a $447 billion plan which is aimed at creating more jobs and stimulate the economy.

The plan envisages an extension in the unemployment benefits and proposed cut in taxes.

A professor of public policy at the Chicago University Bruce Meyer warned that the poverty situation could get worse in future.

He said the 6 million people presently in the category of long term unemployed could fall into poverty, increasing the numbers considerably in coming months.