U.S. poverty spikes between 2001 and 2002

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September 2003

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U.S. poverty spikes between 2001 and 2002
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U.S. poverty spikes between 2001 and 2002
A September 3 U.S. Census Bureau report indicates a sharp spike in the poverty rate last year with the number of Americans officially in poverty increasing by as much as 1.34 million in 2002 to 34.8 million people. This sudden poverty surge reflects the overall weakness in the economy and in the labor market, according to the Center for Budget and Policy Priorities (CBPP).

The spike in economic hardship hit individuals and families alike. The report indicated that the total percentage of people in poverty increased to 12.4 percent from 12.1 percent in 2001. At the same time, the number of families living in poverty went up by more than 300,000 in 2002 to 7 million from 6.6 million in 2001.

The number of children in poverty rose by more than 600,000 during the same period to 12.2 million. The rate of increase in children under age 5 jumped a full percentage point to 19.8 percent living below the poverty line from 18.8 percent a year earlier.

The new data may raise the level of scrutiny on a variety of federal programs like welfare reform and the recently enacted increases in child tax credits, which excluded about 6.5 million low-income working families with children.

Robert Greenstein, executive director of the Center on Budget and Policy Priorities, told the New York Times, "Some people had drawn a Pollyanna-ish conclusion that somehow changes in the welfare system would insulate children from increases in poverty during economic slumps.

"These new data show that that assumption is flatly incorrect. It also underscores the mistake in federal tax policies that exclude the very families who are hurting the most."

In 2001, 33.4 million—or 12.1 percent—of Americans lived below the poverty line. The adjusted poverty line figures for 2002 have yet to be released, but in 2001, a family of two adults and two children would have to have made less than $17,960 a year to be ranked as living below the poverty level. For a single person under the age of 65 the poverty line in 2001 was roughly $9,200 a year.

The Census Bureau released data from the 2002 American Community Survey (ACS) on a range of topics, including population, school enrollment, educational attainment, foreign-born status, income, and poverty. The Census Bureau released national and state data, as well as data for selected counties, on these topics. The data do not represent estimates for calendar year 2002. Instead, these data, roughly speaking, represent the situation in the country between the mid-point of 2001 and mid-point of 2002.

Later this month, the Census Bureau is scheduled to release much more complete income and poverty statistics derived from a different survey, the annual Current Population Survey. This survey, conducted in March 2003, will show "official" poverty and income statistics for calendar year 2002 (January – December 2002) and will be comparable to the income and poverty statistics released each fall.

The figures to be released later this month also will provide a richer set of information about earnings, income inequality, and poverty than the data released thus far from the ACS. According to the CBPP, the ACS’s far larger sample size allows for more reliable state and sub-state estimates to be calculated on a range of topics and is a valuable tool for policymakers and researchers alike.

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