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Overall Poverty Remains Stable, at the Highest Levels Recorded, Wealth Gap Widens

Sep 19, 2013 | By Sr. Marge Clark

The United States Poverty Data for 2012, released on September 17 showed no statistically significant difference from the 2011 situation. We would do well to feel very uncomfortable with this, as 2011 presented the most negative situation in any year since data has been collected.

Even less comfortable is a comparison between the most recent year and that of the last year prior to the recession (2007). Overall, poverty rose by 2.5%, meaning that more than nine million additional members of our communities fell below the poverty threshold since the beginning of the recession. We are now in what is called a “jobless recovery.” According to the Bureau of Economic Research, this recovery began in June, 2009. Yet, poverty continued to increase during the first two years of recovery.

See: Poverty Data, 2007, 2011 and 2012, below

There are many ways to “explain” this phenomenon.

-          Jobs lost in the recession have not been replaced, as companies found more efficient, cost-saving means of getting work done (technology, overseas work, …)

-          The recovery which has occurred benefited the wealthiest few percent of the population

-          Recovery looks inflated, as the stock market continues to hit new records

-          Long-term unemployed are losing unemployment benefits

We are facing rising median incomes, while grappling with the highest levels of poverty in our recorded

history – evidence of the growing wealth gap in the United States.

 

Table H-1.  Income Limits for Each Fifth and Top 5 Percent of All Households:  1967 to 2012

 (Households as of March of the following year.  Income in current and 2012 CPI-U-RS

   adjusted dollars (29))

Year

Number (thousands)

Upper limit of each fifth (dollars)

Lower limit of top 5 percent

Lowest

Second

Third

Fourth

CURRENT DOLLARS

2012

               122,459

          20,599

          39,764

          64,582

         104,096

         191,156

2011

               121,084

          20,262

          38,520

          62,434

         101,582

         186,000

2007

116,783

20,291

39,100

62,000

100,000

177,000

Census Bureau, HISTORICAL INCOME TABLE: Households

The GINI index, used internationally, measures the gap between the wealth of those at the highest levels of income with those at the lowest end. The closer to zero, the greater the equality. The closer to one, the greater the inequality.

The chart below gives the GINI Index for the years being compared, indicating that the wealth gap in the United States has widened as we have lived through the recession and the recovery. Neither recession nor recovery have been equally experienced by all.

YEAR

GINI INDEX

2012

0.477

2011

0.477

2007

0.463

 

The poverty threshold for a family of four, 2012, was $23,492. Therefore, those in the lowest quintile and into the second quintile are below the poverty threshold for an average family. A single individual would be seen as not in poverty with any earnings over $11,720 per year.

 

Poverty Data, 2007, 2011 and 2012

 

% in Poverty 2012`

# 2012

In millions

% 2011

#2011

In millions

%2007

# 2007 in in millions

Overall

15.0

46.5

15.0

46.2

12.5

37.3

Non-Hispanic White

9.7

18.9

9.8

19.2

8.2

16.0

Hispanics

25.6

13.6

25.3

13.2

21.5

9.890

Blacks

27.2

10.9

27.6

10.9

24.5

9.237

Elderly

9.1

3.9

8.7

3.6

9.7

3.556

Children

21.8

16.1

21.9

16.0

18.0

13.324

Asian

11.7

1.9

12.3

2.0

10.2

1.349

Ages 18-64

13.7

26.5

13.7

26.5

10.9

20.396

 

 

 

 

 

 

 

West

15.1

11

15.8

11.0

12.0

8.372

South

16.5

19.1

16.5

18.4

14.2

15,501

 

 

 

 

 

 

 

Outside Metropolitan

17.7

8.5

17.7

8.0

15.4

7.355

In Metropolitan

14.5

38

14.5

38

11.9

29.921

Census Bureau, 2013, 2012, 2008