Vol. 74/No. 37      October 4, 2010

The figures show the impact on working people of increased unemployment, rising prices, and cuts in services and benefits, despite the National Bureau of Economic Research’s announcement that the recession officially ended in June 2009.

The poverty threshold is an arbitrary figure established by the government. It is primarily used to set levels for means testing that restricts access to various social benefits.

The economic crisis has hit Blacks and Latinos hardest. More than a quarter of African Americans and Latinos live below the government's poverty line. More than one-third of those labeled as living in poverty are children. Almost 40 percent of families headed by single women now live in poverty—more than half of the 6.6 million families counted as poor.

The situation for female-headed households has worsened since the passage of the 1996 Personal Responsibility and Work Opportunity Reconciliation Act, during the presidency of William Clinton. The law eliminated Aid to Families with Dependent Children and put a lifetime limit of five years on welfare payments a family could receive. This was the biggest success to date in the U.S. government's effort to erode Social Security and other measures fought for and won by working people from the labor struggles of the 1930s to the civil rights battles of the 1960s.

While acknowledging the increase in poverty, President Barack Obama claimed that because of his policies “millions of Americans were kept out of poverty last year.”

Millions of workers were kept out of the poverty statistics—because they moved in with their parents or other families and were included in the total household income.

The number of multifamily households increased dramatically in the last year. “If the poverty status of related subfamilies were determined by only their own income, their poverty rate would be 44.2 percent,” said David Johnson, chief of the Housing and Household Economic Statistics Division of the U.S. Census Bureau. The rate falls to 17 percent when based on the resources of all household members.

Close to half of the households in the United States have someone receiving government benefits such as Social Security, subsidized housing, or unemployment—the highest percentage ever recorded. The number of people receiving food stamps increased 45 percent in the past two years.

Food pantries around the country report an increase in those requesting help. Approximately one and a half million people in New York City rely on food pantries, soup kitchens, and federal food stamps in order to get enough to eat.

The Census Bureau is now planning to change the way poverty figures are calculated, claiming this will create “an improved understanding of the economic well-being of American families.” The government will start counting food stamps and tax credits as income under the new rules. Almost 8 million additional people would have been removed from the poverty figures in 2009 if the new methods had been used.

The decision to recalculate how to measure poverty is similar to the Clinton administration's 1994 move to only count those unemployed workers who had been looking for a job for less than a year as part of the workforce. With this measure, he was able to erase millions of jobless workers from the official unemployment figures.  
 
 
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