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Aug 20, 2009

Numbers of poor in US projected to increase to 38.8mil

The numbers of poor and uninsured Americans are likely rising - with more than 38.8 million believed to be in poverty.

Rebecca Blank, the Commerce Department's undersecretary of economic affairs, spoke to The Associated Press in advance of next month's closely watched release of 2008 census data.

Noting the figures are not yet final, Blank said the numbers will likely show a "statistically significant" increase in the poverty rate, to at least 12.7 percent.

That would represent a jump of more than 1.5 million poor people last year.

"There's no question that 2008 economically was a much worse year than 2007," she said Wednesday.

"The question is how much and how bad."

The number of Americans without medical insurance is also expected to notably increase due largely to rising unemployment and the erosion of private coverage paid for by employers and individuals, but Blank declined to say by how much.

In 2007, the number of uninsured fell by more than 1 million mostly because government programs such as Medicaid for the poor picked up the slack.

The census figures, set to be released Sept. 10, could have important ramifications as Congress returns from its August recess to debate health reform, its cost, and the ways to pay for it.

Republicans also have traditionally pointed to the intractable poverty rate as a sign that government programs do not work, a claim likely to be repeated often in light of the federal economic stimulus package.

In a 30-minute interview, Blank said the census figures released next month could possibly understate the actual number of poor people, since the poverty rate is a lagging indicator that tends to accelerate over time.

As a result, the 2008 data could prove to be the tip of the iceberg, with more significant declines reflected in 2009 figures released next year.

Blank, a former co-director of the National Poverty Center at the University of Michigan, estimated this year that poverty could eventually hit 14.8 percent or more in the United States should unemployment reach 10 percent as some analysts have predicted.

That would be almost one of every seven Americans.

Based on 2007 figures, the poverty rate currently stands at 12.5 percent, or 37.3 million, largely unchanged from recent years.

The official poverty level is now $21,203 for a family of four, $13,540 for a family of two, based on a calculation that includes only cash income before deductions for taxes.

It excludes capital gains and it does not take into account accumulated wealth or assets, such as a home.

On Wednesday, Blank said she was working with the Census Bureau to provide better measures of poverty.

Such alternative measures, which will be released sometime after Sept. 10, will seek to better incorporate added costs of health care, child care, housing and transportation, but also noncash income from the stimulus and other government programs, such as tax credits and food stamps.

Source : STAR
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