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September 2011, Week 2

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Fri, 9 Sep 2011 01:13:53 -0400
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Working-age poor population highest since '60s

3 out of 5 below the poverty line are now adults between
18 and 64

By HOPE YEN
Associated Press
updated 9/6/2011 4:46:12 PM ET
msnbc.com2011-09-06T20:46:12

http://www.msnbc.msn.com/id/44413750/ns/business-
us_business/#

WASHINGTON -- Working-age America is the new face of
poverty.

Counting adults 18-64 who were laid off in the recent
recession as well as single twenty-somethings still
looking for jobs, the new working-age poor represent
nearly 3 out of 5 poor people -- a switch from the early
1970s when children made up the main impoverished group.

While much of the shift in poverty is due to demographic
changes -- Americans are having fewer children than before
-- the now-weakened economy and limited government safety
net for workers are heightening the effect.

Currently, the ranks of the working-age poor are at the
highest level since the 1960s when the war on poverty was
launched. When new census figures for 2010 are released
next week, analysts expect a continued increase in the
overall poverty rate due to persistently high unemployment
last year.

If that holds true, it will mark the fourth year in a row
of increases in the U.S. poverty rate, which now stands at
14.3 percent, or 43.6 million people.

"There is a lot of discussion about what the aging of the
baby boom should mean for spending on Social Security and
Medicare. But there is not much discussion about how the
wages of workers, especially those with no more than a
high school degree, are not rising," said Sheldon
Danziger, a University of Michigan public policy professor
who specializes in poverty.

"The reality is there are going to be a lot of working
poor for the foreseeable future," he said, citing high
unemployment and congressional resistance to raising the
minimum wage.

The newest poor include Richard Bowden, 53, of southeast
Washington, who has been on food stamps off and on the
last few years. A maintenance worker, Bowden says he was
unable to save much money before losing his job months
ago. He no longer works due to hip and back problems and
now gets by on about $1,000 a month in disability and
other aid.

"At my work, we hadn't gotten a raise in two years, even
while the prices of food and clothing kept going up, so I
had little left over," Bowden said. "Now, after rent, the
utility bill, transportation and other costs, my money is
pretty much down to nothing."

"I pray and hope that things get better, but you just
don't know," he said.

The poverty figures come at a politically sensitive time
for President Barack Obama, after a Labor Department
report last Friday showed zero job growth in August. The
White House now acknowledges that the unemployment rate,
currently at 9.1 percent, will likely average 9 percent
through 2012.

Obama is preparing to outline a new plan for creating jobs
and stimulating the economy in a prime-time address to
Congress on Thursday. The Republican-controlled House has
been adamant about requiring spending cuts in return for
an increase in the federal debt limit. Suggested cuts have
included proposals to raise the eligibility age for future
Medicare recipients or to reduce other domestic programs
in a way that would disproportionately affect the poor.

According to the latest census data, the share of poor who
are ages 18-64 now stands at 56.7 percent, compared to
35.5 percent who are children and 7.9 percent who are 65
and older. The working-age share surpasses a previous high
of 55.5 percent first reached in 2004.

Lower-skilled adults ages 18 to 34, in particular, have
had the largest jumps in poverty as employers keep or hire
older workers for the dwindling jobs available. The
declining economic fortunes have caused many unemployed
young Americans to double up in housing with parents,
friends and loved ones.

In 1966, when the Census Bureau first began tracking the
age distribution of the poor, children made up the biggest
share of those in poverty, at 43.5 percent. Working-age
adults comprised a 38.6 percent share, and Americans 65
and older represented nearly 18 percent.

Douglas Besharov, a University of Maryland public policy
professor and former scholar at the conservative American
Enterprise Institute, says that expansions of the federal
safety net including Social Security retirement and
disability payments have been important in reducing
poverty.

In 2009, for instance, the Census Bureau estimated that
new unemployment benefits -- which gave workers up to 99
weeks of payments after a layoff -- helped keep 3.3 million
people out of poverty. For 2010, Besharov said
demographers on average expect an increase in poverty of
roughly half a percentage point to nearly 15 percent,
depending partly on the impact of unemployment insurance,
which did not run out for many people until this year.

The current poverty level was set at $10,956 for one
person and $21,954 for a family of four, based on an
official government calculation that includes only cash
income, before taxes. It excludes capital gains or
accumulated wealth, such as home ownership, as well as
noncash aid such as food stamps.

Taking noncash aid into account shifts the poverty numbers
notably. Next month, the government will release new
supplemental poverty numbers for the first time that will
factor in food stamps and tax credits -- which often
benefit out-of-work families with children -- but also
everyday costs such as commuting that tend to have a
bigger impact on working Americans.

Preliminary census estimates released this summer show a
decline in child poverty based on the new measure and a
jump in the shares of poor who are working age -- from 56.7
percent to nearly 60 percent. In all, the child poverty
rate decreases from 20.7 percent under the official
poverty measure to 17.9 percent, according to estimates.
But the senior poverty rate jumps from 8.9 percent to 15.6
percent after including out-of-pocket medical costs, and
working-age adults see an increase in poverty from 12.9
percent to 14.9 percent.

Food banks say they see a shift to a new working poor.

"Americans from all walks of life are now finding
themselves in need of help for the first time in their
lives," said Vicki Escarra, president of Feeding America,
a national network of food banks that is based in Chicago.
She noted that demand has increased by 46 percent since
the recession began in late 2007, with more than 1 in 3
families who get their assistance having one or more
adults working.

"The reality is we all know someone who has lost a job or
a crisis that has caused financial concern. In fact, some
people who used to be donors to our Feeding America food
banks are themselves now turning to us for help," she
said.

Demographers expect next week's poverty report to show:

A rise in working families who are low income, to nearly 1
in 3. "Low income" is defined as those making less than
200 percent of the poverty threshold, or about $43,000 for
a family of four.
Larger numbers of people who are uninsured, due to
slightly higher rates of unemployment on average in 2010.
Most provisions of the new health care law, which in part
expands Medicaid to pick up millions more low-income
people, don't take effect until 2014.
Blacks and Hispanics disproportionately hit, based on
their higher rates of unemployment.
A possible widening of the income gap between rich and
poor, at least by some measures, due partly to last year's
stock market rebound while the job market languished.
Timothy Smeeding, a University of Wisconsin-Madison
professor who specializes in income inequality, called the
outlook for younger adults in the U.S. especially
troubling. He pointed to youth discontent in other parts
of the world, such as England, where he says high
unemployment and widening inequality contributed to recent
rioting.

"We risk a new underclass who are not able to support
their children, form stable families, buy houses and reach
the middle class," Smeeding said.

___________________________________________

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