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Portfolio > Economy & Markets

U.S. Poverty Nearing Highest Rate Since 1965

By John Sullivan

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More bad news on the economy, as the ranks of America’s poor are on track to climb to levels not seen in nearly 40 years.

Census figures for 2011 will be released this fall in the weeks ahead of the November elections. However, the Associated Press surveyed more than a dozen economists, think tanks and academics, both nonpartisan and those with known liberal or conservative leanings, and found a broad consensus: The official poverty rate will rise from 15.1% in 2010, climbing as high as 15.7%. Several predicted a more modest gain, but even a rise of a tenth of a percentage point would put poverty at the highest level since 1965, according to the news service.

“Poverty is spreading at record levels across many groups, from underemployed workers and suburban families to the poorest poor,” the AP writes. “More discouraged workers are giving up on the job market, leaving them vulnerable as unemployment aid begins to run out. Suburbs are seeing increases in poverty, including in such political battlegrounds as Colorado, Florida and Nevada, where voters are coping with a new norm of living hand to mouth.”

The predictions for 2011 are based on separate AP interviews, supplemented with research on suburban poverty from Alan Berube of the Brookings Institution and an analysis of federal spending by the Congressional Research Service and Elise Gould of the Economic Policy Institute.

The AP found that analysts’ estimates suggest that some 47 million people in the U.S., or one in six, were poor last year. An increase of one-tenth of a percentage point to 15.2% would tie the 1983 rate, the highest since 1965. The highest level on record was 22.4% in 1959, when the government began calculating poverty figures.

The AP also reports:

  • Poverty will remain above the prerecession level of 12.5% for many more years. Several predicted that peak poverty levels — 15% to 16% — will last at least until 2014, due to expiring unemployment benefits, a jobless rate persistently above 6 percent and weak wage growth.
  • Suburban poverty, already at a record level of 11.8%, will increase again in 2011.
  • Part-time or underemployed workers, who saw a record 15% poverty rate in 2010, will rise to a new high.
  • Poverty among people 65 and older will remain at historically low levels, buoyed by Social Security cash payments.
  • Child poverty will increase from its 22% level in 2010.

Analysts also believe that the poorest poor, defined as those at 50% or less of the poverty level, will remain near its peak level of 6.7%.

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