Buddy can you spare a dime . . .

Poverty Rate Rises to 12.7 Percent

By JENNIFER C. KERR
Associated Press Writer

WASHINGTON - The nation's poverty rate rose to 12.7 percent of the population last year, the fourth consecutive annual increase, the Census Bureau said Tuesday.

The percentage of people without health insurance did not change.

Overall, there were 37 million people living in poverty, up 1.1 million people from 2003.

Asians were the only ethnic group to show a decline in poverty -- from 11.8 percent in 2003 to 9.8 percent last year. The poverty rate among the elderly declined as well, from 10.2 percent in 2003 to 9.8 percent last year.

The last decline in overall poverty was in 2000, when 31.1 million people lived under the threshold -- 11.3 percent of the population. Since then, the poverty rate has increased steadily from 11.7 percent in 2001, when the economy slipped into recession, to 12.5 percent in 2003.

The number of people without health insurance grew from 45 million to 45.8 million. At the same time, the number of people with health insurance coverage grew by 2 million last year.

Charles Nelson, an assistant division chief at the Census Bureau, said the percentage of uninsured remained steady because of an "increase in government coverage, notably Medicaid and the state children's health insurance program, that offset a decline in employment-based coverage."

The median household income, meanwhile, stood at $44,389, unchanged from 2003. Among racial and ethnic groups blacks had the lowest median income and Asians the highest. Median income refers to the point at which half of households earn more and half earn less.

Regionally, income declined only in the Midwest, down 2.8 percent to $44,657. The South was the poorest region and the Northeast and the West had the highest median incomes.

The increase in poverty came despite strong economic growth, which helped create 2.2 million jobs last year.

"I guess what happened last year was kind of similar to what happened in the early 1990s where you had a recession that was officially over and then you had several years after that of rising poverty," Nelson said. "... These numbers do reflect changes between 2003 and 2004. They don't reflect any improvements in the economy in 2005."

Tim Smeeding, an economics professor at the Maxwell School of Syracuse University, says the nation has experienced a shift from earnings income to capital income and capital gains, which aren't reflected in the Census Bureau's latest numbers.

"Most of that growth in the economy over the last couple of years has gone to higher income people and has taken the form of capital income -- interest, rents, dividends," Smeeding said.

The poverty threshold differs by the size and makeup of a household. For instance, a family of four with two children was considered living in poverty if income was $19,157 or less. For a family of two with no children, it was $12,649. For a person 65 and over living alone, it was 9,060.

The estimates on poverty, uninsured and income are based on supplements to the bureau's Current Population Survey, and are conducted over three months, beginning in February, at about 100,000 households nationwide.

The only city with a million or more residents that exhibited a significant change in poverty level last year was New York City, which saw the rate increase from 19 percent to 20.3 percent.