US Poverty Hits Record High: 1 in 6 Americans Living Below Poverty Line

September 14, 2011Marketsby EW News Desk Team


46 million Americans (15.1 percent of the population) are living below the federal poverty line – the highest in percentage since 1993 and the most in absolute numbers since 1959 – according to a report by the US Census Bureau on Tuesday.

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In 2010, 2.6 million Americans joined the ranks of individuals living below the poverty line – set at US$22,113 for a family of four and US$11,139 for an individual – raising the percentage of poor Americans from 14.3 to 15.1 percent.

Broken down by state, Mississippi had the highest share of poor people, at 22.7 percent, closely followed by Louisiana, the District of Columbia, Georgia, New Mexico and Arizona. New Hampshire had the lowest poverty rate in the US at 6.6 percent.

The results come at a politically sensitive time for President Barack Obama, especially with the poverty rate having risen for the third consecutive year.

Obama is also currently suffering from low job approval ratings for the economy and his US$447 billion job creation scheme will be now placed under greater scrutiny.

Related: Obama’s Approval Rating on Economy Slumps to Record Low

Related: Obama Urges Congress to Pass US$447 Billion American Jobs Act

According to the Organisation for Economic Cooperation and Development (OECD), the United States now has the highest poverty rate among all the developed countries in the world. The data from the Census Bureau also indicated that the number of uninsured Americans was also on the rise, while unemployment rose from 9.3 percent to 9.6 percent.

"All of this deterioration in the labor market caused incomes to drop, poverty to rise and people to lose their health insurance," said Heidi Shierholz of the Economic Policy Institute think tank, to Reuters. "One of the immediately obvious issues this brings up is that there is no relief in sight."

Paul Osterman, a labour economist at MIT, added that the results of the census report were not surprising considering the current economic climate, both globally and domestically.

"You would expect with so many people unemployed, the poverty rate would go up. It's just another sign of what a difficult time this is for so many people,” he told CNN.

Significantly, while lower and middle class income has fallen, the richest 5 percent in America remained relatively unbothered by the economy. The median household income, which has barely changed since 1980, fell from US$49,777 to US$49,445 in the last year. Adjusted for inflation, a middle-income family in America only earned 11 percent more in 2010 than they did in 1980, while the richest 5 percent saw their incomes surge by over 42 percent.

"Over that period of time, it's not that the American economy has necessarily performed badly," Osterman said. "As a country we're richer over that period, but there's been this real shift in where the income has gone, and it's to the top."

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