Fox News reports:
The nation’s poverty rate dropped last year, the first significant decline since President Bush took office. The Census Bureau reported Tuesday that 36.5 million Americans, or 12.3 percent — were living in poverty last year. That’s down from 12.6 percent in 2005. The median household income was $48,200, a slight increase from the previous year. But the number of people without health insurance also increased, to 47 million.
The last significant decline in the poverty rate came in 2000, during the Clinton administration. In 2005, the poverty rate dipped from 12.7 percent to 12.6 percent, but Census officials said that change was statistically insignificant.
The poverty numbers are good economic news at a time when financial markets have been rattled by a slumping housing market. However, the numbers released Tuesday represent economic conditions from a year ago.
The poverty level is the official measure used to decide eligibility for federal health, housing, nutrition and child care benefits. It differs by family size and makeup. For a family of four with two children, for example, the poverty level is $20,444. The poverty rate — the percentage of people living below poverty — helps shape the debate on the health of the nation’s economy.
Robert Rector, of the Heritage Foundation, reminds us of what it means to live as “the poor” in America:
The following are facts about persons defined as “poor” by the Census Bureau, taken from various government reports:
* Forty-six percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.
* Seventy-six percent of poor households have air conditioning. By contrast, 30 years ago, only 36 percent of the entire U.S. population enjoyed air conditioning.
* Only 6 percent of poor households are overcrowded. More than two-thirds have more than two rooms per person.
* The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
* Nearly three-quarters of poor households own a car; 30 percent own two or more cars.
* Ninety-seven percent of poor households have a color television; over half own two or more color televisions.
* Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.
* Seventy-three percent own microwave ovens, more than half have a stereo, and a third have an automatic dishwasher.
Important items to remember:
(1) Those living “in poverty” is never a static population. People cycle in and out of poverty over time.
(2) Unemployment numbers remain steady. Both the number of unemployed persons (7.1 million) and the unemployment rate (4.6 percent) were about unchanged in July. The jobless rate has ranged
from 4.4 to 4.6 percent since September 2006. (Data from the Bureau of Labor Statistics)
(3) Raising the minimum wage will not reduce the poverty rate but increasing the number of jobs will in the short-term.
(4) The low-skilled labor market continues to experience job loss due to advances in technology (robots, “self-check out” lanes, etc.)
(5) There has been considerable job growth since 2003. On August 3, The Bureau Of Labor Statistics released new jobs figures. Since August 2003, more than 8.3 million jobs have been created, with more than 1.8 million jobs created over the twelve months ending in July. Our economy has now added jobs for 47 straight months.
(6) According to White House data:
(a) Real GDP Grew At A Strong 3.4 Percent In The Second Quarter Of 2007. The economy has now experienced nearly six years of uninterrupted growth, averaging 2.7 percent a year since 2001.
(b) Real After-Tax Per Capita Personal Income Has Risen By 11.4 Percent
(c) Real Wages Rose 1.3 Percent Over The 12 Months Ending In June. This is faster than the average rate during the 1990s, and it means an extra $782 in the past year for a family with two average wage earners.
(d) Since The First Quarter Of 2001, Productivity Growth Has Averaged 2.8 Percent Per Year. This is well above the average productivity growth in the 1990s, 1980s, and 1970s.
In the end, the current poverty rate reduction is simply a result of a combination of the factors listed above. In order to continue reductions in poverty the business sector needs more freedom to create jobs to meet the needs of our changing communities. Tax burdens and frivolous government regulation continue to stifle entrepreneurial creativity and innovation. Additionally, the moral dimensions of poverty need continued attention by the various mediating institutions like the church and other non-profits. Poverty is multi-layered and material solutions alone will not bring about long-term reductions.