The Great Recession officially ended in mid-2009, but a recent Census Bureau report shows that, for the average American family, the first full post-recession year only brought increased misery. According to Income, Poverty, and Health Insurance Coverage in the United States: 2010, household incomes plummeted last year, while the number of people living in poverty rose sharply.
The numbers put a concrete measure on the so-called "jobless recovery" that left more than 9% of the American workforce unemployed throughout 2010. According to the Census Bureau, the number of people living in poverty rose for the fourth year in a row in 2010: Since 2007, it's up by 2.6%.
Between 2009 and 2010, the rate rose from 14.3% to 15.1% as more than 2.6 million people slipped below the poverty line. By the end of the year, 46.2 million people were officially impoverished. In raw numbers, this translates into the largest population of poor since the Census Bureau began tracking the data in 1958. Looking at the numbers as a percentage of the population, the outlook is slightly less dire: Rather than a 53-year high, 2010's numbers only represent a 27-year high: Back in 1993, an equally large percentage of the country was living in poverty.
High Unemployment, Low Wages
While unemployment numbers have remained high, they have also remained relatively constant, which raises a simple question: If the number of unemployed people hasn't significantly risen in the past year, why has the number of people living in poverty gone up so sharply? One possibility is that the huge mass of unemployed workers has helped drive down wages and made minimum wage, part-time, and temporary jobs look increasingly attractive. Not surprisingly, the U-6 unemployment numbers, which measure the "officially" unemployed as well as part-timers and those who are "marginally attached to the employment force," have consistently remained high too, topping 16.7% in August 2010.
This has had a profound effect on the median household income in America. Between 2009 and 2010, it dropped by 2.3% to $49,445. And, like the increase in the number of people living in poverty, this decline isn't an isolated single-year change: Since 2007, household incomes have fallen by a staggering 6.4%.
But the rising numbers of unemployed and underemployed have also changed the way Americans live, leading to an increase in "doubled-up households." Defined as "households that include at least one 'additional' adult ... who is not enrolled in school and is not the householder, spouse or cohabiting partner of the householder," their numbers have risen sharply over the last four years. Between 2007 and 2010, more than 2 million families have doubled up as unemployed or underemployed workers have moved in with families and friends. Today, 18.3% of American households are doubled up.
This statistic reflects a significant increase in recent college graduates who are moving back in with their parents. Before the recession, 11.8% of new college grads lived at home; by 2010, that number had risen to 14.2%. In some ways, this doubling-up may actually have lowered poverty rates: According to the Census, young adults aged 25-34 who lived with their parents had an official poverty rate of 8.4%. Living on their own, 45.3% would have been below the poverty line.
The report's link between high poverty and high unemployment adds more weight to a point that was already crystal clear: Improving the lot of America's workers is largely a matter of creating jobs. But with almost 1 in 6 Americans now living below the poverty line and Washington caught in a partisan deadlock, it remains to be seen if America can put its people back to work.
Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at email@example.com, or follow him on Twitter at @bruce1971.