THESE ARE lean times for the poor in Obama’s America. Last year the chill of recession pushed the numbers in poverty – those living on the equivalent of an annual pretax income of €16,300 or less for a family of four – to record levels, 43.6 million, from 39.8 million in 2008.
That’s more than the Census Bureau, which reported last week, has logged in the 51 years it has been tracking the issue. The percentage living in poverty also climbed – to 14.3 per cent, one in seven of the population, the highest since 1994. And analysts warn next year’s figures will be even worse.
Since 2007, the year before the recession kicked in, the US has lost almost four million wage-earners, and the largest share of the new poor come from the newly unemployed. A deeper, endemic core poverty is also associated with three main indicators – a failure to complete schooling, having a child outside marriage and a failure to maintain a link to the labour force.
But the figures also highlight again the continuing challenge of sharp inequality in racially divided America. More than a quarter of both African Americans and Latinos live in poverty, often in communities that never emerged from the 2001 recession. And the data for poor children is even more striking. Nearly 36 per cent of all black and 33 per cent of Latino children were poor in 2009, as were 38.5 per cent of all families headed by single mothers. Their plight also reflects a dilution in the past two decades of social safety nets as government pared them back to emphasise pathways to employment as the way to lift groups out of poverty. As unemployment soars, however, the safety net gaps are exposed ever more sharply.
The figures also show a dramatic increase in those last year who had to survive without health insurance – 50.7 million, up from 46.3 million in 2008, largely caused by the 6.5 million drop in private healthcare coverage as employers laid off workers or eliminated benefits.
Some of those who have fallen out of the insurance system will have been caught by the Medicaid health programme for the poorest. But the figures strongly vindicate the rationale for Mr Obama’s bitter healthcare-reform battle with Republicans. It should mean, when fully into force by 2014, that those losing cover through unemployment will be helped to buy private insurance in a new healthcare markets, made affordable both by competition among insurance companies and with subsidies for people on wages up to four times the poverty line.