Millions more thrust into poverty

Ten years’ worth of growth wiped out. New statistics confirm the grim toll the recession has taken. Millions more people are now living in poverty. But sadly, the numbers are set to get even worse. The Washington Post reports,

A new comprehensive economic survey shows that the recession has plunged 2.6 million more Americans into poverty, [and] wiped out the household income gains of an entire decade. … The nation’s poverty rate rose to 13.2 percent in 2008, up from 12.5 percent in 2007, the Census Bureau data showed. That was the … highest level in 11 years.

According to the report, one in five children under the age of 18 now lives in poverty. That equates to 14.1 million, or 20 percent. All told, almost 40 million people lived in poverty at the end of 2008, according to the government. The government defines poverty as a family of four with an income of $22,025.

Since the recession, salaries have plunged too—median household income was down 3.6 percent last year. Families now earn almost $1,000 less per year, on an inflation-adjusted basis, than they did 10 years ago. The income loss is the largest on record.

“We’ve basically seen a lost decade,” said Lawrence Katz, an economist at Harvard University. “We had a plutocratic boom. Then we have egalitarian recessions. Taken together, only the top ends up growing, on average. For the typical American family, the 2000s have been a disaster.”

But if you think these numbers are bad, you haven’t seen anything yet. This year is on track to be much worse. The economy has shed millions of additional jobs since January; millions more are working reduced hours, have taken salary cuts, or are working multiple part-time jobs. Unemployment insurance is also running out for millions of people.

“When the numbers come out next year at this time, I expect them to look even worse,” said Robert Greenstein, executive director of the left-leaning Center on Budget and Policy Priorities.

The Census Bureau data also does not include all the wealth that has evaporated with the plunging housing and stock markets.