US poverty rate rises for second year while incomes are little changed
THE US poverty rate climbed for a second straight year in 2021 and household income slipped slightly as the economy slowly started a recovery from the Covid-19 pandemic.
The poverty rate rose to 11.6 per cent from 11.5 per cent in the prior year, annual data released on Tuesday (Sep 13) by the US Census Bureau showed. It reached the lowest in 6 decades in 2019. Last year, 37.9 million people were in poverty, about 3.9 million more than in 2019. The US poverty rate has been roughly cut in half over the past 60 years.
Median, inflation-adjusted household income decreased last year to US$70,784. It has declined about US$2,000 over the last 2 years but has risen by about US$20,000 since 1967.
The data help flesh out the picture of American families’ economic health in the first full year of President Joe Biden’s term after the turbulence of 2020, when the pandemic was declared a national emergency.
In 2021, the annual jobless rate fell to 5.3 per cent after surging to 8.1 per cent in 2020, a 9-year high. In 2019, the rate was roughly where it is today at 3.7 per cent.
In March last year, Biden signed the American Rescue Plan, a US$1.8 trillion pandemic-relief package that provided US$1,400 cheques for millions of people - at a US$410 billion cost - and extended unemployment benefits for those out of work. That followed the 2 major packages in 2020 totalling almost US$3 trillion under President Donald Trump.
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There was a clear divergence between the wealthy and the poor: Median incomes at the 90th percentile rose to US$211,956 in 2021, while incomes for those among the bottom 10th fell to US$15,660. In 2020, the income-percentile limit for the lowest 10th was US$16,400.
The so-called Gini index, a measure of income inequality, rose to 0.494, indicating the widest disparity on record.
The report affirms the importance of investment in the social safety net, said Kim Janey, president of non-profit Economic Mobility Pathways.
“We should do more, and we should do better,” she said.
Last year, median incomes for Asians were at US$101,418, Non-Hispanic Whites at US$77,999, Hispanics of any race at US$57,981 and for Blacks at US$48,297.
The earnings ratio of women to men narrowed to 83.7 per cent. BLOOMBERG
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