By Anthony Zei
September 28, 2009

The Census Bureau released its 2008 poverty and income data September 10 indicating a poverty rate of 13.2 percent, or a 0.7 percentage point increase from the previous year. Despite the fact that similar rates were observed in the 1980s and early 1990s, the U.S. now faces the largest number of individuals below the poverty line since 1960.

The middle-class also suffered as inflation-adjusted median household income dwindled from $52,163 to $50,303. Executive Director of the Center on Budget and Policy Priorities Robert Greenstein commented that part of the problem was the recession arrived after a less-than-bountiful economic expansion. Notwithstanding three previous years of income increases, the recent economic downturn has returned median income to a level last seen in 1998. This comes as less of a shock when considering the fact that the top one percent of households, those earning more than $400,000, were able to absorb two-thirds of the income gains occurring between 2002 and 2007 according to economists.

As a result of the income reduction, family members constituted the largest group of individuals in 2008 to join those living below the poverty line. While families contributed the greatest number of people, single men experienced a steeper hike in poverty rate with an increase of 1.8 percentage points, leading to an overall rate of 18.9 percent. In terms of ethnic populations, Hispanics suffered the most significant income loss at 5.6 percent that lead in part to their 23.2 percent poverty rate. It follows that New Mexico and Arizona, with the first and third largest Hispanic populations respectively, encountered jumps in poverty at a rate at least five times greater than the nation’s. Even though black household incomes decreased less than the national average, African Americans were still the race most likely to be impoverished with a rate of 24.7 percent. For minors, an increased rate of 19 percent meant that 744,000 additional children lived in poverty in 2008.

With such dim and daunting figures, it is important to assess the financial future of our cities. In an article for Next American City, Ariella Cohen revealed that the majority of urban financial councils were facing shortfalls in sources of revenue related to property, sales, and income taxes as well as access to credit. In a survey of 300 officials, she reported that eighty percent anticipated worse conditions for their cities in 2009 than during the prior year. The fiscal stress was reflected in everyday contexts such as heightened fees for municipal services ranging from parking to the neutering of pets. In 2007, Detroit, Cleveland, and Buffalo ranked among the U.S. cities with the highest percentage of their populations living in poverty according to the American Community Survey released in August of 2008. The Census Bureau will release poverty and income data September 22 for states and local municipalities from the most recent American Community Survey.