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Stuck in place: US poverty rate unchanged

The American poverty rate held steady at 15% in 2012, according to the latest numbers from the U.S. Census Bureau. Analysts had predicted a slight decrease in
US Census Poverty Numbers - Ned Resnikoff - 09/17/2013
John Purpura, a recovering alcoholic, waits for an afternoon meal at a soup kitchen run by Greater Waterbury Interfaith Ministries on May 20, 2013 in...

The American poverty rate held steady at 15% in 2012, according to the latest numbers from the U.S. Census Bureau. Analysts had predicted a slight decrease in the number of Americans living under poverty since 2011. Instead, 46.5 million Americans—including 16.1 million children—remain impoverished, half a decade into the post-recession economic recovery.

Nor did the middle class see much improvement over the past year. Median household income, after having plummeted 8.3% between 2007 and 2011, didn't budge in 2012.

The new Census report shows that "the ongoing economic recovery has yet to reach either the middle class or the poor," said economist Jared Bernstein during a press conference call.

The new report also showed that income inequality between the rich and poor had not changed from 2011 to 2012, however the Census Bureau's measurements do not take capital gains income into account, a source of income shown by other studies to be among the main drivers of income inequality.

"The growth of the stock market shows that the recovery is even more unbalanced than what the Census Bureau numbers show," said Economic Policy Institute president Lawrence Mishel during a conference call.

Race and gender also continue to economically stratify Americans. As of 2012, women who worked year-round and full-time were still found to earn only 77 cents for every dollar of income flowing to men in the same position. Similarly, black and Latino households continue to have a significantly lower median income than their white counterparts: Whereas for white families, the median household income in 2012 was $57,009, Latinos and African Americans saw median household incomes as low as $39,005 and $33,321, respectively.

The report did include one or two positive trend lines. Because of the Affordable Care Act, which allows young people to stay on their parents' insurance until the age of 26, the number of uninsured people between the ages of 19 and 25 continued to decline. The percentage of people in that age group without health insurance has now dropped 4.2% since 2009, the year before the law went into effect. Among people of all ages, the percentage of uninsured dropped by a fraction of a percentage point.

The Census report also underscored the importance of social insurance programs and other government policies in reducing poverty, said Bernstein.

"It clearly takes more than a growing economy to lift the bottom half," he said. The Census Bureau estimates that 1.7 million more people would have been in poverty in 2012 if unemployment insurance were excluded from their income. If food stamps were counted as income, "four million fewer people would be categorized as in poverty in 2012," according to the report.