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New Census Report Says 1 in 6 Americans Live in Poverty; Real Numbers Even Higher

According to the US Census, 46.2 million people lived in poverty last year in the United States. Economist Heidi Shierholz explains why the real number is even bigger.

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NERMEEN SHAIKH: Heidi, what would you say the main causes of this are?

HEIDI SHIERHOLZ: Yeah, it’s a good question, and at this point, when you look at the changes over the last three years, it’s crystal clear the main causes are job loss due to the Great Recession. So, over the—at this point, taking into account both the jobs we’ve lost since the start of the recession plus the jobs that we should have gained just to keep up with natural—the natural expansion of the working-age population, the jobs deficit our country is in is 11 million. Families take hits because of lost jobs and unemployment. They also are taking income hits due to reductions in hours and wage cuts. The persistent high unemployment keeps wage growth really low. So all of those things, the weakness in the labor market, translates into losses for families.

And then, obviously, when you’re talking about the health insurance numbers, the health insurance coverage numbers, which also came out, when you have people losing jobs when they have employer-sponsored health insurance, that goes out the window. So that also is directly related to the loss of jobs.

One thing I think is important to note, this report was about 2010. We actually were in a recovery, in an official recovery in 2010. But the losses that we saw through 2009 were so severe, and the very modest growth that we saw in 2010 wasn’t enough to make up for that. And so, the labor market actually deteriorated between 2009 and 2010, which is why we see these big hits in the 2010 numbers that just came out.

AMY GOODMAN: Talk about the racial divide, Heidi Shierholz. One in six people are poor, more than half of them black and Latino.

HEIDI SHIERHOLZ: Yeah. So I think that’s a really important thing that comes through in these numbers, that racial and ethnic minorities started out with higher levels of poverty, started out with lower levels of typical income, and they’ve gotten hit harder by the Great Recession. They’ve seen bigger increases in poverty, bigger declines in income for typical families. And you see that is also very related to labor market outcomes. Racial and ethnic minorities have seen much larger increases in unemployment over the last three years. So it all fits together in this really clear story of, the weakness in the labor market is at the heart of all this. The key thing we need to do right now is get jobs back.

NERMEEN SHAIKH: Heidi, can you say a little about how poverty is defined in this study? What constitutes poverty?

HEIDI SHIERHOLZ: Yeah, that’s a really good point, and it’s controversial. So the poverty threshold is, by anyone’s measure, extremely low. So, to give you an idea, for a family of four, the poverty threshold is just over $22,000. So anyone thinking about trying to live on $22,000 with a family of four will immediately realize that that’s not a really reasonable cutoff for material deprivation. And poverty researchers actually use, in many cases, twice the poverty line to have a more reasonable idea of what the—a sort of cutoff for material deprivation, for, you know, below this—above this number, you have what you need to make ends meet—below this, you don’t. So there really is—by alternative measures of poverty that take those things into account, the poverty rates are even higher than the numbers that we saw yesterday.

AMY GOODMAN: Well, Heidi Shierholz, we want to thank you so much for being with us, with the Economic Policy Institute in Washington, D.C. Thanks so much.