Fiction? The American dream is failing to deliver for millions of families and workers living below the poverty line

Half Americans 'poor or low-income'


A record number of Americans - nearly one-in-two - have fallen into poverty or are scraping by on earnings that classify them as low-income, according to new figures.

The latest census data reveals a middle class that is shrinking as unemployment stays high and the government's economic safety net frays.
And experts have warned that if stagnant wages and government cuts persist, many more workers and families will be affected in the future.

Chill winds: 49.1 million Americans come from poor or low-income households

'Safety net programmes such as food stamps and tax credits kept poverty from rising even higher in 2010, but many low-income families with work-related and medical expenses are considered too rich to qualify,' said Sheldon Danziger, a University of Michigan public policy professor who specialises in poverty.

'The reality is that prospects for the poor and the near poor are dismal,' he said.

'If Congress and the states make further cuts, we can expect the number of poor and low-income families to rise for the next several years.'

In a US Conference of Mayors survey being released today, 29 cities say more than one in four people needing emergency food assistance did not receive it.

Many middle-class Americans are dropping below the low-income threshold - roughly 45,000 dollars (£29,000) for a family of four - because of pay cuts, a forced reduction of work hours or a spouse losing a job.

Housing and child-care costs are consuming up to half of a family's income.

States in the South and West had the highest shares of low-income families, including Arizona, New Mexico and South Carolina, which have cut back or eliminated aid programmes for the needy.

By raw numbers, such families were most numerous in California and Texas, which each had more than a million of them.

Fiction? The American dream is failing to deliver for millions of families and workers living below the poverty line

About 97.3 million Americans fall into a low-income category, commonly defined as those earning between 100 and 199 per cent of the poverty level, based on a new supplemental measure by the Census Bureau that is designed to provide a fuller picture of poverty.

Together with the 49.1 million who fall below the poverty line and are counted as poor, they number 146.4 million, or 48% of the US population.

This is a four million increase on 2009, which provides the earliest numbers for the newly-developed poverty measure.

The measure takes into account medical, commuting and other living costs. Considering these expenses helped push the number of people below 200 per cent of the poverty level up from 104 million, or one in three Americans, as was officially reported in September.

Broken down by age, children were most likely to be poor or low-income - about 57 per cent - followed by seniors over 65.

By race and ethnicity, Hispanics topped the list at 73 per cent, followed by blacks, Asians and non-Hispanic whites.

Paycheques for low-income families are also shrinking. The inflation-adjusted average earnings for the bottom 20 per cent of families have fallen from 16,788 dollars (£10,800) in 1979 to just under 15,000 dollars (£9,700), and earnings for the next 20 per cent have remained flat at 37,000 dollars (£23,850).

In contrast, higher-income brackets have had significant wage growth since 1979, with earnings for the top 5 per cent of families climbing 64 per cent to more than 313,000 dollars (£202,000).

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