Job and Health Insurance Loss Reached Poverty at 11 Year High

According to the report Income, Poverty and Health Insurance Coverage In The United States: 2008, released yesterday by the Census Bureau, a total of 39.8 million people were below the poverty line, meaning 2.5 million more than in 2007 (12.5 %).

The growing poverty in a nation with over 307 million people and the growing gap between rich and the poor, has been a constant trend in the U.S. since the 1980s. However, the effects of recession have heightened in the last two years the problems of lack of health insurance (46.3 million in 2008), chronic unemployment and lack of opportunities for new generations.

The loss of purchasing power of middle-class families (3.6% between 2007 and 2008) has made America a poorer nation and more inequitable when it comes to distribution of wealth. In fact, if one takes into account the inflation factor, the average family income has shrunk significantly over the past decade. The median household income fell by 3.6 percent between 2007 and 2008, reaching about $ 50,300 now. It is down from $52,163.

Although the criteria for determining the official U.S. poverty level are not comparable to those of developing nations, according to the census a family of four is officially considered poor if its annual income does not exceed 22 thousand dollars. The two demographic groups that are the most affected by the poverty are the African Americans and the Hispanics.

The poverty rates among Hispanics is 23.2 percent, up from 2007's 21.5 percent. in Asians it increased from 10.2 to 11.8 percent. It remained the same among the African Americans at 24.7 percent. The rate increased slightly among the white people going up to 8.6 from 8.2. Child poverty rose about 1 percentage point reaching to 19%.

Interestingly, the Northeastern U.S. states are those that have best weathered two years of severe depression that has caused havoc in the rest of the country.

According to IMF statistics the U.S. is still the richest country in the world in terms of GDP per capita. However, it has legions of unemployed and homeless street people and nearly 50 million people without health insurance coverage.

Many people lost their health insurance coverage last year, which was the first official year of the U.S. recession. Most people in the United states get health insurance through their employment. Therefore, huge numbers of job losses resulted in very high numbers of uninsured people, thus contributing to the rise of U.S. poverty rate.

Written by Armen Hareyan
Source: U.S. Census Bureau report Income, Poverty and Health Insurance Coverage In The United States: 2008