By Kerry Curry

October 20, 2011

Poverty rates rose to 15.3% in 2010 from 14.3% 2009 as the nation’s economic malaise and housing crisis persist, according to Census Bureau data released Thursday.


Some 3.3 million more people were living in poverty in 2010 than in 2009 — or 46.2 million people compared to 42.9 million, according to the bureau, despite the National Bureau of Economic Research declaration that the Great Recession ended in June 2009.


The Census Bureau said 32 states saw poverty rise in 2010 with some states hard hit by foreclosures showing significant increases. Florida’s poverty rate rose to 16.5% from 14.9%. Nevada saw its poverty rate rise to 14.9% from 12.4% in 2009, and California’s rate rose to 15.8% from 14.2%. For 20 of those states with increased poverty, this was the second consecutive annual increase. No state saw a statistically significant decline in either the poverty rate or the number of people living in poverty.


“It is not surprising that default notices are up, given the high incidence and persistence of poverty,” said Janneke Ratcliffe, executive director of the Center for Community Capital at the University of North Carolina at Chapel Hill. Ratcliffe is also a senior fellow at the Center for American Progress, a progressive think tank based in Washington, D.C.


“This evidence counters claims that defaults are strategic, especially among working-class families, and helps explain the inability of loan modifications and piecemeal, voluntary attempts to strengthen the housing market,” she said. “No piecemeal approach is likely to work, especially as people continue to lose jobs and income.”


Ratcliffe said the Census survey results also highlight the need for “a strategy to provide quality, affordable rental housing, especially as rents are becoming less affordable. It also raises implications that, as lower-earning households increasingly struggle, it starts to spill into and erode middle-class economic security.”


Poverty rates for the 50 states and the District of Columbia ranged from a low of 8.3% in New Hampshire to a high of 22.4% in Mississippi. Poverty rates for Alaska (9.9%), Maryland (9.9%), Connecticut (10.1%), and New Jersey (10.3%) were among the lowest in the nation. Mississippi and New Mexico (20.4%) were the highest with the states showing the most poverty across the southern half of the nation. (Click on chart to expand.)


For large metro areas, the poverty rate varied from a low of 8.4% in the Washington, D.C., area to a high of 33.4% in the McAllen-Edinburg-Mission, Texas, area along the border of Mexico.


Tom Feltner, vice president at the Chicago-based Woodstock Institute, a nonprofit that promotes housing equality for low-income and minority residents, said many of the states with the largest increases in poverty rates are also states with high percentages of underwater homes.


“Rising poverty rates are — in many respects — a symptom of uncertainty in the housing market in states like Nevada and Florida where job creation and asset building are tied so closely to housing,” Feltner said. “In these and other states where half of homes are underwater, housing ills continue to delay construction job creation and prevent many homeowners from tapping home equity to meet short- and long-term expenses.”


The percent of people with income below 125% of their poverty threshold rose to 20.1% from 18.9%. Poverty status is determined by comparing annual income to a set of dollar values called poverty thresholds that vary by family size, number of children, and age of householder. Thresholds are updated annually to allow for changes in the cost of living but do not vary geographically.


The next chart shows the percentage of people by income-to-poverty ratio in the past 12 months by state. (Click on chart to expand.)


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