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September 29, 2003
Smaller Incomes, More Poverty in 2002
For the second straight year, poverty rose and income levels declined in 2002, the Census Bureau reported Friday.

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Median household income declined 1.1 percent between 2001 and 2002, to $42,409, after accounting for inflation. (The median means half of all households earned more than that amount, and half earned less.) Income levels had increased through most of the 1990s, then went flat in 2000, then fell in each of the last two years.

Meanwhile, the Census Bureau reported that nearly 34.6 million people lived in poverty in 2002—about 1.7 million more than in the previous year. That put the poverty rate at 12.1 percent last year, compared to 11.7 percent in 2001. The rate had fallen for much of the 1990s, finally hitting 11.3 percent in 2000—its lowest level in more than 25 years. It began rising again in 2001 and continued upward in 2002.

The Associated Press quoted Bill Spriggs, director of research and public policy at the National Urban League, as calling the numbers frightening. "This may become one of the worst downturns in income in 30 years," he told the AP. "We see that people are digging themselves deeper into poverty because the economy is not generating jobs."

Even though the last recession officially ended in November 2001, experts had predicted increased poverty and lower income for most people in 2002, pointing to rising unemployment and a still-shaky economy.

Census Bureau statistician Daniel Weinberg said the numbers are consistent with changes following past recessions. "The highest point in the cycle of poverty and the lowest point in income tend to come in the year after a recession," he said at a news conference.

The Census Bureau traditionally breaks the poverty and income numbers down according to racial and ethnic groups, but the bureau cautioned that this was more difficult in 2002 because it was the first time survey respondents could report whether they belonged to more than one race.

As a result, the poverty rate for those who identified themselves as black and of another race was 23.9 percent; for those who identified themselves solely as black, it was 24.1 percent. Both numbers, however, represented a significant jump from the 2001 poverty rate for blacks, 22.7 percent.

The bureau also reported that:

  • Poverty rates remained relatively unchanged for non-Hispanic whites, Asians, and Hispanics.

  • Median income fell for blacks and Hispanics, but was relatively unchanged for whites.

  • Income was highest among whites and Asians.

  • Incomes declined significantly for foreign-born noncitizens, people living in metropolitan areas, and for family households.

  • The Midwest experienced a significant decline in income, while all other regions were relatively unchanged.

The poverty threshold differs by the size and makeup of a household. For instance, a person under 65 living alone in 2002 was considered in poverty if income was $9,359 or less; for a household of three including one child, it was $14,480.

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