U.S.

Poverty Rate Dropping

By CBSNews.com staff CBSNews.com staff

September 25, 2001 / 12:52 PM EDT / CBS

Fewer Americans are living in poverty.

There are now about 31 million Americans at or below the poverty line. That compares with about 32 million a year earlier.

A family of four is considered to be impoverished if the household earned $17,603 (or less) a year.

But the Census Bureau also says American families actually slipped slightly backward in income last year.

The median household income was $42,148. Accounting for inflation, that is down slightly from $42,187 the previous year, while the poverty rate fell to 11.3 percent (statistically equivalent to the previous historic low of 11.1 percent in 1973) from 11.8 percent in 1999.

"The drop in the poverty rate belongs to a larger story of economic recovery since the last recession," said Daniel Weinberg, chief of the bureau's division of housing and household economics statistics. "Poverty rates tend to peak soon after a recession."

Analysts have cautioned not to consider these figures an up-to-date barometer of the country's financial health.

The figures come from a survey of 50,000 households taken in March in response to questions about income and poverty status for 2000. As a result, experts have said it would not reflect recent turmoil in the economy.

Since 1993, Weinberg said, poverty rates have declined along most racial, ethnic and age groups.

The poverty rate for Americans under 18 was 16.2 percent, down for the third straight year, the bureau said. Even so, people under 18 still had a higher poverty rate than those in any other age group.

But another study is questioning what the poverty level rate should be - at least in California.

The study finds it costs more than $52,000 a year for a family of four to live modestly in the Golden State.

That means both parents must work full time for at least $12.51 an hour, and it assumes that the family saves little or nothing toward retirement or their children's college education.

The study was conducted by Sacramento nonprofit research and advocacy group California Budget Project.

The report contends the federal poverty level for a family of four is obsolete. It says the poverty threshold fails to consider the reality of modern families because it doesn't account for needs such as child care.