- The Washington Times - Wednesday, September 25, 2002

The recession dragged the 2001 U.S. household income down from record highs and raised the poverty rate for the first time in eight years, the Census Bureau said yesterday.

Median household income last year dipped to $42,228, roughly 2 percent lower than its record high of $43,355 in 1999 and near-record high of $43,162 in 2000.

The poverty rate rose from 11.3 percent in 2000 to 11.7 percent in 2001. This was the first increase since 1993.

Both of these changes are "very parallel" to changes seen in previous recessions, said Daniel H. Weinberg, chief of the bureau's household economic statistics division.

Neither change is unusually large, Mr. Weinberg said. However, these numbers typically do not improve until a year or two after a recession has ended, he said, adding that the current recession which started in March 2001 and intensified after the September 11 attacks, war on terrorism and corporate scandals has not been declared officially over.

President Bush yesterday said he is optimistic because America has "the ingredients for growth" low inflation, low interest rates and "the best workers in the world."

But House Minority Leader Richard A. Gephardt, Missouri Democrat, said he was "deeply disturbed" by the data.

Mr. Bush "has been in office almost two years and his only answer to mounting economic problems is to blame his predecessor and urge the Congress to pass a tax cut for the wealthy beginning in 2011," Mr. Gephardt said.

The 2001 rate changes did not affect every region or every racial group. For instance, families in the Northeast saw no statistical change in their median household incomes even as incomes declined 1.4 percent in the South, 2.3 percent in the West and 3.7 percent in the Midwest.

Median incomes in 2001 were $45,716 in the Northeast, $45,087 in the West, $43,834 in the Midwest and $38,904 in the South.

Some 1.3 million people entered poverty in 2001, bringing the number of poor people to 32.9 million.

Virtually all of the newly poor were in the South: That region's poverty rate rose 0.7 percent while the other three regions saw no statistical changes in their poverty rates.

Poverty rates increased only among whites; rates for blacks, Hispanics and Asian/Pacific Islanders stayed the same statistically, the bureau said.

Most surprisingly, the child poverty rate which typically tracks changes in the overall poverty rate did not fall between 2000 and 2001 but stayed the same statistically, at 16.3 percent.

"That's amazing," Heritage Foundation analyst Robert Rector said of the stable child poverty rates. "This is remarkable evidence of the success of welfare reform."

Deepak Bhargava, director of the National Campaign for Jobs and Income Support, took the opposite view: With more than 1 million people entering poverty, "it was obviously premature to uncork the champagne welfare reform appears to be failing the test of an economic downturn," he said.

The bureau also said:

•The median income of women who worked full time rose by 3.5 percent, while men saw no change in earnings. That narrowed the female-to-male earnings ratio to a record-high 76 cents to the dollar.

•Blacks had the highest poverty rate (22.7 percent), followed by Hispanics (21.4 percent), Asian/Pacific islanders (10.2 percent) and whites (9.9 percent).

•Asian/Pacific islanders had the highest median income ($53,635), followed by whites ($44,517), Hispanics ($33,565) and blacks ($29,470).

•The poverty threshold for a family of four was $18,104 in 2001.


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