Gap between the rich and poor widens

NEW YORK — The income gap between rich and poor Americans grew to the widest in more than 40 years in 2011 as the poverty rate remained at almost a two-decade high.

The U.S. Census Bureau released figures Wednesday that showed median household income fell, underscoring a sputtering economic recovery and struggling middle-class that are at the center of the presidential campaign.

The proportion of people living in poverty was 15 percent in 2011, little changed from 15.1 percent in 2010, while median household income dropped 1.5 percent. The 46.2 million people living in poverty remained at the highest level in the 53 years since the Census Bureau has been collecting that statistic.

“The gains from economic growth in 2011 were quite unevenly shared as household income fell in the middle and rose at the top,” said Robert Greenstein, president of the Center on Budget and Policy Priorities in Washington.

Average incomes fell for the bottom 80 percent of earners and rose for the top 20 percent, highlighting the need for “those at the top to share,” as the nation looks to reduce its budget deficit, Greenstein said.

The top 1 percent of households experienced about a 6 percent increase in income, said David Johnson, chief of the social, economic and housing division at the Census Bureau.

Americans’ economic struggles are the focus of November’s presidential election. Republican nominee Mitt Romney argues that people are worse off because of President Obama’s economic policies. Obama counters that Romney would push plans benefitting the wealthiest at the expense of the middle-class and those striving to get out of poverty.

“The recession is going to have long-term effects on the poverty rate, which our projections suggest is going to hang high for many years to come,” said Isabel Sawhill, a senior fellow at the Brookings Institution in Washington who studies poverty issues.

Brookings had projected the 2011 poverty rate would rise to 15.5 percent, and the static number may be a result of unemployment benefits keeping thousands out of poverty, Sawhill said.

The data also show the number of Americans who lack health insurance declined to 15.7 percent from 16.3 percent, as many under age 26 took advantage of a provision in Obama’s 2010 health-care overhaul that allowed them to be covered under their parents’ plans.

About 540,000 more young people were insured in 2011, the Census Bureau said. Nationwide, about 48.6 million people were uninsured last year, compared with 49.9 million a year earlier.

While the ranks of Americans in poverty were little changed in 2011, median household income last year was $50,054, down from an inflation-adjusted $50,831 in 2010. In 2011, median household income, adjusted for inflation, was 8.1 percent less than in 2007, the year before the recession began.

The weighted-average poverty threshold for a family of four in 2011 was about $23,000, according to the census.

“Even though the recovery has been slow, the economy has been expanding,” said Melissa Boteach, who coordinates an effort to cut U.S. poverty in half in 10 years at the Center for American Progress, a Washington-based research group with ties to the Obama administration. “The gains from the economic growth have not reached working families struggling at the bottom.”

White House spokeswoman Amy Brundage said the report shows that while progress has been made since the recession, “too many families are still struggling.”

U.S. unemployment, which hovered at or above 9 percent for most of 2011, has exceeded 8 percent since February 2009, the longest stretch in monthly records going back to 1948. The increase in hardship comes as state and federal governments are cutting spending to close budget deficits.

The income figures declined as the U.S. economy expanded 1.8 percent in 2011, down from 2.4 percent in 2010. Growth has averaged a 1.9 percent annual rate through the first six months of this year.

The Census Bureau also reported that a measure of the gap between rich and poor households rose. A figure of zero means all income is evenly distributed while a 1 represents complete concentration. The measurement, known as the Gini index, rose to .463 from .456. The figure has risen steadily from its 1968 low of .351.

The persistent poverty rates pose a threat to the nation’s long-term economic competitiveness as more and more children are growing up in poor households, Boteach said. Down the road, that leads to higher health-care costs, lower educational levels and reduced worker productivity.

“We’re really shooting ourselves in the foot if we don’t tackle early childhood poverty,” Boteach said.

The government reported earlier this month that food-stamp use reached a record 46.7 million people in June. Participation was up 0.4 percent from May and 3.3 percent higher than a year earlier. It has remained greater than 46 million all year.

Contributing to the rising poverty rates are government job cuts at the local, state and federal levels, with about 386,000 such positions eliminated in 2011, Boteach said.

State and local governments have run out of funds from the 2009 stimulus package that helped balance their budgets and are now having to cut jobs, said Sheldon Danziger, director of the University of Michigan’s Gerald R. Ford School of Public Policy’s National Poverty Center.

“Modest” gains in private-sector job growth in 2011 were largely offset by cuts in government jobs and a drop in unemployment benefits, Greenstein said.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

Bothell
Bothell man charged with the murder of his wife after Shoreline shooting

On Tuesday, the 43-year-old pleaded not guilty in King County Superior Court.

Five Snohomish County men named in drug and gun trafficking indictments

On Tuesday, federal and local law enforcement arrested 10 individuals in connection with three interrelated drug and gun trafficking conspiracies.

Snohomish County Sheriff Susanna Johnson speaks at a press conference outside of the new Snohomish County 911 building on Wednesday, April 30, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
County sheriff working to fix $15M in overspending

In a presentation to the County Council, Sheriff Johnson said she’s reducing overtime hours and working to boost revenue with a new 0.1% sales tax.

A Sound Transit bus at it's new stop in the shadow of the newly opened Northgate Lightrail Station in Seattle. (Kevin Clark / The Herald)
Sound Transit may add overnight bus service between Everett, Seattle

The regional transit agency is seeking feedback on the proposed service changes, set to go into effect in fall 2026.

The Edmonds School District building on Friday, Feb. 14, 2025 in Lynnwood, Washington. (Olivia Vanni / The Herald)
Mother sues Edmonds School District after her son’s fingertip was allegedly severed

The complaint alleges the boy’s special education teacher at Cedar Way Elementary closed the door on his finger in 2023.

Pedal-free electric bikes are considered motorcycles under Washington State law (Black Press Media file photo)
Stanwood Police: Pedal-free e-bikes are motorcycles

Unlike electric-assisted bikes, they need to be registered and operated by a properly endorsed driver.

The aftermath of a vandalism incident to the Irwin family's "skeleton army" display outside their Everett, Washington home. (Paul Irwin)
Despite vandalism spree, Everett light display owners vow to press on

Four attacks since September have taken a toll on Everett family’s Halloween and Christmas cheer.

Students, teachers, parents and first responders mill about during a pancake breakfast at Lowell Elementary School in 2023 in Everett. If approved, a proposed bond would pay for a complete replacement of Lowell Elementary as well as several other projects across the district. (Ryan Berry / The Herald)
Everett school board sends bond, levy measures to Feb. ballot

The $400 million bond would pay for a new school and building upgrades, while the levy would pay for locally funded expenses like extra-curriculars and athletics.

Edgewater Bridge construction workers talk as demolition continues on the bridge on Friday, May 9, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Edgewater Bridge construction may impact parking on Everett street

As construction crews bring in large concrete beams necessary for construction, trucks could impact parking and slow traffic along Glenwood Avenue.

Customers walk in and out of Fred Meyer along Evergreen Way on Monday, Oct. 31, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Closure of Fred Meyer leads Everett to consider solutions for vacant retail properties

One proposal would penalize landlords who don’t rent to new tenants after a store closes.

People leave notes on farmers market concept photos during an informational open house held at the Northwest Stream Center on Oct. 9, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Snohomish County presents plans for Food and Farming Center

The future center will reside in McCollum Park and provide instrumental resources for local farmers to process, package and sell products.

People walk through Explorer Middle School’s new gymnasium during an open house on Oct. 7, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Everett middle school celebrates opening of new gym

The celebration came as the Mukilteo School District seeks the approval of another bond measure to finish rebuilding Explorer Middle School.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.