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Millions more in poverty, corporate profits at record levels in 2010

By Masao Suzuki |
September 14, 2011
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San José, CA - On Sept. 13, the Census Bureau released their annual report on income, poverty, and health insurance in the United States. The report said that the number of people below the official poverty line rose from 14.3% in 2009 to 15.1% in 2010. This meant that 2.6 million more people fell into poverty last year, and the total of 46.2 million poor was the largest number in more than 50 years of records. Worst hit were African Americans (27.4% below the official poverty line), Latinos (26.6%), and children (22.0%).

At the same time, corporate profits after taxes soared to a record high in 2010. After tax corporate profits were more than $1.4 trillion dollars in 2010, up almost 20% from 2009. Corporations were able to produce more than before the recession began, while paying their employees less. Total business profits totaled almost $3.5 trillion, or about one-quarter of the entire economy.

The poverty rate would have been even higher except for a number of factors. The official poverty line is unrealistically low, set at only $17,568 for a family of three including two children. Millions of people, especially younger adults, ‘doubled-up’ by living with relatives. While the poverty rate for adults, 25 to 34 years old, staying with their parents was only 8.4% when counting their entire family income, but was 45.3% if only their income was counted.

The median income, where half of household earn more and half earn less, fell to $49,445 in 2010, a drop of 2.3% from the 2009 figure of $50,599. This is the lowest average income, adjusted for inflation, since 1996. Inequality among races increased, as the median for white households fell 1.3% from 2010 to 2009, as compared to a 3.2% drop for African Americans and 2.3% drop for Latinos. African American median household income fell to less than 59% that of a typical white household in 2010.

The report also said that a nearly a million more people went without health insurance for all of 2010 as compared to 2009, with the total rising to almost 50 million. There were also large inequalities in health insurance coverage, with more than 30% of Latinos lacking health insurance as compared to less than 12% of whites. This drop in health insurance coverage was mainly due to a fall in people getting health insurance from work, partly made up for by expanded government health insurance (Medicaid for low-income households, Medicare for seniors and disabled, and military health care), that covered an additional 1.8 million people in 2010 as compared to 2009.

The numbers of poor and people without any health insurance could expand dramatically if the federal government goes through with proposed cuts to Social Security and Medicare. The poverty rate for the elderly, who generally are not working, was 9.0% in 2010, as compared to a 13.7% rate for working age adults, 18 to 64 years old, because of Social Security. The percentage of elderly without health insurance was only 2.0%, as compared to almost 22% for working aged adults 18-64 years old, again because of Medicare. Privatization of Social Security and Medicare as proposed by the Republicans would increase poverty for seniors and cause the number of uninsured to soar.