iOS app Android app More

Income Gap Widens: Census Finds Record Gap Between Rich And Poor

HOPE YEN   09/28/10 11:42 PM ET   AP

Rich Poor Gap Census
A homeless man panhandles October 26, 2009 in New York City.

WASHINGTON — The recession seems to be socking Americans in the heart as well as the wallet: Marriages have hit an all-time low while pleas for food stamps have reached a record high and the gap between rich and poor has grown to its widest ever.

The long recession technically ended in mid-2009, economists say, but U.S. Census data released Tuesday show the painful, lingering effects. The annual survey covers all of last year, when unemployment skyrocketed to 10 percent, and the jobless rate is still a stubbornly high 9.6 percent.

The figures also show that Americans on average have been spending about 36 fewer minutes in the office per week and are stuck in traffic a bit less than they had been. But that is hardly good news, either. The reason is largely that people have lost jobs or are scraping by with part-time work.

"Millions of people are stuck at home because they can't find a job. Poverty increased in a majority of states, and children have been hit especially hard," said Mark Mather, associate vice president of the Population Reference Bureau.

The economic "indicators say we're in recovery, but the impact on families and children will linger on for years," he said.

Take marriage.

In America, marriages fell to a record low in 2009, with just 52 percent of adults 18 and over saying they were joined in wedlock, compared to 57 percent in 2000.

The never-married included 46.3 percent of young adults 25-34, with sharp increases in single people in cities in the Midwest and Southwest, including Cleveland, Phoenix, Los Angeles and Albuquerque, N.M. It was the first time the share of unmarried young adults exceeded those who were married.

Marriages have been declining for years due to rising divorce, more unmarried couples living together and increased job prospects for women. But sociologists say younger people are also now increasingly choosing to delay marriage as they struggle to find work and resist making long-term commitments.

In dollar terms, the rich are still getting richer, and the poor are falling further behind them.

The income gap between the richest and poorest Americans grew last year to its largest margin ever, a stark divide as Democrats and Republicans spar over whether to extend Bush-era tax cuts for the wealthy.

The top-earning 20 percent of Americans – those making more than $100,000 each year – received 49.4 percent of all income generated in the U.S., compared with the 3.4 percent made by the bottom 20 percent of earners, those who fell below the poverty line, according to the new figures. That ratio of 14.5-to-1 was an increase from 13.6 in 2008 and nearly double a low of 7.69 in 1968.

At the top, the wealthiest 5 percent of Americans, who earn more than $180,000, added slightly to their annual incomes last year, the data show. Families at the $50,000 median level slipped lower.

Three states – New York, Connecticut and Texas – and the District of Columbia had the largest gaps between rich and poor. Big gaps were also evident in large cities such as New York, Miami, Los Angeles, Boston and Atlanta, home to both highly paid financial and high-tech jobs as well as clusters of poorer immigrant and minority residents.

Alaska, Utah, Wyoming, Idaho and Hawaii had the smallest income gaps.

"Income inequality is rising, and if we took into account tax data, it would be even more," said Timothy Smeeding, a University of Wisconsin-Madison professor who specializes in poverty. "More than other countries, we have a very unequal income distribution where compensation goes to the top in a winner-takes-all economy."

Lower-skilled adults ages 18 to 34 had the largest jumps in poverty last year as employers kept or hired older workers for the dwindling jobs available. The declining economic fortunes have caused many unemployed young Americans to double-up in housing with parents, friends and loved ones, with potential problems for the labor market if they don't get needed training for future jobs, he said.

Homeownership declined for the third year in a row, to 65.9 percent, after hitting a peak of 67.3 percent in 2006. Residents in crowded housing held steady at 1 percent, the highest since 2004, a sign that people continued to "double up" to save money.

Average commute times edged lower to 25.1 minutes, the lowest since 2006, as fewer people headed to the office in the morning. The share of people who carpooled also declined, from 10.7 percent to 10 percent, while commuters who took public transportation were unchanged at 5 percent.

The number of U.S. households receiving food stamps surged by 2 million last year to 11.7 million, the highest level on record, meaning that 1 in 10 families was receiving the government aid. In all, 46 states and the District of Columbia had increases in food stamps, with the largest jumps in Nevada, Arizona, Florida and Wisconsin.

Other findings:

_The foreign-born population edged higher to 38.5 million, or 12.5 percent, following a dip in the previous year, due mostly to increases in naturalized citizens. The share of U.S. residents speaking a language other than English at home also rose, from 19.7 percent to 20 percent, mostly in California, New Mexico and Texas.

_The poorest poor hit record highs. Twenty-eight states had increases in the share of people below $10,977 in income, half the poverty line for a family of four. The highest shares were in the District of Columbia, Mississippi, Kentucky, Arkansas and South Carolina. Nationally, the poorest poor rose to 6.3 percent.

_Women's average pay still lags men's, but the gap is narrowing. Women with full-time jobs made 78.2 percent of men's pay, up from 77.7 percent in 2008 and about 64 percent in 2000, as men took bigger hits in the recession.

_More older people are working. About 27.1 percent of Americans 60 and over were in the work force. That's up from 26.7 percent in 2008.

The census figures come weeks before the pivotal Nov. 2 congressional elections, when voters anxious about rising deficits and the slow pace of the economic recovery will decide whether to keep Democrats in control of Congress.

The 2009 tabulations, which are based on pretax income and exclude capital gains, are adjusted for household size where data are available. Prior analyses of after-tax income made by the wealthiest 1 percent compared to middle- and low-income Americans have also pointed to a widening inequality gap, but only reflect U.S. data as of 2007.

___

Online:

http://www.census.gov

FOLLOW HUFFPOST BUSINESS
Subscribe to the HuffPost Money newsletter!
Filed by Adam J. Rose  |