The ratio of impoverished Connecticut families, along with the gap between the state’s rich and poor, has climbed the past two years, which saw the worst recession in more than a generation, federal census data shows.
Meantime, the income gap between the richest and poorest Americans grew last year to its widest amount on record as young adults and children in particular struggled to stay afloat in the recession, the U.S. Census Bureau reports.
The Census Bureau in 2009 counted roughly 6.7 percent of all Connecticut families and people with incomes below the poverty level, about the same percentage as in 2008. In 2007, the year economists credit as the start of the Great Recession, the ratio was 5.7 percent. The estimates are derived from a sampling of census data.
The Census Bureau defines household poverty level as income of $21,756 or less in 2009 for a family of four. For an individual, the threshold is $10,991 a year.
Connecticut poverty rates generally had been falling since 2003, when 8.1 percent of all the state’s households lived below the poverty level, government counters said. The poverty ratio fell to 6.2 percent in 2004 and 2004, and to 5.9 percent in 2006.
Meanwhile, 8 percent of state households in 2009 reported income of $200,000 or more, up from 6 percent in 2002, the Census Bureau said.
Nationwide, 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 earned by those below the poverty line, according to newly released census 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.
A different measure, the international Gini index, found U.S. income inequality at its highest level since the Census Bureau began tracking household income in 1967. The U.S. also has the greatest disparity among Western industrialized nations.
At the top, the wealthiest 5 percent of Americans, who earn more than $180,000, added slightly to their annual incomes last year, census data show. Families at the $50,000 median level slipped lower.
“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, Smeeding said. 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.
Rea Hederman Jr., a senior policy analyst at The Heritage Foundation, a conservative think tank, agreed that census data show families of all income levels had tepid earnings in 2009, with poorer Americans taking a larger hit. “It’s certainly going to take a while for people to recover,” he said.
The findings are part of a broad array of U.S. census data being released this month that highlight the far-reaching impact of the recent economic meltdown. The effects have ranged from near-historic declines in U.S. mobility and birth rates to delayed marriage and the first drop in the number of illegal immigrants in two decades.
