Unemployment and poverty
The numbers are dismal. In 2007, 37 million people were living in poverty. That’s 4 million more than when the business cycle expansion started 2001. Real median household income grew by only 0.26 percent a year throughout the years of economic expansion, according to the Center for American Progress. That abysmal improvement meant that incomes were below 2000 levels.
The unemployment rate is currently 7.6%, and it’s a safe forecast that it will breach 8% soon. What does rising unemployment signal about poverty?
According to a recent analysis by the Center, more than 12 million Americans are at risk. It calculates that the number of people living in poverty will rise by 12.4 million by 2010 if the unemployment rate reaches 11 percent. And more than 7 million people will fall into deep poverty, living below half of the poverty line.
The study also notes that sharp hikes in poverty happened in previous downturns. For instance, the ranks of the poor grew by 9 million between 1979 and 1983, and it grew by 8 million between 1989 and 1993.
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