Recession Takes its Toll

Recession Takes its Toll

The recession that began in March 2001 contributed to a reduction in income levels and a rise in poverty, reports the U.S. Census Bureau.
Between 2000 and 2001, poverty among all Americans rose from 11.3% to 11.7%. According to Poverty in the United States: 2001, one of two U.S. Census Bureau reports issued in September 2002, poverty increased among African Americans, but at a slower rate than it did for whites. Disturbingly, the data indicates that low-income blacks may face tough times ahead.

While 2000 yielded the lowest-ever poverty rate for African Americans at 22.5%, it rose slightly to 22.7% in 2001. Black poverty levels have fallen to historic lows with the 1990s expansion. The big question over the next couple of years, particularly if the economy does not recover quickly, will be whether poverty rates will start creeping back up, says RoderickHarrison, director of DataBank at the Joint Center for Political and Economic Studies in Washington, D.C.

The annual surveys other report, Money Income in the United States: 2001, shows that median household income declined by 2.2%. Black median household income fell 3.4% from $30,495 to $29,470. All regions except the Northeast experienced a decrease in median household income. Dr. Harrison says a possible explanation is that the Northeast has a more diverse mix of industries than the South and West, which depend more on soft sectors like travel and high-tech.

And with economic uncertainty likely to continue, next years report could be even grimmer. I would certainly expect the downward trends in income and an increase in poverty to appear in next years data, says Harrison.