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In US, fewer are poor, more are working

The poverty rate dipped in 2006, the first significant decline in the Bush presidency. Median household income bumped up slightly.

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Over the course of 2006, low-income families in America fared a little better than they did the year before.

The nation's poverty rate dipped to 12.3 percent in 2006, from 12.6 percent – the first significant decline during the Bush administration despite the economic recovery, the Census Bureau reported Tuesday.

The primary reason is that more people are working, which helped boost median income last year to $48,200, a slight increase over 2005.

But there's a caveat. "This is the second consecutive year household income has increased, even though the overall household median income has not recovered to its 1999 prerecessionary peak of $49,200," says David Johnson, chief of the housing and household economic statistics division at the US Census Bureau.

The bureau's poverty rate measures a snapshot in time. Some experts say that focus masks a significant increase in economic instability for Americans that makes more people in the middle class vulnerable to poverty. That's because while the percentage of people in poverty at a given time may be declining (it's fluctuated between 10 and 15 percent for the past 20 years), more Americans overall are experiencing poverty at some time during their lives than at any time during the past 30 years, according to a study done at Washington University in St. Louis.

The study found that in the 1970s, about 24 percent of people between the ages of 20 and 29 experienced poverty for a year or more. In the 1980s, that went up to 30 percent. And in the 1990s, it increased to 38 percent. The reasons, according to Mark Rank, one author of the study, are the increase in lower-paying jobs, employment insecurity, and significant decreases in health-insurance coverage.


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