US poverty rate for '84 falls
The rising tide of the United States economy helped lift 1.8 million Americans out of poverty last year. According to a US Census Bureau report unveiled Tuesday, the nation's poverty rate declined ``significantly'' for the first time since 1976. At the same time, inflation-adjusted median family income rose 3.3 percent to $26,430.
``The bottom line is, we have very good news to report this morning,'' said Gordon W. Green, an official with the Census Bureau's population division in announcing the new findings. The decline, from 35.5 million people in 1983 to 33.7 million people in 1984, reflected a drop of nearly a full percentage point from the recently adjusted 1983 rate of 15.3 percent.
The decline surprised few experts. White House officials are delighted over what could be seen as a significant confirmation of Reagan administration economic policies. Their relief is compounded by the fact that last year's figures showed a 0.2 percent increase in the poverty level at a time when administration officials were hoping for a decline.
Yet doubt remains as to whether the news over the next few years will be as sunny. ``The big question, and I wish I could answer it, is what's going to happen in the future,'' said Mr. Green.
Independent analysts and even Census Bureau officials caution that the figures may not point to long-term trend.
The drop in unemployment and inflation rates are mostly responsible for the decline in the number of Americans living below the official poverty threshold. But the recovery has shown signs of having stalled. Many analysts expect this fact to eventually be reflected in future poverty statistics, just as it took two years for the recovery of 1982 to be reflected in Tuesday's figures.
``In the short run, just getting prople back to work is going to increase the nation's average income,'' says Frank Levy, an economist at the University of Maryland's College of Public Affairs. ``In the long run, how fast family incomes increase is going to depend on how fast worker output grows.''
Productivity, a measure of the change in output per hour in the private sector, grew 5.9 percent in a single quarter during the recovery's heyday in 1983 and the first half of '84. By the second half of '84, productivity weakened. Many economists noted this as evidence of a weakening economy.
Some economists call Tuesday's poverty figures disappointing. Unemployment was estimated at 7.5 percent for last year, they note. Yet in 1980, the last time the rate fell below that level, the poverty rate sat at 13 percent.
Official poverty statistics are based on cash income only: For example, the current poverty threshold for a family of four last year was $10,609. But the Census Bureau also releases supplemental reports that show the value of in-kind subsidies to welfare recipients. If one includes those subsidies in 1984's poverty reckoning, the poverty rate falls from 14.4 percent to 9.7 percent.
Democrats have charged that the Reagan administration uses such adjusted figures to justify cuts in domestic spending programs. The Census Bureau will be holding a conference on how to best incorporate in-kind payments into poverty statistics this December. Tomorrow: poverty among young women and children.