A descent into poverty for millions

  • Article by: WARREN WOLFE and JEREMY OLSON , Star Tribune s taff w riters
  • Updated: September 16, 2010 - 11:38 PM

“It’s always been tight, but we’ve never been in this position before,” said Keith Dowd, with his son at Ramsey County’s 55-bed shelter.

Photo: Kyndell Harkness, Star Tribune

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Ramsey County human services planner Jim Anderson didn't need Thursday's census report to know that poverty has climbed sharply since the economy collapsed in 2008.

Last month he turned away 59 adults with 126 children seeking emergency shelter for families.

In a report that confirmed what experts like Anderson have sensed, the U.S. Census Bureau said Thursday that the nation's poverty rate shot to 14.3 percent last year, the highest in 16 years, and that one in five American children were living below the poverty line. Household incomes also stagnated, and the number of people without health insurance reached an all-time high of 51 million. The report suggested that in Minnesota, too, poverty is on the rise.

With one in seven Americans in poverty, demand for emergency financial help has skyrocketed. Advocates across the Twin Cities say that homeless shelters are overflowing, food shelves are strapped and church basements are filling up.

"We have this effort to end homelessness in Minnesota, and we are getting more and more people into permanent housing," Anderson said. "But it's pretty rugged. We just can't keep up."

At Families Moving Forward, a Minneapolis network of churches offering shelter to families with children, the number of calls for housing has shot up from 50 for every opening to 150.

At Ramsey County's permanent 55-bed shelter on Thursday, Keith Dowd, 31, was holding out hope as he talked about opportunities for his family of six, which includes four children 6 months to 11 years old.

"This is scary,'' Dowd said. "It's always been tight, but we've never been in this position before.'' Every day, Dowd seeks temp jobs to replace the landscaping and factory work he lost through layoffs. "We need to leave here in two weeks, and we're not sure where we'll go."

His partner, Clarissa Horne, 28, wants a medical assistant job that she has trained for, but will settle for a retail sales job. She has an interview on Friday.

"We think we can qualify for a program that will help us with rent, but first we need a job," she said. "Poverty, homelessness -- it all comes down to jobs."

The picture in Minnesota

Last year, 43.6 million Americans were in poverty, the Census Bureau said in its annual report on the economic well-being of U.S. households.

In Minnesota, the combined poverty rate for 2008-09 was 10.5 percent, up from 8.7 percent in 2006-07. The increase, however, was within the statistical margin of error, so the actual rate may have remained flat or increased to more than 12 percent.

The new report put Minnesota's poverty rate as 12th best among the states. Census officials use two-year averages for states in the annual report.

A different and startling measure of economic stress on Minnesotans showed that median household income, after adjustment for inflation, fell to its lowest level since 1994-95.

The median income of $55,404 for 2008-09 represented a decline from $57,389 in 2006-07 and from the high of $65,699 in 2000-01. In 1994-96, the figure was $50,581.

Still, Minnesota income ranked 13th among the states.

The state's share of people lacking health insurance remained unchanged at 8.8 percent, but only because the state-subsidized Medicaid program picked up the number of people descending toward poverty.

The rate of Minnesotans with employer-based health insurance fell to a decade low of 62.2 percent in 2009, according to census data. The share of Minnesotans on public Medicaid programs leapt from 7.6 percent in 2001 to 14.6 percent in 2009. More than a quarter of the state's children are now covered by Medicaid. However, Minnesota's uninsured rate was the third lowest among the states, behind Massachusetts and Hawaii. Nationally, the rate rose from 15.4 percent to 16.7 percent.

Government cuts, stimulus

In a statement Thursday, President Obama called 2009 a tough year for working families but said it would have been worse without federal money to help the economy and prop up programs for those hurt by rising unemployment and foreclosures.

Some economists agreed that increases in Social Security payments and expansion of unemployment insurance helped cushion the impact of the weakened economy on Americans. In addition, more women joined the labor force after layoffs had a disproportionately high impact on men. However, the poverty rate among working-age people rose from 11.7 percent to 12.9 percent, the highest since the 1960s, the census report said.

"Given all the unemployment we saw, it's the government safety net that's keeping people above the poverty line," Douglas Besharov, a University of Maryland public policy professor and former scholar at the conservative American Enterprise Institute, told the Associated Press.

Indeed, Catholic Charities of St. Paul and Minneapolis said $1.8 million in federal money it received last year has helped some Minnesotans keep their homes or regain housing. Still, the social service agency said, cuts by state and federal governments to safety net programs have pushed more people into poverty.

At Catholic Charities, use of food shelves shot up 91 percent between 2008 and 2009. But 2010 brought no increase, spokeswoman Rebecca Lentz said. "The reason it was flat is we're at capacity. For the first time, we can't serve any more people."

wolfe@startribune.com • 612-673-7253 jeremy.olson@startribune.com • 612-673-7744

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