»Nearly 36 Million Americans Live in Poverty«

WASHINGTON (Reuters) - Some 1.3 million Americans slid into poverty in 2003 as the ranks of the poor rose 4 percent to 35.9 million, with children and blacks worse off than most, the U.S. government said on Thursday in a report sure to fuel Democratic criticism of President Bush (news - web sites).


Despite the economic recovery, the percentage of the U.S. population living in poverty rose for the third straight year to 12.5 percent -- the highest since 1998 -- from 12.1 percent in 2002, the Census Bureau (news - web sites) said in its annual poverty report. The widely cited scorecard on the nation's economy showed one-third of those in poverty were children.


The number of U.S. residents without health care coverage also rose by 1.4 million last year to 45 million, the highest level since 1999, and incomes were essentially stagnant, the Census Bureau said.


The poverty line is set at an annual income of $9,573 or less for an individual, or $18,660 for a family of four with two children. Under that measure, a family would spend about a third of its income on food.


Democratic presidential candidate John Kerry (news - web sites) has argued Bush's economic stewardship, including three rounds of tax cuts since 2001, has done more to help wealthy Americans than the poor or middle class.


"Today confirms the failure of President Bush's policies for all Americans," the Massachusetts senator said in a statement. "Under George Bush (news - web sites)'s watch, America's families are falling further behind."


Analysts have said the poverty rate typically tracks the broad economy, rising during a recession and falling in boom times, and the Bush administration said the report was "looking backwards at the economy" because it does not capture recent job growth or the full benefit of recent tax cuts.


"The first thing to remember is that the number of people living below the poverty line has historically mirrored the rise and fall in the number of people working," Commerce Secretary Don Evans told a conference call. "In June of 2003, when this data was collected, the unemployment rate was 6.3 percent. Now it is down to 5.5. percent."


POOR CHILDREN


The United States has struggled to recover from the 2001 slump, and job creation has lagged behind overall growth. Since Bush took office, 1.1 million jobs have disappeared, but employment has begun to rebound and analysts believe incomes may begin to improve once the job market strengthens.


The poverty rate has risen each year since 2000, when it was 11.3 percent. It hit a record low 11.1 percent in 1973.


Children and most racial minorities again fared worse in 2003 than the overall population, according to the Census report. The rate of child poverty rose to 17.6 percent from 16.7 percent in 2002 -- boosting the number of poor children to 12.9 million.


The poverty rate of African Americans remained nearly twice the national rate, with 24.4 percent of blacks living below the poverty line in 2003, nearly unchanged from 24.1 percent a year earlier. The poverty rate for Hispanics was 22.5 percent, up from 21.8 percent.


Non-Hispanic whites fared best, with a poverty rate of 8.2 percent, nearly unchanged from 8.0 percent a year earlier.


The report showed real median income for all races was unchanged at $43,318 in 2003.


Democrats criticized the government's decision to release the highly anticipated report in mid-August -- when many people are on vacation -- rather than sticking to the usual September release. They also said the decision to release both the health insurance and poverty statistics in the same report was a bid to minimize media coverage of the worsening lives of the poor in the runup to the November election.

Professor Jagdish Bhagwati: There has been this debate about outsourcing. Kerry and Edwards are clearly trying to use scare tactics here. At the convention, they got lots of applause whenever they spoke about American jobs being shipped overseas.

SPIEGEL ONLINE: If those arguments resonate at the convention, they might convince voters, too.

Bhagwati: But Kerry and Edwards don't know what they're talking about. If we look at the offshoring of online services like call centers or basic accounting, we're talking about a maximum loss of 100.000 jobs a year to countries like India. That is nothing for an economy this size. The US is a major hyperpower, and yet every time it gets into competition with Mexico, China and India, we work ourselves into a panic. It's like a rottweiler getting scared because a French poodle is coming down the road.

SPIEGEL ONLINE: Kerry and Edwards are not just speaking about call centers. Especially in industrial swing states like Ohio, they promise to stop the loss of manufacturing jobs to lower-wage countries like China or Malaysia.

Bhagwati: Here we're not talking about outsourcing but good old foreign investment. There is a huge amount of academic work that shows that this is beneficial to the US. On average, low-value jobs are going out and high-value investment is coming in. In North Carolina, where Mr. Edwards comes from, we have the I95. Along the way, there used be textile firms that have gone out since they can't produce efficiently there. Now the workers are employed by Siemens and several other German companies, with far better salaries. That section of I95, in fact, is now known as the autobahn.

The nation’s poverty rate rose for a third straight year in 2003 and the ranks of the uninsured swelled, the Census Bureau said Thursday in a report sure to fuel election-season debate over President Bush’s handling of the economy.

Democratic presidential nominee Sen. John Kerry pounced on the figures, saying the report “confirms the failure of President Bush’s policies for all Americans.”