State poverty rate stabilized in 2010

Nationally, indicators worsened

— Higher percentages of Arkansans were unemployed, receiving food stamps or living in poverty last year than before the 2007 recession, but census numbers released today show those figures leveled off going into 2010.

Regarding 2009 and 2010, census figures show that although median household income didn’t decline as steeply in Arkansas as in most states and that the state’s poverty rate went unchanged, both categories were worse than they were four years ago.

The stabilization in those figures, presented in the annual American Community Survey, indicate a tame recovery in the first full year after the economic slump that economists say lasted from December 2007 through June 2009.

“I think that’s very consis- tent with the business cycle that we’ve been through,” said Michael Pakko, the state economic forecaster and the chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock. “The sharp recession, and slow recovery since then, you would expect would lead to a leveling off of income and stagnating poverty rates.”

Pakko found it surprising that the state’s median income declined slightly from one year to the next — from $38,441 in 2009 to $38,307 last year, a 0.3 percent drop that was one of the smallest among the states.

“It’s crucial that we see that number come up as the recovery proceeds,” Pakko said. He said he expected the median income would have swung upward because 2010 “was a little bit of a recovery year.”

Nationally, median income fell 2.2 percent from $51,190 to $50,046, census figures show.

Arkansas’ income numbers come from census estimates calculated from responses to an annual survey that goes out to about 3 million households nationally. The survey was taken throughout the 2010 calendar year and offers reliable estimates for most communities with populations of 65,000 or more.

The census numbers show a stark contrast between the state’s economic well-being in 2010 and 2007.

Between those years, median household income in Arkansas fell more than 4.5 percent, and the state’s workforce unemployed rose from 7.2 percent to 9.6 percent. Both mirrored national trends.

Over the same time, the state’s poverty rate climbed from 17.9 percent in 2007 to 18.8 percent in 2009 and remained there in 2010, a break from the national average, which grew. Nationally, 15.3 percent of people were living in poverty in 2010, up from 14.3 percent the year before.

David Seith, research analyst at the National Center for Children in Poverty at Columbia University, said the difference with what happened to the poverty rate in Arkansas and nationally in 2010 was largely due to the state’s having more people in poverty before the recession.

The state’s poverty rate in 2007 was nearly 5 percentage points higher than the nation’s, and rates of single mothers and children in poverty also were well above the national average.

“Things are really tough for a lot of families, and the only bright side is that it didn’t get a lot worse because they didn’t have a lot further to fall,” he said.

Seith said the state’s higher-than-average rates of residents receiving public assistance also played a role.

“Rates of public health insurance and food stamps were higher in Arkansas, and those buffer people from poverty,” he said.

In 2010, 36 percent of Arkansas residents were receiving some form of public health insurance coverage compared with 29.7 percent nationally. There are no comparable numbers for 2007.

About 16 percent more Arkansas households were receiving food stamps in 2010 than in 2007.

Figures from the Arkansas Department of Human Services show the total amount of benefits paid also rose dramatically between those years.

The department spent more than $672.8 million in food-stamp benefits in fiscal 2010, a 62 percent increase from 2007, when benefits totaled $415.1 million. The state’s fiscal year runs July 1 through June 30.

Amy Webb, spokesman for the Human Services Department, said the increase in total benefits was partly affected by the federal government’s increasing individual household benefits in 2009.

Still, she said, “we have seen a steady increase over the last few years.”

Census figures show the percentage of Arkansas households receiving benefits from the Supplemental Nutrition Assistance Program increased from 11.9 percent in 2007 to 13.7 percent in 2010. The state also was one of 25 states with higher rates of residents participating in that food-stamp program than the national average of 11.9 percent in 2010.

“The SNAP program is a really good reflection of the economy because if people need food assistance, then that number goes up. When they get back into jobs you see a sharp decrease,” Webb said.

Tara Manthey, spokesman for Arkansas Advocates for Children and Families, said the programs played a large role in keeping families out of poverty, particularly those most vulnerable such as children and single mothers.

The state’s child-poverty rate also remained relatively unchanged, rising slightly from 26.9 percent in 2009 to 27.2 percent in 2010.

Over the same time, Arkansas’ rate of single mothers in poverty fell from 49.5 percent to 47.1 percent, though the number is still well above the national average of 39.6 percent.

Those figures were better than analysts at the nonprofit advocacy group had expected, Manthey said.

“I think looking at this and the national data from last week, it really shows the critical role that assistance has played. Unemployment insurance, extended food stamps, a lot of these have been helping people stabilize their finances in the past year,” Manthey said.

“As bad as the poverty levels are today, the census numbers ... show that they’ve kept millions of people from falling below the poverty level in 2010.”

Front Section, Pages 1 on 09/22/2011

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