Thread: Arizona's middle class: Poverty casts longer shadow

Arizona's middle class: Poverty casts longer shadow
38 commentsby Betty Beard - Jan. 24, 2011 12:00 AM
The Arizona Republic
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Gas prices hover near $3. Medical costs are on the rise, and child care can be expensive. And there's always an emergency home repair that just wasn't in the budget.

It's hard to climb back to a middle-class lifestyle after a tumble into joblessness and poverty, as many Arizonans are finding.

In September, the U.S. Census Bureau said Arizona had the nation's second-worst poverty rate in 2009, behind Mississippi. The percentage of impoverished Arizonans was said to have increased to 21 percent in 2009 from 18 percent in 2008.

The one-year change highlights the devastating impact of the Great Recession in Arizona, which typically falls in the upper third of the 50 states for high poverty rates.

The lower-middle class, in particular, faces a shaky short-term outlook.

Although employers in the state now are creating more jobs than they are cutting, it could take years for workers to recover fully. Arizona lost about one-tenth of its jobs during the recession, many of them construction and other blue-collar jobs.

Expected state budget cuts could hit the lower-middle class and working poor especially hard by reducing child-care assistance and cash, medical and other aid, the Morrison Institute for Public Policy at Arizona State University noted in a December report.

The Morrison Institute has been tracking increases over the past two years in the numbers of families receiving food stamps and emergency food. Pounds of food distributed by food banks, for example, rose 27 percent between 2009 and 2010 in the state - up 28 million pounds in one year.

Bill Eckard, 62, of Phoenix, used to earn $90,000 a year selling water conditioners when the housing market was hot. Now, he lives off Social Security and occasional sales.

He lives in a small poolside bungalow because he can't afford to fix the air-conditioner and water heater for his 2,400-square-foot house. He can't afford medical or dental insurance or care. "If it weren't for my faith, I don't know where I would be," Eckard said. "I have learned how little I need to live on."

What does it mean to live in poverty? Officially, the U.S. Census Bureau puts 14.3 percent of Americans in that category, the highest percentage since 1994. From 2007 to 2009, 6 million were added to the rolls of officially impoverished, bringing the number to 43.6 million - the highest in 51 years.

The 2010 preliminary poverty thresholds are set by household size. They include $11,344 for a single person under 65; $10,458 for a single person 65 and older; $22,314 for family of four; and $45,094 for a family of nine or more.

But the official poverty rate has been criticized for being too low and relying on too narrow parameters.

Many organizations don't rely on official poverty guidelines because they are considered so low.

The Arizona Association of Food Banks uses 185 percent of the poverty rate to determine who can get its food boxes, said Ginny Hildebrand, president and chief executive.

One issue she has with the official poverty guidelines is that they are based on concepts developed in the 1950s that assumed food constituted about one-third of a household budget. Since then, housing, medical and working-related expenses such as gasoline and child care have dwarfed that.

Government measures rely in part on a "thrifty food plan" that assumes a family of four, with kids ages 9 to 11, can eat for about $134 a week, or about $6.30 a meal.

"If you have to exist on that thrifty food plan, it has already been proven by scientists that nutrition is inadequate," she said.

Poverty has become increasingly difficult to measure because people's financial condition can depend on many factors: whether they own or rent, mortgages, whether they get public assistance, where they live, and how much they pay for child care and medical care.

Arizona State University economist Tom Rex said, "The more you look at it, the more difficult it becomes both to measure those things and to decide what should go in or out."

Rex prefers to watch rolling poverty measures instead of the one-year rates. The one-year rates are based on sample sizes that are too small, in his opinion. According to Census Bureau estimates from 2005 through 2009, Arizona's poverty rate was 14.7 percent, tied with Montana's. Thirteen states and the District of Columbia had higher rates.

The U.S. Census Bureau this fall is expected to offer an alternative measure of poverty. The bureau is not looking at replacing the official rate. But the alternative measure will take into account tax payments, work expenses, clothing and utility costs and geographic differences in the cost of housing.

Researchers at the Washington-based Economic Policy Institute expect that the alternative measure will show the poverty rate will be 2 to 6 percentage points higher, depending on the household size and race.

http://www.azcentral.com/news/articles/ ... verty.html

Unfortunately, too many of us have not saved money for retirement.

At 62 yrs of age, I seriously doubt he will ever get back to $90,000/yr. I hope his house is "paid for".