Wednesday, September 29, 2010

Poverty rate in Utah on the rise

Utah has seen a "huge increase" in poverty levels as a result of the recession, according to an analysis of U.S. Census Bureau data released Tuesday by the American Community Survey. Utah's poverty rate jumped from 9.6 percent in 2008 to 11.5 percent in 2009. And while 10.5 percent of Utah children were in poverty in 2008, that has increased to 12.2 percent.

Voices for Utah Children, a child advocacy group based in Salt Lake City, said the number of kids living in poverty in Utah is "now equivalent to the number of first and second graders in the state, plus about 20,000 of the third graders." Deseret News

Note: See our previous discussion of poverty rates. And, let's put these numbers in perspective. The 2008 increase in the poverty rate was actually larger than the 2009 increase. This has been the longest recession in the post WWII era. One would expect the poverty rate to increase in an economic downturn. This increase is most likely cyclical (related to the business cycle) rather than structural (a long-term change). As the economy improves, the poverty rate should drop also. It is interesting to note that in 2004--an expansionary year--the poverty rate measured 10.9 percent--noticeably higher than in 2009--a recessionary year.

In 2009, the U.S. poverty rate measured 14.3 percent--far higher than Utah's 11.5 percent. Additionally, 37 states have higher poverty rates than does Utah.

Finally, note that the American Community Survey publishes confidence intervals for all its estimates. The margin of error for Utah's poverty rates are plus or minus 0.5 percentage points. In other words, they are 90 percent confident that the poverty rate for Utah in 2009 fell between 11 percent and 12 percent.

Utah's poverty rates for all persons from the U.S. Census Bureau's American Community Survey:
  • 2009 - 11.5%
  • 2008 - 9.6%
  • 2007 - 6.7%
  • 2006 - 10.6%
  • 2005 - 10.2%
  • 2004 - 10.9%

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