[US] More people toil on edge of poverty

from The Detroit News

Odds of a temporary financial nose-dive doubled for Americans in the 1990s, study says.

Erik Eckholm / New York Times

ANAHEIM, Calif. -- The Abbotts date their tailspin to a collapse in demand for the aviation-related electronic parts that Stephen sold in better times, when he earned about $40,000 a year.

He lost his job in late 2001, unemployment benefits ran out over the next year and the couple, along with their teenage son, were evicted from their apartment.

They spent a year in a borrowed motor home here in the working-class interior of Orange County, followed by eight months in a motel room with a kitchenette. During that time, Laurie Abbott, a diabetic who is now 51, lost all her teeth and could not afford to replace them.

"Since I didn't have a smile," she recalled, "I couldn't even work at a checkout counter."

Americans on the lower rungs of the economic ladder have always been exposed to sudden ruin. But in recent years, with the soaring costs of housing and medical care and a decline in low-end wages and benefits, tens of millions are living on even shakier ground than before, according to studies of what some scholars call the "near poor."

"There's strong evidence that over the past five years, record numbers of lower-income Americans find themselves in a more precarious economic position than at any time in recent memory," said Mark R. Rank, a sociologist at Washington University in St. Louis and the author of "One Nation, Underprivileged: Why American Poverty Affects Us All."

Insecurity worsens

In a rare study of vulnerability to poverty, Rank and his colleagues found the risk of a plummet of at least a year below the official poverty line rose sharply in the 1990s, compared to the two previous decades. By all signs, he said, such insecurity has continued to worsen.

For all age groups except the elderly, the odds of a temporary spell of poverty doubled during the 1990s, Rank reported in a 2004 paper titled, "The Increase of Poverty Risk and Income Insecurity in the U.S. Since the 1970s."

For example, during the 1980s, around 13 percent of Americans in their 40s spent at least one year below the poverty line; in the 1990s, 36 percent of people in their 40s did, according to the analysis.

Comparable figures for this decade will not be available for several years, but other indicators -- a climbing poverty rate and rising levels of family debt -- suggest a deepening insecurity, poverty experts and economists say.

Fewer have health benefits

More people have jobs without health coverage, including temporary or contract jobs that may offer no benefits or access to unemployment insurance. Medicaid is offered to fewer adults (though to more children). Cash welfare benefits are harder to secure and their real value has eroded.

About 37 million Americans lived below the federal poverty line in 2004, set at $19,157 a year for a family of four. But far more people, another 54 million, were in households earning between $38,000 and $57,000 a year.

Those suffering a nose-dive say the statistics do not begin to convey their fears and anguish. Only a year ago, Machele Sauer thought she was entering the middle class. She and her husband, a licensed electrician, owned a mobile home. He was starting a business and Sauer, after bearing their fourth child, hoped to stop waitressing and be a stay-at-home mom.

Life fell apart last spring when her husband was arrested for theft, linked to a drug addiction she says she did not know about. Because of a prior record, he received a long prison sentence.

Now Sauer, 34, draws on a charity in Garden Grove, Orange County for goods and its director, Gayle Knight, for advice and emotional support, part of a scramble to provide for her four daughters, aged 16 months, 8, 9 and 15.

She receives $200 worth of food stamps that cover bills for just the first two weeks of each month, she said.