The proportion of Americans in poverty, which rose steeply over the last five years and reached 15.2 percent of the population in 1983, will fall to between 13.5 percent and 14.5 percent in 1984, principally because of a decline in unemployment, according to projections by poverty experts at Princeton University and the University of Wisconsin.
The Census Bureau's official poverty figures are now being worked out and 1984 figures are not expected to be ready till August.
However, Sheldon Danziger, director of the Institute for Research on Poverty at Wisconsin, and Peter Gottschalk, professor of economics at Bowdoin College, Maine, have projected that the rate for 1984 will fall to about 14.5 percent.
They are further projecting that it will drop to 13.9 percent in 1986.
"Most of the improvement is the result of declining unemployment rates," Gottschalk said in a telephone interview. He added, "It's going down but it's still far, far above where you were in 1978," when the rate -- then 11.4 percent -- began the sharp climb that raised it to 15.2 percent for 1983.
An even greater decline in the poverty rate is being projected by Alan Blinder, professor of economics at Princeton, and Rebecca Blank, assistant professor of economics there.
In a paper researched last fall and just being published, they predict that the poverty rate for 1984 will be 13.5 percent. Blinder said that in view of some economic changes in recent months, perhaps the figure for 1984 will turn out closer to 13.7 percent.
By 1989, Blinder said, the rate will drop to about 11.5 percent.
Blinder said in a telephone interview that "the 1984 unemployment rate was a lot lower than 1983, that's virtually the only reason" for the decline in the poverty rate.
In 1984, he said, the average monthly unemployment rate was 7.3 percent of the labor force; in 1983, the figure was much higher, 9.6 percent. That means more people are working and have incomes and therefore will move out of the ranks of the poor.
In 1983, a family of four was considered to be in poverty if its cash income was below $10,178, the official government poverty line. In 1984, the official poverty line for a family of four rose to $10,610, reflecting price increases since the previous year. The poverty line was first developed in the 1960s, based on studies of consumer spending, minimum adequate food budgets and general notions of income adequacy. It is updated annually for inflation.
Using these standards, government experts calculated the poverty rate back to 1959, when, they determined, it was 22.4 percent of the population. It fell during the 1960s, reaching a low of 11.1 percent in 1973. Then, with slower economic growth and higher unemployment, it fluctuated between 11.2 and 12.3 percent for several years. In 1979 it reached 11.7 percent, but then began rising sharply because of a higher oil prices, recession, high unemployment and inflation. In 1980 it went to 13 percent, in 1981 to 14 percent, in 1982 to 15 percent and in 1983 to 15.2 percent.
One of the reasons the Wisconsin and Princeton projections for the decline in poverty differ is that the Danziger and Gottschalk assign less weight to economic change than does Blinder.
Danziger and Gottschalk expect only a modest drop in poverty in 1984 -- in part because they think that reductions in public support programs for the poor played an important role, along with economic change, in increasing the poverty population over the past five years. Gottschalk said that in his view, about 10 percent of the rise in poverty over the past five years is the result of demographic changes, such as the increase in one-parent families. About 45 percent resulted from higher unemployment, inflation and other economic change, and another approximately 45 percent was the result of cuts in programs, failure of the states to keep welfare payments abreast of inflation and other policy changes, he said. Therefore, a decline in unemployment by itself will not be sufficient to cut the poverty rate by a large measure.
Blinder said his view, based on studies of the period 1973-1983, is that the bulk of the rise in poverty was the result of economic change, not program changes; therefore, sharply improved economic conditions, such as much lower unemployment, is the main factor leading to lower poverty rates.