The proportion of Americans living in poverty last year dropped to the lowest level since 1980, while median family income after adjustment for inflation took one of its biggest jumps in the past 15 years, the Census Bureau reported yesterday.
The bureau said the number of people below the government's official poverty line ($11,203 for a family of four in 1986) fell from 33,064,000 in 1985 to 32,370,000 in 1986 -- from 14 percent to 13.6 percent of the population. Median family income rose to $29,458, a 4.2 percent increase from 1985.
Gordon Green, assistant chief of the bureau's population division, said the figures are the result of "no economic downturn, four years of sustained economic growth, more people working, low inflation, lower unemployment, and job creation" in recent years.
President Reagan said the figures released yesterday showed that "sustained noninflationary growth is the government's single best tool for fighting poverty."
But Rep. Thomas J. Downey (D-N.Y.), chairman of the House Ways and Means public assistance subcommittee and sponsor of a major welfare bill, said the drop in poverty was so small that "there is nothing to be proud of in these statistics," and noted that the rates are still higher than during the 1970s.
In 1973, 11.1 percent of the population was living in poverty, the all-time low, before oil embargoes, a general economic slowdown and three recessions pushed up the figure. The most recent high was 15.2 percent in 1983.
Census figures also reflected "an increase in income inequality," as Green described it. In 1970 the lowest fifth of households got 4.1 percent of total income, the middle three-fifths got 52.7 percent and the top fifth 43.3 percent. By 1986, the figures show, the bottom fifth had dropped to 3.8 percent, the middle three-fifths to 50.2 percent and the top fifth had risen to 46.1 percent.
Among the possible reasons for the change, Green said, are the greater growth in high-paying and low-paying jobs than in middle-paying ones, a huge increase in population because of the baby boom, which has made the economy struggle to find enough jobs, and the increase in female-headed families, which tend to have low incomes.
But he said, "I don't think we have to worry about the middle class disappearing."
However, Robert Greenstein, director of the nonprofit Center on Budget and Policy Priorities, said the figures reflected the fact that "The gap between the rich and the middle class and the rich and the poor has now reached its widest point in at least 40 years, and this trend has accelerated in the 1980s."
"The income of the typical family in the poorest 40 percent of the population is essentially unchanged in real purchasing power since 1980, while the income of the typical family in the top 10 percent rose $10,338," he said.
The Census Bureau figures are based on the official poverty index, which counts only cash income. However, if $135 billion in noncash benefits given in 1986 in the form of Medicare, food stamps, Medicaid, school lunches, and housing subsidies were counted, the number of people in poverty would be lower than 13.6 percent.
The bureau said it would be 9 percent if based on the market value of the noncash benefits, and 11.6 percent if based on the amount of cash the individual would need to obtain the same goods and services provided by the noncash benefits.
The 4.2 percent increase in median family income represented the fourth consecutive year that real income has increased, the bureau said. The 1986 figure of $29,458 is slightly lower than inflation-adjusted figures for 1973, 1978 and 1979, but the size of families has been declining. After adjusting for that factor, family income in 1986 was probably slightly higher than in those earlier years.
The family figures, Green said, do not include millions of single people. If one looks at the income of everyone in the United States, in 1986 it was $11,670 per person, the highest per capita income ever after adjustment for inflation. The figures for blacks ($7,207) and Hispanics ($7,000) were also at record highs. Overall, Green said, income grew in the 1970s and 1980s -- "not at the robust levels of the 1960s, but still at a respectable rate."
While the poverty rate for all Americans was 13.6 percent (based on cash income only), it was 31.1 percent for blacks and 27.3 percent for Hispanics. For persons 65 and over the rate was 12.4 percent; for children under 18, it was 19.8 percent. For married-couple families the rate was 6.1 percent, but for households headed by a woman with no husband present, 34.6 percent.
Geographically, there was less poverty in the Northeast than any other section of the country -- 10.5 percent. Elsewhere, it was Midwest, 13 percent; the West, 13.2 percent, and the South, 16.1 percent.
Green said a noteworthy development was that households headed by young persons (15 to 24) now lag far behind those headed by older persons (65 and above). In constant 1986 dollars, the young households had a median family income of $19,870 in 1970, compared with $14,270 for the older ones. But by 1986, young households dropped to $15,150 and the elderly rose to $19,930.
Green said that in 1970 the median earnings of full-time year-round female workers were 59 percent those of full-time year-round male workers. In 1986, the female figure was $16,230, 64 percent of the $25,260 for men.