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Poverty, stagnant incomes still prevalent in W.Va., Census report shows

CHARLESTON, W.Va. -- More than five years after the start of the great recession, West Virginians' incomes continue to stagnate and poverty is still pervasive, despite soaring corporate profits nationwide and 41 consecutive months of job growth, according to new Census data released Thursday.

Median household income for West Virginians rose by about $900 to just over $40,000 in 2012, but the change is too small to be statistically significant, according to the Census Bureau. And while median household income is up about $1,300 since 2000, it has declined since 2007 and the start of the recession, when adjusted for inflation.

Median income is a measure of the household that sits directly in the middle of the income distribution. West Virginia's median household income is lower than every state's except Arkansas and Mississippi.

"The story is that we're not changing year-to-year," said Sean O'Leary, a policy analyst at the West Virginia Center on Budget and Policy, a left-leaning think tank. "Poverty's high and it's staying high and income's low and it's staying low."

The state-specific data was released with the Census Bureau's annual American Community Survey.

Nearly one in five West Virginians -- 17.8 percent -- was living in poverty in 2012, according to the Census data. Again, that's slightly better than in 2011, when it was 18.6 percent, but not a statistically significant amount.

The federal poverty threshold is $23,550 for a family of four. A low-income family is generally defined as one making less than double the federal poverty threshold.

More than 59 percent of West Virginia households had income of less than $50,000 in 2012.

Nearly one in 10 West Virginians was living in extreme poverty in 2012, with incomes less than half the poverty level -- that's less than $11,775 for a family of four. That number is slightly worse than it was in 2011, but again the change is statistically insignificant.

On the whole, the numbers show that West Virginia weathered the recession better than the country as a whole. But the state started off, and remains, worse off economically than the country as a whole.

Nationally, median household incomes are significantly higher than they are in West Virginia -- about $51,000, essentially unchanged since 2011. But that number has fallen from more than $55,000 in 2000, when adjusted for inflation.

"It's not so much that we're doing better," O'Leary said. "During the recession a lot of states did a lot worse than us. We didn't have that big housing boom that then collapsed that a lot of states had."

West Virginia was one of only nine states that has had any rise in median income since 2000. Most of the others - North and South Dakota, Montana, Wyoming and Louisiana - also have economies heavily dependent on fossil fuel production.

Christiadi, an economist at West Virginia University and a liaison to the Census Bureau, said that West Virginia's natural resources were a big reason why growth here has been slightly better than the nation as a whole.

"To begin with, the impact of the great recession was significantly milder on the West Virginia economy than the U.S.," Christiadi, who goes by only one name, said in an email. "The stronger economic growth in West Virginia ... was primarily driven by strong growth in natural resources and mining, the natural gas industry in particular."

Poverty, also less endemic nationally than in West Virginia, has nonetheless grown by more than 30 percent in the U.S. since 2000. Nationwide 49 million people live in poverty, about 16 percent of the country, and more than 21 million people live in extreme poverty.

While West Virginians and most Americans have failed to see their finances improve since the recession, corporate profits have set all-time highs. Corporate profits, after taxes, bottomed out at about $650 billion in late 2008 during the heat of the economic crisis, according to Federal Reserve data. But by 2009 they had regained all the lost ground and in the first quarter of 2013 corporate profits passed $1.8 trillion, nearly triple the profits of four years ago.

Ron Haskins, a fellow at the Brookings Institution and a former economic advisor to President George W. Bush, sees this trend of growing corporate profits but relatively stagnant median incomes as likely to continue.

"You can no longer just graduate from high school and get a job for $50,000 a year," Haskins said. "The people who have below a four-year degree have not seen their income increase, on average, in 30 years. What's going on here is not unusual, it's just a continuing trend."

In West Virginia, the poverty rate for people with a four-year college degree was 4.3 percent, less than a quarter than the rate for the population as a whole. For those with less than a high school degree, it was 31 percent.

"It's been five years since the recession, and too many West Virginians remain living in poverty," O'Leary said in a news release. "State leaders need to think of these families and their children when setting the state's priorities."

Reach David Gutman at david.gutman@wvgazette.com or 304-348-5119.

 


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