Poor still suffering from last recession

By Jon Hurdle

PHILADELPHIA (Reuters) - Many of the poorest people in the United States are still struggling to recover from the effects of a recession that ended six years ago, making them very vulnerable as the country stands on the brink of a new downturn.

In 2006, the latest year for which Census Bureau figures are available, 12.3 percent of Americans were living in poverty, compared with 11.7 percent in 2001, the year of the last recession.

"It's unusual in an economic recovery that ... we still have poverty higher than it was in the recession that preceded it," said Sharon Parrott, a policy analyst for the Center on Budget and Policy Priorities, a liberal think tank in Washington.

This shows the poor have largely missed out on the gains made when the economy was expanding, Parrott said. The recent expansion was "much stronger for the people at the top than for people at the bottom."

Few places illustrate this more readily than Philadelphia.

Mattie McQueen, 43, put off paying her phone bill in December so she could afford a few Christmas treats for herself and her 1-year-old granddaughter, who lives with her.

"You've got to rob Paul to pay Peter," she said.

By holding on to the $162 that she owed the phone company, McQueen, a resident of South Philadelphia, was able to buy turkey, chicken, collard greens, and a few toys for her granddaughter, Mayliyah.

Without the budget adjustment, it would have been a cheerless Christmas dinner.

BELOW POVERTY

McQueen, who is diabetic and unemployed, lives on welfare payments of $637 a month from the City of Philadelphia, another $102.50 every two weeks in supplementary social security for her granddaughter, and $89 a month in food stamps.

That adds up to an annual income a little over $11,000, well below the $13,690 set by the federal government as the official poverty level for a family of two.

She spends $319 a month in rent, $425 a month on groceries, and $60 for the phone. She says she can't afford to use public transportation, and sometimes has to borrow money from family members to make ends meet. She has had help with child care from Episcopal Community Services, a church-based social services organization.

Formerly homeless and now living in public housing, McQueen would seem to be far removed from the worries of some more affluent people hit by the foreclosure crisis gripping the United States, people who bought their own homes in the last few years but now find they cannot afford the mortgage payments.

But the foreclosure crisis is making itself felt throughout the U.S. economy and threatening to send the United States into recession, which is often defined as a decline in economic growth for two or more successive quarters.