Poverty Decline is Last Glimpse of Economic Boom

News Release
September 25, 2001

Over Course of Decade 20 Percent More Poor Oregonians While Household Income Up Slightly

The U.S. Census Bureau released new data today on the extent of poverty and the change in household median income in Oregon and the nation. According to an analysis by the Oregon Center for Public Policy, a non-profit research institute in Silverton, the new numbers may be the last bit of good news from the economic expansion of the 1990s and may be short lived as Oregon experiences the onset of a recession.

Related materials:

See the graphs (PDF)

See the Census Poverty Page

The Census figures show that the poverty rate in Oregon went down slightly in 1999-2000 from 1998-99, from 13.8 percent to 11.6 percent. There was no statistically significant difference between the poverty rate for 1999-2000 and for the period ten years earlier (1988-89), before Oregon's last recession. During the last decade, the poverty rate remained relatively constant. However, the number of poor Oregonians has increased along with the state's population.

Median household income in Oregon improved slightly over the course of the decade. However, between 1998-99 and 1999-2000 median household income did not change by a statistically significant amount. The median household income in 1999-2000 was $42,260. This is higher than the late 1980s, prior to the last recession, by a statistically significant amount. The median household income in 1988-89 was $38,758.

"The decrease in the poverty rate, the first time it declined in the1990s, is welcome news," said Jeff Thompson, an economist and policy analyst with the Oregon Center for Public Policy. "Unfortunately, it is important to note that the data are for last year and the good news is already turning sour. We already know that unemployment in Oregon is up and our economy is contracting, neither of which bode well for poverty this year."

Commenting further, Thompson noted "It took the full length of the economic expansion of the 1990s to reduce the poverty rate in Oregon. Now that the expansion has ended, we can expect poverty to increase once again."

Oregon's poverty rate is no different from ten years earlier, but the number of poor in Oregon increased over the course of the 1990s. "As the population grows, so do the number of poor in the state. Oregon has nearly 80,000 more poor people than it did in the late 1980s," noted Charles Sheketoff, executive director of the Oregon Center for Public Policy.

"Demand on food banks and government social services is higher today than 10 years ago, and the little bit of good news on the poverty rate does nothing to alleviate that pressure," said Sheketoff. "Unfortunately, our social safety net is no longer designed or funded to meet the increased need," added Sheketoff.

A previous OCPP study showed that, over the long term, the poverty rate among working families with children doubled from the late 1970s to the late 1990s. One out of seven (15.2 percent) working families with children are poor, up from one out of 14 (7.3 percent) in the late 1970s.

The poverty figures today cover a period of tremendous economic prosperity in Oregon. Between 1996 and 1999 Oregon raised its minimum wage to what was then the highest in the nation. These increases, and tight labor markets, improved wages for even the lowest-paid workers in the last few years.

"The state should continue to increase the minimum wage each year to keep up with inflation, expand and improve the safety net, and take affirmative steps to create a high wage economy that benefits all Oregonians," said Thompson.

"The economy of the late 1990s was good, but working people did not gain as much as might be expected," said Thompson. "Too many new jobs in Oregon are low wage, and most of the benefits of the boom have been captured by the already well-off. That's why we aren't seeing the improvement in median household income."

The annual survey used by the Census to estimate the poverty rate and median income for Oregon is based on approximately 1,000 households statewide. Census and the Oregon Center for Public Policy use two-year averages of the Census statewide data to provide more reliable figures.

NOTE to editors and reporters: Graphs are available in PDF format.