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Arizona poverty, income estimates worse than national average in 2012

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WASHINGTON – Poverty rates remained significantly higher and incomes lower in Arizona than in the rest of the nation last year, according to data released Thursday by the Census Bureau’s American Community Survey.

The survey said Arizona’s poverty rate stood at 18.7 percent in 2012, well above the national average of 15.9 percent and eighth-highest among states. The median household income for the state that year was $47,826, compared to a national mark of $51,371.

Both numbers were slightly improved from the year before in Arizona, but sharply worse than where the state stood in 2000, when the poverty rate was 15.6 percent and income, adjusted for inflation, would have been $51,376.

While the Phoenix metro area was slightly better than the rest of the state, with a poverty rate of 17.4 percent, that still tied Detroit for fourth-worst among the country’s 25 most-populous areas.

Despite the apparently grim statistics, economists said they were not discouraged by the new numbers, which show the state about where they expected in its long climb out of recession.

Barry Broome, president of the Greater Phoenix Economic Council, said poverty rates are higher than they should be now, but he expects they will continue to drop.

“It’ll drop in 2013, it’ll drop in 2014, it’ll drop in 2015,” Broome said.

Bill Hart, a senior policy analyst with Arizona State University’s Morrison Institute for Public Policy, said the bleak numbers reflect the income gap that has characterized the country’s economic recovery.

“You have the stock market surging while you have millions of people unemployed or underemployed,” Hart said. “So it really smacks of heading toward two different Americas. One is reaping the fruits of the economic system and the other is left behind.”

Hart, who co-authored an upcoming study on homelessness in Arizona, said the state’s poverty rate and its homelessness are strongly linked, and both stem largely from unemployment. Most of those in Hart’s study cited economic reasons – usually the loss of a job – for their homelessness. His study cited job creation and job training as two major factors in combating homelessness.

Arizona’s poverty and income trends largely mirrored the nation’s, improving on 2011′s numbers but still worse than in 2000.

The only states to see poverty rates decline from 2000 to 2012 were Louisiana, North Dakota and West Virginia, and those decreases were small enough to fall within the study’s margin of error. Michigan saw the most dramatic increase in its poverty rate, rising from 10.1 percent in 2000 to 17.4 percent in 2012.

Almost all the states in the southern half of the country had at least 16 percent of their residents below the poverty line in 2012, according to the report.

Thursday’s report also showed that the percentage of Arizonans without health insurance rose to 20.4 percent in 2012 from 19.4 percent in 2010. An estimated 56.4 percent of the state was covered with private insurance only, and 23.2 percent had public coverage, the survey said.

For Arizona, the numbers provide a reasonable picture of the economic recovery, said Tom Rex, associate director of the Center for Competitiveness and Prosperity Research at ASU’s W.P. Carey School of Business. The numbers confirm previous estimates on when the state thought it could fully recover, he said.

“During the recession, people were saying it’s going to be 2014 or 2015, and so far that seems pretty much right on,” he said. “I’d say closer to 2015.”

Hart agreed that the new numbers fit into what Arizonans already knew about the state’s economic situation. The main reason for the high rate of poverty and low income in Arizona, and especially in Phoenix, was the state’s economic reliance on construction and real estate.

Because of that, Hart and Rex said the state’s political leaders should be trying to diversify the economy now, so that when the economy recovers, it won’t be due for another crash.

“We will recover,” Rex said. “It’s just a matter of time. But that doesn’t take away the underlying issue of cyclicality. Cyclicality isn’t good for people.”