Income Up, Poverty Rates the Same, Uninsured Down: Should We Celebrate?

The U.S. Census Bureau released their annual income, poverty and health insurance coverage statistics today. Here are the quick facts:

• Real median household income increased by 1.3 percent between 2006 and 2007, with the national median income reaching $50,233.
• The official poverty rate remained statistically the same from 2006, at 12.5 percent.
• In 2007, 37.3 million people lived in poverty.
• The number of people without health insurance declined from 15. 8 percent (47 million people) in 2006 to 15.3 percent (47.0 million people) in 2007.

Is this good news? Not really. Let’s take a closer look at the numbers:

Income

The real median household income of $50,233 is not statistically different from the 1999 pre-recession peak, when median incomes were $50,641. This means that during the past decade, household income has virtually remained flat.

Furthermore, As Jared Bernstein of the Economic Policy Institute writes:

2007 was almost certainly the last year of the 2000s recovery, and the Census release enables us, for the first time, to evaluate how the living standards of middle- and low-income families fared over this recovery.

And:

Because for most of 2007, the economy wasn’t in the shape it’s in now, and usually — not always — in the last year of an expansion, poverty goes down.

Therefore, these numbers don’t account for the worst of our current economic troubles. We can expect that from now and this time next year, these statistics will decline.

Poverty

While the overall poverty rate did not increase, it is hard to celebrate the fact that 37.3 million people in America live in poverty. What’s more alarming, poverty rates for children below the age of 18 increased from 17.4 percent (12.8 million children) in 2006 to 18.0 percent (13.3 million children) in 2007.

The poverty rates among racial groups show that we certainly have not reached a point of equal opportunities for upward mobility. Among non-Hispanic Whites the poverty rate in 2007 was 8.2, among Blacks the rate was 24.5, among Asians the rate was 10.2, and among Hispanics the poverty rate was 21.5.

Furthermore, after falling sharply in the 1990s, the poverty rate has remained flat during the past decade. Overall, the picture is one of stalled momentum, and America continues to lag other advanced nations when it comes to using public policy to help citizens lift themselves from poverty.

Health Insurance Coverage

An increase in the number of people with health insurance coverage is good news. However, in 2007, there was no statistical change in the number of people covered by private health insurance (202 million people) from 2006. The number of people covered by government health insurance increased from 80.3 million people in 2006 to 83.0 million people in 2007. Think what the numbers would look like if we had followed the lead of the current president and completely privatized health care.

While the number of overall children with health insurance coverage increased, the coverage rates for children in poverty decreased to 17.6 percent in 2007, from 19.3 percent in 2006.

Again, these numbers do not represent the worst of our current economic problems. There is no doubt that the next president must make poverty reduction and social mobility a top priority. I am looking forward to see how both Obama and McCain campaigns address these new statistics.