Economy

Census: Poverty rate and income remain unchanged in US

For the first time since 1992, US income and poverty rates didn't change, but fewer young people lack health insurance

For the first time since 1992, the poverty rate and household income of Americans did not change from one year to the next while the number of young people without health insurance dropped, according to the U.S. Census Bureau.

The status quo is a thin silver lining for a nation struggling to recover from the worst recession since the Great Depression.

"It’s a metaphor for the whole economy,” said Ron Haskins, senior fellow and co-director of the Center on Children and Families at the Brookings Institution, a liberal Washington, D.C., think tank. “We're running in place. Poverty is high. Income is low. We're not making up for lost time.”

The annual Census report released Tuesday tracks income, poverty and health insurance coverage, and comes as Congress continues to battle over full implementation of the Affordable Care Act.

Median household income in 2012 was $51,017, not statistically different in real terms from 2011’s $51,100. Household income had dropped the two previous years but is still 8.3 percent below pre-recession levels and 9 percent lower than the all-time peak in 1999.

More than 46 million people – or 15 percent – live in poverty, according to the report. Poverty increased for all age groups but is highest among children.

The average poverty threshold for a family of four in 2012 was $23,492, as defined by the Office of Management and Budget and updated for inflation. The 2012 poverty rate was 2.5 percentage points higher than in 2007, the year before the most recent recession.

“No way this is good news,” Haskins said. “Even if it came down a little bit, it’s still way above where we were. We’ve lost progress.”

The only region to experience a decline in poverty was the West, where it dropped from 15.8 percent to 15.1 percent in one year. California is on the verge of enacting the highest minimum-wage rate in the nation at $10 an hour.

"We're not making the kind of progress we should be making on poverty now that those government programs that we instituted during the recession are fading out," said Austin Nichols, economist at the left-leaniing Urban Institute.

Employment insurance benefits were helping lift 3 million people out of poverty, he said. Now that they're running out, they're helping only 1.7 million people stay above the poverty line.

Financial conditions are improving for only the top 1 percent earners, Nichols said, and child poverty has remained at 22 percent the last three years.

"Nobody else is doing better, just holding constant and poverty is the same even though we're supposed to be recovering from the recession," he said. "Something needs to be done."

The only region where the number of poor people went up was in the South – from 18.4 million in 2011 to 19.1 million in 2012.

"What's striking is how little things have changed," said Mark Mather, associate vice president of U.S. Programs at the nonpartisan Population Reference Bureau, a Washington-based research group. "Income was up slightly in cities. … Poverty increased in areas outside of metro areas."

If statistically significant, "it could suggest that the recovery is uneven" and that urban residents are recovering faster than those in rural areas, he said.

Among the race groups, Asian households had the highest median income ($68,636). White households that are not Hispanic were at $57,009. Hispanic households had a higher income than black households, $39,005 vs. $33,321.

Still, every group is far below pre-recession levels: whites down 6.3 percent, blacks 15.8 percent, Hispanics 11.8 percent and Asians 7.7 percent.

The number of people without health insurance coverage is dropping among the young, partly because of social programs and partly because more are on their parents’ employer-sponsored insurance plans. One of the first provisions of the Affordable Care Act allowed young adults to stay on their parents’ plans until the age of 26.

“Two-thirds of the drop (in uninsured) is occurring in children,” said Stephen Zuckerman, health economist and co-director of the Urban Institute’s Health Policy Center. “There are half a million more children with private health insurance coverage and about 300,000 more with government coverage. … I would expect to see an increase in employer coverage as the economy improves.”

The long-term trend, however, is a steady decline in employer coverage. The report is bound to generate more debate around the Affordable Care Act, which would expand Medicaid coverage.

“What these numbers show is that unless you have some turnaround in employer coverage, you need to have some other mechanism,” Zuckerman said.

The Census report shows the gender gap is narrowing among younger workers as women become more educated, but remaining the same overall.

“Unfortunately for women and their families, it’s the same old story — another year of no improvement,” said Linda Hallman, executive director of the American Association of University Women. “Women working full time in the United States are still paid only 77 percent of what men are paid, just as they were a decade ago.”

Median earnings for men is $49,400 vs. $37,800 for women. The gap is even wider for black and Hispanic women.

“This stagnation must end, for the good of women and the nation,” Hallman said.

Haskins said the gender gap is bound to narrow further because women’s education and employment is rising relative to men.

“Women are working more, men are working less,” he said. “The gap is definitely going to decline in the future.”

But overall, Haskins finds little to rejoice about.

“It’s a lousy recovery,” he said, “one of the worst recoveries we’ve ever had.”

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