Wednesday, September 12, 2012

New Data from the U.S. Census on Poverty, Income and Health Insurance

Earlier today the Census Bureau released the 2011 data on income, poverty and health insurance coverage. The good news is after three consecutive years of increases, neither the official poverty rate nor the number of people in poverty were statistically different from the 2010 estimates. The bad news is there is still an unacceptable poverty rate, marked income disparities by race, and a continued shift of wealth to people in the top income percentiles.

Highlights from the Census data on poverty and income:
  • The 2011 official poverty rate for the nation was 15.0% and there were 46.2 million people in poverty, not statistically different from last year.
  • There still persists a large income disparity among racial groups, as Blacks had a poverty rate of 27.6%, Hispanics 25.3%, Asians 12.3% and Non-Hispanics Whites 9.8%.
  • Hispanics were the only ethnic group to see a change in poverty rate, which decreased from 26.5% in 2010 to 25.3% in 2011.
  • The percentage of people without health insurance coverage decreased in 2011 to 15.7% from 16.3% in 2010. The number of uninsured also decreased to 48.6 million in 2011 from 50.0 million in 2010.
  • There was a significant change in the share of aggregate income, as the top 5% of earners saw their share of aggregate income increase by 5.3%. Those in the second, middle, and fourth quintiles saw their share of aggregate income decrease by 1.6%, 1.9%, and 1.6%, respectively. Those in the lowest quintile saw no significant difference.
  • People in the lowest quintile of income increased their percentage of year-round, full-time workers by 17.3%, which was much higher than any other income quintile.
  • The percent of people in deep poverty (i.e. their income is 50% of their poverty threshold) was 6.6%--although this is not a significant change from 2010, it is important to note that 6.6% is a substantial increase from the 1967 level of 4.4%.
  • Unemployment insurance benefits saved 2.3 million people (600,000 of whom were children under 18) from being poverty
  • Social Security income saved 21.4 million people (1.1 million of whom were children under 18) from being in poverty
  • Although the Supplemental Nutrition Assistance Program (SNAP—food stamps) and the Earned Income Tax Credit (EITC) are not counted in the poverty measure, if they were: SNAP would have decreased the poverty number by 3.9 million people (1.7 million of whom were children) and the EITC would decreased the poverty number by 5.7 million people (3.1 million of whom were children).
On health insurance:
  • In 2011, the percentage of people without health insurance decreased to 15.7% from 16.3% in 2010. The number of uninsured people decreased to 48.6 million, down from 50.0 million in 2010. This is the first time in four years that the number fell.
  • However, coverage levels remain below levels prior to the Great Recession. The percentage of people without coverage remains higher than in 2007, when 14.7% of the population was uninsured.
  • Among adults aged 19-25, in 2011 27.7% were uninsured as compared to 29.8% in 2010. This is a decrease of 2.2%. There was not a significant change in insurance coverage for children under 19.

The poverty data released today tells us the percentage and demographic information of people in the United States that live in poverty.  However, the numbers indicate something else too: the impact that public policies have on poverty.  Public investment in policies that create jobs and support families significantly impacts whether or not people experience poverty.  In an earlier post, the Center on Budget and Policy Priorities connected the numbers on health insurance to related federal policies. They found that the decrease in the percentage of uninsured young people aged 19-26 can be explained in part because of the new provision under the Affordable Care Act that allow adult children to obtain coverage from their parents’ health insurance plan up to their 26th birthday. Similarly, in a recent piece by Half in 10, they outline the impact of public policy choices on poverty, including information on the tax programs that were included in the Recovery Act. Furthermore, CBPP found that it is possible to reduce poverty while reducing the deficit, as the three largest three largest deficit-reduction packages of the last two decades achieved both by increasing the EITC (in 1990 and 1993), increasing SNAP (in 1993) and creating the Children’s Health Insurance Program (CHIP) (in 1997).

The Take-Home Message
While the official poverty rate did not change from last year, it is important to note that the data shows the wealth gap between rich and poor continues to increase, and the rate of people in deep poverty remains staggeringly high.

The Census data also showed a link between full time work and the leveling-off of the poverty level.  This has meaningful implications for policymakers. Continuing to focus on job creation will help to bring more people out of poverty and stable employment at a reasonable wage will ensure they stay there. However, the data also shows the immense value of safety net programs like SNAP, the EITC, unemployment insurance, and Social Security which are there to support those  who have a job but are still struggling to meet their basic needs, those who have lost their jobs and those who may be unable to work.

While budgets are tight and falling short, and while unemployment rates and poverty remain high, it is important for policymakers to continue to work on supporting the families in greatest need - all while considering the feasibility within the current economic climate. Understanding how communities are being most affected and why will help policymakers create safety-net programs that will meet family and community needs. Creating policy with a focus on results will help to do this in a way that also efficiently allocates scarce resources and improves the odds that problems will be addressed effectively.

To read CSSP's Statement on the New Poverty Data and Implications for Children and Families please click here.

More from our blog: a primer on poverty measurement and the Census instruments used.

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