Median household income was 8 percent lower last year than in 2007, and the poverty rate was two percentage points higher
The New York Times, September 16, 2014
WASHINGTON — The poverty rate declined last year for the first time since 2006, the Census Bureau reported on Tuesday. But at the same time, it said, there was no statistically significant change in the number of poor people or in income for the typical American household.
The report showed significant improvements for children. The poverty rate for children under 18 declined last year for the first time since 2000, the bureau said, and the number of children in poverty fell by 1.4 million, to 14.7 million.
Over all, the bureau said, 14.5 percent of Americans were living in poverty last year, down from 15 percent in 2012.
Charles T. Nelson, a Census Bureau official, said the decline in the poverty rate resulted partly from an increase in the number of people working full time year-round. In particular, he said, the numbers show an increase in employment and earnings for parents with dependent children.
The bureau estimated that 45.3 million people were living below the poverty level in 2013. This was not a statistically significant change from the estimate for 2012, the bureau said in its annual report on income and poverty.
Poverty thresholds vary with the size and composition of a family. A family of four was classified as poor if its income was less than $23,830 last year; for one person, the threshold was $11,890.
The official poverty levels are updated each year to reflect changes in the Consumer Price Index. The income figures do not reflect the value of noncash benefits like food stamps, Medicaid, Medicare and public housing. Nor do they include capital gains or the effects of taxes and tax credits.
The official poverty rate indicates the number of poor people as a share of the total population. The rate can decline without a significant change in the number of poor people if the total population has grown.
Census officials said that income inequality did not change in a statistically significant way from 2012 to 2013. However, they said, inequality has increased substantially in the last two decades, and the most common measure of household income inequality, known as the Gini index, is up 4.9 percent since 1993.
Median household income in the United States was $51,940 last year, the bureau said. This was not statistically different from median income in 2012, after adjustment for inflation. The number of households with income above the median is the same as the number below it.
Many households have not regained the purchasing power they had before the recession that began in December 2007. Median household income was 8 percent lower last year than in 2007, and the poverty rate was two percentage points higher.
“The typical family has still not seen its income recover from the deep recession, which came on top of a decade in which incomes stagnated for the middle class, itself part of a longer-term trend of increasing income inequality,” said Jason Furman, the chairman of President Obama’s Council of Economic Advisers.
The poverty rate is much lower than the 19 percent of 50 years ago, when President Lyndon B. Johnson declared “unconditional war on poverty.” But it is higher than it was in the 1970s, when the rate dropped as low as 11.1 percent.
“If this report tells us anything, it’s that we can do better,” said Representative Paul D. Ryan, Republican of Wisconsin and chairman of the House Budget Committee. “The status quo simply isn’t good enough.”
Senator Sherrod Brown, Democrat of Ohio, said congressional Republicans were partly responsible because, he said, they were “blocking legislation that would raise the minimum wage, ensure that women receive equal pay for equal work and help Americans repay college loans.”
One-fifth of all American households had incomes of $105,910 or more last year, the Census Bureau said, and the top 5 percent had incomes of $196,000 or more. But median household income was still 8.7 percent below its peak in 1999.
The Census Bureau adopted a new set of questions in an effort to measure health insurance coverage more accurately. Using the new method, the bureau estimated that 42 million people, accounting for 13.4 percent of the population, were uninsured for all of 2013.
These figures are not directly comparable with prior years’ data on health insurance, or with estimates in surveys by other federal agencies. The National Center for Health Statistics, for example, said the number of Americans without health insurance had declined substantially in the first quarter of this year, in part because of the expansion of coverage under the Affordable Care Act.
The center said that the number of uninsured Americans had fallen by about 8 percent, to 41 million people, in the first quarter of this year compared with 2013, a drop that represented about 3.8 million people.
The Census Bureau report was based on interviews with 68,000 households chosen to be representative of the country. It also included these findings:
■ The number of men working full time year-round increased by 1.8 million last year, and the number of women working full time throughout the year increased by one million.
■ Households headed by women with no husband present had less than half the income of married couples’ households: $35,150 versus $76,500.
■ For Hispanic households, median income increased 3.5 percent, to $40,960. This was the first increase for Hispanics since 2000. However, for non-Hispanic white, black and Asian households, income showed no significant change in 2013.
■ Among major racial and ethnic groups, only Hispanics experienced a significant change in their poverty rate (down two percentage points, to 23.5 percent last year). The number of Hispanics in poverty fell to 12.7 million, a reduction of 870,000.
■ Median income for households headed by noncitizens rose 6 percent last year, to $40,580. There was no significant change in income for households headed by United States citizens, whether native-born ($52,780) or naturalized ($54,970).
In addition, the bureau said, nearly 20 million people lived in families with incomes below half the poverty level. One-third of them were children.
Data in the report showed the powerful effects of government benefit programs. In the absence of Social Security, it said, the number of people 65 and older in poverty would have been nearly 15 million higher last year. If food stamps had been counted as income, 3.7 million fewer people would have been classified as poor.