Income, Poverty, and Health Insurance Coverage in the United States

Posted by on September 26, 2010

Number of Americans living in poverty at 50 year high: census

According to a new report from the US Census Bureau, last year’s 43.6 million poor people, including 15.5 million children, comprise the highest number of Americans living in poverty in the past 50 years.

http://www.census.gov/prod/2010pubs/p60-238.pdf

Overall, the number of Americans living in poverty increased by 3.7 million to 14.3 percent.  In Pennsylvania, over 1.37 million or 11.1% of people were living below the Federal Poverty Level.

According to the report, African Americans and Hispanics remain disproportionately poor, at shocking levels:  Blacks: 26%; Hispanics: 25%; Asians: 12.4%; Whites: 9.4%.  Black children: 35%; Hispanic children:33%; Asian children:13.3%; White children: 11.9%.

The report also noted that the number of children in poverty and the child poverty rate increased between 2008 and 2009. The number of children in poverty rose from 14.1 million to 15.5 million in 2009 and the child poverty rate increased from 19 percent to nearly 21 percent.

In 2009, a family of four including two children was considered to be living in poverty if their income was below $21,756. Despite the widespread use of the standard federal poverty level, many experts believe 200 percent of the federal poverty threshold is a better measure of economic hardship.  Under this criterion, 42.2 percent of U.S. children lived in “low income” households in 2009.

The number and percentage of children living in “deep” poverty (households with incomes below 50 percent of the federal poverty level) also increased (from 6.3 million to 6.9 million and from 8.5 percent to 9.3 percent in 2009, respectively.) Children made up more than a third (35.5 percent) of all people in poverty in 2009.  These numbers represent an increase again over 2007 data, which reported 13.3 million children, or 18 percent, living in poverty in the United States.

A substantial body of research links poverty with multiple negative outcomes for children. When compared with children from more affluent families, poor children are more likely to have low academic achievement, to drop out of school, and to have health, behavioral, and emotional problems. These linkages are particularly strong for children whose families experience deep poverty, who are poor during early childhood, and who are trapped in poverty for a long time.

http://www.childtrends.org/Files/Child_Trends-2009_04_07_RB_ChildreninPoverty.pdf

On the health care front, the ranks of the uninsured increased, except for children, due to the further erosion of employment-based coverage. Public health insurance programs, like Medicaid and the State Children’s Health Insurance Program, offset some of the decline in employer coverage but not enough to prevent growth in the uninsured rate.

Deborah Weinstein, executive director of the Coalition on Human Needs, called the report “nothing less than a national emergency.  The Great Recession’s severe joblessness has taken a toll on families, and will cause lasting harm to children and to our economic future if Congress does not act now to continue and expand successful anti-poverty aid.”

Despite these dire numbers, poverty did not increase as much as some had predicted in large part due to help from economic recovery measures.  This includes unemployment insurance and income from subsidized temporary jobs and cash assistance, all of which were expanded by the Obama Administration and Congress.  “Without these benefits poverty among families would have been even harsher,” noted Weinstein.

The Pennsylvania Budget and Policy Center said that the data indicate unemployment compensation for laid off workers saved 3.3 million Americans and as many as 120,000 Pennsylvanians from falling into poverty.

Carol Goertzel, President/CEO of PathWays PA, which publishes the Self-Sufficiency Standard for Pennsylvania 2010-2011, agreed that poverty is more severe than the Census Bureau numbers indicated.

“Although the numbers we are seeing today are startling, it is important to remember that the Federal Poverty Level is not the same as a measurement of all people who are struggling in the United States.  In fact, it is likely that far more people in Pennsylvania and in the US are struggling without enough to make ends meet.”

The FPL was created in 1965 based on a food budget for families to prevent starvation on a temporary or emergency basis. The food plan was modified for different family sizes and multiplied by three, since one-third of household income was spent on food. However, food now consumes a much smaller share of a family’s budget than it did in 1965.

The Self-Sufficiency Standard shows that increased housing costs, as well as child care and healthcare costs that were not part of a 1965 budget, have changed family spending to the point where three times the amount spent on food is not enough to cover all expenses. The Standard examines the cost of basic necessities including food, transportation, healthcare, childcare, and housing in every county in Pennsylvania for 70 different family configurations. For example, a self-sufficient wage for a family with two adults and two children in Delaware County is $67,238, which is 305% of the Federal Poverty Level.

The Pennsylvania Budget and Policy Center has prepared a fact sheet on the Census Bureau data that can be downloaded here.

http://www.pennbpc.org/sites/pennbpc.org/files/Poverty-Day-2010-fact-sheet.pdf