Latest Census Bureau Report on Poverty, Income and Health Insurance in the US-(2008) Released 9/10/09

INCOME, POVERTY AND HEALTH INSURANCE
COVERAGE IN THE UNITED STATES: 2008

The U.S. Census Bureau announced today that real median household income in the United States fell 3.6 percent between 2007 and 2008, from $52,163 to $50,303. This breaks a string of three years of annual income increases and coincides with the recession that started in December 2007.

The nation’s official poverty rate in 2008 was 13.2 percent, up from 12.5 percent in 2007. There were 39.8 million people in poverty in 2008, up from 37.3 million in 2007.

Meanwhile, the number of people without health insurance coverage rose from 45.7 million in 2007 to 46.3 million in 2008, while the percentage remained unchanged at 15.4 percent.

These findings are contained in the report Income, Poverty, and Health Insurance Coverage in the United States: 2008. The following results for the nation were compiled from information collected in the 2009 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC):

Income

Race and Hispanic Origin (Race data refer to people reporting a single race only. Hispanics can be of any race.)

• Between 2007 and 2008, the real median income of non-Hispanic white households declined 2.6 percent (to $55,530); for blacks, it declined 2.8 percent (to $34,218); for Asians, it declined 4.4 percent (to $65,637); and for Hispanics, it declined 5.6 percent (to $37,913). Except for the difference between the declines for non-Hispanic white and Hispanic households, all other differences between the declines were not statistically significant.

Regions

• Between 2007 and 2008, real median household income declined in the South by 4.9 percent (to $45,590), declined in the Midwest by 4.0 percent (to $50,112) and declined in the West by 2.0 percent (to $55,085). Income in the Northeast was statistically unchanged ($54,346). The apparent differences in the declines in median household income between the South and Midwest, and the Midwest and West were not statistically significant. The apparent difference between the median household incomes for the West and Northeast was not statistically significant.

Nativity

• Native- and foreign-born households, including those maintained by a naturalized citizen, had declines in real median income between 2007 and 2008. Income was statistically unchanged for households maintained by a noncitizen. The decline for native-born households was 3.5 percent; the decline for foreign-born households was 5.3 percent; and the decline for those maintained by a naturalized citizen was 4.8 percent. The apparent differences among the declines in median income for native-born, foreign-born and naturalized citizen households were not statistically significant.

Earnings

• In 2008, the earnings of women who worked full time, year-round was 77 percent of that for corresponding men, not statistically different from the 2007 ratio.
• The real median earnings of men who worked full time, year-round declined by 1.0 percent between 2007 and 2008, from $46,846 to $46,367. For women, the corresponding drop was 1.9 percent, from $36,451 to $35,745.

Income Inequality

• Income inequality was statistically unchanged between 2007 and 2008, as measured by shares of aggregate household income by quintiles and the Gini index. The Gini index was 0.466 in 2008. (The Gini index is a measure of household income inequality; 0 represents perfect income equality and 1 perfect inequality.)

Poverty

Overview

• The increase in the poverty rate between 2007 and 2008 was the first statistically significant annual increase since 2004. The 2008 poverty rate (13.2 percent) was the highest since 1997.
• In 2008, the family poverty rate and the number of families in poverty were 10.3 percent and 8.1 million, respectively, up from 9.8 percent and 7.6 million in 2007.
• For married-couple families, both the poverty rate and the number in poverty increased — 5.5 percent (3.3 million) in 2008, up from 4.9 percent (2.8 million) in 2007. Both measures, however, showed no statistical change in 2008 for female-householder-with-no-husband-present families (28.7 percent and 4.2 million) and for male-householder-no wife-present families (13.8 percent and 723,000).

Thresholds

• As defined by the Office of Management and Budget and updated for inflation using the Consumer Price Index, the weighted average poverty threshold for a family of four in 2008 was $22,025; for a family of three, $17,163; for a family of two, $14,051; and for unrelated individuals, $10,991.

Race and Hispanic Origin (Race data refer to people reporting a single race only. Hispanics can be of any race.)

• In 2008, the poverty rate increased for non-Hispanic whites (8.6 percent in 2008, up from 8.2 percent in 2007), Asians (11.8 percent in 2008, up from 10.2 percent in 2007) and Hispanics (23.2 percent in 2008, up from 21.5 percent in 2007). The poverty rate in 2008 was statistically unchanged for blacks (24.7 percent).

Age

• The poverty rate increased for children younger than 18 (19.0 percent in 2008, up from 18.0 percent in 2007) and people 18 to 64 (11.7 percent in 2008, up from 10.9 percent in 2007), while it remained statistically unchanged for people 65 and older (9.7 percent).
• Similar to the patterns observed for the poverty rate in 2008, the number of people in poverty increased for children younger than 18 (14.1 million in 2008, up from 13.3 million in 2007) and people 18 to 64 (22.1 million in 2008, up from 20.4 million in 2007) but remained statistically unchanged for seniors 65 and older (3.7 million).

Nativity

• Among the native-born population, 12.6 percent (33.3 million) were in poverty in 2008, up from 11.9 percent (31.1 million) in 2007.
• Among the foreign-born population, the poverty rate and the number in poverty increased to 17.8 percent and 6.5 million in 2008, up from 16.5 percent and 6.2 million, respectively, in 2007. The poverty rate in 2008 for naturalized citizens, 10.2 percent, was statistically unchanged from 2007, while the poverty rate for those who were not U.S. citizens rose to 23.3 percent in 2008, up from 21.3 percent in 2007.

Regions

• The Midwest and West experienced increases in both their poverty rate and the number in poverty. The Midwest poverty rate increased to 12.4 percent (8.1 million) in 2008, up from 11.1 percent (7.2 million) in 2007, and the West poverty rate increased to 13.5 percent (9.6 million) in 2008, up from 12.0 percent (8.4 million) in 2007. The poverty rates for the Northeast (11.6 percent) and the South (14.3 percent) were both statistically unchanged.

Health Insurance Coverage

Overview

• The number of people with health insurance increased from 253.4 million in 2007 to 255.1 million in 2008.
• The number of people without health insurance coverage rose from 45.7 million in 2007 to 46.3 million in 2008.
• Between 2007 and 2008, the number of people covered by private health insurance decreased from 202.0 million to 201.0 million, while the number covered by government health insurance climbed from 83.0 million to 87.4 million. The number covered by employment-based health insurance declined from 177.4 million to 176.3 million.
• The number of uninsured children declined from 8.1 million (11.0 percent) in 2007 to 7.3 million (9.9 percent) in 2008. Both the uninsured rate and number of uninsured children are the lowest since 1987, the first year that comparable health insurance data were collected.
• Although the uninsured rate for children in poverty declined from 17.6 percent in 2007 to 15.7 percent in 2008, children in poverty were more likely to be uninsured than all children.

Race and Hispanic Origin (Race data refer to those reporting a single race only. Hispanics can be of any race.)

• The uninsured rate and number of uninsured for non-Hispanic whites increased in 2008 to 10.8 percent and 21.3 million, from 10.4 percent and 20.5 million in 2007. The uninsured rate and number of uninsured for blacks in 2008, meanwhile, were not statistically different from 2007, at 19.1 percent and 7.3 million. The uninsured rate for Asians in 2008 rose to 17.6 percent, up from 16.8 percent.
• The percentage of uninsured Hispanics decreased to 30.7 percent in 2008, from 32.1 percent in 2007. The number of uninsured Hispanics was not statistically different in 2008, at 14.6 million.
• Based on a three-year average (2006-2008), 31.7 percent of people who reported American Indian and Alaska Native as their race were without coverage. The three-year average uninsured rate for Native Hawaiians and Other Pacific Islanders was 18.5 percent.

Nativity

• The uninsured rates for the native-born and foreign-born populations were statistically unchanged at 12.9 percent and 33.5 percent, respectively, in 2008. Among the foreign-born population, the uninsured rates for both naturalized citizens (18.0 percent) and noncitizens (44.7 percent) were statistically unchanged.

Regions

• At 11.6 percent, the Northeast and the Midwest had lower uninsured rates in 2008 than the West (17.4 percent) and the South (18.2 percent). The 2008 rates for the Northeast, Midwest and South were not statistically different from their respective 2007 rates. The uninsured rate for the West increased to 17.4 percent in 2008, up from 16.9 percent in 2007.

The CPS ASEC is subject to sampling and nonsampling errors. All comparisons made in the report have been tested and found to be statistically significant at the 90 percent confidence level, unless otherwise noted.

For additional information on the source of the data and accuracy of the estimates for the CPS, visit <http://www.census.gov/hhes/www/p60_236sa.pdf>

Burning Bridges?

I've been thinking about Ruby Payne and her Bridges Out of Poverty program. Payne has developed a sort of manual for bootstrapping the poor. Essentially, she views poverty as a culturally-transmitted illness and has produced what social workers call a "manualized intervention," a sort of curriculum for acculturating poor people to middle class norms.
This is a particularly interesting time to consider cultural arguments about poverty, since many formerly middle class individuals and families have become the new poor. Of course, Payne might say, this will be temporary rather than generational poverty. The latter, she warns, is the especially egregious form of poverty that is rooted in and reproduces cultural deficiencies.
We don't yet know what effects the current recession will have on the structure of poverty, but we can make some guesses. Older workers who have been laid off and have lost their assets may stay poor, but their children would already have been acculturated to middle class norms, so no worries there.
Younger workers, especially those for whom their house was their chief asset, may be trapped in a lengthier episode of poverty, since their access to credit will be compromised for many years. Their children, who were formerly middle class but are now sleeping on a relative's sofa or in a homeless shelter might, in Ruby's world, be harmed by their contact with the deviant generational poor. A Bridges Out of Poverty coloring book might be useful for the younger children in these families, and might provide an additional revenue stream for Payne's growing list of enterprises.
I am not entirely unsympathetic to Payne's argument. I grew up in a neighborhood and in a home where the culture reproduced many of the negative behaviors that concern Payne. Substance abuse and violence were endemic. The woman three streets over drowned her baby while drunk and her husband subsequently commited suicide, one of many substance-related suicides and suicide attempts in the neighborhood. These dysfunctional episodes were common knowledge among the neighborhood children, who learned that some houses- and some parents- were not at all safe.
The police were called frequently. My stepfather, for example, had a habit of firing his rifle at neighboring homes when he had had one too many. Often the police arrived when a family dispute escalated into violence.
Fathers came and went. I saw mine maybe once a year, and the encounters were disastrous. The majority of adults had, at best, a weak attachment to the world of employment. In my own family, for instance, neither of my maternal my grandparents had never worked and my father and stepfather worked only sporadically, quitting whenever the job got to be too much of a hassle. This was a common pattern in the neighborhood.
Bridges Out of Poverty would have been just the thing, encouraging everyone to sober up, go to work, and learn to be "middle-class". Except that virtually everyone in the neighborhood was already rich. I grew up in a lakeside suburb where people didn't work because they didn't have to- they had trust funds. We all lived on transfer payments, but the transfers came from private rather than from public trusts. As my grandfather used to say "if you have to work, it means you're poor."
When the police came to our neighborhood, they were respectful. All the perpetrators had lawyers on retainer and some of them had law degrees. No one ever got arrested.
And everyone had great educations, which they put to little or no use. Taking account of my various parents and stepparents, none of whom ever worked steadily, unemployed members of my family had degrees from Brown, Bryn Mawr, Princeton, Wellesley and Stanford. It was the same thing for most of the neighbors- the Wharton School, Harvard, Lehigh, Bucknell and so on.
What does all this say about Ruby Payne? Well, she could learn something from the apocryphal exchange between Scott Fitzgerald and Ernest Hemingway. When the former said "the rich are very different from you and I," the latter said "yes, they have more money."
The differences between those at the bottom and those in the middle or at the top are not cultural. They are structural.

The Policy Panopticon

Jeremy Bentham, the 19th century utilitarian philosopher, developed a plan for the ultimate prison. Called the panopticon, it worked on a simple principle: the prisoner would constantly be under surveillance by his jailers. No aspect of his life would be free from scrutiny. His acts and omissions would be entirely visible to all.
The modern state puts us all in something of a panopticon- credit reporting agencies, insurers, employers and various branches of government "see" deeply into the minutia of all our lives. Visibility is an exchange: we submit because we want what these observers have to offer.
But those of us who who have marketable skills and accumulated assets are in a position to manipulate our terms of trade and gain some shelter from prying eyes. We can change insurers, we can change jobs, we can use our skills or hire advocates to help us manage our relationship with bureaucracies. We have some ability to limit our visibility.
Those at the bottom of the income ladder, however, do not have these options. Minimum wage workers, the unemployed and the disabled may require public subsidies to meet basic needs in every aspect of their lives. Their ability to purchase food, to obtain medical care, to obtain safe, affordable housing all depend on public subsidies, and these subsidy programs each regulate and review almost every aspect of an applicant's life.
An application for food stamps, for instance, requires as much information as a mortgage application: Vehicle titles and license numbers, proof of earned and unearned income, retirement accounts, proof of all property owned, proof of possible future income, employment information, birth certificates, social security numbers...the list goes on. And the food stamp recertification process typically requires this information to be produced at least twice a year, more frequently when circumstances change.
Subsidized housing programs require all this information and more. Criminal histories are required for these programs, along with landlord references from previous tenancies. The criminal histories of family members-even those who do not reside with the tenant can be a reason to deny public housing: if your Uncle Joe, who was once arrested for drug abuse, is a frequent visitor, you can be evicted. Frequently, credit checks are also used to select tenants in subsidized housing programs. And here, too, re-certification occurs at least yearly and more often if circumstances change.
The justification for this surveillance and regulation is the principle of "least eligibility," inherited from the Elizabethan poor law. The major problem in providing assistance, this logic goes, is that of separating the worthy from the unworthy poor. Intensive certification works on the principle that applicants are unworthy until they prove otherwise.
In Bentham's scheme, individuals were consigned to the panopticon because they had committed a crime. The social policy panopticon works on the same principle, but here, the crime is that of poverty.

Cash for Clunkers: Driving Poor People Closer to the Edge

Cash for clunkers seems like a no-lose proposition. Help the environment, stimulate the economy, save jobs. This is no zero-sum game- everyone wins, right?
Well, maybe not everyone. Probabilistically speaking, what population groups are most likely to drive clunkers? Low-income people drive what they can afford, and what they can afford are often clunkers that they can buy for cash. Would they prefer to drive snappy, fuel-efficient vehicles? Mostly they would, if they could afford them. Newer cars raise the costs of driving and operating motor vehicles in ways that are especially problematic for people at the bottom of the income scale.
First, there is the issue of credit. Individuals with higher debt-to-income ratios, lower incomes, and difficult credit histories are less likely to be able to obtain financing, and will pay much higher interest rates if they are approved at all. Secondly, there is the issue of insurance. Cars financed on credit require full coverage- poor people with paid-off clunkers typically choose the minimal coverage that they can afford.
And, for low-income individuals who manage to get through this obstacle course, a final set of problems will show up when the warranty expires. Newer cars are full of bells and whistles: helpful Uncle John probably can't fix them in his garage.
So what if you can't afford to take advantage of cash for clunkers and have instead to buy a clunker to take you to your minimum-wage job? Now, the law of supply and demand becomes your problem. What happens to the clunkers that are traded in? They are crushed and sold for scrap. As the supply of clunkers diminishes, their price will rise.
The end result? More cash for those with credit good enough to take advantage of another government subsidy for the middle- and upper-classes. And, for the poor- less cash, and more expensive clunkers.