August 27, 2008 in Business

Poverty rate holds steady in ’07

Census says number of uninsured declines
By RICARDO ALONSO-ZALDIVAR Associated Press
 

WASHINGTON – As housing markets started to stumble last year, the number of poor people rose by 816,000, with Latinos and children among the hardest hit.

That was not enough for Census Bureau statisticians to declare an official increase in the nation’s poverty rate, but it was a clear signal that the economy was slowing.

“A little more and you might have had (statistical) significance,” said David Johnson, head of the Census office that on Tuesday released 2007 figures for poverty, income and health insurance coverage.

The numbers represent a scorecard on President Bush’s stewardship of the economy at the kitchen-table level. But they only went as far as the end of last year, before the current downturn started gathering force. Although there were some bright spots, it was a mixed picture.

While the national poverty rate held steady at 12.5 percent, poverty rose among some groups. Latinos, children and the foreign-born – demographic categories that overlap considerably – experienced significant increases.

The number of people without health insurance fell by more than 1 million, to 45.7 million, the first annual decline since the Bush administration took office. But it was largely because more people were covered through government programs.

For the middle class, the median – or midpoint – household income rose to $50,233. It was the third consecutive annual increase, yet only a modest change of $665 from the previous year.

“The gains that occurred last year were welcome, but unfortunately they are too little, too late,” said Jared Bernstein, a senior economist with the liberal Economic Policy Institute in Washington. “The median household is no better off now than in 2000, despite their deep contribution to the nation’s economic growth during this period.”

For example, after adjusting for inflation, last year’s median household income of $50,233 was not significantly different from the figure for 2000, which was $50,557. “The American work force is baking a bigger economic pie, but the slices haven’t grown at all,” Bernstein said.

White House spokesman Tony Fratto said the household income and health insurance numbers are definitely good news.

“It’s clear that the long period of strong economic growth we were in had a positive impact for most Americans,” Fratto said. “Obviously, today we’re dealing with higher energy prices and the downturn in housing, but the economy is showing enough resilience to keep growing in spite of those challenges.”

Some analysts said that global trends, not just administration policies, are shaping the economic fortunes of individual Americans.

“Presidents like to take credit when things go well, and therefore they should get the blame when things don’t go well, but there are lots of things driving this, not all of which are homegrown,” said Douglas Besharov, an expert on poverty at the business-oriented American Enterprise Institute. “The oil shocks are not. And globalization, which on balance is good for the country, leaves winners and losers.”

The Census report was immediately swept up into presidential politics. Democratic presidential candidate Barack Obama’s campaign fired off a statement blasting what it called the “failed record” of Bush’s economic policies and promising “bottom up economic growth” if the Illinois senator is elected.

Republican candidate John McCain, meanwhile, distanced himself from the White House response. “Too many of our neighbors are living in poverty, too many can’t find a job and too many are living without health insurance,” he said in a statement. The Arizona senator pledged tax cuts and policy changes to make health care more affordable.

Overall, the Census reported 37.3 million people living in poverty in 2007, of which 13.3 million were children. The poverty level for a four-person family in 2007 was $21,203. Among age groups, seniors had the lowest poverty rate at 9.7 percent, while children had the highest at 18 percent.

The national poverty rate for 2006 had been 12.3 percent, but the change of two-tenths of a percentage point in 2007 was not statistically significant. For Latinos, however, whose poverty rate rose to 21.5 percent from 20.6 percent in 2006, it was a statistically significant increase.

The welcome news on health insurance coverage was tempered by the continued erosion of private coverage paid for by employers and individuals. Government programs – such as Medicaid for the poor – picked up the slack, resulting in the overall reduction in people without health insurance.

The uninsured rate also fell to 15.3 percent, down from 15.8 percent in 2006.

The Census report also underscored the growing role of women in the workplace, finding the gap between earnings of women and men has shrunk to an all-time low.

In 2007, women working full-time, year-round averaged 78 percent of what men earned. But the gender gap varied considerably depending on the industries and types of jobs involved. And the good news for women may not necessarily be a positive for family incomes. The Census found that a major reason the gap is shrinking is that men’s earnings have been fairly flat.

© Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


Thoughts and opinions on this story? Click here to comment >>

Get stories like this in a free daily email