Thursday, August 30, 2007
Editorial: Poverty by the numbers
News of a decline in poverty sounds good, but the government's latest figures show too few economic gains for ordinary Americans.
From the RoundTable blog
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Behind the overall decline in the nation's poverty rate from 2005 to 2006 are mainly grim numbers for middle- and working-class Americans.
Grimmest of all in a U.S. Census report released this week is the downward trend of the percentage of Americans with health care insurance -- damning evidence that voters need to push universal coverage to the top of the domestic agenda.
Another 2.2 million Americans were without health insurance last year, bringing the number to a record 47 million people, or 15.8 percent of the population.
The reason for the continuing erosion? Mainly the decline in employer-sponsored health insurance. More and more businesses are deciding they can't afford health benefits as health costs soar. And more and more families are finding they can't afford the benefits when they are offered as companies shift a greater portion of the cost onto workers.
This is a trend that shows no sign of reversing. It's not likely to in a global economy where American businesses are expected to provide an essential human service that governments pay for in other industrialized nations.
Of the 2.2 million newly uninsured Americans last year, 1.4 million had household incomes of $75,000 or higher. So health care insecurity is spreading through the middle class and putting its economic security at risk. Without insurance coverage, a family experiencing just one major accident or illness can face financial ruin.
That brings us to the poverty rate, which dipped last year, a decline driven by a lower rate among people older than 65. The poverty rate among children and adults 18 to 24 was just as high in 2006 as it was the year before.
Still, the nation's median household income rose in 2006 for the second year in a row, and the poorest households had the largest percentage gain in income last year over the year before -- good news in both cases.
It's blunted by the fact, though, that individual earnings actually fell by more than 1 percent. The higher median household income came from more people per household taking full-time jobs, not from pay gains -- or even stability.
Republicans argue the Bush administration's huge tax cuts for the wealthiest Americans have fueled the investment that has created the jobs: a win-win. After all, people should expect to work their way out of poverty.
While wage earners are working more, though, they are making less for every hour they work.
Ah, but White House spokesman Tony Fratto can explain: "Our economy was in very bad shape for a significant period of time," he said after release of the report, "and when that happens, you are going to see incomes fall."
Well, not all incomes. Earnings in the top 5 percent of households were higher in 2006 than in 2000, a gain not shared by the rest of the country since the 2000-01 recession.
The median household income, meanwhile, remained lower last year than in 1999. Similarly, the slight drop in the poverty rate last year, to 12.3 percent, doesn't match the low of 11.3 percent in 2000 during the Clinton administration.
Americans haven't shared equally in the pain or the gains of the Bush years.
