Each September, members of the policy and advocacy communities anxiously wait for the U.S. Census Bureau to release data on poverty, incomes, and health insurance from the previous year. This year was no different. The new numbers released this week show not much has changed from the previous year: average income currently at $51,017, did not rise, and poverty, currently at about 15%, did not fall. Those Americans without health insurance dropped to 15.4% in 2012 from 15.7% the previous year. For all the talk of an improving economy, decreasing rates of unemployment, and a return to profit on Wall Street, this comes as disappointing news.
The impact of the economy bottoming out in 2008 is still being felt by millions of Americans. Whatever income gains have occurred since the official end of the recession has only been felt by the most highly educated and wealthy Americans. The top 5% of income earners—households making more than $191,000 a year—earned as much in 2012 as they did before the recession started. For most others, income levels are significantly lower now than the period before the recession.
The Census data does not take into account government transfer programs like housing subsidies, food stamps, Medicaid, tax credits, etc. In a thoughtful opinion piece, Sheldon Danziger, the new president at Russell Sage Foundation, a social science research center down the street from Hunter, argues that Census numbers are misleading. If welfare programs were taken into account, poverty numbers would probably be lower, closer to 11%. Food stamps programs lift 4 million people above the established poverty line while earned-income tax credits have been found to reduce poverty levels by about 5.5 million people. Unemployment insurance, which was expanded in response to the recession, kept 1.7 million people out of poverty last year. Social security benefits used by senior Americans are counted as income in Census reports. Without Social Security, poverty rates would be worse —44% for seniors instead of the current rate of less than 9%.
There’s a clear conclusion to draw from these latest Census numbers. Safety net programs work. They go a long way to help the most vulnerable of Americans—children and senior citizens. Yet, food stamps programs are caught in Washington gridlock. Some benefits expire in November that would affect nearly 2 million New Yorkers; there is a proposal to cut $40 billion more over the next 10 years. Poverty rates might look dramatically different a year from now.
Tell us your thoughts on creating pathways out of poverty. What are some sensible policy solutions to create livable wage jobs, and help America’s poorest families see an improvement in the quality of their lives?
Wishing you a peaceful week.
Shyama
