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Income, Poverty, and Healthcare 2012: The Patient Did Not Get Worse But Remains Seriously Ill

The Census Report “Income, Poverty, and Healthcare” covering the year 2012 came out on Tuesday. Overall, the picture was little changed from 2011, which is to say that the recovery which did not happen for most Americans in 2011 continued not to happen for them in 2012. The situation for women remained poor. (All amounts are expressed in 2012 dollars. Incomes and earnings are pre-tax.)

Income

After four years of declines, median household income was statistically unchanged in 2012, decreasing from $51,100 in 2011 to $51,017. A comparison of real household income over the past five years showed an 8.3 percent decline since 2007, the year before the nation entered an economic recession, and a 9.0 percent decrease from the 1999 peak of $56,080. The first time median real household income hit current levels was in 1989 ($51,681). If we take into account higher debt levels, it could be argued that overall we are worse off than we were 23 years ago.
Additionally, mean or average household income was $71,274 in 2012. This is an indication of the degree to which income is skewed to the upper brackets.
This becomes clear if we look at the shares of aggregate income by quintile and top 5%:

Shares of Aggregate Income (%)

The top 5% has almost as much aggregate income (22.3%) as the bottom 60% (25.9%). The top 20% has slightly more aggregate income than the bottom 80% combined.

We see a similar distribution looking at household income by selected percentiles. The black line is the 50th percentile or median. Those in the 60th percentile (purple line) and below have had very small to small increases in real household income over the last 45 years. While most groups experienced gains in the 1980s and 1990s, these were concentrated in the 80th percentile and above. Since 2001, all groups plateaued with some dropoff after the start of the 2007 recession. The difference is that in the lower percentiles most of the gains were lost whereas in the upper percentiles, especially the 90th percentile and above, the losses were minor and almost all of the overall gains were retained.

By race, real median income in 2012 was $68,636 for Asians, $57,009 for whites, $39,005 for Hispanics, and $33,321 for African Americans.

As the graph shows, the income of African Americans has been hardest hit of any group in the last dozen years. In 2000, the median household income of whites was $60,831. White household income has declined $3,822 since then. This represents a 6.3% loss. In 2000, African American median household income was $39,556. In 2012, it was $33,321 a decline of $6,235. In absolute terms, this is a loss 1.6 times that of whites. As a percent of their income, it is greater still: 15.8%, or about 2 1/2 times the hit whites took over the same period. To be blunt, neither Bush nor more importantly Obama have done anything for African Americans in the last 12 years.

Looking at the composition of households, real median incomes for family households ($64,053) and nonfamily households ($30,880) were not statistically different from the levels in 2011. Married couple households had the highest median income ($75,694), and those with women with no husband present had the lowest ($34,002). This last figure is important. A theme in this report is the poor status of women.

By sex, the median earnings of women who worked full time, year-round was $37,791, and $49,398 for men. That is the median earnings of women working full time was 76.5% that of men. As the chart below shows, the ratio of women’s earnings to men’s has been stagnant since 2001 (76.3%). While much heralded as a major legislative success and one of his few “progressive” accomplishments, Obama’s Lilly Ledbetter Act has had no effect on the ground.

Poverty

46.496 million Americans or 15% of the population lived in poverty. This was up 249,000 from 2011, but not a statistically significant change. 12.7% of whites, 11.7% of Asians, 27.2% of African Americans, and 25.6% of Hispanics had incomes below the poverty line. And as the Census notes, that line should be considered more a “statistical yardstick” whatever that might mean rather than a “complete description of what people and families need to live.”

This is clear from looking at the poverty threshold of a single person living alone ($11,945), a one parent, two children family ($18,498), or a two adult, two children family ($23,283).
A perhaps more realistic measure of poverty would be to look at those making less than twice the current poverty levels. If we did, this would comprise 106.376 million Americans (34.2% of the population). Of these, 57.532 million would be women and 48.844 million would be men.

Of these, 50.445 million would be white (25.9%), 20.243 million would be African American (50.5%), and 29.019 million would be Hispanic (54.6%). This illustrates the fact that while there are as many whites at or near poverty (as officially defined) as African Americans and Hispanics combined, in terms of percentages, African Americans and Hispanics are twice as likely to fall into this marginal group.

Looked at this way with these numbers and these percentages, we begin to see the America that we all know and experience everyday. Like so many problems in our country, poverty is understated, and those in government whose job it is to address this issue have a vested interest in understating it as much as possible.

While not a statistically significant change, the number of children (under 18) declined in 2012 by 61,000 to 16.073 million (21.8%). No statistical change was seen in the 18 to 64 age group: 26.497 million (13.7%). The only group experiencing a statistically significant change was in those over 65, increasing 306,000 to 3.926 million (going from 8.7% to 9.1%). Of those over 65 and in poverty, 11% are women and 6.6% are men.

Overall, this is opposite to the trend begun in the 2007 recession where poverty increased in those under 65 even as it decreased slightly in those over 65.

Figures for families were similar to the previous year. 9.520 million (11.8%) families were defined to be in poverty in 2012. Married-couple families had the lowest poverty rate 6.3%. This is still higher than the pre-recession 2007 4.9% rate (4.7% in 2000). The poverty rate for male householder, no wife present, families increased from 16.1% to 16.4% (1.023 million). The rate for this group was 11.3% in 2000. The poverty rate for female householder, no husband present was 30.9% (4.793 million), down from 31.2% in 2011 and 31.7% in 2010. The low for this group was also in 2000 (25.4%). It says something about the status of women in this country that the poverty rate for single mothers is nearly twice that of single fathers and five times that of married couples.

Regionally, the poverty rate decreased 0.5% in the Midwest to 13.3% and in the West 0.7% to 15.1%. It increased 0.5% in both the Northeast (13.6%) and in the South (16.5%). Changes in the Midwest and Northeast were not considered statistically significant. The South has the greatest number of poor 19.106 million followed by the West 11.049 million. The Midwest has 8.851 million and the Northeast 7.490 million.

19.934 million of the poor live in cities and comprise 19.7% of this population. 18.099 million live in the suburbs and account for 11.2 % of this population. 8.463 million of the poor live in rural areas and are 17.7% of this population.

One final note from the report:

“Shared households are defined as households that include at least one “additional” adult: a person 18 or older who is not enrolled in school and is not the householder, spouse or cohabiting partner of the householder.
In spring 2013, 10.1 million young adults age 25-34 (24.1 percent) were additional adults in someone else’s household. Neither of these were statistically different from 2012.
It is difficult to precisely assess the impact of household sharing on overall poverty rates. Young adults age 25-34, living with their parents, had an official poverty rate of 9.7 percent, but if their poverty status were determined using only their own income, 43.3 percent had an income below the poverty threshold for a single person under age 65.”

Health Insurance Coverage

In 2012, the number of Americans with health insurance increased to 263.2 million (84.6%) up from 260.2 million (84.3%) in 2011. This says nothing about the quality of that insurance. The number of Americans without healthcare insurance decreased from 48.613 million (15.7%) in 2011 to 47.951 million in 2012 (15.4%). (It was 13.1% in 2000.) The change in the number of uninsured was not statistically significant while the percent change was.
Much of the increase among the insured appears to have been a baby boomer effect. Those on Medicare as a percent of the insured rose from 15.2% to 15.7%. As the report notes, the number of Americans on Medicaid surpassed those on Medicare in 2009. In 2012, there were 50.903 million Americans on Medicaid and 48.884 million on Medicare. In 2012, there were 101.493 million on some kind of government healthcare insurance (Medicaid, Medicare, military) and 198.812 million on some form of private insurance.

Only 1.5% of those over 65 are uninsured. If we look at other age groups, we can surmise that those under 19 probably are covered by their parents’ insurance or Medicaid. Those 19 to 25 were in the highest group but their numbers have declined to the same level as the next highest group. This may, in part, be a beneficial effect of Obamacare, allowing young adults to stay on their parents’ insurance coverage longer.

Those on a private insurance plan sometime in 2012 accounted for 63.9% of the insured while those who were only on a private plan were 52.0%, both the same as in 2011. Those on an employment-based plan were 54.9%, down a statistically not significant 0.2% from 2011. These numbers do not sum to the 263.2 million of the insured because people can be on more than one kind of insurance during the year.

By race, 21.585 million whites (11.1%) were uninsured, 15.500 million Hispanics (29.1%), 7.629 million African Americans (19.0%), and 2.477 million Asians (15.1%). The undocumented may explain why Hispanics are so far out of range with other groups. All groups experienced decreases in the percentage of uninsured, but only those for Asians (-1.7%) and Hispanics (-1.0%) were statistically significant.

Regionally, the South continued to lead in the number (21.587 million) and the percent (18.6%) of uninsured, followed by the West 12.488 million (17.0%), the Midwest 7.937 million (11.9%), and the Northeast 5.939 million (10.8%). The declines in the Midwest (-0.8%), the West (-1.0%). The 0.2% decrease in the Northeast and the 0.3% increase in the South were not considered significant.

18.836 million in cities (18.6%), 21.859 million (13.5%) in the suburbs, and 7.256 million rural (15.2%) were uninsured. While all these groups saw declines, none were significant. Combining city and suburbs did result in a significant 0.3% decline to 15.5%.

With regard to children (those under 18), 6.586 million (8.9%) were uninsured in 2012, down from 6.964 million (9.4%) in 2011.
The following chart neatly encapsulates the parameters of uninsured children.

That children in poverty are more likely to be uninsured is unsurprising. That the difference between uninsured children in and not in poverty is only 5.2% is more so. This may be because, as I pointed out above, the parameters the Census is using to define poverty are too restrictive. As we see, as household income rises, the rate of uninsured children declines. Also as we would expect, thanks to our healthcare and immigration policies, Hispanic children are more than twice as likely to be uninsured as white children, and relatedly, children of noncitizens are more than three times as likely to be uninsured as native born children.

Conclusion

2012 saw marginal improvements in some areas, some significant, some not, in what remains an overall bad economic picture. In category after category, the situation compares poorly not just to pre-recession 2007, but to pre-2001 recession 2000, and in the case of household income to pre-1990 recession 1989. We are not back to where we were ten and twenty years ago, let alone where we should be. There is drift but no progress. Inequality remains stifling. Poverty is undermeasured as is healthcare. Obamacare will likely affect the numbers on healthcare in a major way, although we will not begin to see its effects until the 2014 report when it comes out in two years in September 2015. But will it affect the reality?

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jo6pac's picture
Submitted by jo6pac on

normal pass a bill but don't tell doj to do their job. No teeth.

The good news is almost all of Main Street will qualify for SNAP unless repugs get their way.

Yep, we now live in the new Amerika of hurry and die poor people.