STILL A STRUGGLE SEPTEMBER 17, 2013
The Census Bureau has released its annual report on income, poverty and health insurance. The report is a bit like a national report card, showing us how well the U.S. provides for the economic security of its citizens. And the grades aren't very impressive, although they are better than they’ve been in the recent past.
Here’s what we know, subject to revision as real experts (i.e., not me) have more time to analyze the data:
Median income isn’t statistically different than it was last year. Neither is the poverty rate. And that’s progress of a sort. It’s the first time in five years that incomes haven’t fallen and poverty hasn’t risen—a sign, in other words, that an economic recovery is underway.
But it’s a slow, uneven recovery. The poverty rate is still a lot higher than it was before the recession. And while the poverty rate itself isn’t necessarily the most accurate measure anymore, the income data, in particular, suggests that poor and middle-income Americans are still struggling, even as the wealthy regain the ground they lost in the recession. This trend has been going on for a long time: According to Larry Mishel, from the Economic Policy Institute, median income for non-elderly households, adjusted for inflation, fell by 11.6 pecent between 2000 and 2012. But there are few signs that it is abating and some experts wonder whether this is becoming some kind of new normal.
Here's what Luke Shaefer, a poverty researcher at the University of Michigan, told me via email:
You might have thought with the annual unemployment rate falling ... that poverty might budge, if just a little—and perhaps median income might go up some this year. But instead we are just holding steady... Makes you wonder how long it's going to be before we can get back to even mid 2000 levels.
The sad part, as Timothy Noah argues at MSBNC, is that "there’s quite a lot America can do to reverse growing income inequality." (Tim's book, The Great Divergence, has a few ideas along those lines.) It hasn't happened on Obama's watch, but that's largely because the policies he enacted merely slowed down the deterioration—and Republicans refuse to join him in doing what it would take to actually stop and reverse it. Instead, they continue to call for immediate cuts to domestic spending, including steep reductions in safety net programs like food stamps and Medicaid. That would further undermine economic security for low-income and some middle-income Americans, while making inequality even worse.
More encouraging was the news on health insurance. The proportion of people without health insurance declined once again, from 15.7 percent to 15.4 percent. That’s the second consecutive year that the rate has fallen and the most likely reason for this year's decline seems to be an increase in Medicare enrollment: In other words, more baby-boomers are reaching retirement age. But it's also the second year in a row that the rate of uninsurance among young adults, under 26, is the same for those between 26 and 35. That's a marked change from the past and it reflects the lasting influence of Obamacare, which allows people under 26 to enroll on their parents’ insurance plans if they have no alternative source of coverage.
This added coverage has come at a price, as it always does. Employers have cited the higher costs of covering young adults as one reason to cut elsewhere—by, for example, withdrawing coverage for spouses who can get their own insurance. But it’s a minor cost, by most reckonings. And that’s what Obamacare is all about: Accepting some modest trade-offs so that most Americans can get the health care they need, without risk of financial ruin.
Jonathan Cohn is a senior editor at the New Republic. Follow him on twitter @CitizenCohn