Income and Poverty in the US

The Census Bureau has just released its annual estimates of poverty, income, and health insurance coverage for the US in 2003. Some of the highlights:

• Real median household income fell by .1%, from $43,381 to $43,318 between 2002 and 2003. By contrast, in 2000, real median household income was $44,853. Real household income has therefore fallen about 3.5% since 2000. (Note that these are all pre-tax figures of household money income only. Income received in kind, such as health insurance or retirement benefits, non-cash government transfer payments, etc. are not included in these figures.)
  
  
• The rich got richer, the lower and middle class got poorer. The bottom 60% of US families by income saw their average income fall by about .7%, while the top 40% of households saw their average income rise by about .3% between 2002 and 2003.
  
  
• The number of people living in poverty rose by 1.3 million, to 35.9 million. This compares to a low of about 31 million people in the US living in poverty in 2000. The percent of the US population living in poverty increased from 12.1% to 12.5%.
  
  
• States with declining real household income between 2001 and 2003 are AR, AZ, NC, KY, IL, PA, MA, and TX. Note that the first three of these states were supposed to be solid Bush territory but are places where Kerry is doing surprisingly well, while PA was supposed to be a swing state, but seems to be fairly solidly in the Kerry camp at this point.

The report also gives us some data regarding health insurance coverage in the US:

• The US population grew by about 2.4 million between 2002 and 2003, while the number of people without health insurance grew by about 1.4 million. The percent of the US population that lacked health insurance therefore rose from about 15.2% to 15.6% between 2002 and 2003.
  
  
• The percent of the US population that received health insurance through their job fell from 61.3% to 60.4%.

Nothing in this report is particularly surprising, but it does put some concrete numbers on the worsening plight of the economically disadvantaged in the US during the past 3 years. Such deterioration in the situation of the nation’s poorest households is normal during periods of slow economic growth. That's why this data reinforces the point that sitting around and just waiting for the economy to improve imposes serious, personal costs on lots of individuals. Every month that goes by without economic improvement drives more people into poverty, deprives more people of adequate health care, and ruins families. It’s sometimes hard to remember that there are real individuals comprising all of the economic data that we economists so blithely discuss, so it’s good to have a reminder.

Kash