Annual Census Bureau Report Shows Tremendous Progress in Health Insurance Coverage but Little Change in Poverty
By Dan Lesser
The U.S. Census Bureau’s three reports relating to annual income and poverty were released last week, and they present a decidedly mixed bag of progress toward ending poverty in the United States.
The data show a dramatic drop in the number of Americans who lack health insurance in 2014, the first year that all of the policy provisions of the Affordable Care Act took full effect. In fact, the number of uninsured Americans dropped to its lowest rate since the Census Bureau began measuring it in 1987. Nearly nine million Americans gained health insurance, and the uninsured rate fell 2.9% from 13.3% in 2013 to 10.4% in 2014. While racial and sex disparities in coverage persist, the rate of uninsured Blacks fell from 15.9% in 2013 to 11.8% in 2014, and from 17% to 13% for working-age women, indicating significant but incomplete progress.
Official Poverty Measure
Despite these gains in health insurance coverage, the report showed no significant decline in the poverty rate. Nearly 47 million Americans lived below the poverty line in 2014. That’s 14.8% of us, including 21.5% of all children. This marks the fourth year in a row in which poverty rates have failed to decline significantly. As it stands, poor people, in particular poor children, have been left behind in the recovery from the Great Recession. This stagnation in progress reducing poverty is unacceptable.
More than one in every five children is growing up in poverty in the United States. Moreover, large, enduring racial inequalities persist; Hispanic children are two-and-a-half times more likely to live in poverty than white children ,and Black children are three times more likely. Aside from being a moral disgrace, childhood poverty has a high economic cost. Lost productivity, extra health and criminal justice costs, and other consequences of childhood poverty are estimated to cost the U.S. economy close to $500 billion per year, or 3.8% of our Gross Domestic Product.
Like racial equality, gender equality remains elusive. Women are more likely than men to be poor, with 14.7 percent of women in poverty compared to 10.9 percent of men. Even more shocking, 39.8% of all female heads of households are in poverty, making a clear case for stronger investments in programs that help lift women and their children out of poverty. The gender wage gap has changed little since 2007: Women working full time earned 79 cents for every dollar earned by their male counterparts.. This gap is even starker for women of color, with black and Hispanic women earning 60 cents and 55 cents, respectively, to every dollar earned by white men.
Supplemental Poverty Measure
This year, for the first time, in addition to releasing data measured against the Official Poverty Measure (OPM), the Census Bureau also released a report on the Supplemental Poverty Measure at the same time. The OPM, which is used to determine eligibility for government benefits and transfers, measures only an individual’s or family’s resources based on their gross before-tax cash income. The SPM is a far more accurate measure of a family’s wealth, and includes income from non-cash benefits like nutritional assistance (such as SNAP or WIC), subsidized housing (like Section 8 Vouchers), home energy assistance (like LIHEAP) and tax credits (like the EITC or CTC) and subtracts expenses including income and social security taxes, childcare or work-related expenses, and out-of-pocket medical care and health insurance costs. Because it accounts for these resources, the SPM offers a far more nuanced and realistic picture of who is living in poverty and the important role that these assistance programs play in alleviating poverty.
To be clear, noncash benefits and tax credits are by no means silver bullets, but they clearly improve the lives of some of our most vulnerable people. For example, the rate of children living in deep poverty (below 50% of the poverty threshold) during 2014 was 5.4% lower measured under the SPM than under the OPM (4.3% instead of 9.7%). The Supplemental Nutrition Assistance Program (SNAP) alone decreased the 2014 child poverty rate by 3.2%, while refundable tax credits, such as the Child Tax Credit and the Earned Income Tax Credit, cut child poverty rates by 7.1%. These statistics show that anti-poverty programs provide some measure of relief to many low-income households.
Amidst a political environment that often seeks to stigmatize, denigrate, and ultimately weaken safety net programs, the 2014 U.S. Census Poverty Data should galvanize those of us committed to ending poverty. As a strong starting point, we should urge Congress , when taking up tax reform later this year, to make permanent certain key improvements, for low-income workers, in the Earned Income Tax Credit and Child Tax Credit that otherwise are likely to expire at the end of 2017. These tax credits are instrumental to keeping a large number of people above the poverty threshold; according to the Center on Budget and Policy Priorities, 16 million individuals, including 8 million children, will either be thrust into or fall deeper into poverty in 2018 if the EITC and CTC expire.
The 2014 Census data show that, although progress in eliminating poverty may be stalled, strong policy measures do make a substantial difference. We know what works to advance justice and opportunity for low-income people and communities. Now is the time to make strong investments in proven policy measures to ensure the best possible present and future for all Americans.
Originally published at www.theshriverbrief.org on September 21, 2015.