Poverty Rate Continues To Climb

By Jonathan Weisman and Ceci Connolly
Washington Post Staff Writers
Wednesday, August 31, 2005

Despite robust economic growth last year, 1.1 million more Americans slipped into poverty in 2004, while household incomes stagnated and earnings fell, the Census Bureau reported yesterday. The number of Americans without health insurance rose by 800,000, to 45.8 million.

The Census Bureau's annual report on income, poverty and health insurance sheds light on voter discontent with the economy in the face of seemingly strong economic data. The broad data draw a picture of a labor market still struggling to find its footing, three years after the 2001 recession.

"The poverty rate seems to be the last lonely lagging indicator of the business cycle," said E.R. Anderson, chief of staff in the Commerce Department's economic directorate, which oversees the Census Bureau.

The median household income stood at $44,389 last year, down slightly from the 2003 level of $44,482. But that level was propped up by more people going to work for lower earnings. A full-time male worker earned a median income of $40,798 last year, down $963 in inflation-adjusted dollars from 2003. Women's median earnings fell $327, to $31,223.

The poverty rate climbed in 2004 to 12.7 percent, from 12.5 percent in 2003 -- the fourth year in a row that poverty has risen. The increase was borne completely by non-Hispanic whites, the only ethnic group that saw its poverty rate rise. The percentage of whites in poverty rose from 8.2 percent in 2003 to 8.6 percent. African Americans saw no change in their poverty rate, which remained at 24.7 percent. The poverty rate for Hispanics remained at 21.9 percent, while Asian Americans' poverty levels dropped by two percentage points, to 9.8 percent.

The Midwest was the only region that saw both the poverty rate rise and median household income fall, a "double whammy," said Ron Haskins, a welfare economist at the Brookings Institution.

The percentage without health insurance -- 15.7 percent -- did not change, but only because the expanding federal insurance programs compensated for a continuing decline in employer-provided health care. Last year, 27.2 percent of the population received medical care through the government, up from 26.6 percent in 2003.

The findings on poverty and health insurance are directly linked, said Diane Rowland, executive director of the Kaiser Commission on Medicaid and the Uninsured, noting that "more people are falling into the low-income groups that qualify" for Medicaid.

From the start of President Bush's first term in 2001 to 2004, the number of Americans without health insurance increased from 41.2 million to 45.8 million. Last year's uninsured rate was the highest it has been since 1998.

Two-thirds of the growth came from the Hispanic community, where the number of people without health coverage rose from 13.2 million in 2003 to 13.7 million last year.

Hispanic workers "are much less likely to have health insurance offers with jobs than they were 10 years ago," said Len Nichols, a health economist at the nonpartisan New America Foundation.

Michael J. O'Grady, an assistant secretary at the Department of Health and Human Services, said Bush's effort to expand the nation's network of community health centers will help bring care to more immigrants.

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