U.S. Poverty Rate Drops; Ranks of Uninsured Grow

By N.C. Aizenman and Christopher Lee
Washington Post Staff Writers
Wednesday, August 29, 2007

The nation's poverty rate declined last year for the first time this decade, but the number of Americans without health insurance rose to a record 47 million, according to annual census figures released yesterday.

Maryland edged out New Jersey as the nation's richest state, with a median household income of $65,144. The Washington region ranked second among metropolitan areas, with three suburban Washington counties -- Fairfax, Loudoun and Howard -- maintaining their status as the nation's wealthiest large counties. Montgomery and Prince William counties also registered in the top 10.

Nationally, however, the statistics from the U.S. Census Bureau offer a mixed picture of the economy's recovery from the recession of 2000-01.

Although median household income, adjusted for inflation, rose for the second straight year, it has not reached the pre-recession high of 1999.

The increase from 2005 to 2006 in median household income, to $48,201, appeared to be mainly the result of a jump in the number of people per household who held a full-time job rather than a rise in wages. Earnings of both men and women declined by slightly more than 1 percent.

Although the poorest households had the largest percentage income gain from 2005 to last year, income inequality remains at a record high. The share of income going to the 5 percent of households with the highest incomes has never been greater.

The 2006 poverty rate of 12.3 percent remained higher than during the recession. And the slight drop in the rate from 12.6 percent the year before was driven by a decrease in poverty among those older than 65. There was no change in the rates for children or for adults 18 to 24

The release of the statistics yesterday drew divergent responses from the Bush administration and its critics.

"To be in worse shape in the fifth year of a recovery than during the previous recession is both unprecedented and disappointing," said Robert Greenstein, executive director of the liberal Center on Budget and Policy Priorities.

U.S. House Speaker Nancy Pelosi (D-Calif.) placed the blame on the administration's economic policies. "Enormous tax cuts for the wealthy and massive budget deficits have failed the vast majority of the American people," she said in a statement. "The rich have gotten richer, but every other income group under the Bush administration has lost ground."

White House spokesman Tony Fratto disagreed, saying that the data on household income are "good numbers," considering the many blows the economy has suffered, including the Sept. 11, 2001, terrorist attacks and the bursting of the stock market bubble.

"Our economy was in very bad shape for a significant period of time, and when that happens, you are going to see incomes fall," Fratto said.

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