Nation's Poverty Rate Holds Steady as More Get Health Insurance

The nation's poverty rate held steady as median household income edged upward and the number of Americans without health insurance decreased by more than 1 million people last year, according to annual census data released today.

The Census Bureau report says that 37.3 million people -- or 12.5 percent of the population -- fell below the official federal poverty threshold in 2007, which is not statistically different than the 12.3 percent who were in poverty in 2006.

Meanwhile, the number of people without health insurance declined to 45.7 million from last year's record 47 million, the Census report says. Census officials and health insurance advocates attributed the decrease in the number of uninsured to the growing popularity of government-sponsored health insurance, including Medicaid and the State Children's Health Insurance Program (SCHIP). The number of people under 65 who are insured by government-funded health insurance increased by more than 2 million to 48.6 million, according to an analysis by officials at the University of Minnesota.

"Programs like SCHIP and Medicaid are lifelines for providing Americans with the health care they need, especially during times when the economy is soft and more people feel vulnerable to losing employer-sponsored health insurance," said Lynn Blewett of the State Health Access Data Assistance Center at the University of Minnesota.

Despite the apparent good news, the new Census report does not take into account the turmoil that has wracked the nation's economy this year, leading to sharp spikes in joblessness and a reduction in hours worked for many employees. Also, while the indicators are positive over one year, the trends are less promising when viewed over a longer time frame.

"You have mixed news here mirroring the mixed news in the economy last year," said Rebecca M. Blank, a senior fellow at the Brookings Institution. "But I think it is quite reasonable to say 2007 was a peak year. And still, median income is slightly below the 2000 level, poverty is higher and child poverty is way up. You have a cycle here that was very sluggish."

The report highlights the nation's growing income inequality and persistent sluggishness of wages for typical Americans, which growing numbers of economists called one of the most troubling aspects of the new economy. Even as median household income rose 1.3 percent to $50,233 -- the third consecutive increase -- it still fell just short of the previous peak in 2000, when inflation is factored in. Overall, the nation's top 1 percent of wage earners now hold 23 percent of total income, the highest level since 1928, according to calculations by the Economic Policy Institute, a research group.

Maryland remained the state with the nation's highest median household income in 2007, an estimated $68,080 -- a 2 percent increase over 2006. Median household incomes were also up in Washington, D.C., and Virginia, to $54,317 and $59,562 respectively.

The report also reveals continuing large racial disparities in household incomes. While the inflation-adjusted median incomes of black and Hispanic households rose for the first time since 1999 last year, they remained far below those of whites and Asian American households. Blacks had the lowest median household income in the country, $33,916. That was 62 percent of the median household income of whites, which was $54,920 last year. Median Hispanic household income was $38,679 in 2007, while Asian Americans had the highest median household income, $66,103.