New Census Figures Confirm Wide Income Gap

Tuesday, September 17, 2013 at 5:30 PM by

Poverty Remains High, Median Income Remains Low, and Health Insurance Coverage Improves Modestly

Data released today by the U.S. Census Bureau reinforce the recent findings by economists that there is a very wide gap between the rich and the poor.  The new Census figures for 2012 from the Current Population Survey (CPS) show that the painfully slow economic recovery has yet to help a large segment of Americans.    Poverty remained high last year, at 15% nationally, and median income remained low — 8.3% below the 2007 level, before the Great Recession began.     

In a New York Times blog post this afternoon, a graph prepared by Jared Bernstein uses the 2012 Census Bureau data to illustrate the diverging trend lines since 1967 in the household income of low, middle and upper income Americans.  And as Bernstein notes, the divergence would be much wider if the Census Bureau didn’t exclude capital gains income from its data. 

According to a blog post by Robert Greenstein of the Center on Budget and Policy Priorities, the Census measure of income inequality didn’t worsen last year (though including capital gains in the figures would have almost certainly changed that conclusion), but inequality remained at record levels:   

“A key Census measure of inequality (known as the “Gini coefficient”) was tied for its highest level on record (with data back to 1967).  The share of national income going to the bottom 20 percent of households — who received just 3.2 percent of the income in the nation in 2012 — and the share going to the bottom 60 percent (who received 25.9 percent of the national income) both tied for the lowest shares on record, with data back to 1967.”

Deborah Weinstein of the Coalition on Human Needs highlighted a couple of other important parts of the data:

  • There were nearly 6.7 million more poor people in 2012 than in 2008, a year deep in the Great Recession.  
  • “More than one-third of our nation is near poor—106 million people live below twice the poverty line, one lay-off or crisis away from poverty.”

One bright spot in the data is a small decline in the number and percentage of uninsured Americans (from 15.7% to 15.4%), which is the second straight year of progress on access to health insurance.  Read more about the health insurance trends, including the decline in employer-sponsored coverage in Wisconsin, in WCCF’s blog post about the CPS data.  

The new Census data show that if food stamp benefits were counted as income in measuring poverty, as many economists and advocates favor, about 4 million fewer people would be counted as being in poverty, and many more above that line would also be boosted.  Ironically, 4 million is roughly the number of people that the Congressional Budget Office estimates will lose their food stamp benefits under a bill that the House leadership plans to bring up for a vote this Thursday!    

On September 19, the Census Bureau will release more reliable state-level data from the American Community Survey, as well as ACS data for more than 20 Wisconsin counties. At that time, we will provide an analysis of the Wisconsin data for income, poverty, child poverty, and health insurance.

Jon Peacock 

Categories: Blog, ECONOMIC SECURITY, food stamps, HEALTH & HUMAN SERVICES, income inequality, poverty | Comments Off on New Census Figures Confirm Wide Income Gap

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