Poor and Uninsured Americans Increase for Third Straight Year

An additional 1.3 million Americans slipped into poverty last year and another 1.4 million went without health insurance, the government reported Thursday.

It was the third year of bad news in both categories and further evidence that the U.S. economy had not snapped back from the downturn of earlier this decade.

The Census Bureau numbers also showed that the annual income of middle-class Americans, which fell in 2001 and 2002, had leveled off last year. Census analysts said the income of households at the center of the economic spectrum was $43,318 in 2003, a statistically meaningless $63 below its 2002 level.

With job and wage growth showing signs of weakening after a strong start this year, the leveling off could prove cold comfort to millions of working Americans or to President Bush, who is locked in a tight reelection battle with Democratic Sen. John F. Kerry of Massachusetts.

“For the third year in a row, the news was basically not good,” said Ron Haskins, a former senior Republican congressional staff member now with the Brookings Institution in Washington. “It’s reasonable to think income and poverty will improve some in 2004, but they didn’t last year.”

Both political campaigns engaged in a furious effort Thursday to put their cast on the Census Bureau’s portrait of Americans’ economic circumstances.

Kerry seized on the new numbers as proof that Bush’s economic policies had failed. In a statement, the Democratic candidate ticked off trends since 2000 -- median household income down more than $1,500; an additional 5.2 million individuals without health insurance and another 4.3 million in poverty.

“While George Bush tries to convince America’s families that we’re turning the corner, slogans and empty rhetoric can’t hide the real story,” Kerry said.

In addition, some Democrats charged that the administration had released the Census Bureau’s numbers a month early to avoid delivering bad economic news during the fall election campaign. Census officials denied the charge, and some independent observers questioned whether the early release was of much help to Republicans.

The Bush campaign countered that the income and poverty numbers painted an incomplete picture by not including the tax cuts championed by the president. In any case, they said, the trends were not as bad as they first appeared.

Bush made no mention of the figures in three campaign appearances in New Mexico, but campaign aides rushed out “talking points.” On poverty: “The poverty rate is still below the average rate of the 1980s and 1990s.” On health insurance: “The percentage of uninsured is still below its highest point during the Clinton administration.”

In addition, senior Republicans, including Rep. Joe Barton of Texas, chairman of the House Energy and Commerce Committee, offered positive interpretations of the Census Bureau numbers.

He noted that although the number of people without health insurance grew last year, the number with coverage also grew by almost 1 million.

“More people in America have health coverage today,” Barton said, “and I think that’s a fact worth noting.”

In a twist that could prove embarrassing to free-market Republicans, the figures showed the ranks of the insured swelled because of substantial growth in government-provided health coverage, especially through Medicaid and the Children’s Health Insurance Program, which offset a third straight year of declines in the number covered by employer-based insurance.

“This shows that government can effectively offset economic hardships generated by the market economy,” said Sheldon H. Danziger, a public policy scholar at the University of Michigan. “Government can work.”

Overall, 35.9 million Americans lived in poverty in 2003, up from 34.6 million in 2002, according to the Census Bureau. The increase pushed up the poverty rate -- the portion of the population in poverty -- from 12.1% to 12.5%. The rate has been climbing since 2000, when it hit a 26-year low of 11.3%.

The poverty level for 2003 was an average of $9,393 for a one-member family and $18,810 for a four-member family.

Children accounted for half of the increase in the number of people living in poverty. An additional 700,000 children under 18 lived below the poverty level in 2003, according to the Census Bureau, driving the total to 12.9 million children. The poverty rate for children rose from 16.7% in 2002 to 17.6% in 2003.

About 45 million people, or 15.6% of the population, went without health insurance last year, the Census Bureau said. That was an increase from the 43.6 million, or 15.2%, who lacked coverage in 2002.

In contrast to the poverty trends, the number of children without health coverage fell by 158,000 between 2002 and 2003, leaving the uninsured rate for children at 11.4%.

Analysts attribute virtually all of the improvement in health coverage for the young to a 1997 program that provides states with money to cover increasingly large numbers of low-income children.

The analysts expressed surprise at the improvement, saying they had thought many states had tightened eligibility rules for the program in the last few years to keep costs low.

“The medical safety net held up,” said Diane Rowland, senior vice president of the Kaiser Family Foundation in Washington.

Although the median household income remained flat in 2003, it fell 2.6% for Latinos, from $33,861 in 2002 to $32,997 last year. A separate measure showed that incomes of foreign-born households fell 3.5%.

Raul Hinojosa-Ojeda, director of UCLA’s North American Integration and Development Center, traced the declines to the concentration of Latino and foreign-born workers in the low-wage manufacturing and service sectors, which were hit hard by the 2001 recession and have not recovered.

Analysts said most of the trends in the new figures were traceable to the recession and the nation’s underperforming labor market since 2001.

“The impact is written all over these results,” said Jared Bernstein, a senior economist with the Economic Policy Institute in Washington.

The declines in median income and health coverage and the rise in poverty have been about half as large as those that occurred in the recessions of the 1980s and ‘90s. But they have proven strikingly persistent and have widened the gap between the haves and have-nots.

Analysts said the fraction of the nation’s total income going to the poorest 20% of households slipped from 3.5% to 3.4%, its lowest level since the Census Bureau began keeping records in 1967.

By contrast, the fraction going to the top 20% of households rose to nearly 50% last year.

Times staff writers Edwin Chen and Warren Vieth contributed to this report.

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The article states inaccurately that 35.9 million Americans lived in poverty in 2003. The figure, based on Census Bureau data, refers to the number of people in America and does not specify whether they are citizens.

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