The long U.S. economic expansion is pulling more people out of poverty, but household incomes are starting to flatten and more Americans are living without health insurance, according to Census Bureau data released Tuesday.
The nation’s official poverty rate dropped further last year, to 11.8%, the lowest since 2001, the bureau reported. The median household income, however, unexpectedly stalled despite strong job and wage gains.
And the share of people without health insurance went up for the first time since the Affordable Care Act took effect in 2013. Experts attributed that at least partly to the Trump administration’s efforts to weaken the healthcare law, also known as Obamacare.
The inflation-adjusted median income — the midpoint at which half of households make more and half make less — essentially stalled after three straight years of growth, which puzzled analysts. The economy grew at a good clip last year and, as the census report showed, there were 2.3 million more full-time, year-round workers. The median earnings of all such workers went up a solid 3.4% from 2017.
Census officials couldn’t offer a detailed explanation, saying only that their household income measure includes a variety of pre-tax cash income, and sometimes the total number doesn’t line up with employment earnings trends. The census income figure includes such things as money from rent, pensions and Social Security benefits. Also, the biggest income gains last year were seen in households headed by younger adults.
Still, Harry Holzer, a public policy professor at Georgetown University, called the apparent stall in the median income “troubling.” He said it could be that the increase in full-time workers did not represent the middle-income group, or that there was a change in the composition of households that dragged down the overall income number.
Whatever the reason, Holzer said, the census data indicated that households in the middle saw little income improvement when the overall economy was doing well. “It’s a mixed report,” Holzer said. “I think we should be happy about the solid growth of earnings for year-round full-time workers. At the same time, we ought to be a little concerned that in what was still a tightening labor market in 2018 ... none of that showed up in terms of the median household income.”
What’s more, despite the large increase in full-time workers, at least some of whom would have gotten employer-covered health insurance, the Census Bureau found that the percentage of U.S. residents who went without medical insurance last year rose to 8.5% from 7.9% in 2017. That translated into 1.9 million more people who did not have health insurance at some point during last year.
It was the first such increase since the Affordable Care Act led to sharp declines in the uninsured rate. Separate census data show the uninsured numbers began to drop in 2010, when it was 15.5%, and then fell more sharply in 2014 when the act took full effect. Health insurance coverage is considered an important measure of economic well-being.
Last year’s erosion of health coverage was driven by sharp drops in people enrolled in Medicaid, the government’s healthcare program for lower-income families and individuals, and those with private insurance through marketplaces created by Obamacare, according to census data. The uninsured rate rose significantly for children.
The administration’s moves to curtail Obamacare have included support of state policies toughening eligibility requirements for Medicaid, as well as cuts in outreach and advertising to inform consumers about their healthcare options, according to experts at the Center on Budget and Policy Priorities, a nonpartisan think tank.
Also, the center said the Trump administration’s harsh stance against immigrants has intimidated some people eligible to enroll in Medicaid and subsidized marketplace plans. It noted that the uninsured rate among Latinos rose 1.6 percentage points last year, more than for any other racial or ethnic group.
“Today’s data provide new suggested evidence that these policies and the climate of fear they’ve created are taking a toll on health coverage,” said the center’s vice president for health policy, Aviva Aron-Dine.
Congressional Republicans and other critics of Obamacare have blamed the law for rising premiums and argue that it has inherent flaws that are responsible for any decline in coverage rates.
The census report showed the nation’s median income was $63,179 last year, up less than 1% from 2017 — a change that was considered statistically insignificant.
Median household income jumped more than 5% in 2015, but since then growth has been moderating.
Gordon Green, a former Census Bureau chief of income statistics, said his analysis from his firm, Sentier Research, indicates that household income grew steadily over the course of last year and into the middle of this year.
According to Sentier, which tracks economic data from monthly census statistics, the median household income reached a new high of more than $65,000 in July, up 2.3% from a year earlier, on an inflation-adjusted basis.
The Census Bureau noted that last year’s 11.8% poverty rate was the first time that this measure was significantly lower than in 2007. The Great Recession began in late 2007 and officially ended in mid-2009.
The number of people in poverty in 2018 was 38.1 million, 1.4 million fewer people than 2017.
Households that rose above the poverty threshold — less than $25,465 for a family of two adults and two children — were almost certainly helped by the growing number of jobs and higher minimum wages in different parts of the country.
“The official poverty report offers good news,” said H. Luke Shaefer, director of the University of Michigan’s Poverty Solutions initiative, noting that it was the lowest rate since 2001, when it was just a notch lower at 11.7%.
Households headed by women in particular, he said, have the lowest official poverty rate ever recorded for that group.
“These are good signs at this stage of a long economic expansion,” Shaefer said. But he added that the percentage of households in deep poverty — those with incomes below half the poverty line — remains high at 5.3%.
Moreover, analysts noted that the Census Bureau’s supplemental or alternative poverty rate saw no statistical improvement last year. That poverty level was 13.1% last year, similar to 2017.
Many analysts consider the agency’s supplemental measure as more accurate because it includes noncash benefits such as food stamps and earned income tax credits.
Sheldon Danziger, president of the Russell Sage Foundation, which supports research on poverty and other social and economic issues, attributed the disappointing progress to the lack of targeted federal policies aimed at improving conditions for lower-income families.
“When the economy is about as good as it gets, those at the bottom don’t gain if government doesn’t do something to help them,” he said.