Slow economic recovery reflected in stagnant income and poverty data
The results of the 2012 American Community Survey (ACS), released by the U.S. Census Bureau, show the lingering effects of the Great Recession, and further evidence of a recovery that has been both too slow and too tentative. Both median household income levels and overall poverty rates were virtually unchanged in 2012.
Between 2011 and 2012, only a handful of states saw changes in inflation-adjusted median household income, consistent with a national median household income unchanged from 2011 (the increase of 0.1% nationally is not statistically significant). Our EPI colleagues explain clearly why we see this holding pattern in effect: “Given the tight relationship between the health of the labor market and incomes for most households, it is unsurprising that incomes for most households grew only slightly if at all in 2012 after deteriorating between 2007 and 2011.” Until we see significantly more robust job growth than that which has left us with a “jobs deficit” of over 8 million, improved income and poverty data (and improved well-being and economic security for American families in every state) will remain elusive.
Changes to median household income between 2011 and 2012 were statistically significant in only six states. In four of those states—Hawaii (4.8%), Illinois (1.4%), Massachusetts (1.6%), and Oregon (3.3%)—median household incomes grew modestly. In the other two—Mississippi (-1.6%) and Virginia (-2.2%)—incomes dropped slightly. In the remaining forty-four states (and the District of Columbia), median household incomes showed no significant change.1
The survey’s poverty results also reflect an economy that has been stuck in neutral. The percentage of people in poverty rose significantly in just three states—Mississippi (+1.6 percent), New Hampshire (+1.2 percent), and California (+0.4 percent)—and declined significantly in just two states—Minnesota (-0.5%) and Texas (-0.5%). All other states saw no significant change from their 2011 poverty rates.
A more troubling comparison (evident in Figure A) is to poverty rates in 2007, prior to the recession. Only North Dakota had a lower poverty rate in 2012 than 2007. In every other state, poverty rates are higher, led by Nevada (with a poverty rate 5.7 percentage points higher), Florida (5.0 percentage points higher), and Georgia (4.9 percentage points higher). Nationally, the Census Bureau’s American Community Survey pegs the overall poverty rate at 15.9 percent, unchanged from 2011 (compared to the Census Bureau’s Current Population Survey estimate of 15.0 percent, also unchanged from 2011). Poverty rates soared during the recession and early phase of the recovery. Until the economy gets more firmly back on track, these elevated poverty rates will continue to take a toll on families in every state.
As EPI’s Director of Health Policy noted earlier, there are wide variations in the extent to which people have health insurance coverage. Notably, today’s data show that in thirty-three states, the percentage of the civilian population under age 65 without health insurance declined significantly between 2010 and 2012, reversing the trend between 2008 and 2010. Only Arizona saw a significant increase in uninsured during this time (in the remaining states, rates of uninsured remained the same). The continued erosion of private health insurance has been offset, and then some, but the expansion of public health insurance coverage.
Policy makers contemplating draconian cuts to programs such as SNAP that play a critical role in helping struggling families make ends meet undermine efforts to get back on track after the Great Recession. Instead, they should be pursuing policies—such as significantly raising the minimum wage—that help put American families, and the economy, back in the fast-lane to shared prosperity.
The full ACS results can be found here.
1. National-level income and poverty statistics are officially derived from the Annual Social and Economic Supplement (formerly known as the March supplement) of the Current Population Survey (CPS). The ACS and the CPS have significantly different sample sizes and methodologies. The CPS is designed primarily for national-level estimates, whereas the ACS is more appropriate for state-level and sub-state-level analyses. The CPS (released Tuesday September 19, and studied at length by EPI economists Elise Gould, Larry Mishel, and Heidi Shierholz, national median household income decreased by 1.5 percent.