Poverty Numbers Starting to Mirror Healthy Economy

Mizzou expert questions why recovery is late

Aug. 28, 2007

Story Contact:  Kevin Carlson, 573-882-3346, CarlsonKe@missouri.edu

COLUMBIA, Mo. — The U.S. Census Bureau released its “Income, Poverty, and Health Insurance Coverage in the United States: 2006 report” on Tuesday afternoon, revealing that household incomes are up for the second consecutive year and the poverty rate is down for the first time this decade.

The number of Americans living in poverty in 2006 was 36.5 million, or 12.3 percent. Real median household income climbed to $48,200, although 47 million people (15.8 percent) were without health insurance coverage. An expert at the University of Missouri-Columbia thinks this recovery should have come sooner.

“The 12.3 percent rate is good news but it's not unexpected. We're so far into this economic expansion that researchers have been wondering when the rate would start to fall. The real questions are: ‘Why hasn't it come down sooner, and why hasn't it fallen faster?’” said Colleen Heflin, an assistant professor with the Truman School of Public Affairs. “Typically the rising tide will lift all boats, so when the macroeconomy is performing well, you expect that the low-income population is also going to be doing well. Since the recession in 2001, the economy has moved ahead but it's leaving behind the low-income population. We're seeing that it is finally starting to turn around.”

About 9.8 percent (7.7 million) of the nation's families were in poverty in 2006. Married-couple families had a poverty rate of 4.9 percent (2.9 million), compared with 28.3 percent (4.1 million) for female-headed households. African Americans had the highest rate along racial lines, with 24.3 percent of the population living in poverty. For children younger than 18, the poverty rate was 17.4 percent.

“If you look at the confluence of those three groups — children who are African-American and living in female-headed families — you are going to find that they are living in extreme dire straights. One indication that comes from the health insurance part of the report is where it shows that 19.3 percent of children in poverty don't have health insurance,” Heflin said. “These are people that should be covered by existing public programs, such as the Child Health Insurance Program, but it's not reaching one in five children in poverty. And that's a problem.”

Americans age 65 and older saw their poverty levels decline from 10.1 percent in 2005 to 9.4 percent last year. That same group also had median income increases.

“The age breakdown is especially interesting here,” Heflin said. “The elderly are the clear winners — their median income level increased and their poverty level decreased. This may be an indication that they may be working longer, or that more retirees are part of pension plans that are tied to the stock market.”

Hefli's research interests include welfare and poverty policy, social stratification, health inequality, and women and work. Her recent work appears in the Journal of Policy Analysis and Management, Journal of Health and Social Behavior, Social Service Review, Social Science Quarterly, and Social Science & Medicine. She served as an executive board member for the University of Kentucky Center for Poverty Research from 2002-07.