Strong job market, Obamacare helping to sharply lift low/middle-incomes and health coverage

September 13th, 2016 at 12:15 pm

I’ve got a longer piece out at WaPo, but let me highlight a few things here re the Census Bureau’s release this AM of poverty, income, and health coverage data for 2015.

Though these data are for last year and thus don’t move markets, they’re important as they provide a rare, granular look at the extent to which economic growth and policy changes are reaching the middle class and the poor.

The highlights are:

–Largest one-year drop in poverty since 1968, from 14.8 to 13.5 percent (see WaPo piece for important info on shortcomings of the poverty measure and data from a superior measure);

–Largest one-year increase in median household income, up 5.2 percent from $53,700 in 2014 to $56,500 in 2015, a gain of $2,800. That’s the first real gain since 2007, and the largest gain on record back to 1967, when these data begin.

–The Affordable Care Act continues to reduce the share of the population without health coverage as the Medicaid expansion and state exchanges diffuse across the land. The share without coverage fell last year to 9.1 percent, down from the 2014 uninsured rate of 10.4 percent, meaning 4 million more people got health coverage. As the figure shows, gains for minorities have been particularly large.

Source: Census Bureau

Source: Census Bureau

As I wrote at the WaPo: “Such a trifecta — lower poverty, higher middle-class incomes and more people covered by health insurance — is rare in this annual report. In fact, since 1988 (the first year for which Census data on health insurance are available), the only other year that brought simultaneous official progress on poverty, median income and health insurance was 1999.”

What this tells you is not that we’re out of the woods or that inequality’s been laid to rest. See, for example, the median male earnings figure in the WaPo piece showing very long-term wage stagnation: a good year doesn’t unwind such a long, damaging trend. But these data do underscore an extremely important truth: when both a strong job market and helpful public policy push in what I think of as a progressive direction, they lift the living standards of middle- and low-income people.

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2 comments in reply to "Strong job market, Obamacare helping to sharply lift low/middle-incomes and health coverage"

  1. Smith says:

    Good news as far as it goes, but, back to reality.

    “Earnings also increased: 1.5% for full-time year-round male workers, and 2.7% for female workers.”
    That’s real earnings aided by low inflation of .1 percent because of oil prices. (inflation still anemic 1.5% though it has Janet Yellen in a panic). How then can you get a 5% jump in median. Median reflects distribution, a bump in middle incomes disproportionately effects the metric. One report cited here:
    “But according to a report from the Federal Reserve Bank of New York, in 2014 and 2015 the growth of middle-income jobs in sectors such as shipping and construction outpaced the gains in lower-paying and higher-paying work.”
    “Even so, median household income remains 2.4 percent below the peak it reached in 1999, when it was $57,909.”
    The real puzzlement should be per capita GDP rising 60% since 1999 and 15% since 2007
    How is that possible? How can the US income be 60% bigger since 1999 but household income smaller, admittedly only 2.4% less, so basically the same? or the same as 2007 but national income is 15% higher?
    It’s because 50% of all income goes to the top 10% Graph on page 9
    Americans are being ripped off (90% of them) but are supposed to be grateful just to have a job and be able to put food on the table.
    This is truly a dumbing down of economic performance.
    Again poverty should be measured before benefits which help those in need, and it’s great to measure the beneficial effects of the safety net. But it is counterproductive to conflate the two very different metrics. It’s common sense too.
    Great that health insurance coverage is greater, and only 10% of the population lacks what every other developed country provides as a right. But high deductible plans actually mean zero coverage for a substantial portion of those covered, and inadequate coverage for many others.
    Again, it’s a huge dumbing down of societal goals and measurements, while the top 10% and 1% love this headline, they can say “Stop complaining.”

  2. Tom in MN says:

    I would phrase “long-term damage that economic deprivation wreaks on children” differently. I think when most people read this they only think about damage being done to the kids involved. But having people in poverty and children in particular costs us all money and thus something like “long-term costs that we all pay due to the economic deprivation of children” or something similar might be better. This also applies to homelessness and lack of health care, we all pay more due to them and I don’t think that is pointed out enough. Even if you don’t care about “those people” you probably care about having to pay more in taxes.

    Also interesting that the last time this triple good news happened was at the end of the previous Democratic President’s 8 years in office.