Poverty Remains Higher, and Median Income for Non-Elderly Is Lower, Than When Recession Hit Bottom

From the Center on Budget and Policy Priorities.

Overall median household income rose modestly in 2005, while the poverty rate remained unchanged. For the first time on record, poverty was higher in the fourth year of an economic recovery, and median income no better, than when the last recession hit bottom and the recovery began.

In addition, the 1.1 percent increase in median income in 2005, which was well below the average gain for a recovery year, was driven by a rise in income among elderly households. Median income for non-elderly households (those headed by someone under 65) fell again in 2005, declining by $275, or 0.5 percent. Median income for non-elderly households was $2,000 (or 3.7 percent) lower in 2005 than in 2001.

In a related development, the median earnings of both male and female full-time workers declined in 2005. Median earnings for men working full time throughout the year fell for the second straight year, dropping by $774, or 1.8 percent, after adjusting for inflation. The median earnings of full-time year-round female workers fell for the third straight year, declining by $427, or 1.3 percent.

Furthermore, the poverty rate, at 12.6 percent, remained well above its 11.7 percent rate in 2001, while median household income was $243 lower than in 2001 (not a statistically significant difference). In addition, both the number and the percentage of Americans who lack health insurance climbed again and remained much higher than in 2001. Four million more people were poor, and 5.4 million more were uninsured, than in 2001. The percentage of children who are uninsured rose in 2005 for the first time since 1998.

The poor also became poorer. The amount by which the average person who is poor fell below the poverty line ($3,236) in 2005 was the highest on record.

Also:

Data released today by the Census Bureau show that the number of uninsured Americans stood at a record 46.6 million in 2005, with 15.9 percent of Americans lacking health coverage. “The number of uninsured Americans reached an all-time high in 2005,” said Robert Greenstein, executive director of the Center on Budget and Policy Priorities. “It is sobering that 5.4 million more people lacked health insurance in 2005 than in the recession year of 2001, primarily because of the erosion of employer-based insurance.