Yesterday morning, the U.S. Census Bureau released their annual income and health coverage reports: Income and Poverty in the United States and Health Insurance Coverage in the United States. Both use 2015 single-year data to measure well-being in two areas that are extremely important to United Way’s community impact work: health and financial stability.
The most significant finding in Income and Poverty in the United States: 2015 is that real median household income increased 5.2% from 2014. That is the first genuine increase households have experienced since 2007, just before the Great Recession.
This increase validates that the country is finally starting to heal from the Great Recession. As a partial result of this change, 3.5 million people were raised above the official poverty rate bringing it to 13.5% nationally.
As we know, however, the official poverty measure does not accurately speak to the survival capabilities of U.S. households. Created during President Lyndon Johnson’s War on Poverty, the official poverty measure is primarily based on the price of three baskets of food from the 1960s and has been updated for inflation every year since. This is significant because the poverty rate fails to account for the cost of housing, child care, health care, transportation and life’s other basic needs. (For a more accurate report on financial well-being on California Households, please see our report Struggling to Get By: The Real Cost Measure in California 2015).
Equally important, this household gain does very little to the change the overall distribution of wealth. As Edwardo Porter states in the New York Times, families at both the 50th percentile and the 20th percentile have experienced very little change in household earnings since 1967 while those at the 95th percentile have seen their income increase by 82% during the same amount of time.
Hence, while the increase in earnings in the past year is positive, it is important to note that many U.S. families have been struggling for a very long period of time and there is no strong evidence to suggest that household income distribution will change significantly in the near term.
The news on health coverage is much more encouraging. Primarily as a result of the Patient Protection and Affordable Care Act of 2010, the percentage of those lacking health coverage has dropped to 9.1% nationally, an improvement of 4 million people from 2014. In California, the rate of those lacking health coverage has improved to 8.6% compared to 17.2% in 2013, easily the best in the nation. Many United Ways throughout California have worked arduously with outreach and enrollment efforts.
While it is still too early to determine the impact of improved health coverage rates nationally, we are cautiously hopeful that one of the primary indicators of health, life expectancy at birth, will continue to improve among all ethnic groups.