Income rose and poverty declined for the third straight year in 2017 but progress on health coverage halted and apparently began to reverse, according to Census data released
The failure of health coverage to improve after three straight years of progress is likely due at least in part to
Uninsured Rate Rises in
The share of Americans without health insurance remained unchanged at 8.8 percent in 2017, according to the
Both surveys have strengths. The CPS is longer, has more detailed health insurance questions, and is likely to measure the uninsurance rate more accurately in any one year. At the same time, the ACS' much larger sample size (3 million homes rather than 100,000) makes it better able to reliably detect small year-to-year changes.(2)
The stalling of progress on the uninsured rate in the 2017 CPS -- and the small increase in the uninsured rate in the ACS -- contrast with the three preceding years of historic declines in the uninsured rate following full implementation of the ACA in 2014. When the ACA's eligibility rules were fully in place, millions of uninsured Americans became eligible to enroll, and most states conducted outreach to this population. The uninsured rate dropped from 13.3 percent in 2013 to a record low of 8.8 percent in 2016, and the number of uninsured fell by 13.7 million people over the same period. (Figures on insurance, income, and poverty throughout this analysis are from the CPS unless otherwise noted.)
Conditions were favorable for additional insurance gains in 2017: the number of people with full-time, year-round employment rose by 2.4 million in 2017; full-time jobs are a major route to insurance coverage. Moreover, several million Americans remained uninsured but eligible for coverage under the ACA or Medicaid, and substantial progress in reaching them had been made in the preceding years, as the number of Americans without coverage fell by 4.0 million in 2015 and by more than 900,000 in 2016.
But insurance gains halted in 2017, likely due at least in part to efforts by the
Data Suggest Importance of State Efforts on
The data also underscore notable differences between states that did and didn't expand Medicaid coverage under the ACA to all non-elderly adults with incomes up to 138 percent of the poverty line. According to ACS figures:(5)
* For people in the 32 states (including the
* For states that did not expand Medicaid, the uninsured rate rose in 2017, from 11.8 percent to 12.2 percent.
* The gap in uninsured rates between expansion states and non-expansion states has now grown for four straight years, from a gap of 4.0 percentage points in 2013 to one of 5.6 percentage points in 2017. (See Figure 1.) If the uninsured rate had fallen in non-expansion states at the same rate since 2013 as it did in expansion states, another 4.5 million uninsured Americans would have had coverage last year.
* Since 2013, the likelihood of being uninsured fell by nearly half (by 49 percent) in expansion states, compared with a decline of just over one-fourth (28 percent) in states that did not expand.
Three-Year Gains in Income and Poverty Are Largest in Decades But Rates of Improvement Slowed
Median household income rose by
Between 2014 and 2017, the typical household's income rose by 10.4 percent after inflation, the largest such three-year gain on record, with data back to 1967. Over the same years, the poverty rate fell by 2.5 percentage points (leaving 7.0 million fewer people in poverty), the largest three-year decline in the poverty rate since the 1960s (1966 through 1969).
Although median household income grew in all three years -- 2015, 2016, and 2017 -- the rate of growth slowed, with increases of 5.1 percent, 3.1 percent, and 1.8 percent in those years, respectively.
Similarly, the official poverty rate fell to 12.3 percent in 2017, down from 12.7 percent the year before, but the decline (0.4 percentage points) was smaller than in 2015 or 2016 (when the declines were 1.2 percentage points and 0.8 percentage points, respectively).
The continued but slowing progress reflects patterns in the broader economy, with continuing job growth but slow wage growth. The economy added more than 2 million jobs in each of the last three years (2.8 million, 2.5 million, and 2.3 million in 2015, 2016, and 2017),
Median Income About Where It Was in 2000
Median income reached
Median incomes dipped in the 2001 downturn, never regained their 2000 level during the subsequent economic expansion through 2007, fell deeply in the Great Recession, and have only now climbed back to approximately their previous high.
Put differently, median income is about where it was two decades ago. In most of the intervening years, it was lower.
Wide Gaps Remain Among Racial and Ethnic Groups
African Americans and Latinos continue to experience the highest risk of poverty by a wide margin. The Census figures show that in 2017:
* Some 21.2 percent of African Americans lived below the poverty line. This was 2.4 times the poverty rate for people identifying as non-Hispanic white.
* About 18.3 percent of Hispanics lived below the poverty line -- about 2.1 times the rate for non-Hispanic whites.(7)
Though non-Hispanic whites had a relatively modest poverty rate of 8.7 percent in 2017, they continue to constitute the single largest racial or ethnic group in poverty, due to their large numbers in the overall population. In 2017, about 17 million non-Hispanic whites were poor, compared with 10.8 million Hispanics and 9 million African Americans.
Poverty Rates Higher for Children Than Other Age Groups
Poverty among children declined again in 2017, though children remain the age group most likely to be poor. Some 17.5 percent of children lived below the official poverty line in 2017, a higher share than for adults aged 18 to 64 (11.2 percent) or seniors aged 65 and older (9.2 percent).
Poverty rates were substantially higher for
Poverty among children is of particular concern because children who experience poverty frequently show lasting deficits in education and health relative to similar non-poor children. Conversely, participation in anti-poverty programs that raise family resources is associated with improvements in children's health, educational achievement, and long-term earning power, studies have found.(8)
Millions More Would Be Poor Without Economic Security Programs
The Census data show that poverty and economic hardship would be far more widespread if not for key federal programs. Using the Supplemental Poverty Measure (SPM) -- which, unlike the official poverty measure, accounts for taxes and non-cash benefits -- Census reported that government programs lifted millions of people above the SPM poverty line in 2017. The data show that:
* SNAP, formerly known as food stamps, lifted 3.4 million people out of poverty;
* Refundable tax credits (the Earned Income Tax Credit and the low-income portion of the Child Tax Credit) lifted out 8.3 million people;
* The Supplemental Security Income program, which serves low-income people who are elderly or have serious disabilities, lifted out 3.2 million;
* Low-income housing assistance lifted out 2.9 million people; and
These programs also reduced the severity of poverty for tens of millions more people.
Moreover, Census data tend to understate the degree to which these programs lift people out of poverty or closer to the poverty line.(9) The Census figures cited here use the SPM, which is favored by most analysts because it measures income more comprehensively than the "official" measure does. But the SPM figures do not correct for the underreporting of government benefits in the Census surveys, which results in some income that households receive from these programs not being reflected in these data.
Supplemental Measure Shows Government Assistance Driving Long-Term Progress Against Poverty
Some policymakers may be tempted to use the new poverty data to argue that federal anti-poverty programs have failed, since the official poverty rate has changed little since the late 1960s. Most analysts would reject such a conclusion, however, because comparing poverty rates between the 1960s and today by using the official poverty measure yields misleading results. The official poverty measure doesn't accurately portray the overall financial well-being of low-income Americans or how that has changed over time, because it counts only cash incomes and omits the impact of key government income-assistance programs such as SNAP, the Earned Income Tax Credit, and rental subsidies.
The SPM does count these benefits and makes other improvements in poverty measurement, such as netting out income and payroll taxes. The Census's SPM tables start in 2009, so they can't be used to answer various historical questions, such as how much the poverty rate has changed since the 1960s or whether it has returned to its level in 2007, before the Great Recession. However,
Our update of the Columbia researchers' anchored SPM series, which uses the recently released Census data and a modernized 2017 poverty line, shows that the poverty rate fell by nearly half (45 percent) between 1967 and 2017 -- from 25.1 percent to 13.9 percent over this period.(11)
Policymakers Should Build on Progress, Not Undermine It
A goal for policymakers should be to sustain recent progress in income and poverty and restore progress on health insurance.
Continued progress on poverty and income is far from certain. Some proposals from the President and some congressional leaders would risk increasing poverty and hardship for low- and modest-income households, including those with low-wage workers. Both the President's 2019 budget(12) and the budget plan that the
Alternative approaches would build on recent progress rather than jeopardize it. And the
On health insurance, federal policymakers should first do no harm. Unfortunately, efforts to weaken health coverage continue.
States, too, have ways to impact health coverage. As one example, states that haven't adopted the Medicaid expansion can do so, and states that have adopted it can support vigorous outreach to bolster enrollment in Medicaid and ACA marketplace programs. Indeed, efforts to implement the Medicaid expansion continue in
(1) For details on Administration efforts to weaken the ACA, see Center on Budget and Policy Priorities, "Sabotage Watch: Tracking Efforts to Undermine the ACA," last updated
(2) The large size of the ACS also makes it suitable for local and state estimates, its main purpose. Nationwide, the ACS uninsured rate inched up from 8.6 percent in 2016 to 8.7 percent in 2017, a statistically significant change. CPS and ACS rates for 2017 are both found in
(7) The Census data also show that 10 percent of Asian Americans lived below the poverty line in 2017, just above the non-Hispanic white rate.
(8) Arloc Sherman and
(10) The anchored SPM uses a modernized poverty threshold that reflects current living standards. The threshold is adjusted downward for previous years to reflect the effects of inflation so that the threshold grows from year to year at the same pace as inflation. Some analysts prefer the anchored SPM to the standard SPM, under which the poverty threshold grows slightly faster than inflation as living standards rise across decades.
(12) Center on Budget and Policy Priorities, "The 2019