Census Report Shows Progress for Those Who Need It Most
U.S. Census data for 2015 showed decisive progress in three measures of well-being: Poverty fell; median household incomes rose; and health-care coverage expanded. Using data going back to 1988, last year was only the second time on record — and the first since 1999 — that all three measures improved.
These indicators reflect a tightening job market that’s led to increased wages; policy changes, including minimum wage increases in several states, counties, and cities, that have further boosted workers’ earnings; and health reform’s continued impact on health coverage, as the national uninsured rate fell below 10 percent for the first time on record.
One of the most encouraging takeaways from the 2015 data is that the gains of the recovery from the Great Recession are starting to reach low- and middle-income people. Jobs and real average weekly earnings rose at their fastest pace in more than 15 years, giving a needed boost to workers at the bottom of the income scale.
The Census data highlight the gains workers see as the economy approaches full employment. Incomes grew fastest in the bottom and middle of the income spectrum, rising 7.9 percent in real (i.e., inflation-adjusted) terms for households at the 10th income percentile and 5.2 percent for households at the 50th percentile, compared to 2.9 percent for those at the 90th percentile.
The data also show progress on poverty: The official poverty rate fell from 14.8 percent in 2014 to 13.5 percent in 2015. Of particular note, the poverty rate for female-headed households with children declined by 3.3 percentage points, from 39.8 percent in 2014 to 36.5 percent in 2015, the largest decline since 1966. The safety net continued to play a large role in reducing poverty in 2015. Safety-net programs cut the poverty rate nearly in half last year, lifting 38 million people — including 8 million children — above the poverty line. The Census data show the impact of a broad range of government assistance, such as Social Security, SNAP (formerly food stamps), and tax credits for working families such as the Earned Income Tax Credit and Child Tax Credit. The figures rebut claims that government programs do little to reduce poverty.
Government benefits and taxes cut the poverty rate from 26.3 percent to 14.3 percent in 2015. Safety-net programs cut poverty significantly across all age and racial/ethnic groups the Census data cover. For example, they lifted 23.3 million white non-Hispanics, 6.1 million black non-Hispanics, 6.7 million Hispanics, and 800,000 Asians above the poverty line in 2015.
However, despite the progress displayed by the 2015 data, the poverty rate remained higher in 2015 than in 2007. Some 43 million people were poor last year by the official poverty measure.
To continue this progress and eventually recoup the recession’s losses, policymakers should work to keep wages rising for workers by increasing the minimum wage at both the state and federal levels and implementing the new federal rule that makes more salaried workers eligible for overtime pay.
Policymakers should also seek common ground on measures to reduce poverty. Examples include strengthening the inadequate Earned Income Tax Credit for low-income childless workers, as both President Obama and House Speaker Paul Ryan have proposed; strengthening the Child Tax Credit for children in the poorest families, especially those with young children; and increasing the supply of rental vouchers and enabling more low-income households with vouchers to live in neighborhoods with lower poverty, better schools, and more job opportunities. Strengthening the safety net is a crucial investment in America’s children; a growing body of research indicates that low-income children who receive safety-net assistance tend to do better in school, are healthier, and have greater earning power when they grow up.
As the American Academy of Pediatrics recently explained, “When a family lacks access to steady income, stable housing, adequate nutrition, and social and emotional support, it threatens the future of children and undermines the security of the nation as a whole.” Using the progress in the 2015 Census data as a guide, policymakers should continue to pursue policies that reduce poverty, promote job and wage growth, and extend health coverage.
Arloc Sherman is a Senior Fellow at the Center on Budget and Policy Priorities.