Poverty rate rises to 13.2 percent, and 46.3 million lack health insurance

The latest statistics on median income, poverty, and people without health insurance are in, and they make clear the severity of the recession in the U.S.

Real U.S. median household income fell 3.6 percent in 2008 to $50,303 from $52,163, breaking a string of three years of annual income increases, the U.S. Census Bureau announced Thursday, in its annual report. (Read the full Census Bureau report by clicking here.)

Equally significant, the poverty rate rose to 13.2 percent in 2008 from 12.5 percent in 2007, the bureau said. As of 2008, 39.8 million Americans were living in poverty, up from 37.2 million in 2007.
In addition, the ranks of Americans without health insurance also increased. As of 2008, they were 46.3 million Americans without health insurance -- or 15.4 percent of the U.S. population -- compared to 45.7 million in 2007.

Poverty: A troubling trend

Further, the poverty rate shows a disturbing trend. The increase in the poverty rate in 2008 from 2007 was the first statistically significant annual increase since 2004. Also, the 13.2 percent poverty rate was the highest since 1997.

The Census Bureau's weighted average poverty threshold for a family of four in 2008 was as follows: $22,025; for a family of three, $17,163; a family of two, $14,051; and for unrelated individuals, $10,991.

The poverty rate typically rises during recessions, due to the increase in unemployment that eliminates the sole source of income for many Americans: a full-time job. More than six million Americans have lost jobs during the current recession, and the number of unemployed Americans has increased to 14.7 million as of August. What's more, there are now 6.05 applicants for every job vacancy in the U.S., up from 1.72 applicants per job opening in December 2007, when the recession started. (Read the full government report on applicants per vacancy by clicking here.)

Americans without health insurance continues to rise

Beyond the 600,000 increase in Americans without health insurance, to 46.3 million, lies another problematic trend: the decline in private sector health insurance. The number of Americans covered by private health insurance decreased to 201.0 million in 2008 from 202.0 million in 2007, while the number covered by government health insurance soared to 87.4 million in 2008 from 83.0 million in 2007.

Overall, the number of people covered by health insurance declined to 176.3 million in 2008, from 177.4 million in 2007.

The rise in the uninsured occurs as President Obama and Congressional Democrats and Republicans continue to negotiate on what Obama administration officials hope will be a plan to provide universal health insurance, while also reducing the nation's health care costs - which are the highest on a per capita basis in the industrialized world.

Median incomes: Only the Northeast is spared

The decline in median incomes was almost universal, with only the Northeast region spared. In 2008, real median household income fell 4.9 percent in the South to $45,590; declined 4.0 percent in the Midwest to $50, 112; and fell 2.0 percent in the West to $55,085. In the Northeast, median income was statistically unchanged, at $54,346.

Further, the decline in median income affected all races and origins. (Note: According to U.S. Census Bureau categories, race data refers to people reporting a single race only. Hispanics can be of any race, the Census Bureau said.)

From 2007 and 2008, the real median income of non-Hispanic white households declined 2.6 percent to $55,530; for blacks, it declined 2.8 percent to $34,218; for Asians, it dropped 4.4 percent to $65,637; and for Hispanics, it decreased 5.6 percent to $37,913. Except for the difference between the declines for non-Hispanic white and Hispanic households, all other differences between the declines were not statistically significant, the Census Bureau said.

Economic Analysis: The numbers are sobering, and are indicative of a pronounced recession. It seems almost impossible that the United States -- the nation with the strongest and most technologically-advanced economy in the world -- could get to a point where 15 percent of its population doesn't have health insurance. The resources, knowledge base, ingenuity, and productivity alone of the United States should have resulted in at least a minimal health care program for all citizens, decades ago; every other major, industrialized nation has one.

Further, the increasing poverty rate underscores the need for health care reform, from fiscal and economic standpoints. A good portion of the those newly impoverished Americans will seek health care services via Medicaid or via trips to hospital emergency rooms, and the U.S. taxpayer will pay for almost all of it -- all the more reason to implement reforms that lower health care costs, system-wide.
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