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The lagging poor


Published: Wed, September 7, 2005 @ 12:00 a.m.


Washington Post: The poverty level edged up last year, to 12.7 percent -- the fourth straight annual increase. Overall median income remained flat at $44,389, down 3.8 percent from its peak in 1999. This is a robust economic recovery?
The Census Bureau's annual report on income, poverty and health insurance in the United States is not alarming -- but neither is it cheering, or even reassuring. Rather, the numbers underscore the lagging and uneven nature of the economic recovery since the 2001 recession. According to the new data, 4 million more people were living in poverty in 2004 than in 2001, and 4.6 million more people lacked health insurance.
Administration officials counsel patience, pointing to the downturn of the 1990s, when it took several years for the poverty rate to start to fall. "The last, lonely trailing indicator of the business cycle," Commerce Department official Elizabeth Anderson said of the poverty rate.
Wishful thinking
This has about it more than a whiff of wishful thinking. For one thing, the increase in poverty between 2003 and 2004 is in fact out of the ordinary; such a rise hasn't happened between the second and third years of an economic recovery since the federal government began collecting poverty data in 1960. For another, the poverty rate may be a lagging indicator, but in this case it's not lonely: See, for example, the median income of working-age households, which declined 1.2 percent.
Another ominous signal involves health insurance coverage. Although the percentage of people with coverage remained unchanged from 2003 to 2004, that masked a shift from employer-provided insurance to government coverage. The percentage of people with employer-based health insurance fell for the fourth year in a row. Most of this slack has been taken up by Medicaid. But with state budgets under increasing strain from Medicaid costs and with Congress poised to make cuts in the program, it's not at all certain that states will be willing or able to maintain coverage for working Americans hovering at the edge of poverty.


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