And other key takeaways from new Census reports on the economy, poverty, and health care.
The Census Bureau released its annual reports on income, poverty, and health insurance coverage Wednesday. The data explain why, despite a rise in employment numbers, Americans have been so pessimistic about the economy.
Here are three highlights:
1. More jobs aren’t making Americans richer
In 2014, despite job growth and and other signs that the economy is improving, the income of the average American didn’t change much from the previous year. The average median household income remained stuck around $53,700 for the third consecutive year. Official (14.8 percent) and supplementary (15.3) poverty rates also didn’t budge.
To survey median household income for 2014, the Census Bureau used different methodology than in years before 2013. For the sake of comparison, liberal think tank Economic Policy Institute has created an interactive chart (below) estimating what the median incomes for the past 15 years would have been based on the Census’s new methodology (green dashed line). The solid green line shows the actual Census income figures from 1995 to 2013. The 2014 median household income was considerably lower than both the actual 2007 income and the EPI’s estimate:
Census Bureau statistician Edward J. Welniak Jr. told The New York Times that an increase in single-person households (that tend to have lower income than households with families) might explain the income stagnation. Experts at EPI, however, blame embarrassingly flat trajectory of average hourly wages for American workers.
”We have stressed over and over that the key to robust, shared prosperity is to get wages to grow. These data very much confirm that,” EPI President Lawrence Mishel said in a press call discussing the report. “Today, there’s been broad-based stagnation of wages driving an incredible low level of household income.”
2. Racial gaps are still intact
In 2014, African Americans continued to have the lowest household income ($35,400); Asians had the highest median income, at $74,300. Compared with every dollar a white family brought in, a black family in America earned 59 cents and Hispanic family earned 71 cents, EPI's Valerie Wilson explained. From the EPI chart below, it’s clear that the effects of the recession—which hit African Americans particularly severely—continues to linger:
African Americans also retained the highest poverty rate (26 percent), closely followed by Hispanics (24 percent); Asians were at 12 percent, and whites at 10 percent. The poverty rate for African Americans rose slightly between 2013 and 2014, but the Census says the increase wasn’t statistically significant (below, left). The number of poor black kids under 18, however, climbed from an already-high 34 percent to 37 percent (below, right):
Wilson says the rise in poor black youth from 2013 and 2014 may partly be explained by the relative decline in earnings of black women (more likely to be single moms) since 2009, compared with women of other races.
3. There is some good news, particularly for immigrants
The share of Americans without health insurance decreased considerably from 13.3 percent in 2013 to 10.4 percent in 2014. The decline happened for all racial groups, and it’s partly a result of the Affordable Care Act. Although the Urban Institute, the RAND Corporation, Gallup, and others have previously evaluated the act, the Census is a more comprehensive appraisal, and some interpret these numbers as new evidence of Obamacare’s success (though critics remain).
Immigrants made out especially well. While the share of native-born Americans without coverage dropped by 2.4 percentage points, that of uninsured naturalized immigrants fell by 5.2 percentage points. (The Associated Press, however, has recently reported that around 400,000 immigrants lost coverage due to snags in paperwork.) Immigrants were also the only group that saw an increase in their income; in 2014, they brought in $59,300—up 4 percent from the previous year.