Household Income Falls, Poverty Rate Ticks Up

Politics Reuters

American household incomes lost ground last year and the poverty rate ticked up, a sign the U.S. economic expansion had yet to lead to gains for many Americans five years after the 2007-2009 recession.

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The data released by the U.S. Census Bureau on Wednesday, which showed the inflation-adjusted median income slipping to $53,657 last year from $54,462 in 2013, offered a reminder of the tepid nature of the economy's recovery.

"In 2014, real median household income was 6.5 percent lower

than in 2007, the year before the most recent recession," Census researchers wrote.

At the same time, the poverty rate ticked up to 14.8 percent from 14.5 percent in 2013, the data showed. Census researchers said the changes in both the median income and poverty rate were not statistically significant.

The Census Bureau also said the number of people in the United States without health insurance coverage fell to 33 million last year, or 10.4 percent of the population, from 41.8 million, or 13.3 percent, in 2013.

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White House economists welcomed the sharp drop in the number of uninsured, which reflected the impact of President Barack Obama's signature healthcare law, and a steep decline in the child poverty rate.

But Republican Paul Ryan, chairman of the House of Representatives Ways and Means Committee, said the Census figures showed U.S. poverty-fighting efforts were not working.

"This disappointing data, five years into an economic recovery, underscores the need for a new effort to modernize our country’s safety net programs," Ryan said in a statement.

A steady expansion has pushed the U.S. unemployment rate down to near 7-1/2-year lows, but wage gains have lagged and nearly 6.5 million Americans are working part time because they cannot find a full-time job.

Edward Welniak, chief of income statistics for the Census Bureau's housing and household economic branch, attributed the leveling of median income in part to a 1.2 million increase last year in non-family households, which typically have much lower income than family households.

"What we see there then is this increase in households at the lower end of the income distribution tended to hold down median household income," he told reporters.

With the economy regularly a top concern of voters, the findings are likely to add fuel for debate as 16 Republicans and six Democrats jockey for their parties' nominations ahead of the November 2016 presidential election.

The Census data covered the first full year of the 2010 Affordable Care Act's requirement for people to have health coverage. Republicans have attacked the law, also known as Obamacare, in Congress and on the campaign trail.

Until last year, the percentage of Americans who were uninsured had been stable since 2008, the Census Bureau said.

"This represents the largest percentage-point decline in the uninsured rate during this period," said Victoria Velkoff, chief of the bureau's social, economic and housing statistics.

Under Obamacare, Americans faced fines starting last year if they did not have health insurance.