BREAKING: Household income moves higher, poverty drops

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The U.S. Census Bureau announced today that Americans have secured solid financial gains for the second year in a row after prolonged stagnation, as household incomes rise and poverty drops.

The median U.S. household income increased 3.2% to $59,039.

The number of Americans living in poverty fell from 43.1 million to 40.6 million, which brought the poverty rate down to 12.7% from its previous level of 13.5%. This is great news for the country, making it the first time since the 2007-09 recession that the rate wasn’t higher than pre-recession levels.

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INCOME

  • Real median incomes in 2016 for family households ($75,062) and non-family households ($35,761) increased 2.7 percent and 4.5 percent, respectively, from their 2015 medians. This is the second consecutive annual increase in median household income for both types of households. The differences between the 2015 to 2016 percentage changes in median income for family and nonfamily households was not statistically significant.

Race and Hispanic Origin

(Race data refer to people reporting a single race only; Hispanics can be of any race.)

  • The real median income of non-Hispanic white ($65,041), black ($39,490), and Hispanic ($47,675) households increased 2.0 percent, 5.7 percent, and 4.3 percent, respectively, between 2015 and 2016. This is the second annual increase in median household income for these households.
  • Among the race groups, Asian households had the highest median income in 2016 ($81,431). The 2015 to 2016 percentage change in their real median income was not statistically significant.
  • The differences between the 2015 to 2016 percentage changes in median income for non-Hispanic white, black, Hispanic, and Asian households were not statistically significant.

Regions

  • Households in the South and West experienced an increase in real median income of 3.9 percent and 3.3 percent, respectively, between 2015 and 2016. The changes in incomes of households in the Northeast and Midwest were not statistically significant.
  • Households with the highest median household incomes were in the Northeast ($64,390) and the West ($64,275), followed by the Midwest ($58,305) and the South ($53,861). The difference between the median household incomes for the Northeast and West was not statistically significant.
  • The difference between the 2015 to 2016 percentage changes in median income for households in all regions were not statistically significant.
 Earnings
  • The 2016 real median earnings of men ($51,640) and women ($41,554) who worked full- time, year-round were not statistically different from their respective 2015 medians.
  • The female-to-male earnings ratio was 0.805, an increase of 1.1 percent from the 2015 ratio of 0.796. This is the first time the female-to-male earnings ratio has experienced an annual increase since 2007.
  • Between 2015 and 2016, the total number of people with earnings increased by about 1.2 million. In addition, the total number of full-time, year-round workers increased by 2.2 million between 2015 and 2016, suggesting a shift from part-year, part-time work status to full-time, year-round work status. The difference between the 2015 to 2016 increases in the number of men and women full-time, year-round workers was not statistically significant.
  • An estimated 74.8 percent of working men with earnings and 62.2 percent of working women with earnings worked full-time, year-round in 2016; both percentages were higher than the 2015 estimates of 73.9 percent and 61.3 percent, respectively.
 Income Inequality
  •  The Gini index was 0.481 in 2016; the change from 2015 was not statistically significant. Developed more than a century ago, the Gini index is the most common measure of household income inequality used by economists, with 0.0 representing total income equality and 1.0 equivalent to total inequality.
  • The share of aggregate household income in the fourth quintile decreased 1.3 percent between 2015 and 2016, while changes in the shares of other quintiles were not statistically significant.

Poverty

  • The poverty rate for families in 2016 was 9.8 percent, representing 8.1 million families, a decline from 10.4 percent and 8.6 million families in 2015.
  • For most demographic groups, the number of people in poverty decreased from 2015. Adults age 65 and older were the only major population group to see an increase in the number of people in poverty.

Thresholds

  • As defined by the Office of Management and Budget and updated for inflation using the Consumer Price Index, the weighted average poverty threshold for a family of four in 2016 was $24,563. (See <www.census.gov/hhes/www/poverty/data/threshld/index.html> for the complete set of dollar value thresholds that vary by family size and composition.)

Sex

  • In 2016, 11.3 percent of males were in poverty, down from 12.2 percent in 2015. About 14.0 percent of females were in poverty in 2016, down from 14.8 percent in 2015.
  • Gender differences in poverty rates were more pronounced for those ages 18 to 64. The poverty rate for women ages 18 to 64 was 13.4 percent, while the poverty rate for men ages 18 to 64 was 9.7 percent. The poverty rate for women age 65 and older was 10.6 percent, while the poverty rate for men age 65 and older was 7.6 percent.

Race and Hispanic Origin

(Race data refer to people reporting a single race only; Hispanics can be of any race.)

  • The poverty rate for non-Hispanic whites was 8.8 percent in 2016 with 17.3 million individuals in poverty. Neither the poverty rate nor the number in poverty was statistically different from 2015. Non-Hispanic whites accounted for 61.0 percent of the total population and 42.5 percent of the people in poverty.
  • The poverty rate for blacks decreased to 22.0 percent in 2016, from 24.1 percent in 2015. The number of blacks in poverty decreased to 9.2 million, down from 10.0 million.
  • The poverty rate for Hispanics decreased to 19.4 percent in 2016, down from 21.4 percent in 2015. The number of Hispanics in poverty decreased to 11.1 million, down from 12.1 million.
  • Asians did not experience a statistically significant change in their poverty rates nor in the number of people in poverty between 2015 and 2016.

Age

  • In 2016, 18.0 percent of children under age 18 (13.3 million) were in poverty, down from 19.7 percent and 14.5 million in 2015. Children represented 23.0 percent of the total population and 32.6 percent of the people in poverty.
  • In 2016, 11.6 percent of people ages 18 to 64 (22.8 million) were in poverty, down from 12.4 percent and 24.4 million in 2015.
  • In 2016, 9.3 percent of people age 65 and older were in poverty, statistically unchanged from 2015. The number in poverty increased from 4.2 million to 4.6 million between 2015 and 2016.

Regions

  • In 2016, the poverty rate and the number in poverty decreased in the Northeast from 12.4 percent (6.9 million) in 2015 to 10.8 percent (6.0 million) and in the South from 15.3 percent (18.3 million) in 2015 to 14.1 percent (17.0 million). The Midwest and West did not experience a significant change in the poverty rate or the number in poverty between 2015 and 2016.

Shared Households

Shared households are defined as households that include at least one “additional” adult, a person age 18 or older, who is not the householder, spouse or cohabiting partner of the householder. Adults ages 18 to 24 who are enrolled in school are not counted as additional adults.

  • In 2017, the number and percentage of shared households remained higher than in 2007, the year before the most recent recession. In 2007, 17.0 percent of all households were shared households, totaling 19.7 million households. In 2017, 19.4 percent of all households were shared households, totaling 24.6 million households.
  • Of young adults ages 25 to 34, 16.1 percent (7.1 million) lived with their parents in 2017, neither estimate was statistically different from 2016.

Supplemental Poverty Measure

The supplemental poverty measure extends the official poverty measure by taking into account many of the government programs designed to assist low-income families and individuals that are not included in the current official poverty measure.

The supplemental poverty measure released today shows:

  • The supplemental poverty rate decreased 0.6 percentage points in 2016 to 13.9 percent, from 14.5 percent in 2015.
  • The supplemental poverty rate for 2016 was 1.2 percentage points higher than the official poverty rate of 12.7 percent.
  • There were 44.6 million people in poverty in 2016 using the supplemental poverty measure (13.9 percent), higher than the 40.7 million (12.7 percent) using the official poverty definition with the supplemental poverty measure universe.
  • While the supplemental poverty rate declined for many groups, individuals age 65 and over experienced a statistically significant increase, from 13.7 percent in 2015 to 14.5 percent in 2016.
  • When tax credits and noncash benefits results are included, this results in lower poverty rates for some groups. For instance, the supplemental poverty rate was lower for children than the official rate: 15.1 percent compared with 18.0 percent.

While the official poverty measure includes only pretax money income, the supplemental poverty measure adds the value of in-kind benefits, such as the Supplemental Nutrition Assistance Program, school lunches, housing assistance and refundable tax credits.

Additionally, the supplemental poverty measure deducts necessary expenses for critical goods and services from income. Expenses that are deducted include: taxes, child care, commuting expenses, contributions toward the cost of medical care and health insurance premiums and child support paid to another household. The supplemental poverty measure permits the examination of the effects of government transfers on poverty estimates. For example, not including refundable tax credits (the Earned Income Tax Credit and the refundable portion of the child tax credit) in resources, the poverty rate for all people would have been 16.5 percent rather than 13.9 percent. The supplemental poverty measure does not replace the official poverty measure and will not be used to determine eligibility for government programs.

Health Insurance Coverage

  • The Current Population Survey shows that the percentage of people with health insurance coverage for all or part of 2016 was 91.2 percent, 0.3 percentage points higher than the rate in 2015 (90.9 percent). Over time, changes in the rate of health insurance coverage and the distribution of coverage types may reflect economic trends, shifts in the demographic composition of the population, and policy changes that affect access to health care. Several such policy changes occurred in 2014 when many provisions of the Patient Protection and Affordable Care Act went into effect.
  • In 2016, private health insurance coverage continued to be more prevalent than government coverage, at 67.5 percent and 37.3 percent, respectively. Neither the private coverage rate nor government coverage rate had a statistically significant change from 2015.
  • Of the subtypes of health insurance coverage, employer-based insurance covered 55.7 percent of the population for some or all of the calendar year, followed by Medicaid (19.4 percent), Medicare (16.7 percent), direct-purchase (16.2 percent) and military coverage (4.6 percent).
  • Medicare was the only subtype of health insurance that experienced a statistically significant change between 2015 and 2016. The rate of Medicare coverage increased by 0.4 percentage points, from 16.3 percent in 2015 to 16.7 percent in 2016. This increase was likely due to growth in the number of people age 65 and over and not to changes in Medicare coverage rates within any particular age group.

Age

  • According to the American Community Survey, between 2015 and 2016, the percentage of people without health insurance coverage dropped for most ages under 65, with generally larger decreases for working-age adults (ages 19 to 64).

Race and Hispanic Origin

(Race data refer to people reporting a single race only; Hispanics can be of any race.)

  • In 2016, non-Hispanic whites had the lowest uninsured rate among race and Hispanic origin groups at 6.3 percent. The uninsured rates for blacks and Asians were 10.5 percent and 7.6 percent, respectively. Hispanics had the highest uninsured rate at 16.0 percent.
  • According to the American Community Survey, in 2016, the state with the lowest percentage of people without health insurance at the time of the interview was Massachusetts (2.5 percent), while the highest uninsured rate was in Texas (16.6 percent).
  • The American Community Survey also showed that between 2015 and 2016, the uninsured rate decreased in 39 states. The declines for the states ranged from 0.3 percentage points (Massachusetts) to 3.5 percentage points (Montana). Eleven states and the District of Columbia did not have a statistically significant change in their uninsured rate.

States

  • According to the American Community Survey, in 2016, the state with the lowest percentage of people without health insurance at the time of the interview was Massachusetts (2.5 percent), while the highest uninsured rate was in Texas (16.6 percent).
  • The American Community Survey also showed that between 2015 and 2016, the uninsured rate decreased in 39 states. The declines for the states ranged from 0.3 percentage points (Massachusetts) to 3.5 percentage points (Montana). Eleven states and the District of Columbia did not have a statistically significant change in their uninsured rate.

State and Local Estimates From the American Community Survey

On Thursday, Sept. 14, the Census Bureau will release 2016 single-year estimates of median household income, poverty and health insurance for all states, counties, places and other geographic units with populations of 65,000 or more from the American Community Survey. These statistics will include numerous social, economic and housing characteristics, such as language, education, commuting, employment, mortgage status and rent. Later today, subscribers will be able to access these estimates on an embargoed basis.

The American Community Survey provides a wide range of important statistics about people and housing for every community (i.e., census tracts or neighborhoods) across the nation. The results are used by everyone from town and city planners to retailers and homebuilders. The survey is the only source of local estimates for most of the 40 topics it covers.

The Current Population Survey Annual Social and Economic Supplement is subject to sampling and nonsampling errors. All comparisons made in the report have been tested and found to be statistically significant at the 90 percent confidence level, unless otherwise noted.

For additional information on the source of the data and accuracy of the Income, Poverty and Health Insurance estimates, visit <www2.census.gov/library/publications/2017/demo/p60-259sa.pdf>.

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