Beyond the poverty rate: Census data shows policy choices matter
Posted on 09/16/15 by Hannah Halbert (she/her) in Work & Wages
Full-time employment has rebounded to pre-recession levels, but new census data shows wages are so low that 1.4 million more workers are living in poverty compared to 2007.
The data released today by the U.S. Census Bureau drives home the fact that U.S. workers are working hard but not making many gains. The data pertains to income, poverty and health insurance (there is good news on health insurance, but not so much on income and poverty). Here are three big things (and a slew of data points) that get us beyond the poverty rate, and into what we can do about it:
1. We are working hard, but not getting ahead. U.S. workers need a raise and, in most instances, a union. There are more people working full-time year round than last year. In fact, the number of people working full-time, year round is back to 2007 levels, the last year before the recession. Yet, median earnings for these workers have not statistically recovered to 2007 levels, when adjusted for inflation. With the absence of meaningful earnings increases, it is not surprising that poverty rates for workers are stuck above pre-recession levels. Need more evidence? Check out the full Census report on this new data, and our State of Working Ohio report.
- More than 2.8 million more workers found full-time, year-round work in 2014 than in 2013 and the number working part-time fell by 1.4 million.
- Median earnings of full-time year-round workers are 2.2 percent lower than the 2007 (-$1,032), pre-recession median. Overall, real median household income was a full 6.5 percent lower in 2014, than in 2007.
- The official poverty rate for all workers in 2014 was 6.9 percent. Full-time, year-round workers did better, with a poverty rate of 3.0 percent. But neither rate showed statistically significant improvement from 2013.
- There were 1.4 million more workers officially living in poverty in 2014 than 2007. And since a family of three would be considered above poverty with a meager $19,073 in earnings, that doesn’t capture everyone who is struggling in America.
2. Anti-poverty programs actually reduce poverty. The official national poverty rate in 2014 was 14.8 percent. There were 46.7 million people in poverty. Both the rate and number were statistically unchanged from 2013. A separate measure of poverty, showed that contrary to nearly every Facebook meme shared by that one “friend”, government programs geared toward expanding opportunity and ameliorating the effects of poverty on children and seniors are doing just that — reducing poverty and helping people move forward.
- Social Security has the largest impact on the supplemental poverty rate, keeping 26 million people above poverty.
- Without Social Security, for people aged 65 and older the supplemental poverty rate would have been a full 50 percent, instead of the actual rate of supplemental rate of 14.4 percent.
- The federal Earned Income Tax Credit (EITC) and the refundable portion of the federal Child Care Tax Credit helped millions of workers climb above the poverty threshold. These credits pushed 5.2 million children above the supplemental poverty threshold in 2014.
- Food assistance, provided by the Supplemental Nutrition Assistance Program, helped almost 5 million individuals move beyond the supplemental poverty threshold last year.
3. Healthcare reform and Medicaid expansion work. The nation saw significant declines in the number of uninsured. Ohio as a Medicaid-expansion state also saw a significant decline. States that didn’t expand Medicaid saw far less improvement, particularly among low-and-middle income people. See the data and Census charts, here.
- More than 8.5 million Americans (2.8 percentage points) picked up coverage between 2013 and 2014.
- More than 300,000 Ohioans gained coverage between 2013 and 2014.
- Ohio had the 16th largest decline in the share of uninsured, among states.
- Kentucky had the biggest year-over improvement with a 5.8 percentage point decline. That makes them number 1 in increasing health insurance coverage, basketball, bourbon, and in county clerks denying people equal rights under the law.
Increases in employment are not translating into decreases in the poverty rate, but they do appear to impact which supports are helping families make ends meet. Three programs show statistically significant changes in impact between 2013 and 2014. The EITC and the Child Care Credit did more to reduce poverty in 2014, while food assistance and unemployment insurance had a smaller effect. These shifts are not necessarily surprising, as employment is increasing but earnings are not. The EITC is well targeted to boosting incomes of low-wage workers. The lesser efficacy of unemployment insurance and food assistance is also likely due to policy changes at the state and federal level that reduced eligibility and benefits in both programs.
The very good news in all of the data is that our policy choices matter. Federal and state action can reduce poverty and expand opportunity. Raising the minimum wage and supporting collective bargaining would help wages keep pace with productivity. Supporting programs like the EITC and food aid help kids have a shot a decent life, regardless of where they happened to be born. Whether we like it or not, our economic well-being is linked to that of our neighbor, and poverty drags us all down. We cannot be a prosperous state unless we have an economy that works for all.
 It is important to note that the impact of these programs cannot be determined using the data generated from the survey that sets the official poverty rate, because that rate only looks at pre-tax money income. Instead, the Bureau relies on a separate measure, the Supplemental Poverty Measure (SPM), which adds non-cash benefits to pre-tax money income to determine how public supports impact the poverty rate. You can learn about the SPM and read the full report on the value of these anti-poverty programs, here.
 It is also important to note that the author of this brief was born and raised in the hollers of eastern Kentucky so all digs at that great state are made with love. But seriously, come on Rowan County.
 No, really it would go along way to helping workers get ahead. Union workers in Ohio earned $20.17 an hour in 2014. Non-union workers earned $15.27. Read all about it in the State of Working Ohio.