August 27, 2004

More Americans Were Uninsured and Poor in 2003, Census Finds

By DAVID LEONHARDT

WASHINGTON, Aug. 26 - The ranks of the poor and those without health insurance grew in 2003 for the third straight year, the government reported on Thursday, in a sign of the lingering pain being caused by a long slump in the job markets.

Those trends, spelled out by the United States Census Bureau, signaled a clear shift in the way the 2001 recession and its aftermath have spread across the country. The economy's troubles, which first affected high-income families even more than the middle class and poor, have recently hurt families at the bottom and in the middle significantly more than those at the top.

Median household income rose at about the same rate as inflation last year after three years of relative declines, according to the report. But the disparity in incomes between the rich and poor grew after having fallen in 2002. Pay did not keep pace with inflation in the South, already the nation's poorest region, in cities, or among immigrants. And the wage gap between men and women widened for the first time in four years.

Poverty rose most sharply among single-parent families last year. Health-insurance coverage fell only for families with annual income of less than $75,000. [Page C1.]

On the campaign trail, Mr. Bush has been saying the country has overcome the recession and a stock market decline in part because of his tax cuts. Democrats Thursday accused the Bush administration of trying to the bury the new numbers by releasing them all at once in late August, rather than reporting the poverty and health-insurance data on separate days in September, as they had in recent years.

"They're trying to lump, dump and run," Representative Carolyn B. Maloney, Democrat of New York, said.

Census officials said that politics played no role in the change and that the two sets of data had also been released simultaneously in the mid-1990's. The bureau published the numbers in August to coincide with the release of local economic numbers it compiles, officials said.

"Normally we're not criticized for bringing out data earlier," Charles Louis Kincannon, the director of the Census Bureau, said.

The national poverty rate rose to 12.5 percent last year, from 12.1 percent in 2002. After dropping rapidly in a long economic boom and a government war on poverty in the 1960's, from more than 22 percent in 1960, the rate has changed relatively little over the last four decades. It was slightly higher in 2003 than in 1969. A family of two adults and two children with an income of less than $18,660 was considered poor last year.

"We have had a generation with basically no progress against poverty," said Sheldon Danziger, a professor of public policy at the University of Michigan. "The economic growth is not trickling down to the poor."

Depending on their political beliefs, economists tend to place varying portions of blame for this on a rise in single-parent families, a withering of good jobs for people without college degrees and a shift away from anti-poverty programs by the federal government.

The number of uninsured Americans rose last year largely because fewer companies were providing health benefits to their workers than in the past, the Census Bureau reported. Almost 16 percent of people did not have health insurance last year, up from 14.2 percent in 2000.

Median household income declined slightly last year, by $63 to $43,318, but census officials said the change was not statistically significant. Since peaking in 1999 at the equivalent of $44,922 in 2003 with inflation taken into account, median household income has fallen more than $1,600, or 3.6 percent, though it remained higher last year than at any point before the late 1990's. The candidates for president offered sharply different views of the economy on Thursday. Senator John Kerry, the Democratic presidential nominee, argued that the report offered new proof that the Bush administration had put the interests of wealthy families ahead those of most Americans.

"The census figures are facts," Mr. Kerry said, while campaigning at Anoka Technical College in a suburb of Minneapolis. "They're not political diatribe. They're facts, statistics, and they tell a story when you add them all up."

Mr. Bush, in Farmington, N.M., said: "Because we acted, our economy since last summer has grown at a rate as fast as any in nearly 20 years. Since last August, we've added about 1.5 million new jobs.''

Terry Holt, a spokesman for President's Bush campaign, said that the census numbers were outdated because they covered only 2003. "Absent from these numbers is the strong economic growth we've seen in the last 11 months," Mr. Holt said.

Mr. Bush has helped the economy recover from recession by cutting taxes, Mr. Holt added, and has attacked poverty by signing a tax cut that eliminated income taxes for five million low-income people.

Unlike most economic downturns, the one that began in early 2001 was something of an equal-opportunity recession, hurting high-income and low-income families alike. The bursting of the stock market bubble, the collapse of many technology ventures and the decline of the manufacturing sector all led to the elimination of many good-paying jobs.

But as the economy continues its uneven recovery, growing but adding many fewer jobs than is typical, families in the lower part of the spectrum have begun to lose ground again, as they did in much of the 1970's, 80's and 90's.

Pay fell last year for households in rural areas and in cities, where income is less than the national average, by a greater percentage than it did for those in suburbs, the bureau said. After reaching an all-time high in 2002, the earnings of full-time female workers relative to their male counterparts fell slightly last year, to 75.5 percent. Income also dropped more for Hispanics than for whites, though it remained essentially unchanged for black households.

Over all, the highest-earning fifth of households took home 49.8 percent of the nation's income last year, up from the 49.7 percent in 2002 and 44.7 percent in 1983. Those figures exaggerate income inequality somewhat, however, because they do not include taxes and because wealthy households are larger on average than poor ones.

"There's a very large transfer of resources to poor people that is not captured in these poverty numbers,'' said Robert Rector, a senior research fellow at the Heritage Foundation, a research group. Whatever the true level of inequality, though, it grew last year, with the greatest increases in poverty coming among some of the nation's poorest groups. The poverty rate among households headed by a single woman rose to 28 percent, from 26.5 percent in 2002.

Of families with children under 6, 19.8 percent, or 4.6 million, were considered poor last year, up from 18.5 percent in the previous year.