(September 2004) U.S. poverty rates rose in 2003 to their highest levels in five years as the number of American children in poverty jumped by over 700,000, according to a report issued late last month by the U.S. Census Bureau.

The report, Income, Poverty, and Health Insurance Coverage in the United States, also revealed that 45 million (15.6 percent) of all Americans are without health insurance—1.4 million more than in 2002. Meanwhile, real median earnings for women who work full time declined in the United States for the first time since 1995.

“Poverty creeping up is bad news,” says John Haaga, PRB’s director of domestic programs. “The rise in the uninsured is also the jobless recovery in action—employers still don’t have the confidence to create full-time jobs, and are making do with contingent workers who are not necessarily getting benefits.”

U.S. Income Steady Overall, But Women and Hispanics Slip

Income, Poverty, and Health Insurance Coverage is based on information collected in the 2004 Annual Social and Economic Supplement to the bureau’s Current Population Survey. The report takes 2003 data on U.S. income, poverty, and health insurance coverage and breaks these numbers down by ethnicity, age, state, and region.

According to the report, real median household income in the United States remained unchanged in 2003 at $43,318. The nation’s income inequality also held relatively steady, with the share of aggregate income received by the bottom 20 percent of U.S. households sliding from 3.5 percent to 3.4 percent.

Income in Hispanic households experienced a real decline of 2.6 percent in median income, while income in Southern households fell 1.5 percent. And U.S. women who work full time saw their real median earnings decline 0.6 percent, to $30,724.

Since men ages 15 and older who work full time have real median earnings of $40,668, that means that women in the United States earn only 76 cents for every dollar men earn—over a full cent less than in 2002.

“The integration of the workplace has not been the well-publicized integration of all-male occupations,” says Haaga. “Most of the segregated occupations like construction worker haven’t integrated all that much, and they also haven’t grown. It’s the more-integrated service industry that has grown dramatically.”

Children Lead the Rise in Poverty

The sharp rise in poverty for children (from 16.7 percent to 17.6 percent of all children under 18, the highest jump in 13 years) accentuated an upward trend in U.S. poverty rates that has been underway since 2000.

One in eight Americans in 2003—35.9 million people—had incomes below official poverty thresholds in 2003, an increase of 1.3 million over 2002. (The modern poverty rate low for the United States is 11.3 percent, reached in 1973.) Ten percent of American families in 2003—400,000 more than in the previous year—now fall below the poverty line. And over one-third of those in poverty in the United States are now under 18.

“There’s been a sort of generational gap in poverty rates for quite some time in the United States and here again,” says Haaga. “But it’s a reversal of the normal historical situation, when both older Americans and children had higher poverty rates than the working population.”

Haaga adds that, while welfare reform, new jobs, and the Earned Income Tax Credit lured many people back into the workforce in the 1990s, poverty rates have been rising despite relatively low unemployment rates. The number of families in poverty that were headed by a single mother jumped 1.5 percent, to 3.9 million. And although poverty rates for many ethnic groups remain unchanged, blacks (at 24.4 percent) and Hispanics (at 22.5 percent) are still nearly three times as likely as non-Hispanic whites to be in poverty.

The report also updates the official U.S. poverty thresholds for households of various sizes. The average poverty threshold for a family of four is now $18,810; for a single individual, it is $9,393.

Haaga says that these thresholds—defined first in the early 1960s as three times what it would cost household of different sizes to afford a basic diet—offer what for many Americans is a rare glimpse into how the other half lives.

“People are always surprised when they learn how low these cutoff lines are,” Haaga says. “They’re well below what most Americans think is needed to have a decent living.”


Robert Lalasz is a senior editor at PRB.


For More Information

Income, Poverty, and Health Insurance Coverage in the United States is available at www.census.gov/hhes/www/income.html.