Press Statement

CAP Responds to New Poverty Numbers

The Census Bureau announced this morning that 36.5 million Americans were in poverty in 2006, down since last year but nearly 5 million more than were poor in 2000. The number of Americans without health care coverage was 47 million, up by 2 million since last year and up by 8.5 million since 2000. In addressing both poverty and health coverage, our nation has gone backwards over this period.

The nation’s poverty rate in 2006 was 12.3 percent, compared with 12.6 percent in 2005. In 2000, after seven consecutive years of falling poverty, the poverty rate was 11.3 percent, and 31.6 million Americans were poor. Not only have we failed to make progress since then, but the nation remains far behind where it was six years ago, with 4.9 million more people in poverty in 2006 than 2000. This underscores that economic growth alone—especially when the benefits are not evenly shared—will not be enough to make meaningful progress in reducing poverty. There needs to be a serious national commitment, and that commitment has been wholly lacking in recent years.

In 2006, children remained, by far, the poorest age group. There was no statistically significant change in the child poverty rate (17.4 percent, compared with 17.6 in 2005). The poverty rate remained 20 percent for children under age six. By contrast, the poverty rate for 18- to 64-year-olds was 10.8 percent, statistically unchanged from 11.1 percent in 2005. The elderly remain the least-poor age group, with a statistically significant decline for people age 65 and over from 10.1 percent to 9.4 percent.

The continued high poverty rates for children impose enormous costs both for them and for our nation. Recent research finds that persistent child poverty costs our economy $500 billion a year in lost productivity, higher health care costs, and crime-related costs.

The racial poverty gap remains severe. In 2006, poverty rates for blacks (24.3 percent) and Hispanics (20.6 percent) remained far higher than the rates for whites (8.2 percent) and Asians (10.3 percent). The poverty rate remained statistically unchanged for the native born—11.9 percent in 2006, and fell for the foreign-born population from 16.5 to 15.2 percent.

The poverty line itself falls far short of the amount of income that families need to make ends meet. In 2006, the poverty threshold for a family of four was $20,444. In many communities, the amount of income needed by a family to get by is often twice that figure or more. In 2006, 90.5 million Americans—30.5 percent—had incomes below twice the poverty line.

Income inequality in the United States remains at historically high levels. In 2006, the share of income for the bottom 20 percent of U.S. households remained at 3.4 percent, while the share for the highest quintile was 50.5 percent. While median household income grew by less than 1 percent in 2006, the real median earnings of full-time workers fell for the third year in a row.

The new Census data on health care coverage is alarming. The Census Bureau also reported that the share of Americans without health insurance grew from 15.3 percent to 15.8 percent while the number of uninsured Americans increased from 44.8 million to 47.0 million, with declines in both the percentage of people covered by employment-based coverage and the percentage covered by government programs. The number and percentage of uninsured children grew (from 10.9 percent and 8 million children in 2005 to 11.7 percent and 8.7 million children in 2006), with children in poverty far more likely to be uninsured (19.3 percent).

The United States should not tolerate sustained high poverty and deteriorating access to health care. We can do better. Earlier this year, our Task Force on Poverty issued a report calling for a national commitment to cut poverty in half in 10 years and proposed a strategy to accomplish the goal. Today’s new poverty, income, and health care data underscores the need for the nation to take action and move forward.