State and National Poverty Rates Remain the Same in Fourth Year of Recovery

(Augusta ME) Today, the Census Bureau reported that poverty in the United States neither rose nor declined.  The national poverty rate of 12.6% for 2005 remained statistically unchanged from 2004.  Some 37 million Americans still live in poverty.  This is the fourth year of recovery since the end of the 2001 recession and although it is the first year the poverty rate has not increased, it still has not declined despite growth in the economy.  

The Census Bureau also reported that the proportion of Americans lacking health insurance increased in 2005.  Some 46.5 million Americans lacked health insurance, in 2005, a statistically significant increase of approximately 1.3 million from 2004.  The Census Bureau reported that employer-provided coverage declined in 2005 and the number of people covered by government-funded health insurance (e.g. Medicaid) remained the same.  The number of uninsured children rose by approximately 400,000 between 2004 and 2005. 
Again, there was no significant change in the numbers for Maine.  The Current Population Survey reports a 12.6% poverty rate for Maine in 2005 (+/- 1.3%).  This is approximately 166,000 people.  The Census Bureau’s American Community Survey (ACS) reports the same poverty rate of 12.6% for Maine in 2005.  Using a 2-year running average for better statistical significance in comparison, Maine’s poverty rate in 2004-2005 was 12.1% (158,000 people), lower than the national rate and still not significantly different from the 11.6% poverty rate calculated for 2003-2004 and not significantly different from the 10.2% rate from 2000-2001 – four years ago.  There was no statistical change in the number of people earning below 200% the poverty rate.  CPS data reports that 32.1%, or 422,000 people, earned below 200% the poverty level in Maine in 2005.  This measure is often used as a proxy for a livable wage.  This means that 1 out 3 people in Maine still have difficulties in meeting basic economic needs on their wages.      

There was no significant change in the number of uninsured Mainers.  Using a 2-year running average, 136,500 people, or 10.5% of Mainers were without health insurance for 2004-2005.  This was not a statistically significant change from the 130,000, or 10.2% of Mainers that were uninsured for 2003-2004.  There was a statistically significant improvement in Maine’s real median family income.  Using a two-year running average, the median household income in Maine was at $43,317 (2005 $) in 2004-2005.  This represented a real 5.5% increase from the $41,048 (2005 $) from 2003-2004.  This was better than the nation, where real median household incomes remained stagnant over that same time period.

On the national level, despite economic growth, we still saw no improvement in the poverty rate, no improvement in median household income, and the number of uninsured Americans, including children, increased.  In response to this, Congress continues to target tax breaks for the wealthiest of Americans, run up our national deficit, all while cutting funding for programs that help low and middle income families improve their lives.  Income and wage data show that this form of economic development has benefited high income earners but has missed the mark for everyone else.  

In Maine, despite a lack of good news for the nation, the state was able to tow the line on these measures and in the case of median household income, improve some.  Having said that, the data shows that there is room for improvement and coupled with a recent slowdown in the Maine economy we should be vigilant in identifying opportunities for growth.  This includes investing in infrastructure, investing in our workforce, and investing in those programs (healthcare, childcare, etc.) that remove hurdles for working families as they strive to improve their condition.  Divesting at this point through formula-base spending limits like TABOR will move us in the opposite direction on these indicators and hurt our economy.  

Ed Cervone, Policy Analyst for the Maine Center for Economic Policy said, “As Maine looks for ways to improve the economy so that all families can enjoy the benefits of their hard work, it is important for us to identify and make the smart and necessary investments.  The State should not back away from this challenge and should resist the false promises of quick fixes like TABOR.  Long-term investment and commitment to our resources and to our workforce are what is needed for economic growth, what we need to lower poverty and what is needed ensure the health and future of this state.”