Income, Poverty, and Healthcare 2012: The Patient Did Not Get Worse But Remains Seriously Ill

By Hugh, who is a long-time commenter at Naked Capitalism. Originally published at Corrente.

The Census Report “Income, Poverty, and Healthcare” covering the year 2012 came out on Tuesday. Overall, the picture was little changed from 2011, which is to say that the recovery which did not happen for most Americans in 2011 continued not to happen for them in 2012. The situation for women remained poor. (All amounts are expressed in 2012 dollars. Incomes and earnings are pre-tax.)


After four years of declines, median household income was statistically unchanged in 2012, decreasing from $51,100 in 2011 to $51,017. A comparison of real household income over the past five years showed an 8.3 percent decline since 2007, the year before the nation entered an economic recession, and a 9.0 percent decrease from the 1999 peak of $56,080. The first time median real household income hit current levels was in 1989 ($51,681). If we take into account higher debt levels, it could be argued that overall we are worse off than we were 23 years ago.
Additionally, mean or average household income was $71,274 in 2012. This is an indication of the degree to which income is skewed to the upper brackets.
This becomes clear if we look at the shares of aggregate income by quintile and top 5%:

Shares of Aggregate Income (%)

The top 5% has almost as much aggregate income (22.3%) as the bottom 60% (25.9%). The top 20% has slightly more aggregate income than the bottom 80% combined.

We see a similar distribution looking at household income by selected percentiles. The black line is the 50th percentile or median. Those in the 60th percentile (purple line) and below have had very small to small increases in real household income over the last 45 years. While most groups experienced gains in the 1980s and 1990s, these were concentrated in the 80th percentile and above. Since 2001, all groups plateaued with some dropoff after the start of the 2007 recession. The difference is that in the lower percentiles most of the gains were lost whereas in the upper percentiles, especially the 90th percentile and above, the losses were minor and almost all of the overall gains were retained.

By race, real median income in 2012 was $68,636 for Asians, $57,009 for whites, $39,005 for Hispanics, and $33,321 for African Americans.

As the graph shows, the income of African Americans has been hardest hit of any group in the last dozen years. In 2000, the median household income of whites was $60,831. White household income has declined $3,822 since then. This represents a 6.3% loss. In 2000, African American median household income was $39,556. In 2012, it was $33,321 a decline of $6,235. In absolute terms, this is a loss 1.6 times that of whites. As a percent of their income, it is greater still: 15.8%, or about 2 1/2 times the hit whites took over the same period. To be blunt, neither Bush nor more importantly Obama have done anything for African Americans in the last 12 years.

Looking at the composition of households, real median incomes for family households ($64,053) and nonfamily households ($30,880) were not statistically different from the levels in 2011. Married couple households had the highest median income ($75,694), and those with women with no husband present had the lowest ($34,002). This last figure is important. A theme in this report is the poor status of women.

By sex, the median earnings of women who worked full time, year-round was $37,791, and $49,398 for men. That is the median earnings of women working full time was 76.5% that of men. As the chart below shows, the ratio of women’s earnings to men’s has been stagnant since 2001 (76.3%). While much heralded as a major legislative success and one of his few “progressive” accomplishments, Obama’s Lilly Ledbetter Act has had no effect on the ground.


46.496 million Americans or 15% of the population lived in poverty. This was up 249,000 from 2011, but not a statistically significant change. 12.7% of whites, 11.7% of Asians, 27.2% of African Americans, and 25.6% of Hispanics had incomes below the poverty line. And as the Census notes, that line should be considered more a “statistical yardstick” whatever that might mean rather than a “complete description of what people and families need to live.”

This is clear from looking at the poverty threshold of a single person living alone ($11,945), a one parent, two children family ($18,498), or a two adult, two children family ($23,283).
A perhaps more realistic measure of poverty would be to look at those making less than twice the current poverty levels. If we did, this would comprise 106.376 million Americans (34.2% of the population). Of these, 57.532 million would be women and 48.844 million would be men.

Of these, 50.445 million would be white (25.9%), 20.243 million would be African American (50.5%), and 29.019 million would be Hispanic (54.6%). This illustrates the fact that while there are as many whites at or near poverty (as officially defined) as African Americans and Hispanics combined, in terms of percentages, African Americans and Hispanics are twice as likely to fall into this marginal group.

Looked at this way with these numbers and these percentages, we begin to see the America that we all know and experience everyday. Like so many problems in our country, poverty is understated, and those in government whose job it is to address this issue have a vested interest in understating it as much as possible.

While not a statistically significant change, the number of children (under 18) declined in 2012 by 61,000 to 16.073 million (21.8%). No statistical change was seen in the 18 to 64 age group: 26.497 million (13.7%). The only group experiencing a statistically significant change was in those over 65, increasing 306,000 to 3.926 million (going from 8.7% to 9.1%). Of those over 65 and in poverty, 11% are women and 6.6% are men.

Overall, this is opposite to the trend begun in the 2007 recession where poverty increased in those under 65 even as it decreased slightly in those over 65.

Figures for families were similar to the previous year. 9.520 million (11.8%) families were defined to be in poverty in 2012. Married-couple families had the lowest poverty rate 6.3%. This is still higher than the pre-recession 2007 4.9% rate (4.7% in 2000). The poverty rate for male householder, no wife present, families increased from 16.1% to 16.4% (1.023 million). The rate for this group was 11.3% in 2000. The poverty rate for female householder, no husband present was 30.9% (4.793 million), down from 31.2% in 2011 and 31.7% in 2010. The low for this group was also in 2000 (25.4%). It says something about the status of women in this country that the poverty rate for single mothers is nearly twice that of single fathers and five times that of married couples.

Regionally, the poverty rate decreased 0.5% in the Midwest to 13.3% and in the West 0.7% to 15.1%. It increased 0.5% in both the Northeast (13.6%) and in the South (16.5%). Changes in the Midwest and Northeast were not considered statistically significant. The South has the greatest number of poor 19.106 million followed by the West 11.049 million. The Midwest has 8.851 million and the Northeast 7.490 million.

19.934 million of the poor live in cities and comprise 19.7% of this population. 18.099 million live in the suburbs and account for 11.2 % of this population. 8.463 million of the poor live in rural areas and are 17.7% of this population.

One final note from the report:

“Shared households are defined as households that include at least one “additional” adult: a person 18 or older who is not enrolled in school and is not the householder, spouse or cohabiting partner of the householder.
In spring 2013, 10.1 million young adults age 25-34 (24.1 percent) were additional adults in someone else’s household. Neither of these were statistically different from 2012.
It is difficult to precisely assess the impact of household sharing on overall poverty rates. Young adults age 25-34, living with their parents, had an official poverty rate of 9.7 percent, but if their poverty status were determined using only their own income, 43.3 percent had an income below the poverty threshold for a single person under age 65.”

Health Insurance Coverage

In 2012, the number of Americans with health insurance increased to 263.2 million (84.6%) up from 260.2 million (84.3%) in 2011. This says nothing about the quality of that insurance. The number of Americans without healthcare insurance decreased from 48.613 million (15.7%) in 2011 to 47.951 million in 2012 (15.4%). (It was 13.1% in 2000.) The change in the number of uninsured was not statistically significant while the percent change was.
Much of the increase among the insured appears to have been a baby boomer effect. Those on Medicare as a percent of the insured rose from 15.2% to 15.7%. As the report notes, the number of Americans on Medicaid surpassed those on Medicare in 2009. In 2012, there were 50.903 million Americans on Medicaid and 48.884 million on Medicare. In 2012, there were 101.493 million on some kind of government healthcare insurance (Medicaid, Medicare, military) and 198.812 million on some form of private insurance.

Only 1.5% of those over 65 are uninsured. If we look at other age groups, we can surmise that those under 19 probably are covered by their parents’ insurance or Medicaid. Those 19 to 25 were in the highest group but their numbers have declined to the same level as the next highest group. This may, in part, be a beneficial effect of Obamacare, allowing young adults to stay on their parents’ insurance coverage longer.

Those on a private insurance plan sometime in 2012 accounted for 63.9% of the insured while those who were only on a private plan were 52.0%, both the same as in 2011. Those on an employment-based plan were 54.9%, down a statistically not significant 0.2% from 2011. These numbers do not sum to the 263.2 million of the insured because people can be on more than one kind of insurance during the year.

By race, 21.585 million whites (11.1%) were uninsured, 15.500 million Hispanics (29.1%), 7.629 million African Americans (19.0%), and 2.477 million Asians (15.1%). The undocumented may explain why Hispanics are so far out of range with other groups. All groups experienced decreases in the percentage of uninsured, but only those for Asians (-1.7%) and Hispanics (-1.0%) were statistically significant.

Regionally, the South continued to lead in the number (21.587 million) and the percent (18.6%) of uninsured, followed by the West 12.488 million (17.0%), the Midwest 7.937 million (11.9%), and the Northeast 5.939 million (10.8%). The declines in the Midwest (-0.8%), the West (-1.0%). The 0.2% decrease in the Northeast and the 0.3% increase in the South were not considered significant.

18.836 million in cities (18.6%), 21.859 million (13.5%) in the suburbs, and 7.256 million rural (15.2%) were uninsured. While all these groups saw declines, none were significant. Combining city and suburbs did result in a significant 0.3% decline to 15.5%.

With regard to children (those under 18), 6.586 million (8.9%) were uninsured in 2012, down from 6.964 million (9.4%) in 2011.
The following chart neatly encapsulates the parameters of uninsured children.

That children in poverty are more likely to be uninsured is unsurprising. That the difference between uninsured children in and not in poverty is only 5.2% is more so. This may be because, as I pointed out above, the parameters the Census is using to define poverty are too restrictive. As we see, as household income rises, the rate of uninsured children declines. Also as we would expect, thanks to our healthcare and immigration policies, Hispanic children are more than twice as likely to be uninsured as white children, and relatedly, children of noncitizens are more than three times as likely to be uninsured as native born children.


2012 saw marginal improvements in some areas, some significant, some not, in what remains an overall bad economic picture. In category after category, the situation compares poorly not just to pre-recession 2007, but to pre-2001 recession 2000, and in the case of household income to pre-1990 recession 1989. We are not back to where we were ten and twenty years ago, let alone where we should be. There is drift but no progress. Inequality remains stifling. Poverty is undermeasured as is healthcare. Obamacare will likely affect the numbers on healthcare in a major way, although we will not begin to see its effects until the 2014 report when it comes out in two years in September 2015. But will it affect the reality?

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. Jim

    I don’t think these numbers reflect reality…I was speaking recently to someone I know who works in billing at a large doctors’ group in the Cincinnati area. The group offers “discounts” to those in lower income brackets, who do not have insurance, for physician services, but those patients must go through a separate application process through their billing office. She said that while a couple of years ago, they received 50 applications a week, now they receive 1,500.

    Maybe this is anecdotal, and maybe this is regional, but numbers such as, only 40+ million uninsured sound like total BS.

    1. Cynthia

      Charity care is paying their medical bills, Jim, which is a government subsidized program for the uninsured, even if they are not poor enough or not sick enough to qualify for either Medicaid or disability insurance through Medicare. This is just a short-term fix, they are still left without insurance to cover the costs of all future medical bills.

      1. Jim

        I know what that is, the point is that there are way more than 40 million uninsured, if so many more people are applying for this type of care.

  2. LAS

    I might argue that the situation does get worse from year after year of being in a stall for the majority. Altho inflation may be mild, cost of services continues to rise. There is a compound negative effect from failure to thrive. There certainly are opportunity losses.

    1. s spade

      Inflation is anything but mild. Measured inflation is mild. I keep careful track of actual expenditures and find the cost of living increasing at 15% p/a over the past four years. Anyone else have a handle on this?

      1. DanB

        Finance and economics folks argue about the definitions of inflation and deflation; but talking past one another reigns in this debate. As I see it, the rising cost of living and inflation are not the same thing. We have the threat of massive deflation -the Fed doing all to keep housing prices up “artificially” is one example- coupled with the rising cost of living. At root, this is due to the unfolding energy crisis brought on by the peak in light sweet crude oil production. It’s most unlikely the status quo is capable of realizing -let alone addressing- this situation. There is too much destruction and redistribution of political and economic power at stake. In my view, deep crisis is all that remains as a catalyst of fundamental change. And which way that change goes -totalitarian or egalitarian- is the big question. An anecdote: While at a party in West Berlin in October 1989, three weeks before the Wall fell- the topic of conversation was political turmoil in East Germany. None of those I spoke to -most were academics- at this party envisioned the impending end of East Germany. The consensus was that it would be some years -10-20- before that occurred.

        1. James Levy

          Amen on the light sweet crude. Oil isn’t exactly scarce, but it has reached a new plateau with a consistent price point above $95 a barrel that can only go down if economic activity crashes. My wife noticed the strange combination of inflation and deflation four years ago. Lived experience for us is that the cost of living is going up, but we bought a house at the trough of the market at a price we never could have gotten in normal times. So you save here, you spend more (especially for food) there. And you watch your savings eaten away because it is impossible to get any safe interest on it, so the slightest inflation devalues your reserves.

      2. Cynthia

        Bought a bag of Lay’s potato chips today and the packaging stated “New Look Same Great Taste.” The bag seemed smaller than before and sure enough, when comparing to another bag of chips at home I had purchased a couple of weeks ago, was in fact smaller by half an ounce. Price was the same but 5% less product. We also know that a pound of bacon in a package no longer exists, those packages are 12 ounces now. The manufacturers have been doing this for a long time trying to fool the consumer, and supposedly the BLS has factored in these quantity changes into their figures when computing inflation but we know the truth – inflation is understated and the government has no credibility.

        I’m so tired of the pack of lies.

        1. craazyboy

          A Baker’s Dozen = 13

          A BLS Dozen = 11

          Then there’s BLS “hedonistic” price adjustments – if the price went up but quality increased, then the BLS decrees the price did not go up.

          I’m sure the lurking foodies here can come up with a much longer list than me, but for starters,

          Quality Improvements Helping Stabilize Rising Food Prices

          Corn feed beef vs range beef

          Chicken pumped full of steroids when alive, then pumped up with 15% water before packaging vs range chicken.

          GMO corn and soy.

          Veggies with half the vitamins and minerals vs not depleting soil.

          MSG – makes everything taste better – even pet food!

          Non water soluble pesticides. Organic food is a hippie thing – not inflation!

          Corn upgraded to gasoline.

  3. Ray Phenicie

    Being without health care insurance is not a good life position to be in; however, in this country, the coverage that does come with insurance is very spotty at best. Coverage includes some huge inequities and injustices: Quality of care is abysmal, out of pocket costs are huge. IN short our health care system is broken at the point of delivery: physicians’ offices, acute care facilities, and ancillary (labs, Out Patient testing facilities) care is of an uneven quality and availability for those services is also uneven. Folks in rural areas can be forced to look at traveling 30, 60 or 100 miles to have a diagnostic test performed.

    1. LucyLulu

      Quality of insurance coverage varies widely. For example, the BCBS coverage available to federal government employees is excellent and very affordable. IIRC, it’s under $150/month for single coverage, with low co-pays and deductibles. Large companies generally also offer good policies reasonably priced.

      Small companies are at the mercy of the claims histories of individual employees. A single employee with high claims can affect the cost of all employees. I don’t know if this will change under ACA, I can’t see why.

      Individual policies are outrageously expensive. For example, ten years ago my sister, 50, a yoga master, extremely fit and healthy, on no medications or health problems, lowest quote was $800/month for coverage. I have another sister, 60, only on thyroid medication, also fit and healthy, who currently pays $400/month for catastrophic coverage through Kaiser in GA.

      Costs also vary considerably depending on geographic location. NJ and S. Florida have the highest premiums, having the highest healthcare costs, allegedly due in large part due to high rates of litigation and malpractice insurance.

      Where I lived in NE Florida, many OB/GYN’s were dropping their OB practice. My very popular (esp. among medical community) older GYN had a sign posted in his office that he did not carry malpractice insurance due to unaffordability, and implied any lawsuits would result in no money to pay awards (guessing assets protected by LLC/LP?). This was also not unusual to find in the area I lived

      We have a severely bloated healthcare system. Obamacare, at best*, only addresses the cost issue around the edges.

      *I know dear Lambert has made compelling posts that ACA will result in higher costs. I’ve read equally compelling articles arguing the opposite. I’m deferring any opinion until the data comes in after implementation, but I wouldn’t expect to see major changes in either direction. Mandatory increases in coverage, e.g. no denial for pre-existing conditions, no lifetime caps, will exert upward pressures on cost, while provider agreements to accept reduced reimbursements and 15-20% caps on insurer non-benefit margins (individual policies historically had 30% or higher) should exert downward pressures.

      I wanted single-payer, universal healthcare. Unfortunately this is what we got. It won’t be repealed. So, we need to see how it pans out and then start making fixes. If we’re lucky, an opening for single-payer will emerge. Also Grayson has sponsored legislation for an opt-in for Medicare for those under 65 in the past, and he can be quite persuasive and effective (and seems to have scaled back on his “crazy” image). If anybody here lives in his district, perhaps he can be persuaded to reintroduce this at a strategic time.

  4. Elliot

    Here’s a goodie: a friend of mine, mid 60’s, decided to opt for the medicare drugs benefit program, for the first time; only to find that they would then bill her for the previous years of not using it. She declined, of course.

    And I REALLY wish we would stop using the term “access to health insurance”. It is NOT health care, does not assure access to health care, and is not very much like insurance. What it does is force us to pay money to the health insurance co’s, with the vague hope that down the road they might shave the cost of health care.

    What we need is single payer, and access to health care that will not force us to choose between food or or health care. Canada can do it, and we could, if we could get Congress to give a red hot damn about us. But they don’t, any more than the political pundit class do.

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