Economic Check-Up Dismal for Many U.S. Families

BY Jason Kane  September 13, 2011 at 2:16 PM EDT

Chelsea Ricardo prepares to go to school. Her family was living at the Community Partnership for the Homeless assistance center in Miami. 2008 photo by Joe Raedle/Getty Images.

American families continued to take an economic pounding in 2010, with median household income declining, health insurance rates remaining dreary and the number of Americans living in poverty reaching a 52-year high, the U.S. Census Bureau reported Tuesday.

According to the yearly status update, real median income for U.S. households dipped by 2.3 percent, coming in at $49,445 in 2010.

The official poverty rate rose for the third year in a row, increasing by nearly a percentage point and topping out at 15.1 percent — the highest rate since 1993. In real terms, that means that about 2.6 million people slipped below the poverty line last year, bringing the total of those living in poverty to 46.2 million nationwide.

Christine Owens of The National Employment Law Project called the numbers “unacceptable” and urged the government to continue federal unemployment programs that have kept them from slipping even more dramatically. Unemployment insurance and Social Security, she noted, collectively kept 23.5 million Americans out of poverty in 2010.

“It’s distressing but not surprising that poverty continues to increase,” she said. “I think the critical thing is putting people back to work, and the plan the president proposed has a lot of important elements to move in that direction.”

At the conservative American Enterprise Institute, economist Joe Antos said the release “simply confirms what we all know: 2010 was a very bad year economically and a very bad year for families.” His AEI colleague, Tom Miller, blamed the stalled economy on the Obama administration’s economic policies.

“Whatever changes that have happened in the past year didn’t help much and didn’t hurt much,” he said. “We haven’t solved the problem. The economy is staggering along and I don’t think we’ll get much progress anytime soon.”

While the number of people without health insurance rose from 49 million to 49.9 million in 2010, the Census reported that the percent without coverage remained fairly stable at 16.3 percent.

Much of the decrease in the private marketplace resulted from employers dropping their insurance coverage due to skyrocketing prices. In 2010, just a little more than half of Americans — 55.3 percent — received health care through their workplace, a one percent drop from 2009 levels, and nearly 10 points lower than a decade ago.

“I think the most significant takeaway from all of this that we have an ongoing trend of people losing job-based health coverage. We now have the lowest portion of the American population covered by jobs-based health coverage since the Census Bureau has been collecting this data,” said Ron Pollack, executive director of the consumer advocacy group Families USA.

What that means, he said, is that “more and more people needed to depend on the public safety nets, specifically Medicaid,” as their lifeline for health coverage. In 2000, 28.1 million people relied on the government health care program for low-income and disabled Americans. In 2010, it’s up to 48.6 million.

“This has profound implications for the current debate taking place about the budget. If Medicaid gets cut back and that lifeline is frayed, we’re going to see a very significant increase in the number of uninsured,” he said.

On its official blog, the Obama administration avoided all of the dreary aspects of the report and focused instead on a ray of hope: the percentage of 18-24 year olds with insurance increased by more than two percentage points in 2010 — rising from 70.7 to 72.8 percent.

That translates into 500,000 more young people with insurance, Health & Human Services Secretary Kathleen Sebelius wrote in the blog post. Noting that the health care reform law allows young people to stay on their parents’ plans until age 26, she pointed to the report as a sign “that the Affordable Care Act is working.”

“This 2% increase in coverage for young people came as the number of Americans under 65 with insurance went down slightly,” she wrote. “The Affordable Care Act will help provide coverage at a decent price for millions of uninsured Americans starting in 2014, when millions of Americans will have access to affordable insurance options.”