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Wednesday, August 30, 2006 - Page updated at 12:00 AM

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Bad news overshadows good for middle class

Los Angeles Times

WASHINGTON — The Census Bureau's annual snapshot of economic health in the United States offered a warning light for the middle class, as an unchanged poverty level and a widening erosion of health-insurance coverage tarnished news that household income was beginning to rise.

Household income rose between 2004 and 2005 for the first time since 1999, the Census Bureau said in its report, released Tuesday.

But that news contained a mixed message. Earnings of full-time workers fell during that period, and incomes rose partly because there were more households in which a second adult joined the work force.

Democrats portrayed the report as evidence that the circumstances of many families had deteriorated under President Bush. "Our economy is moving in the wrong direction," said House Minority Leader Nancy Pelosi, D-Calif.

Rob Portman, Bush's budget director, said the economy's ability to bounce back from the 2001 terrorist attacks and Hurricane Katrina a year ago "is a testament to the strong work ethic of the American people, the resilience of our economy and pro-growth economic policies, including tax relief."

The Census Bureau surveyed 100,000 households in the spring about their incomes and health insurance in 2005. New Jersey had the highest median household income, at $61,672. Mississippi had the lowest, at $32,938.

Mississippi also had the highest poverty rate, at 21.3 percent. New Hampshire had the lowest, at 7.5 percent.

Adjusted for inflation, the median income of U.S. households increased by 1.1 percent last year to $46,326, its highest since 2001. The median marks the point where half of households received more income and half received less.

The poverty rate last year was 12.6 percent, a statistically insignificant decline from the previous year's 12.7 percent. Poverty had been climbing since 2000.

Nearly 37 million people lived below the government's poverty line in 2005, or 90,000 fewer than in 2004.

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The poverty line, which varies with family characteristics, was $19,806 last year for a family of four with two children younger than 18.

The number of people without health insurance rose by about 1.3 million in 2005, to 46.6 million.

That amounted to 15.9 percent of the population, up from 15.6 percent in 2004 and the highest since 1998. The number of insured people rose by 1.4 million.

The census numbers showed that employer coverage and other types of private insurance continued to shrink in 2005 and that government programs failed to expand.

In 2005, private plans provided coverage for 67.7 percent of the population, compared with 68.2 percent in 2004. Government programs covered 27.3 percent in both years.

The number of uninsured children increased by more than 350,000 in 2005, to a total of about 8.3 million.

But most of the increase in the ranks of the uninsured was among working-age people. Nearly 80 percent of the uninsured are native-born Americans or naturalized citizens, despite the perception that many are illegal immigrants.

Material from The Associated Press is included in this report.

Copyright © 2006 The Seattle Times Company

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