Four key things about US economic health in terms of income and poverty

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In September 2016, the US Census Bureau released its annual poverty report declaring that 43.1 million Americans lived in poverty in 2015. Let’s now have a look on five key things on US income and poverty data.

Better health insurance coverage: Many states saw an increase in income and a decrease in poverty rates between 2004 and 2015. During the same period, percentage of people covered by health insurance increased in all the latest 25 metropolitan areas. Between 2014 and 2015, the percentage of people covered by health insurance increased in all 25 of most populous 25 metropolitan areas. The change of the rate observed was in the range of 1.8 to 5.2 percentage points. Miami, Los Angeles and Riverside metropolitan areas experienced the largest increase in the rate of health insurance coverage among the most populous metropolitan areas. Their health insurance coverage rate increased by about 9 percentage points. The percentage of people without health coverage for the entire 2015 was 9.1% down from 10.4% in 2014. The number of people without health insurance declined to 29 million from 33 million. On the other hand, certain metropolitan areas’ health insurance coverage was better wherein, the health insurance coverage rate for the population living inside the metropolitan areas was 90.7% for 2015, a 2.3% rise in rate as compared with 2014. In 2015, the Boston metropolitan area had the highest health insurance coverage rate of 97% among the most populous 25 metropolitan areas and the Houston metropolitan area had the lowest rate of 82.7%.

Poverty rates scenario: The official poverty rate declined 1.2-percentage point to 13.5% in 2015 with 43.1 million people in poverty, 3.5 million fewer than in 2014. The fall of 1.2-percentage point represents the largest annual percentage point drop in poverty since 1999. Poverty rates declined in 23 states between 2014 and 2015, while no state recorded an increase in poverty rate. Poverty rate in 2015 ranged from a low of 8.2% in New Hampshire to a high of 22% in Mississippi.  Alabama, Arkansas, Kentucky, Louisiana, Mississippi and New Mexico recorded the highest poverty rates. Some of the lowest poverty rates were found in Alaska, Connecticut, Hawaii, Maryland, Minnesota, New Hampshire, New Jersey and Vermont. From 2014 to 2015, the poverty rate decreased in 16 of the 25 most populous metropolitan areas and none of the 25 most populous metropolitan areas saw an increase in the poverty rate.

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Number in Poverty and Poverty Rate (Source: Census Board)

Improving income: The real median household income increased by 5.2% to $56,516 in 2015 from $53,718 median income in 2014. The real median income in 2015 for family household ($72,165) and nonfamily households ($33,805) increased 5.3% and 5.4%, respectively from their 2014 medial levels. This is the first annual increase in median household income for family household since 2007. The most recent increase for nonfamily household was in 2009. Meanwhile, 39 states and the District of Columbia saw real median household rise in income. The increase was in the range of 1.8% to 6.8%. No state recorded a decrease in median household income between 2014 and 2015. Highest incomes were recorded in Maryland ($75,847) and the District of Columbia ($75,628). Mississippi recorded the lowest household income of $40,593, which was unchanged from 2014. Median household income increased in 21 of the 25 most populous metropolitan areas between 2014 and 2015 while none of them recorded a decrease in income. Median household income was lower than the US median in 26 states and higher than the US median in 18 states and the District of Columbia.

Income inequality rates: The Gini index was 0.479 in 2015, which is a measure of the income inequality, and a score of 1 indicates total inequality where one household has all of the income. Five states California, Connecticut, Florida, Louisiana and New York and the District of Columbia recorded the Gini indices higher than the US rate. Twelve were not statistically different from the US rate while 33 states were lower than the US rate. Most states experienced no statistical change in income inequality. Income inequality increased in eight states, namely, Florida, Illinois, Indiana, Kentucky, Michigan, Nebraska, Nevada and New Jersey while Connecticut recorded the decrease.


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