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[U. S. Census Bureau] Income and Poverty 1995
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          PRESS BRIEFING ON 1995 INCOME, POVERTY, 
              AND HEALTH INSURANCE ESTIMATES  
                       Daniel H. Weinberg
    Chief, Housing and Household Economic Statistics Division     
              U.S. Bureau of the Census  
                       September 26, 1996  

    Welcome to the press briefing on the 1995 income, poverty, and
health insurance coverage estimates.  Your press packets contain a
press release, a copy of my remarks, a copy of the charts I will be
using today, and the three reports we are releasing today.
Additional unpublished detailed tables can be obtained from the
Census Bureau.  

    Let me introduce some of the analysts who worked on the
reports; they will be available to answer your questions after the
briefing:  Charles Nelson (Assistant Division Chief), Kathleen
Short (Chief of the Poverty and Health Statistics Branch), Edward
Welniak (Chief of the Income Statistics Branch), and the primary
authors of the reports, Eleanor Baugher, Robert Bennefield, Robert
Cleveland, Carmen DeNavas-Walt, and Leatha Lamison-White.  

    Please hold your questions unless it's a technical
clarification.  The main presentation should take less than 30
minutes.  

    Let me first summarize the main findings.  For the first time
in six years, households in the United States experienced an annual
increase in their income.  Between 1994 and 1995, median household
income adjusted for inflation increased 2.7 percent, to $34,076. 
Second, the number of poor and the poverty rate dropped  
-- the number of poor decreased 1.6 million between 1994 and 1995
to 36.4 million people and the poverty rate decreased from 14.5 to
13.8 percent.  Finally, 40.6 million people lacked health insurance
coverage in 1995 (15.4 percent of the population); these are
unchanged from 1994.  

    Data from the March Supplement to the Current Population Survey
or CPS are the basis for these statistics.  The CPS is a sample
survey of approximately 50,000 households nationwide, conducted
each month for the Bureau of Labor Statistics.  These data reflect
1995 and not current conditions.  

    As in all surveys, the data in these reports are estimates,
subject to sampling variability and response errors.  All
statements made in the reports and in this briefing have been
tested statistically.  All historical income data have been
expressed in 1995 dollars using the Consumer Price Index; inflation
was 2.8 percent between 1994 and 1995.  The poverty thresholds are
updated each year for inflation as well; for a family of four in
1995 the threshold was $15,569, for a family of three, $12,158.

    This chart presents the key estimates of median household
income.  As I noted earlier, median income for all U.S. households
rose 2.7 percent between 1994 and 1995.  The Midwest was however
the only region where households experienced an increase in income
-- 7.2 percent.  

    Median household income is now only 3.8 percent below its 1989
level, the most recent business cycle peak.  Overall, median
household income has risen 13.6 percent since 1967, the first year
household median income was computed.  

    The increase in income was broad-based, covering both family
and nonfamily households.  This is the first time since these
distinctions were made in 1980 that an increase in median income
has occurred for all types of households.  

    The poverty rate for all persons declined from 14.5 percent in
1994 to 13.8 percent in 1995, and the number of poor declined as
well, by 1.6 million, to 36.4 million.  This change roughly
parallels the 1993 to 1994 changes, when the number in poverty
dropped 1.2 million and the poverty rate dropped from 15.1 to 14.5
percent.  Consistent with its increase in income, the Midwest was
the only region with a decline in its poverty rate.  

    The number of poor is still 4.0 million above the 1989 level
when 32.4 million people were poor and the poverty rate was 13.1
percent.  

    This next chart presents the changes in income by race and
ethnicity.  Income rose for both White and Black households -- 2.2
and 3.6 percent, respectively.  On the other hand, median household
income fell for Hispanics by 5.1 percent.  We have no explanation
at this time for this change in income.  

    As this next chart for poverty shows, poverty rates fell for
Whites and Blacks, but there was no change for the other groups.
Despite the improvements for Blacks, Blacks and Hispanics still
have much higher poverty rates and lower incomes than Whites and
Asian and Pacific Islanders.  Nevertheless, as this pie chart
shows, two-thirds of all poor are White and 45 percent of all poor
are nonHispanic Whites.  

    Children are 40 percent of the poor though they are but 27
percent of the total population.  Their poverty rate is higher than
for any other age group, 20.8 percent in 1995, but this is a
decline from last year.  Poverty for children has been at or above
20 percent since the early 1980's.  Poverty rates also declined
between 1994 and 1995 for those 18 to 64 and for those 65 and
older.  1995 is the first year that the poverty rate for the
elderly was lower than that for those 18 to 64.  

    This is the first year the Census Bureau is presenting income
and poverty estimates for immigrants.   The median income of
households headed by a native-born individual increased by 3.1
percent, while there was no change for those households headed by
a foreign-born individual.  The median household income of the
native-born, at $34,784, is higher than that of the foreign-born,
$28,352.  

    The same pattern prevails for poverty -- a decline for
native-born persons, from 13.8 to 13.0 percent, and no change for
the foreign-born, now at 22.2 percent.  Naturalized citizens have
a lower poverty rate, at 10.5 percent, than either foreign-born
non-citizens or the native-born.  

    Per capita income shows no change between 1994 and 1995 and the
ratio of female-to-male earnings for year-round full-time workers
also remains unchanged, at 0.71.  

    The long-term trend in the U.S. has been toward increasing
income inequality.  This chart illustrates the increasing share of
household income received by the highest income quintile -- 48.7
percent in 1995 but only 43.8 percent in 1967.  It also illustrates
the declining share of those in the bottom quintile  
-- 4.0 percent in 1967 down to 3.7 percent in 1995.  

The only statistically significant change in share between 1994 and
1995 was a 0.1 percentage point increase for the bottom quintile. 
These changes together mean that the middle 60 percent of the
income distribution (those households with incomes of $14,401 to
$65,124 in 1995) has received a declining share over this period  
-- from 52.3 percent of income in 1967 down to 47.6 percent in
1995.  

A second measure of income inequality, the Gini index, showed no
change in income inequality between 1994 and 1995.  The Gini index
is now 12.8 percent above its 1967 level.  

    Based on a comparison of two-year moving averages, real median
household income grew between 1993 and 1995 for 11 states and did
not fall for any.  In the same period, nine states had a drop in
their poverty rate while only New Mexico showed an increase.  

    The Census Bureau also produces a series of experimental
estimates of income, in an attempt to gauge the effect on income
and poverty of noncash benefits and taxes, which are not considered
in the official measures.  Seventeen experimental definitions of
income are computed, and tables based on those results are
presented in the reports.  

    The Bureau's research in this area has shown that the
distribution of income is more equal under a broadened definition
that takes into account the effects of taxes and noncash benefits
than under the official cash income definition.  Government
benefits play a much more equalizing role on income than do taxes. 
    Valuing noncash benefits and subtracting taxes also effects the
estimated poverty rate.  Based on the official poverty thresholds,
but under the broadened definition of income, the estimated poverty
rate was 10.3 percent or 27.2 million people, compared to 13.8
percent and 36.4 million persons under the official income
definition.  

Regardless of the method chosen to measure income, as you can see
in this chart, the pattern of poverty change over time is similar. 
    The remaining topic I will cover today is health insurance
coverage.  The number of people without health insurance coverage
in 1995 was 40.6 million, or 15.4 percent of the population, both
unchanged from 1994.  The proportion of poor people without health
insurance coverage was 30.2 percent, also not different from last
year and double the rate for all persons.  Young adults, those with
low educational attainment, and Hispanics were the demographic
groups most likely to lack coverage.  Coverage rates rose in one
state (Alabama) and fell in two states (Tennessee and Vermont).  

    Let me again summarize the main findings.  For the first time
in six years, households in the United States experienced an annual
increase in their income.  Between 1994 and 1995, median household
income adjusted for inflation increased 2.7 percent, to $34,076. 
Second, the number of poor and the poverty rate dropped  
-- the number of poor decreased 1.6 million between 1994 and 1995
to 36.4 million people and the poverty rate decreased from 14.5 to
13.8 percent.  Finally, 40.6 million people lacked health insurance
coverage in 1995 (15.4 percent of the population); these are
unchanged from 1994.
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Contact the Housing and Household Economic Statistics Division at
301-763-8576 (hhes-info@census.gov) for further information.  
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Last Revised: Thursday, 26-Sep-96 11:08:35
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