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October 2012 Volume 18 Number 4
Poverty: 2011, TANF
Poverty. Some 46.2 million people, 15 percent of US residents, had incomes below the poverty line of $23,021 for a family of four in 2011, down from 15.1 percent in 2010. The poverty rate reached its lowest levels in the past two decades during the late 1990s economic boom.<< back
The poverty rate of white non-Hispanic residents was 10 percent in 2011, compared with almost 28 percent for Blacks, 25 percent for Hispanics, and 12 percent for Asians. The poverty rate for households headed by native-born residents was 14 percent, compared with 19 percent for households headed by foreign-born persons (24 percent for households headed by foreign-born persons who were not naturalized US citizens). About 45 percent of foreign-born US residents in 2011 were naturalized US citizens.
The poverty-level income measure does not include the value of many government benefits provided to the poor, including the earned-income tax credit, food stamps, subsidized school lunches and housing assistance. If the value of these benefits were included, the poverty rate would be halved.
Income. The median household income of the 121 million US households was $50,054 in 2011. Real median household income peaked at $53,252 in 1999, and was nine percent lower in 2011 than in 1999. By ethnic group, the median household income of Asians was $65,100 in 2011; of non-Hispanic whites $55,400; of Hispanics $38,600; and of Blacks $32,200.
The median income of households headed by US-born persons was $50,800 in 2011, and $44,400 for households headed by foreign-born persons. Households headed by foreign-born persons who had become naturalized US citizens had a median income of $51,900, compared to $37,900 for households headed by foreign-born persons who were not naturalized US citizens.
The median earnings of the 58 million men who worked full-time and year-round were $48,200 in 2011, while the median earnings of 44 million women who worked full-time and year-round were $37,100, that is, women earned about 77 percent as much as men. Note that 81 million men, and 58 million women, worked for earnings sometime in 2011.
Health Insurance. The number of US residents without health insurance sometime during 2011 was 48.6 million in 2010, down slightly from 50 million in 2010. Some 197 million US residents, about 64 percent, had private health insurance, including 170 million who received health insurance from their employers.
A sixth of US residents, some 51 million, received health insurance via Medicaid in 2011. Medicaid is a federal-state program; the federal government pays almost 60 percent of total costs ($375 billion in 2009) and the states pay 40 percent. About 55 percent of those covered by Medicaid are children. Medicaid spending averaged $5,500 in 2009, but varied by type of recipient. The average annual cost of enrolled children was $2,300 in 2009, compared to $15,500 for each disabled person enrolled.
In a July 2012 report (www.cbo.gov/publication/43373), the Congressional Budget Office added the value of government health care benefits to the incomes of the poor and found that households in the bottom fifth of income distribution received an average $4,600 worth of government health care benefits in 2009. Government spending averages $8,000 for each Medicaid beneficiary and $12,000 for each Medicare beneficiary.
If health care benefits for the poor are valued at their cost to the government, the average income of households in the poorest fifth of the population rises to $23,300 in 2009 from $18,900. Two-thirds of Medicare spending, and 83 percent of Medicaid spending, is on behalf of the poorest 40 percent of the population.
TANF. The Temporary Assistance for Needy Families program, which replaced AFDC in 1996, is a federal block grant given to states to provide cash and other assistance to qualifying poor residents. The federal government provided $21 billion in TANF funds in FY11 to provide assistance to 4.4 million people in 1.8 million families.
HHS in July 2012 allowed states to request waivers that, Congressional Republicans charged, could reduce the work requirements of the 1996 law. HHS said that it was responding to the desire of states for more flexibility in spending TANF funds, and pointed out that states must "move at least 20 percent more people from welfare to work compared to the state's past performance" to continue to receive federal welfare funds.
A record 45 million US residents received Supplemental Nutrition Assistance Program (SNAP) benefits or Food Stamps in 2011, up from 28 million in 2008. A record 53 million were enrolled in Medicaid.
The Cato Institute estimated that federal, state, and local governments spend $1 trillion a year to help the poor, about six percent of US GDP. Two-thirds of this spending flows through 126 federal programs, ranging from Medicaid to Pell grants. Even though not all of those served by "poor" programs have incomes below the poverty line, Cato says that dividing $1 trillion by 46 million poor US residents suggests that assistance averages almost $22,000 per poor person and $87,000 for a family of four.