Annual Census Data on Income, Poverty, and Health Insurance for 2011

Today’s report shows that while we have made progress digging our way out of the worst economic crisis since the Great Depression, too many families are still struggling and Congress must act on the policies President Obama has put forward to strengthen the middle class and those trying to get into it.

Real median income declined by $777 to $50,054 in 2011. This decline in income is another example of why it was so important for Congress to pass the President’s payroll tax cut - which put $1,000 in the pocket of approximately 160 million working Americans last year, thus providing an important cushion for families that saw their pre-tax incomes decrease in 2011. More recent data available for 2012, including data on job growth, unemployment and wages, indicate that real median income is growing this year. In addition, data from the government’s Current Population Survey analyzed by Sentier Research indicate that median household income has grown $1,176 in the last 12 months; although these data are not as reliable as the comprehensive Census estimates, they are an indicator of more recent trends in income.

Still, too many Americans are feeling the effects of the crisis, which is why the President believes Congress must vote this month to extend the middle class tax cuts to ensure that 98 percent of Americans do not see a significant tax hike at the end of the year. If Congress fails to act, the typical middle class family will face a $2,200 tax increase. Middle class families need economic certainty and Republicans in Congress should not hold these middle class tax cuts hostage simply to preserve massive tax breaks for millionaires and billionaires.  Moreover, if Congress is truly concerned about income levels, it should act this month to pass job creation proposals in the President’s American Jobs Act – which independent economists believe would create 1 million jobs and has been before Congress for over a year. 

Today’s report also shows that thanks in part to the Affordable Care Act, 1.3 million fewer people were uninsured in 2011. Today’s report also shows that thanks in part to the Affordable Care Act, 3.6 million more people were covered by health insurance in 2011 and the percentage of the population without insurance declined from 16.3 percent in 2010 to 15.7 percent in 2011. In addition, the rate of private insurance coverage was essentially unchanged in 2011 for the first time in a decade.

The poverty rate fell from 15.1 percent in 2010 to 15.0 percent in 2011, with the number of people in poverty edging down from 46.3 million in 2010 to 46.2 million in 2011. President Obama believes in building an economy where those in the middle class and those fighting to get out of poverty have a fair shot. That’s why he’s fighting to help families stay in their homes, reform our education system, and get Americans the skills they need to compete. President Obama signed into law provisions that kept 7 million people out of poverty in 2010, increased the income of 32 million more and lifted millions more out of poverty in 2011. These include, for example, the expansion of the refundability of the child tax credit and the expansion of the Earned Income Tax Credit. It is also important to note that the official poverty number released today does not reflect the effects of tax credits like these and non-cash assistance to low income families. The Census Bureau calculated that 5.7 million fewer people would have been classified as in poverty in 2011 had the EITC been taken into account. 

Further background on 2012 data that are consistent with growth in real median household incomes in 2012:

  • Payroll employment is up 1.8 million and private employment is up nearly 2.0 million between August 2011 and August 2012.
  • The unemployment fell from 9.1 percent in August 2011 to 8.1 percent in August 2012.
  • Real average weekly earnings was up 0.3 percent between July 2011 and July 2012.
  • Median usual weekly earnings of full-time wage and salary workers are up 0.3 percent from 2011-Q2 to 2012-Q2.
  • Real disposable personal income per capita is up 1.3 percent between July 2011 and July 2012.
  • Private estimates by Sentier Research estimate that income was up 2.4 percent, or $1,176, from July 2011 to July 2012.
Amy Brundage is Deputy Press Secretary for the Economy