Poverty and income essentially unchanged

Maryland's poverty rate and median household income were essentially unchanged in 2012, according to new data from the American Community Survey.

• 2012 MD Poverty Rate: 10.3 percent
• 2012 MD Median Household Income: $71,122

The poverty rate has steadily increased since the beginning of the Great Recession, from 8.1 percent in 2008 to its current peak. This mirrors the story in most of the rest of the country, as poverty remains high despite the economic recovery. I suspect this graph has something to do with it.

Maryland continues to have the highest median household income of any state at more than $71,000 (though we also know that 35 percent of Maryland households make less than $50,000). The state's median household income is about $1,000 more (in 2012 dollars) than it was in 2000.

Our neighbors to the south actually saw a decline in median household income, so much so that Virginia is now about $1,000 below (in 2012 dollars) their 2000 level. Virginia's poverty rate is also higher, at 11.7 percent in 2012.

Wash Post: "How the 1 percent won the recovery, in one table"

The Washington Post has a great table up today, showing the results of a study (PDF) by economists at UC Berkeley, the Paris School of Economics, and Oxford University using Internal Revenue Service statistics. The bottom line: the top 1 percent have captured 95 percent of real growth in average income since the end of the Great Recession. No wonder income disparity is at its highest level since the First World War.

Why is that a problem? There are lots of reasons, but for just one look no further than another new study, this one from Ohio State University - children bear the brunt of economic inequality.

Here in Maryland we know that income inequality exists between different communities, ethnic groups, and education levels. Income for households in the top 1 percent increased 240 percent since 1979, while it grew just 10.8 percent for households in the bottom fifth.

That's why we continue to push for expanded programs to increase educational attainment, job opportunities, and the social safety net. As we begin preparing for the 2014 legislative session we will continue to support raising the minimum wage, providing workers with earned paid sick leave, and increasing the refundable state earned income tax credit.

CEOs’ favorite states: lower incomes, less education, less health coverage

Big business and anti-tax groups have been making hay out of a story in CEO Magazine in which a survey of CEOs ranked Maryland 41st in business climate. But look closely: a lot of the things that made CEOs downgrade Maryland (and the other states that ranked low in this poll) are actually things you would want for yourself and your family.

The results are based on a survey of over 700 CEO’s on the subjects of “Tax and Regulation,” “Workforce Quality,” and “Living.” So, what have these CEO’s told us about the states they like and don’t like? Here are their top 10 and bottom 10 states:

CEO Magazine Top 10	CEO Magazine Bottom 10
1. Texas	50. California
2. Florida	49. New York
3. North Carolina	48. Illinois
4. Tennessee	47. Massachusetts
5. Indiana	46. New Jersey
6. Arizona	45. Connecticut
7. Virginia	44. Michigan
8. South Carolina	43. Hawaii
9. Nevada	42. Pennsylvania
10.Georgia	41. Maryland

To find out how well the CEOs opinions tracked with the actual economic data, I looked at some indicators related to these twenty states. Median household incomes. Growth in per capita incomes. Poverty rates. Health insurance coverage. Education attainment.

 

Sources: CEO Magazine, US Census, MBTPI calculations

 

In each of these indicators, CEO Magazine’s bottom 10 states outperform their top 10. The blue bars on the graph show the average ranking of CEO Magazine’s top 10 states on these indicators. The green bars show the average ranking of CEO Magazine’s bottom 10 states. For example, the top 10 states, as rated by the CEO’s actually averaged the 28th highest median household income. Household incomes in the states ranked in the bottom ten were much higher – ranking 11th on average. In fact, CEO magazine’s 10 least favorite states included 6 of the 10 states with the highest incomes.

And it goes on like that for category after category. The states ranked lowest by CEOs had faster income growth, lower poverty, more health insurance coverage and more college grads. These are all things we want for ourselves and our families: we want to make a good living, to avoid poverty, for our kids to have a good education, and to have access to health care.

As business managers focused on their bottom lines, some CEO's might like to operate where they can get labor cheaply and without being expected to provide a lot of benefits.

As citizens, though, we want to promote good jobs that can support families, broad access to education, and health services.

This is not just an article in a trade magazine. This divergence between the interests of the short-term profit for investors and managers versus workers and citizens has a real impact on families in the real world. I know, because there was one measure I found where CEO’s top 10 lined up with economic realities: job growth.

CEO Magazine’s top 10 includes 8 of the 10 fastest-growing states in terms of employment over the past decade. The CEO top ten ranked 10th on average in job growth. The bottom 10 ranked 21st on average (Maryland fared better on this measure, ranking 11th).

And this helps to explain why workers are no longer benefiting from increases in productivity and why nearly all of the benefits of economic growth are going to the top 1 percent. These new jobs in the CEO-preferred states are low-quality (for the worker) jobs--lower paid, lacking benefits, and with few prospects for advancement.

CEO Magazine's kind of employment strategy is not what we want in Maryland. We need to continue to focus on maintaining our high standards for education and quality of life, and on attracting and retaining jobs that will help Marylanders thrive.

Growing income inequality in Maryland

Our friends at the Center on Budget and Policy Priorities and the Economic Policy Institute have released a new report looking at the growth in income inequality between the top, middle, and bottom of the income spectrum. They've created a great infographic about how inequality in Maryland has widened in recent decades:

Click to enlarge

This prolonged growth in income inequality undermines the basic American belief that hard work should pay off. Continued growth in income inequality would harm our state’s future economy. Policies that narrow rather than widen income inequality will help Maryland recover from the downturn and grow our economy into the future. Policies such as:

• Promoting access to education and job training for tomorrow's labor market.
• Continued growth in investments in transit, childcare, and other programs that help workers connect with employers and keep jobs once they're hired.
• Other protections for low-wage worker incomes such as paid sick leave.

Growing income inequality is bad for Maryland and policymakers should pursue policies that narrow – not widen – income gaps.

Health insurance coverage up in 2011 but poverty, median income unchanged

The Census Bureau released the 2011 American Community Survey today. The ACS is the primary resource for demographic data at the state, county, local, and sub-local level.

Some Maryland highlights:

Click to enlarge

• Median household income in the state was unchanged (no statistical difference with 2010) at $70,004 in 2011. Once again, Maryland has the highest median income in the nation. Nationwide, the median household income is $50,502.
• Maryland's poverty rate was also essentially unchanged, at 10.1 percent. The national poverty rate was 15.9 percent.
• Health insurance coverage among younger Marylanders 18-25 jumped 6.7 percentage points between 2009 and 2011, to 81.7 percent. The coverage rate for this population was significantly higher than the national coverage rate for the same age group of 71.8 percent (up 3.6 percentage points). This growth in coverage is partially attributable to the Patient Protection and Affordable Care Act provision allowing children under 26 to remain on their parent's policy.

Of course, there was enormous variation across Maryland in 2011 in each of these categories. Median household income was as low as $38,502 in Allegany County and as high as $98,953 in Howard County. Poverty rates ranged between 4.2 percent in Calvert County all the way up to 25.1 percent in Baltimore City. And health insurance coverage for Marylanders 18-24 (note slight variance due to data availability from statewide age range) varied between 86.4 percent in Wicomico County and 93.9 percent in Montgomery County.

U.S. poverty rate stable as number of uninsured fell

The Census Bureau just released data on poverty, income, and health insurance coverage in 2011. The data is from the Current Population Survey (CPS). According to the report, median household income declined, the poverty rate was not statistically different from the previous year and the percentage of people without health insurance coverage decreased.

The national poverty rate was 15 percent in 2011, with 46.2 million Americans living under the poverty line. The top 5 percent of wage earners saw their incomes rise between 2010 and 2011, while incomes fell for the other 95 percent.

Unlike the last ten years, private health insurance coverage remained steady nationwide. The provisions of the Affordable Care Act allowing young adults to remain on their parents insurance until age 26 seem to be responsible. Medicaid enrollment growth has offset some-but not all- of the losses in private health insurance coverage over the last decade. The program continued to grow in 2011 in response to the slow economic recovery. Combined with a stable private insurance pool, the share of uninsured Americans fell.

Maryland’s average poverty rate between 2010 and 2011 was 10.1% (in the CPS two-year averages are more accurate at the state level). That’s up 2.8 percentage points compared to the average in 2000-2001. This means on average 583,000 Marylanders were in poverty during the last two years. That’s 583,000 too many. Sadly, there were even more Marylanders without health insurance in 2010-2011 (an average of more than 758,000 uninsured).

MBTPI and its partners continue to advocate for policies and programs that assist Marylanders living in or near poverty. More detailed Maryland-specific data will be released next Thursday by the US Census based on the American Community Survey.