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    "ocrText": "Economic Report\nof the President\nTransmitted to the Congress\nFebruary 1999\nTOGETHER WITH\nTHE ANNUAL REPORT\nOF THE\nCOUNCIL OF ECONOMIC ADVISERS\nUNITED STATES GOVERNMENT PRINTING OFFICE\nWASHINGTON : 1999\nFor sale by the US Government Printing Office\nSuperintendent of Documents. Mail Stop: SSOP Washington. D.C. 20402-9328\nChart 3-9 Labor Force Participation Rates of Single Women\nBox 3-2.-continued\nThe share of single mothers in the labor force has increased dramatically since 1993,\ndue in part to increases in the earned income tax credit (EITC).\nsome firms may hire fewer workers. Many studies have examined\nPercent\nThousands of 1997 dollars\nthis issue, and the weight of the evidence suggests that modest\n100\n5\nincreases in the minimum wage have had very little or no effect on\nemployment. In fact, a recent study of the 1996 and 1997 increases,\n5\nusing several different methods, found that the employment\nSingle women\n90\nwithout children\neffects were statistically insignificant. Moreover, the unemploy-\n(left scale)\n4\nment rates of black teenagers and high school dropouts-two\nSingle women\ngroups of workers most likely to be affected by the wage hike-are\nwith children\n80\n(left scale)\n3\nlower today than they were just prior to the increases.\nIncreases in the minimum wage and expansions in the earned\nincome tax credit reinforce each other. Among low-wage workers,\n2\nthe joint effect of these changes has been a substantial increase in\n70\nincome. Between 1993 and 1997 the inflation-adjusted minimum\nMaximum EITC\n1\nwage rose by 9 percent, while the maximum payment under the\n(right scale)\nearned income tax credit rose by 38 percent for one-child families\n60\n0\n(116 percent for two-child families). For families with one earner\n1984\n1985\n1986\n1987\n1988\n1989\n1990\n1991\n1992\n1993\n1994\n1995\n1996\n1997\nworking full time at the minimum wage, the combination of higher\nNote: After 1990, the maximum EITC is the average of the maximum for taxpayers with one child and\nwith more than one child.\nearnings and a larger tax refund would have raised total income\nSource: Jeffrey B Liebman \"The Impact of the EITC on Incentives and Income Distribution.\" Tax Policy\nand the Economy, 1998. Updated by Council of Economic Advisers.\nby 14 percent if the family had one child, and by 27 percent for a\nfamily with two or more children. As a result of these policy\nparticipated in the labor market-who became eligible for only a very\nchanges, one- and two-child families with a single full-time\nsmall credit in 1994, if their earnings were very not change\nminimum wage worker now earn enough to escape poverty.\nover this period. As Chart 3-9 shows, the difference in labor force par-\nticipation rates of single women with and without children has closely\ntracked growth in maximum EITC benefits.\nSINGLE MOTHERS\nOne recent study concluded that as much as 60 percent of the\nThe percentage of children living in single-parent families, usually\nincrease in employment of single mothers since 1984 was attributable\nwith a single mother, has risen sharply over the past few decades. The\nto expansions in the EITC. For the period between 1992 and 1996 the\nshare of all families (defined as households in which one or more per-\nEITC explains 33 percent of the increase in annual employment among\nsons live with children of their own under age 18) that were headed by\na single parent increased from 13 percent in 1970 to 32 percent in\nBox 3-3. The Earned Income Tax Credit\n1998. The majority of these families rely heavily on the mother's labor\nearnings; therefore, the labor market opportunities available to these\nThe EITC is a tax credit for low-income workers designed to\nmothers are critical for their families' economic well-being.\nreduce their overall tax burden. The credit is refundable; that is,\nThe labor force participation rate of single mothers aged 16-45 has\nworkers can receive the full amount to which they are entitled\nbeen climbing since 1993, after remaining essentially flat for many years\neven if it exceeds the income tax they owe. Workers apply directly\nChart 3-9). In just the 4 years from 1993 to 1997, their participation rate\nto the Internal Revenue Service for the EITC and generally\nincreased by 8.7 percentage points, from 75.5 percent to 84.2 percent.\nreceive the credit as part of their tax refund.\nWhat caused this unusually large rise? The expansion of the earned\nOnly families with a working member are eligible for the EITC,\nincome tax credit (EITC: Box 3-3) seems to have contributed. During\nand the amount depends on the family's labor market earnings.\nthe same 4 years the real value of the maximum EITC payment\nFor example, a worker with one child will receive a credit of 34\nincreased by 38 percent for workers with one child, including single\ncents per dollar of 1998 earnings, up to a maximum of $2,271 A\nmothers, and by 116 percent for those with two or more children.\nfamily with two or more children gets 40 cents per dollar up to a\nIn contrast, the proportion of single women without children who\n112\n113\nChart 3-10 The Earned Income Tax Credit in 1993 and 1998\nBox 3-3.-continued\nThe EITC has been expanded considerably since 1993. with the maximum credit\nincreasing by over $2,000\nmaximum of $3,756 (Chart 3-10). Childless workers aged 25-64\nCredit amount (1997 dollars)\nwith earnings under $10,030 are eligible for a much smaller cred-\n4,000\nit of less than 8 cents per dollar up to a maximum of $341. For all\neligible workers the credit remains at the maximum over a range\nof earnings and then is gradually phased out.\n1998\n3000\nThe EITC was significantly expanded under the Omnibus Bud-\nget Reconciliation Act (OBRA) of 1993. Before the 1993 law was\npassed, eligible working parents received just 19 to 20 cents for\neach dollar earned up to the maximum. OBRA 1993 increased the\n2,000\nmaximum credit for families with two or more children by over\n1993\n$1,500 (in 1998 dollars) and extended eligibility to families with\nincomes up to $30,095-about $3,600 more than under previous\n1 000\nlaw. These expansions have resulted in significant increases in the\nlabor force participation of single mothers.\nA large proportion of families eligible for the EITC-81 to 86\npercent in 1990-have claimed the credit. About 19.8 million\n0\n0\n5.000\n10.000\n15 000\n20.000\n25 000\n30,000\nworkers are expected to claim the credit in tax year 1998, receiv-\nEarnings (dollars)\ning an average of $1,584. About 16.4 million of these claims will be\nNote: Credit amount depicted is for a family with two or more children\nfor workers living with children; these families will receive an\nSource Department of the Treasury\naverage credit of $1,870.\nOther factors also contributed to the increase in labor force partici-\nThe EITC is targeted to families living in poverty, with the goal\npation among single mothers. Changes in the welfare system. culmi-\nof lifting their income above the poverty line. The latest estimate\nfrom the Bureau of the Census shows that the EITC lifted 4.3 mil-\nnating in the enactment of the Personal Responsibility and Work\nOpportunity Reconciliation Act (PRWORA) in 1996, were very impor-\nlion persons-workers themselves and their family members-out\ntant. PRWORA replaced the Aid to Families with Dependent Children\nof poverty in 1997, more than twice as many as in 1993. Just over\n(AFDC) program with Temporary Assistance for Needy Families\nhalf (2.2 million) of these were under the age of 18, and 1.8 million\n(TANF), which made most Federal welfare assistance dependent on\nwere living in families headed by unmarried women. Updates by\nwork effort and limited the lifetime duration of assistance. Before\nthe Council of Economic Advisers of analyses reported in the 1998\nPRWORA was passed, States had been experimenting with work\nEconomic Report of the President find that over half the decline in\nrequirements and time limits under waivers of the Federal rules gov-\nchild poverty between 1993 and 1997 can be explained by changes\nerning AFDC since the early 1990s. Even before that, States had been\nin taxes, most importantly in the EITC. The EITC enabled about\nchanging their formulas for calculating AFDC benefits in ways that\n1.1 million blacks and nearly 1.2 million Hispanics to escape\nmade it more worthwhile for low-income single mothers to work. It has\npoverty in 1997. These statistics make it clear that the EITC has\nbeen estimated that changes in the welfare system account for about\nbecome a major weapon in the fight against poverty.\n30 percent of the increase in employment of single mothers between\n1984 and 1996, and at least 20 percent of the increase between 1992\nthis group. A second study examined the 1986 EITC expansion, which\nand 1996. PRWORA is discussed further below.\nwas more modest than the 1993 expansion. and found that it, too, sig-\nExpansions of Medicaid coverage to low-income children who were\nnificantly increased labor force participation among single mothers.\nnot eligible for AFDC removed another disincentive to their mothers'\nespecially those with less education. Still another study, looking at the\nworking. Expansions of training and child care programs for low-\neffects of the EITC on all eligible families, found that the 1993 expan-\nincome workers also encouraged these women to work. These factors\nsion could account for an increase in labor supply of 19.9 million hours\nplayed a much smaller role than did the EITC and welfare reform.\nby 1996 and induced an estimated 516.000 families to move from\nhowever. Finally, the tighter labor market has made employers more\nwelfare into the work force.\n114\n115\nWelfare Reform Weekly Report -- 2/25/99\nWelfare Reform -- Vice President's Welfare to Work Event: On Monday, at a town\nhall meeting in San Francisco with businesses and community groups, the Vice President will\nannounce the results of a new survey showing that the businesses participating in the Welfare to\nWork Partnership have now hired 410,000 welfare recipients, more than meeting the challenge\nyou set for the Partnership last May. At that time, there were 5,000 companies and 135,000\nhires, and you challenged the Partnership to double both numbers -- with Eli Segal's tremendous\nwork, they've now done both.\nThe survey shows that welfare recipients are moving into jobs with opportunities for\nadvancement and promotion -- 60% of the companies report some promotion of former welfare\nrecipients in the past year, which is generally consistent with the promotion rates for other hires.\n77% of companies hire individuals for promotion-track jobs, and 91% of the companies offer\ntraining that could lead to promotion. Most companies (65%) report that welfare hires stay on\nthe job at the same rate or higher rates than other entry level employees -- this percentage\nincreased significantly from 48% one year ago. Most businesses (72%) are hiring individuals off\nwelfare into full-time jobs with medical benefits. Businesses continue to express a need for help\nin the critical areas of child care and transportation, which underscores the need for our child care\nand Access to Jobs initiatives.\nThe survey, conducted by Wirthlin Worldwide, also found a positive correlation between\nestablishing formal mentoring programs and the promotion of former welfare recipients.\nCompanies who have entered into partnerships with community based organizations to do\nmentoring have the highest rate of promotion. However, the study finds there is untapped\npotential to enter into such partnerships, which validates the efforts of the civic and faith-based\norganizations participating in the Vice President's Welfare to Work Coalition.\nWelfare -- Reporting on Working Families in Poverty: On Thursday, the research\ngroup Child Trends put out a report on working poor families. The report, based on 1996 Census\ndata, found that children of working parents were much less likely to be poor. Only 9 percent of\nchildren whose parents work were poor, compared to 63 percent with parents who didn't work.\nThus, children in non-working families were seven times more likely to be poor as children in\nworking families. The study defined working as at least 20 hours per week for a single parent\nfamily and 35 hours for a two parent family (the same as required by the welfare law).\nThe report also found that working does not guarantee an escape from poverty, at least by\nthe official poverty definition. The study found 35 percent of poor children have working\nparents. However, the report used the official measure of poverty, which does not include as\nincome the Earned Income Tax Credit or non-cash supports such as Food Stamps. Many\nanalysts have calculated how EITC and Food Stamps help provide families with resources to\nmove above the poverty line. As the Council of Economic Advisers has reported, the EITC lifted\n4.3 million people out of poverty in 1997 and over half the decline in child poverty between\n1993 and 1997 can be explained by changes in taxes most importantly in the EITC. The Center\non Budget and Policy Priorities has calculated that a family of four can reach the $17,100\npoverty line through a full time minimum wage job ($9,800), the EITC ($3,700), and Food\nStamps ($3,600).\nImmigrant Benefits -- Declining Participation: The Urban Institute will issue a report\non Monday showing evidence of a \"chilling effect\" that has resulted in fewer immigrant families,\ncompared to citizen families, accessing an array of public benefits. The study found welfare use\nby noncitizens declined by 35 percent from 1994 to 1997 while use by citizens declined 15\npercent. While Medicaid use by citizen households under 200 percent of poverty did not change\nsignificantly, non-citizen family participation dropped 19 percent. Since most legal immigrants\nwere still eligible for benefits in 1997, these effects may be the result of the publicity\nsurrounding the debate over welfare and immigration reform leading people to think they were\nineligible or that accepting benefits would affect their immigration status. As you know we have\nbeen working closely with the Department of Justice and HHS on these issues, and we expect the\nINS will issue guidance in the near future to provide clarity on what type of benefits an\nimmigrant can accept without being labeled a \"public charge.\" Clearer guidance on public\ncharge policies, along with our proposals to restore additional health, nutrition, and disability\nbenefits to vulnerable legal immigrants, will allow us to begin sending clearer messages to\nimmigrant families regarding their eligibility for benefits.\nWorking Poor Families with Children\nhttp://www.childtrends.org/workingpoor.shtml\nSummary Report\nWorking Poor Families with Children\nRichard F. Wertheimer, Ph.D.\nEMBARGOED UNTIL 12:01 A.M. FEBRUARY 25, 1999\nFebruary 1999\nFunded by a grant from the Foundation for Child Development\nIntroduction\n\"Increasing employment and earnings of needy families\n[and] decreasing\nchild poverty\" are two\n?\nexplicit objectives of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996\n(PRWORA). 1 However, imposing a stringent work requirement does not guarantee that a family will\nescape poverty. In 1996, over 2.7 million children (19 percent of all poor children) lived in families with\nincomes below the official poverty threshold, although the head of the household worked full-time,\nfull-year.\nThe existence of a substantial number of children who remain poor in spite of considerable work effort\nby their parents represents a possible scenario for what we can expect when families leave the welfare\nrolls. However, relatively little research has focused on children in working poor families. Indeed, no\ngenerally accepted way of even defining them exists.\nThe primary purpose of this project is to develop a reasonable definition of working poor families and to\nprovide a baseline of descriptive information about them. Trends can then be tracked over time, as\nwelfare reform proceeds. Currently, we can use this descriptive information to address four important\nissues:\n1. How likely is it for children in working families to be poor?\n2. How common is it for children in poverty to have working parents?\n3. How are working poor families different from poor families not making a substantial work effort?\n4. How are working poor families different from other working families?\nWho are working poor families?\nWe have used the official definition of poverty to determine if a family unit is poor. In 1996, the poverty\nthreshold was $16,036 for a family of four. 2\nSetting the standard for counting a family as a \"working\" family is a judgment call. Since poverty is\ndefined based on annual income, we measure work effort as total hours worked annually. Because our\nstudy is focused on children, we use a family-based definition of work effort. Consequently, for\ntwo-parent families, we add together the hours worked per year for both parents.\nThe working poor have become a focus of increasing attention due primarily to welfare reform and its\nfocus on encouraging increased work effort. Therefore, we have based our standard on the work\n1 of 8\n2/25/99 11:44 AM\nWorking Poor Families with Children\nhttp://www.childtrends.org/workingpoor.shtml\nrequirement imposed upon states by the 1996 welfare legislation. The work required of single-parent\nfamilies with children under age 6 is 20 hours per week, while the work required of two-parent families\nis 35 hours per week. We have translated this into a work standard of 1,820 hours per year for\ntwo-parent families and 1,040 hours per year for single-parent families. Thus, we have defined any\nfamily with income below the poverty line and with at least these many hours of work during a calendar\nyear as \"working poor.\" Any family with income below the poverty line and not enough hours of work\nto meet this annual work standard is defined as \"poor---not meeting work standard.\"\nHow Likely is it for children in working families to be poor?\nChildren are much less likely to be poor if they are living in a working family. According to 1996\nestimates from the March 1997 Current Population Survey, 20 percent of all children (13.8 million)\nlived in families whose incomes were below the official poverty threshold. However, as shown in Figure\n1, among children living in families that meet the work standard, only 9 percent were poor. In contrast,\namong children in families not meeting the\nFigure 1. Of all children, percentage living in poor families by work\nstandard and race/ethnicity, 1996\n100%\n80%\n73%\n75%\n63%\n64%\nPercentage\n60%\n51%\nWorking\n40%\nNot meeting work stand\n24%\n17%\n20%\n9%\n5%\n6%\n0%\nTotal\nWhite\nBlack\nAsian\nHispanic\nnon-\nnon-\nnon-\nHispanic\nHispanic\nHispanic\nSource: March 1997 Current Population Survey\nwork standard, 63 percent were poor. Thus, in 1996, children living in families not meeting the work\nstandard were seven times as likely to be poor as children living in working families.\nThis difference in the likelihood of poverty also holds for the four racial/ethnic groups in Figure 1.\nAlthough black and Hispanic children in working families have a higher likelihood of poverty than\ncomparable white or Asian children, work is consistently associated with dramatically lower levels of\npoverty.\nThe likelihood of poverty for children in working families is also lower when children in married-couple\nfamilies are considered separately from those in single-mother families. As shown in Figure 2, among\nchildren living in married-couple families meeting the work standard, only 5 percent were poor. In\ncontrast, among children in married-couple families not meeting the work standard, 54 percent were\npoor. Among children living in single-mother families meeting the work standard, only 24 percent were\npoor. In contrast, among children in single-mother families not meeting the work standard, 76 percent\nwere poor.\n2 of 8\n2/25/99 11:44 AM\nWorking Poor Families with Children\nhttp://www.childtrends.org/workingpoor.shtml\nIn short, the likelihood of poverty is lower if a child has one or more working parents reduces the risk of\npoverty for children. However, as we shall demonstrate in the next section, it provides no guarantee of\nescaping poverty.\nFigure 2. Of all children, percentage living in poor families by\nwork standard and family structure, 1996\n100%\n76%\n80%\nPercentage\n60%\n54%\n40%\n24%\n20%\n5%\n0%\nWorking\nMarried\nSingle\nNot meeting work standard\ncouple\nmother\nSource: March 1997 Current Population Survey\nMoving in and out of poverty: effect of work\nOver time, there is a rough balance between the number of children entering and leaving poverty. For\nexample, according to analysis of the Survey of Income and Program Participation (SIPP), 2.6 million\nchildren who were poor in 1991 left poverty in 1992, and 2.6 million children previously in families\nabove the poverty line entered poverty in 1992.³ Since about 12.7 million children were in poverty in\n1991 (according to analysis of SIPP), about one in five children left poverty between 1991 and 1992 and\nwere replaced by a different group but equal number of children.\nFor children living in poor families not meeting the work standard, increasing parental work effort to\nmeet or exceed the work standard is successful at removing the children from poverty about half the\ntime. Conversely, having one's parents meeting the work standard for two consecutive years helps\nnonpoor children avoid falling into poverty. According to analyses of SIPP, for children who were not\npoor in 1993 and whose parents met the work standard in both 1993 and 1994, the likelihood of moving\ninto poverty in the second year was only 2 percent. In contrast, if nonpoor children's parents met the\nwork standard in 1993 but not in 1994, the likelihood of moving into poverty was 15 percent.\nIn short, while there is substantial movement of children into and out of poverty, children whose parents\nmeet the work standard have higher odds of leaving poverty and lower odds of entering poverty.\nHow common is it for children in poverty to have working parents?\nAlthough children living in a working family have a substantially lower likelihood of a child being poor,\n5.0 million children lived in poor families that met the work standard in 1996. As shown in Figure 3, 52\npercent of children in poor, married-couple families had parents who met the work standard. Meeting the\nwork standard is significantly less common for children in poor, single-mother families. In 1996, only\n30 percent of children in poor, single-mother families had a parent who met the work standard.\n3 of 8\n2/25/99 11:44 AM\nWorking Poor Families with Children\nhttp://www.childtrends.org/workingpoor.shtm\nFigure 3. Percentage of poor children whose families meet the\nwork standard, by race/ethnicity, 1996\n100%\n80%\n61%\nAll\nPercentage\n60%\n52%\n51%\nfamil\n47%\n38%\n42%\n40%\n35%\n35%\nMan\n30%\n27%\n28%\n26%\ncoup\n20%\nSingl\nmoth\n0%\nTotal\nWhite\nnon-\nHispanic\nBlack\nnon-\nHispanic\nHispanic\nSource: March 1997 Current Population Survey\nAmong the three largest racial/ethnic groups, 4 poor Hispanic children living in married-couple families\nwere the most likely (61 percent) to have parents meeting the work standard. In contrast, poor Hispanic\nchildren living in single-mother families were the least likely (26 percent) to have their parent meet the\nwork standard.\nHow are working poor families different from poor families not meeting the\nwork standard?\nThere are substantial differences between working poor families and poor families not meeting the work\nstandard with respect to family structure, education, home-ownership, health insurance coverage, car\nownership, and child care costs. As shown in Figure 4, 48 percent of children living in working poor\nfamilies lived with both parents, while only 24\npercent of children living in poor families not meeting the work standard lived with both parents.\nCompared with children in poor families not meeting the work standard, children in working poor\nfamilies are:\nmore likely to have at least one parent who has completed 12 years of education;\nmore likely to live in owner-occupied housing;\nmore likely to live in a family that owns a car;\nmore likely to be in preschool child care paid for by parents; and\nless likely to be covered by health insurance.\n4 of 8\n2/25/99 11:45 AM\nWorking Poor Families with Children\nhttp://www.childtrends.org/workingpoor.shtml\nFigure 4. Percentage of children with selected characteristics in\nworking poor and poor families not meeting work standard,\n1\n1996\n100%\n81%\n76%\n80%\n68%\nPercentage\n60%\n48%\n9%\nWorking po or families\n42%\n37%\n40%\n32%\nFamilies not meeting work star\n14%\n26%\n13%\n20%\n8%\n0%\nMarried\ncouple\nfamilies\nless than\n12 years\nLive in\nhousing\nHealth\ninsurance\ncoverage\nCar\nownership\nPaid child care\nforpreschoolers\nSource: March 1997 Current Population Survey and 1993 panel of the\nSurvey of Income and Program Participation\n1 Car ownership statistics are for 1994; child care statistics are for 1993\nThese differences illustrate some of the obstacles to meeting the objectives of welfare reform. First, 42\npercent of the parents of children in poor families not meeting the work standard lack a high school\ndiploma, and about half do not own a car. This may put them at a serious disadvantage in finding and\nholding a job--especially in a labor market that is less vibrant than today's. 5\nUnfortunately, providing the financial assistance and the time needed to help these parents complete\ntheir high school education conflicts with the goal of immediately increasing these parents' work effort.\nGiven the already heavy demands on the time of working single mothers, it would seem unlikely that\nmany of them would be able to devote time to obtaining a high school diploma or a post-secondary\neducation.\nThis suggests that policy makers should continue to explore the payoff from adult education. Analysis of\nthe JOBS program by the Manpower Development Research Corporation (MDRC) may provide a\ndefinitive answer to this question over the next two years. Regardless of the payoff to remedial\neducation, these findings underscore the importance of encouraging students who are still in school to\nearn a high school diploma and consider post-secondary education.\nSecond, a significantly higher percentage of preschool age children in working poor families are in child\ncare arrangements paid for by their parents. This suggests that some parents not currently meeting the\nwork standard and not currently paying for child care may have to obtain paid child care when they\nincrease their work effort. Since child care costs are likely to consume a substantial percentage of\nworking poor families' income, on-going subsidization of child care costs may be necessary. Welfare\nreform legislation increased federal spending on child care assistance in 1997 by an estimated 27 percent\nover prior law (Long and Clark, 1997). However, it did so by consolidating several key federal child\ncare assistance programs for low income families into a single block grant entitled the Child Care and\nDevelopment Fund (CCDF). CCDF give states much more autonomy in both setting total child care\nspending and in how both the federal and state money is spent. Under CCDF, states could either increase\nor decrease total child care subsidies and could either increase or decrease the percentage of a family's\nchild care expenses that are subsidized.\n5 of 8\n2/25/99 11:45 AM\nWorking Poor Families with Children\nhttp://www.childtrends.org/workingpoor.shtml\nThird, the low health insurance coverage rate for children in working poor families suggests that\ncoverage rates for children may fall as poor families not meeting the work standard make the transition\ninto work. The newly enacted State Child Health Insurance Program (CHIP) is providing block grants to\nstates that provide coverage to children not covered by health insurance and whose family income is\nbelow 200 percent of the poverty threshold.\nHow are working poor families different from other, more prosperous,\nworking families?\nWhile there are substantial differences between working poor families and poor families not meeting the\nwork standard, there are also important differences between working poor families and other, more\nprosperous, working families. As shown in Figure 5, a high school diploma is nearly universal for at\nleast one parent in working families above the poverty line, and children are twice as likely to live in\nowner-occupied housing. Car ownership rates, participation by preschoolers in paid child care, and\nhealth insurance coverage rates are higher as well. The low rate of participation in paid child care by\npreschoolers in working poor families may be due to the high cost of child care relative to family income\nfor families in poverty. Of those working poor families paying for child care for their preschoolers in\n1993, half paid more than 20 percent of their family income, and one out of five paid more than 40\npercent of their family income.\nThese findings suggest that moving children from the ranks of the working poor families to above the\npoverty line may require a substantial investment in the human capital of their parents. As noted in the\nprevious section, this investment may be very difficult to undertake if we are expecting these parents to\nbe making a substantial work effort at the same time.\nFigure 5. Percentage of children with selected\ncharacteristics in working poor and other working families,\n1996\n100%\n89%\n87%\n82%\n75%\n76%\n80%\n68%\nPercentage\n60%\n48%\nWorking poor famil\n37%\n38%\n40%\n32%\nOther working fami\n13%\n20%\n026\n0%\nMarried\ncouple\nfamilies\nEducation\nless than\n12 years\nLive in\nowned\nhousing\nHealth\ninsurance\ncoverage\nCar\nownership\nPaid child care\nforpreschoolers\nSource: March 1997 Current Population Survey and 1993 panel of the\nSurvey of Income and Program Participation\n1 Car ownership statistics are for 1994; child care statistics are for 1993\nAnother alternative is further expansion of the earned income tax credit (EITC). 6 Until the EITC reaches\nthe phase-out point, its incentives are completely consistent with welfare reform. It encourages expanded\nwork effort by increasing the amount of disposable income received for each hour of employment. A\nrecent study credits the EITC with moving the families of 2.4 million children above the poverty\nthreshold (Center on Budget and Policy Priorities, 1998).\n6 of 8\n2/25/99 11:45 AM\nWorking Poor Families with Children\nhttp://www.childtrends.org/workingpoor.shtml\nA third plausible way to help the children in working poor families to escape poverty is to encourage\nmarriage for single parents. Marriage provides a family with at least the potential for two earners, and\ntwo parents working full-time can generally escape poverty as measured by the official standard.\nHowever, many of the programs that have been set up to provide assistance to low-income families with\nchildren weaken the economic incentive for a single parent to get married. Both the EITC and many\nneeds-tested transfer programs phase out benefits as income increases, and these phase-out provisions\noften apply at or near the poverty threshold.⁷ These phase-out features also reduce the incentive for\nparents to increase their hours worked or invest in education or training to increase their wage rates.\nAlthough it is impossible to eliminate altogether these \"phase-out\" problems, it is possible (at a\nsubstantial cost to the federal treasury) to adjust upwardly the ranges at which they apply or to reduce\nthe \"tax rates\" they implicitly impose.\nSummary\nAlthough having one or more working parents reduces the likelihood that children will live in poverty, it\ndoes not provide a guarantee of escaping poverty. Thus, if welfare reform succeeds in moving more\nparents into the labor market, more working poor families may be a consequence.\nWe can expect the transition from welfare to working poor to be difficult (especially in a labor market\nthat is less robust than today's), because poor parents not meeting the work standard are at a competitive\ndisadvantage in the labor market compared with working poor parents. More specifically, parents not\nmeeting the work standard are less likely to have graduated from high school and less likely to own a\ncar.\nMoving children from working poor families above the poverty line may be even more difficult since\nworking poor parents are at a similar competitive disadvantage in the labor market compared with other\nworking parents. In short, if eradicating child poverty is the objective, welfare reform is only the first\nstep in a long and difficult process.\nReferences\nCenter on Budget and Policy Priorities (1998), \"Strengths of the Safety Net: How the EITC, Social\nSecurity, and Other Government Programs Affect Poverty,\" Washington, D.C.\nLong, Sharon K., and Sandra J. Clark (1997), \"The New Child Care Block Grant: State Funding Choices\nand their Implications,\" New Federalism: Issues and Options for States, No. A-12. Washington, D.C.:\nThe Urban Institute.\nPear, Robert (1998), \"Most States Meet Work Requirements of Welfare Law,\" New York Times,\nDecember 30.\nEndnotes\n1 U.S. Congress, Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Sec. 411.\n411 10qms Intracollection trept folorgnam\n2 The official poverty standard has many deficiencies that have been carefully described elsewhere. The\nmost important deficiencies for purposes of this study are that refunded Earned Income Tax Credit\n(EITC) payments and non-cash benefits (e.g., Food Stamps) are not included as economic resources,\nincome and payroll taxes are not deducted from income, and work-related expenses (especially child\ncare) are not deducted from income.\n3 When the economy is growing rapidly, the balance shifts in favor of children leaving poverty; when\n7 of 8\n2/25/99 11:46 AM\nWorking Poor Families with Children\nhttp://www.childtrends.org/workingpoor.shtml\nthe economy is in recession, the balance shifts the other way.\n4 Statistics for Asian children are not shown due to small sample.\n5 During 1998, about 28 percent of adults on the welfare rolls were engaged in work-related activities as\ndefined by the TANF rules (Pear, 1998). This provides evidence that welfare reform is promoting\nincreased work activity on the part of welfare recipients, in spite of their disadvantages in competing in\nthe labor market. It should be noted, however, that this increase in work is occurring in the context of an\nunusually robust economy with unemployment rates lower that they have been since 1969 (during\nVietnam War) and the lowest unemployment rates for blacks and Hispanics since statistics first began to\nbe published for these groups.\n6 As of 1997, working families with at least two children could qualify for EITC as large as $3,656,\ncompared with only $851 ten years earlier.\n7 For example, in 1997, for a family with two children earnings between $11,930 and $29,290, the EITC\nwas reduced by 21 cents for every dollar of additional earnings. This phaseout \"tax\" is imposed on top of\nthe federal payroll tax rate, the federal income tax rate, and the marginal state income tax rate.\nRichard Wertheimer, Ph.D., is an economist and a Senior Research Associate at Child Trends.\nChild Trends is a nonprofit, nonpartisan research center that studies children and families. For more\ninformation on Child Trends, visit our web site, www.childtrends.org.\n8 of 8\n2/25/99 11:46 AM\nPAGE\n2\n3RD STORY of Level 1 printed in FULL format.\nCopyright 1999 Associated Press\nAP Online\nFebruary 25, 1999; Thursday 05:09 Eastern Time\nSECTION: Washington - general news\nwww. childtrends.org\nLENGTH: 514 words\nHEADLINE: Parents Work, but Some Kids Poor\nBYLINE: LAURA MECKLER\nAP-Children-Poverty 0548\n362-5580\nDATELINE: WASHINGTON\nBODY:\nMillions of children live in poverty although their parents work, a new\nreport says, warning that falling welfare rolls do not necessarily mean an\nescape from poverty.\nOne-third of all poor children live in families where the parents work, say\nresearchers from Child Trends in a report released today on the working poor.\nThe report notes that the massive overhaul of the nation's welfare system was\nmeant to both increase work by parents and decrease child poverty. But it warns\nthat imposing a strict work requirement does not guarantee that a family will\nescape poverty.\nTwenty percent of all American children or about 14.2 million youngsters\nlived in families with incomes below the poverty line in 1996. That meant less\nthan $16,036 a year for a family of four.\nFive million of those poor children 35 percent of the total had working\nparents.\n''We have many parents who are playing by the rules\nbut their children\nare still poor, said Richard Wertheimer, who wrote the report.\nThe study is meant to measure the effects of the nation's welfare overhaul\nlaw on children, establishing a definition of 'working poor'' families and\nmeasuring how many children remain in poverty even when their parents work.\nFuture reports will examine the well-being of these children and examine if the\nnumber of working poor grows.\nIn the meantime, researchers are recommending that states provide health\ninsurance and child care subsidies after families leave welfare but before they\ncan afford it on their own.\n''Some people have called them the forgotten Americans, said Ruby\nTakanishi, president of the Foundation for Child Development, a private\nphilanthropy financing the study.\nUnder the study's definition, a working poor family has an annual income\nbelow the poverty line and, in the case of a two-parent family, has at least\nPAGE\n3\nAP Online, February 25, 1999\none parent working full time, and in the case of a single-parent family, has the\nparent working at least 20 hours a week.\nThe report examines these families in 1996, before the new federal welfare\nrules took effect but after many states had made their own changes and welfare\ncaseloads began dropping.\nIt found:\nAbout one-quarter of children in single-parent, working families were in\npoverty. For working families with married parents, just 5 percent of children\nwere poor.\nFor the most part, working poor families are better off than non-working\npoor families. They were more likely to be married, to have a high school\neducation, to live in their own homes and to own a car.\nBut even those who didn't work were more likely to have health insurance,\nsince they probably qualify for Medicaid and many working poor families do not\nqualify.\nOnly 5 percent of white children in working families were poor, while 17\npercent of black children were poor despite parental work, and 24 percent of\nHispanic children.\nChild Trends is a private research group financed by contracts from the\nfederal government and many of the nation's largest philanthropies, including\nthe Ford and Robert Wood Johnson foundations.\nLANGUAGE: ENGLISH\nLOAD-DATE: February 25, 1999\nHelping Working Families\nReach the Poverty Line, 1998\n$17,117\n99.9%\nPoverty Line for\nFamily of Four\nFood Stamps\n$3,588\n79.7%\nEITC\nEITC\nAnnual Income\n$3,756\n$3,756\nFull-time Minimum Wage\nFull-time Minimum Wage\nJob (less withholding)\nJob (less withholding)\n$9,893\n$9,983\nWith Food Stamps\nWithout Food Stamps\nChanges in Food Stamp Participation and Poverty,\n1995-1997\n1995\n1997\nChange\n% Change\n95-97\n95-97\nNumber of Poor\n36,425,000\n35,574,000\n-851,000\n-2.3%\nAverage Monthly\nFood Stamp\n26,292,904\n21,935,748\n-4,357,157\n-16.6%\nParticipation\nNumber of Food Stamp Participants\nfor Every 100 Poor People\n1995\n72\n1997\n62\nuses Admin data\n3\nChanges in Number of Poor People and\nFood Stamp Participation, 1995-1997\n0%\n-2.3%\n-5%\n-10%\n-15%\n-16.6%\n-20%\nChange in Average Monthly\nChange in Number of Poor\nFood Stamp Participation\nDecline in Food Stamp Participation\nfrom March 1994 to July 1998\nArizona\nMinnesota\nWisconsin\nOhio\nTexas\nIndiana\nKansas\nMississippi\nNew Hampshire\nMassachusetts\nColorado\nFlorida\nIowa\nVirginia\nMissouri\nIdaho\nRhode Island\nNevada\nWyoming\nLouisiana\nUtah\nCalifornia\nPennsylvania\nNorth Dakota\nNew Mexico\nDelaware\nTennessee\nWashington\nVermont\nMichigan\nIllinois\nOklahoma\nNew York\nNew Jersey\nAlabama\nKentucky\nOregon\nGeorgia\nWest Virginia\nMaine\nMaryland\nNorth Carolina\nSouth Dakota\nMontana\nSouth Carolina\nConnecticut\nNebraska\nAlaska\nArkansas\nVirgin Islands\nDist. of Columbia\nHawaii\nGuam\nTOTAL US\n-20\n0\n20\n40\n60\n% Reduction\nCenter on Budget and Policy Priorities\nF:/sfp/karen/presentn/1103DS.ps.\nDecline in Food Stamp P rt cipation Since March 1994\nPercent Decline -\nMarch 1994 to\nSTATE\nMarch 1994\nJuly 1998\nJuly 1998\nALABAMA\n561,803\n415,612\n-26.0%\nALASKA\n51,692\n43,834\n-15.2%\nARIZONA\n512,288\n229,316\n-55.2%\nARKANSAS\n290,212\n254,142\n-12.4%\nCALIFORNIA\n3,191,890\n2,216,978\n-30.5%\nCOLORADO\n275,765\n177,222\n-35.7%\nCONNECTICUT\n225,044\n189,268\n-15.9%\nDELAWARE\n61,717\n43,394\n-29.7%\nDIST. OF COLUMBIA\n92,427\n82,640\n-10.6%\nFLORIDA\n1,469,271\n946,660\n-35.6%\nGEORGIA\n826,295\n635,794\n-23.1%\nGUAM\n15,058\n16,931\n12.4%\nHAWAII\n115,461\n121,388\n5.1%\nIDAHO\n88,094\n58,368\n-33.7%\nILLINOIS\n1,207,279\n875,297\n-27.5%\nINDIANA\n543,248\n301,515\n-44.5%\nIOWA\n203,883\n134,046\n-34.3%\nKANSAS\n197,340\n113,625\n-42.4%\nKENTUCKY\n536,337\n402,139\n-25.0%\nLOUISIANA\n763,280\n525,729\n-31.1%\nMAINE\n141,742\n110,764\n-21.9%\nMARYLAND\n399,877\n314,126\n-21.4%\nMASSACHUSETTS\n451,344\n276,984\n-38.6%\nMICHIGAN\n1,047,450\n755,230\n-27.9%\nMINNESOTA\n323,939\n173,818\n-46.3%\nMISSISSIPPI\n519,006\n309,173\n-40.4%\nMISSOURI\n606,179\n399,431\n-34.1%\nMONTANA\n74,280\n61,610\n-17.1%\nNEBRASKA\n113,484\n95,726\n-15.6%\nNEVADA\n98,977\n67,694\n-31.6%\nNEW HAMPSHIRE\n63,760\n38,518\n-39.6%\nNEW JERSEY\n554,501\n409,894\n-26.1%\nNEW MEXICO\n251,655\n176,779\n-29.8%\nNEW YORK\n2,175,154\n1,592,673\n-26.8%\nNORTH CAROLINA\n646,230\n509,793\n-21.1%\nNORTH DAKOTA\n47,459\n33,118\n-30.2%\nOHIO\n1,269,050\n693,748\n-45.3%\nOKLAHOMA\n382,926\n279,962\n-26.9%\nOREGON\n298,653\n229,435\n-23.2%\nPENNSYLVANIA\n1,243,533\n866,465\n-30.3%\nRHODE ISLAND\n96,336\n63,874\n-33.7%\nSOUTH CAROLINA\n390,940\n326,527\n-16.5%\nSOUTH DAKOTA\n55,200\n44,574\n-19.3%\nTENNESSEEE\n747,371\n527,488\n-29.4%\nTEXAS\n2,764,395\n1,529,964\n-44.7%\nUTAH\n131,124\n90,618\n-30.9%\nVERMONT\n65,475\n46,837\n-28.5%\nVIRGIN ISLANDS\n19,632\n17,501\n-10.9%\nVIRGINIA\n571,254\n376,137\n-34.2%\nWASHINGTON\n483,004\n344,136\n-28.8%\nWEST VIRGINIA\n333,260\n257,976\n-22.6%\nWISCONSIN\n334,900\n181,049\n-45.9%\nWYOMING\n34,698\n23,797\n-31.4%\nTOTAL US\n27,965,172\n19,009,317\n-31.4%\nQ&A on Child Trends Report on Child Poverty\nFebruary 25, 1999\nQ:\nThe AP reported on a new report saying millions of children were poor even though\ntheir parents were working. What is the Administration doing to address this issue?\nA:\nWe are currently reviewing this study, which shows that in 1996, 20 percent of American\nchildren were living in poverty and 35 percent of these had working parents. This\nAdministration does not believe parents who are working should be remain in poverty.\nThat is why we have fought so hard to expand the Earned Income Tax Credit, and why\nwe continue to fight hard to raise the minimum wage, and expand child care and health\ncoverage for working families. It should be noted that this study measured the status of\nfamilies in 1996, prior to full implementation of welfare reform. We will continue to\nmonitor these trends closely.\nNEWS\nCENTER ON BUDGET\nRELEASE\nAND POLICY PRIORITIES\nFOR IMMEDIATE RELEASE:\nCONTACT: Robert Greenstein\n820 First Street, NE\nSuite 510\nRevised October 8, 1998\nHerb Schaffner, Michelle Bazie\nWashington, DC 20002\n(202) 408-1080\nTel: 202-408-1080\nFax: 202-408-1056\nPOVERTY RATES FALL, BUT REMAIN HIGH FOR A PERIOD\nWITH SUCH LOW UNEMPLOYMENT\[email protected]\nhttp://www.cbpp.org\nHandsNet: HN0026\nGains Strongest for Blacks and Hispanics\nStrong economic growth and low unemployment reduced poverty and raised\nRobert Greenstein\nincomes in 1997, with especially strong gains occurring among minorities. A\nExecutive Director\nnumber of years of growth have returned the poverty rate and median household\nIris J. Lav\nDeputy Director\nincome to the levels at which they stood in 1989, the last year before the recession\nof the early 1990s. The Census data show that 13.3 percent of Americans lived in\npoverty in 1997, down from 13.7 percent in 1996.\nBoard of Directors\nThe poverty rate remained high, however, for a year in which the\nJohn R. Kramer, Chair\nTulane Law School\nunemployment rate averaged 4.9 percent, its lowest level in 24 years. The poverty\nrate in 1997 was at about the same level as it was in 1987 through 1989, years in\nHenry J. Aaron\nBrookings Institution\nwhich unemployment averaged between 5.3 percent and 6.2 percent. The 1997\nBarbara B. Blum\npoverty rate was substantially above the poverty rates for every year of the 1970s,\nColumbia University\neven though the unemployment rate was close to or above six percent for more than\nDavid de Ferranti\nThe World Bank\nhalf of the years of the 1970s. More than one of every eight people in the United\nStates continue to live in poverty.\nMarian Wright Edelman\nChildren's Defense Fund\nJames O. Gibson\nDepth of Poverty Grows\nDC Agenda\nRichard P. Nathan\nOn average, poor families became poorer in 1997. The average amount by\nNelson A. Rockefeller\nwhich families that are poor fall below the poverty line increased $200, the Census\nInstitute of Government\nfigures show, from $6,395 in 1996 to $6,602 in 1997. (These figures are both\nMarion Pines\nJohns Hopkins University\nexpressed in 1997 dollars.)\nSol Price\nChairman, The Price Company\nThis increase in the depth of poverty for the average poor family appears to\n(Retired)\nbe related to a weakening of safety net programs in 1997; the decline in the number\nRobert D. Reischauer\nBrookings Institution\nof families receiving assistance was much greater than the decline in the number of\nfamilies that are poor. The proportion of poor families with children that receive\nAudrey Rowe\nLockheed Martin IMS\nbasic cash assistance that can lessen the severity of their poverty has decreased. The\nSusan Sechier\nproportion of such families receiving food stamp assistance also has fallen, although\nThe Aspen Institute\nfood stamp receipt is not reflected in the Census Bureau's standard measures of the\nJuan Sepulveda, Jr.\nThe Common Enterprise/\nincidence and depth of poverty.\nSan Antonio\nWilliam Julius Wilson\nThe lack of greater progress in reducing poverty also reflects a broader, long-\nHarvard University\nterm trend - income growth over the past quarter century has been unevenly\n- more\nPovpr,103.wpd\nPoverty Rates Fall\nRevised October 8, 1998\nPage 2\nspread. Average household income in 1997 exceeded average income in 1989 only for the top\ntwo-fifths of the population. For the rest of the population, average income was at or below the\n1989 level, after adjusting for inflation. Income gains have been largest for the five percent of\nhouseholds with the highest incomes.\nIncome Inequality Tied for All-time High;\nIncome Gains Largest for High-Income Households\nThe Census data show that while the increase in income inequity between 1996 and 1997\nwas not statistically significant, the increase in inequity over the course of the current business\ncycle - the period from 1989 to 1997 - has been sizeable. Every income group except those at\nthe top of the income scale received a significantly smaller share of national pre-tax income in\n1997 than in 1989. The highest-income groups received larger shares.\nIn 1997, the 20 percent of households with the largest incomes received nearly half -\n49.4 percent - of the national income, while the other 80 percent of the population divided the\nother half of the national income. Although the 49.4 percent of the national income going to the\ntop fifth of households did not represent a statistically significant change from the 49 percent\nfigure for 1996, it tied for the largest share of national income the top fifth has received in any\nyear on record. It also significantly surpassed the share of national income the top fifth of\nhouseholds received in 1989. Each one percent of national income equals $51 billion.\nThe top five percent of households received 21.7 percent of the national income in 1997,\nalso tied for the highest level on record. Meanwhile, the shares of income that each of the\nbottom four fifths of the population received in 1997 were at or below their shares for all other\nyears on record. The share going to the middle three-fifths of the population combined was at a\nrecord low.\nIn addition, the incomes of households at the top of the income spectrum grew more\nbetween 1996 and 1997 than the incomes of households at the middle or the bottom.\nBetween 1996 and 1997, the\naverage income of the top fifth\nChange in Average Household Income\nof households rose by 3.9\n1996 - 1997\npercent, or $4,600, after\n5%\nadjusting for inflation.\n4%\nThe average income of the top\nfive percent rose 4.7 percent,\nor $9,600.\nPercent Change\n3%\n2%\nBy comparison, the average\n1%\nincome of the middle fifth rose\n0%\n2.4 percent, or $880, while the\nLowest Second Middle Fourth Highest Top 5%\naverage income of the bottom\nIncome Quintile\nfifth climbed 0.9 percent, or\njust $80.\n- more -\nPoverty Rates Fall\nRevised October 8, 1998\nPage 3\nThese data are for households. Household income data are the data the Census Bureau\nemphasizes in its reports and briefings. Household income data comprise the most\ncomprehensive data on income trends among the U.S. population because these data include\nvirtually everyone in the United States, whether they are, for example, individuals living alone,\nfamilies with children, or other types of households. The Census Bureau also releases\ninformation on family incomes. The term \"families\" refers to related people who reside together;\nit does not include individuals who live alone or with other individuals to whom they are not\nrelated.\nIf only families are examined, income growth from 1996 to 1997 is more broad-based\nthan if all households are examined. The bottom four fifths of families experienced average\nincome gains between 2.6 percent and 3.5 percent in 1997, after adjusting for inflation. The\naverage income of the top fifth rose 4.5 percent.\nThe income story remains largely the same, however, whether families or households are\nexamined - either way, those at the top of the income scale fared better than others. For\nexample, the average income of the top five percent of families grew 5.7 percent, or $12,680 last\nyear, far more than the income growth in either percentage or dollar terms for any other group of\nfamilies. The family income data also indicate that income inequality among families remains at\nan all-time high and that between 1989 and 1997, only upper-income families experienced\nsubstantial income gains.¹\nPoverty Rates Decline, Incomes Rise for Blacks and Hispanics\nThe brightest parts of the new Census report are the strong gains registered by Blacks and\nHispanics. Poverty dropped for both groups in 1997, with the Black poverty rate falling from\n28.4 percent in 1996 to 26.5 percent in 1997, an all-time low. The Hispanic poverty rate also\ndropped substantially, declining from 29.4 percent in 1996 to 27.1 percent last year.\nMedian household income also climbed for both groups, rising 4.3 percent, or a little over\n$1,000, for Blacks and 4.5 percent, or $1,150 for Hispanics. These strong gains suggest that\nminorities - the groups with the highest unemployment rates - benefit disproportionately when\nthe overall unemployment rate drops below five percent and employers reach increasingly into\nlow-income and minority populations for new hires. These data also suggest that keeping\nunemployment at its current low levels is especially important to making continued progress in\nraising incomes and reducing poverty among Blacks and Hispanics.\n1\nThe Congressional Budget Office uses a different method for measuring incomes for each fifth of the\npopulation. The CBO method, which includes an adjustment for household size, is generally regarded by analysts\nas a better way of measuring changes in income for different income groups than measuring changes for either\nhouseholds or families as the Census Bureau defines those terms. Applying the CBO method to the new Census\ndata shows that in 1997, average income rose by a smaller percentage (1.9 percent) for the bottom fifth of the\npopulation than for any other income group and rose by the largest percentage for those at the top of the income\nscale.\n- more -\nPoverty Rates Fall\nRevised October 8, 1998\nPage 4\nGains were especially strong in 1997 for Black and Hispanic female-headed families.\nMedian income for Black female-headed families climbed a robust eight percent in 1997, after\nadjusting for inflation, while for Hispanic female-headed families, median income surged 10.3\npercent. In addition, the poverty rate for black female-headed families fell from 43.7 percent in\n1996 to 39.8 percent in 1997. (The poverty rate for Hispanic female-headed families also\nappeared to decline, but the change was not statistically significant. The poverty rate for non-\nHispanic white female-headed households appeared to rise, but here, too, the change was not\nsignificant.)\nLooking at changes over the course of the current business cycle - that is, since 1989 -\nthe new Census data show that Blacks have experienced larger percentage decreases in poverty\nand increases in income than either-Hispanics or non-Hispanic whites. The median income of\nBlack households climbed 6.2 percent between 1989 and 1997, after adjusting for inflation. By\ncontrast, for non-Hispanic whites, median household income was essentially unchanged (it rose\none percent, but the change was not statistically significant), while median income for Hispanics\nfell 5.5 percent over this period.\nSimilarly, while the Hispanic poverty rate and poverty rate for non-Hispanic whites were\nboth at about the same level in 1997 as they had been in 1989, the overall Black poverty rate\ndropped from 30.8 percent in 1989 to the record low of 26.5 percent in 1997. Poverty rates for\nBlack children, Black female-headed families and Black married-couple families also have\ndeclined substantially since 1989 and all set or remained at record lows in 1997.\nEven so, poverty rates for Blacks as well as for Hispanics continue to be much higher\nthan poverty rates for non-Hispanic whites. Some 8.6 percent of non-Hispanic whites were poor\nin 1997, a rate less than one-third that for Blacks and Hispanics. Similarly, median household\nincome in 1997 was more than 50 percent higher for non-Hispanic whites than for both Blacks\nand Hispanics.\nPoverty at All-time Low for Elderly, but not for Working-age Adults\nIn 1997, the poverty rate stood at or below its 1989 level for the youngest and oldest age\ngroups, but not for working-age adults. Children continued to have the highest poverty rate of\nany age group at 19.9 percent, although this poverty rate has returned to its 1989 level.\nThe Census Bureau reported that children constituted 40 percent of all people who were\npoor in 1997 although they made up only 26 percent of the population. The Census data show an\nextremely high poverty rate for one group of children - those under age six who live in female-\nheaded families with no spouse present. Their poverty rate was 59 percent last year.\nAmong working age adults 18 to 64, the 1997 poverty rate of 10.9 percent remained\nsignificantly above the 1989 poverty rate of 10.4 percent. This likely reflects the long-term\ndownward trend in wages for lower-paying jobs.\nFor the elderly, the 1997 poverty rate of 10.5 percent ties for the lowest rate on record.\nAlmost all elderly individuals receive Social Security benefits. Since Social Security benefits are\n- more -\nPoverty Rates Fall\nRevised October 8, 1998\nPage 5\ntied to average wages earned during a worker's career and each new group of retirees has earned\nhigher average wages than previous groups of retirees, Social Security benefits have been\nsteadily rising. This pushes down elderly poverty rates. The poverty rate for elderly people of\n10.5 percent in 1997 compares to a 24.5 percent rate in 1970 and a rate of approximately 35\npercent in 1960. Census data show that in 1997, the elderly poverty rate would be close to 50\npercent in the absence of Social Security.\nThe poverty rate also was low, in comparison to other years, for female-headed families\nwith children.² The poverty rate for these families was as low or lower in 1997 as in any other\nyear in the past 40, except for 1979. Nevertheless, the poverty rate for this group remains quite\nhigh, at 41 percent, which is nearly six times the poverty rate for married-couple families with\nchildren. (The Census data also show that the proportion of families with children that are\nfemale-headed has stopped rising; it has remained essentially unchanged for the past six years.\nThis percentage remains above its levels in previous decades, however, which is one of the\nreasons that the overall poverty rate continues to be higher than it was in the 1970s.)\nOne group for which the poverty rate trends are less favorable consists of individuals of\nall ages who live alone or with others to whom they are not related. Some 20.8 percent of these\npeople, termed \"unrelated individuals\" by the Census Bureau, were poor in 1997, a rate higher\nthan the 19.3 percent poverty rate for this group in 1989. Low-income single individuals are\nlikely to have been affected adversely by the erosion in wages paid for low-skilled work. In\naddition, over the past decade, assistance programs have shrunk for low-income single\nindividuals who are not elderly or disabled (or have disabilities not covered under the\nSupplemental Security Income program). Many states have eliminated state cash assistance\n(often referred to as general assistance) for these individuals, while changes in federal law that\ntook effect in 1997 ended SSI benefits and Social Security disability benefits for most disabled\nindividuals whose disability stems from a current alcohol or drug addiction.\nDecline in Number of People Receiving Assistance Outstrips Decline in Poverty\nThe new Census data show that in recent years, the declines in the number of people\nreceiving basic assistance targeted on needy families have far outstripped the decline in the\nnumber of people who are poor. This suggests that sizable numbers of people who are poor are\nreceiving less aid from means-tested assistance programs than in the past. The Census data also\nindicate that this decrease in assistance is one of the reasons that poverty rates have not declined\nmore in the past few years amidst a stunning performance by the economy, and these data help\nexplain why the average poor family has become poorer.\nFrom 1995 to 1997, the number of poor people in female-headed families with children\nfell 4.3 percent. But the number of people receiving welfare assistance for poor families with\n2\nThe data on female-headed families cited on page 4 of this analysis are for all female-headed families,\nincluding those without children. Poverty rates for all female-headed families are lower than poverty rates for\nfemale-headed families with children.\nmore\nI\nPoverty Rates Fall\nRevised October 8, 1998\nPage 6\nchildren dropped 22.6 percent, more than five times as large a percentage. (Most of the families\nthat receive welfare assistance are female-headed families with children.) Just between 1996 and\n1997, the number of people receiving welfare assistance fell by nine times as large a percentage\nas the number of poor people in female-headed families with children; the number of poor people\nin such families fell 1.7 percent in 1997, while the number receiving welfare assistance in an\naverage month fell 15.7 percent.\nSimilar developments mark the food\nstamp program. Between 1995 and 1996, the\nChange in Number of Poor People versus Change in\nNumber of People Receiving Cash Ald\nnumber of poor people remained statistically\n0%\nunchanged, but the number of people\n-2%\nreceiving food stamps in an average month\n-4%\nfell 1.2 million, or nearly five percent. This\ntrend accelerated in 1997. From 1996 to\n1997, the number of poor people fell 955,000,\nPercent Decline\n-6%\n-8%\n-10%\nor 2.6 percent, while the number receiving\n-12%\nfood stamps plunged an additional 3.1\n-14%\nmillion, or more than 12 percent. During the\n-16%\n1995 1996\n1996 1997\ntwo-year period from 1995 to 1997, the\nChange in Number of AFDC/TANF\nChange in Number of People in Poor\ndecline in the number of people receiving\nRecipients\nSingle Mother Families\nfood stamps - 4.4 million - was five times\ngreater than the decline in the number of\npeople living in poverty.\nThe food stamp figures are especially noteworthy because the income limit for food\nstamps is slightly above the poverty line; as a result, families moving from public assistance to\nlow-wage work that leaves them in poverty do not lose eligibility for food stamps. These data\nindicate that the reductions in the number of households receiving food stamps have exceeded\nreductions in need and that the proportion of poor people receiving basic food assistance to help\nthem secure an adequate diet has declined.\nCenter director Robert Greenstein noted that anecdotal evidence suggests that many\nfamilies no longer receiving cash assistance are not receiving food stamps either. \"Practices in\nsome states to dissuade families from receiving welfare aid may be having the unintended effect\nof discouraging many working poor families from receiving food stamps even though they\nremain eligible for this assistance,\" Greenstein said.\nThe effects of these declines in public assistance and food stamp receipt show up in new,\nunpublished Census data on poverty rates under alternative measures of poverty that count non-\ncash benefits such as food stamps as income. These Census data show that the diminished\ncoverage of means-tested programs such as food stamps and cash welfare assistance resulted in\nmore\nPoverty Rates Fall\nRevised October 8, 1998\nPage 7\n700,000 fewer children being lifted out of poverty by means-tested programs in 1997 than in\n1995.³\nIn addition, the data show that the percentage of poor children receiving cash welfare\nassistance, as well as the percentage receiving food stamps, has declined in the past two years.\nFor example, in 1995, some 61.5 percent of poor children received cash assistance, while in\n1997, some 53.3 percent did.⁴\nAt the same time, the Census Bureau's alternative measures of poverty show strong\npositive effects from the expansions of the Earned Income Tax Credit enacted in 1990 and 1993.\nDue to the EITC expansions, federal tax policy lifted 400,000 more children out of poverty in\n1997 than in 1995 and 1.8 million more children out of poverty last year than in 1989.\nThe new Census data are likely to lead to speculation about the effects that changes in the\nwelfare system are having on poverty. Full understanding of those effects must await more time,\ndata, and study. Nevertheless, the new Census data suggest the changes in the system are having\ndifferent effects on different families. The combination of the welfare policy changes, the\nincreased number of job opportunities created by a growing economy, the rise in the minimum\nwage and expansions of the Earned Income Tax Credit (which have boosted the compensation\nfor low-paid work), and the extension of Medicaid to more children in low-income working\nfamilies appear to have spurred significant increases in employment and earnings among female-\nheaded families with children. These increases in employment and earnings appear to have\nraised incomes and reduced poverty among a substantial number of female-headed families. At\nthe same time, welfare system changes appear to have led to losses of cash and food assistance\nby a sizeable number of other families, many of whom have not offset these losses of benefits\nwith increases in earnings. Such families have become poorer as a result.\n3\nAmong children who were poor before receipt of means-tested benefits, the proportion lifted from poverty by\nthese benefits fell substantially between 1995 and 1997. If means-tested programs had lifted from poverty in 1997\nthe same proportion of children who otherwise would be poor as these programs lifted from poverty in 1995, some\n700,000 fewer children would have been poor last year. (These figures refer to the alternative measures of poverty\nthat count non-cash benefits such as food stamps as income).\n4\nThis percentage might have been expected to decline if poor families with children became less poor, on\naverage, and more of them secured earnings that lifted them above cash assistance income limits in their states while\nstill leaving them below the poverty line. The Census data suggest, however, that this did not occur; to the contrary,\npoor families with children became poorer, on average, in 1997. Furthermore, the Census data indicate that the\ndecline in receipt of cash assistance by poor families with children was greatest among very poor families with no\nearnings.\nThe figures cited here on the percentages of poor children receiving cash assistance in 1995 and 1997 reflect\naverage monthly participation by children in state cash assistance programs funded through the Temporary\nAssistance for Needy Families block grant, as reported by states to the U.S. Department of Health and Human\nServices, measured as a percentage of the number of children the Census Bureau reports as having been below the\npoverty line that year.\n-\nmore\n-\nPoverty Rates Fall\nRevised October 8, 1998\nPage 8\nEmployment and Minimum Wage Increases Reduce Poverty and Raise Incomes\nThe new Census data also show that although median weekly earnings of full-time\nworkers rose in 1997, these earnings remain below their level for most of the period since 1970.\nThese long-term trends are particularly unfavorable for male workers. For men working full-\ntime year-round, wages remain $1,500 below 1989 levels, after adjusting for inflation. For\nwomen working full-time year-round, wages were $750 higher in 1997 then in 1989.\nMedian household income is higher than in any year except 1989 despite these less\nfavorable trends in wages because of large increases in the number of people working and the\nnumber of hours worked. Labor Department data show that the proportion of adults who worked\nin 1997 reached the highest level ever recorded. In addition, data from the Economic Policy\nInstitute (EPI) indicate that the amount of time that families work increased significantly between\n1989 and 1997, with some of this increase occurring in 1997.\nIncreases in work hours were particularly important in 1997 in reducing poverty and\nraising income among low-income families. The EPI data show that among the bottom fifth of\nfamilies, the average number of hours worked per family rose more than five percent between\n1996 and 1997.\nOne other factor appears to have helped raise wages and family incomes for lower-paid\nworkers in 1997 - the increase in the minimum wage from $4.25 an hour to $5.15 an hour,\ninstituted in two stages in October 1996 and September 1997. A recent EPI study found that the\nminimum wage increase has contributed to faster growth in the wages of low-wage workers.\nThe Center on Budget and Policy Priorities is a nonpartisan research organization and policy institute\nthat conducts research and analysis on a range of government policies and programs, and specializes\nin issues related to fiscal policy, social welfare and nutrition policy. It is supported primarily by\nfoundation grants.\n####\n09/25/98 13:59\nCBPP\n202 456 5581\nCENTER ON BUDGET\nAND POLICY PRIORITIES\nFAX\nFrom the desk of\nEllen Nissenbaum\nLegislative Director\n202-408-1080\nFax 202-408-1056\nCenter on Budget and Policy\[email protected].\nPriorities\nTo:\nBruce Reed 456-7431\n-\nBarry Toiv -456-6201 -\nBarry White 395-7752\nMichael Barr 622-5672 -\nJanet Yellen 395-6958 -\nDate: September 24, 1998\nRE:\nHere is the Center's report on the Census data on poverty released today.\nWe felt that it would be of interest to you.\n820 First Street, NE, Suite 510, Washington, DC 20002\n09/25/98 13:59\nCBPP\n202\n5581\nNEWS\nCENTER ON BUDGET\nRELEASE\nAND POLICY PRIORITIES\nFOR IMMEDIATE RELEASE:\nCONTACT: Robert Greenstein\n820 First Street, ME\nSeptember 24, 1998\nHerb Schaffner, Michelle Bazie\nSuite 510\nИ nington, DC 20002\n(202) 408-1080\nTel: 202-408-1080\nFax: 202-408-1056\nPOVERTY RATES FALL, BUT REMAIN HIGH FOR A PERIOD\nWITH SUCH LOW UNEMPLOYMENT\[email protected]\nhttp://www.cbpp.org\nHandsNet: HN0026\nStrong economic growth and low unemployment reduced poverty\nand raised incomes in 1997, with especially strong gains among minorities.\nRobert Greenstein\nSeveral years of growth have returned the poverty rate and median\nExecutive Director\nhousehold income to the levels at which they stood in 1989, the last year\nIris J. Lav\nbefore the recession of the early 1990s. The Census data show that 13.3\nDeputy Director\npercent of Americans lived in poverty in 1997, down from 13.7 percent in\n1996.\nB\nd of Directors\nThe poverty rate remained high, however, for a year in which the\nJohn R. Kramer. Coair\nTulane Law School\nunemployment rate averaged 4.9 percent, its lowest level in 24 years. The\npoverty rate in 1997 was at about the same level as it was in 1987 through\nMeary J. Aaron\nBrookings Institution\n1989, years in which unemployment averaged between 5.3 percent and 6.2\nBarbara B. Blum\npercent. The 1997 poverty rate was substantially above the poverty rates\nColumbia University\nfor every year of the 1970s, even though the unemployment rate was close\nDavid de Perranti\nThe World Bank\nto or above six percent for more than half of the years of that decade.\nMartan Wright Edelman\nChildren's Defense Fund\nPoor Families Grow Poorer, Welfare Caseloads Decline\nJames O. Gibson\nDC Agenda\nIn addition, poor families became poorer, on average, in 1997. The\nRichard P. Rathan\naverage amount by which families that are poor fall below the poverty line\nNelson A. Rockefeller\nInstitute or Government\nincreased $200, the Census figures show, from $6,395 in 1996 to $6,602 in\nMarion Pines\n1997. (These figures are both expressed in 1997 dollars.)\nJohns Hopkins University\nSol Price\nThis increase in the depth of poverty for the average poor family\nChairman. The Price Company\n(Retired)\nappears to be related to a weakening of safety net programs in 1997; the\nRobert D. Reischauer\ndecline in the number of families receiving assistance was much greater\nBrookings institution\nthan the decline in the number of families that are poor. The proportion of\nAudrey Howe\nLockheed Martin IMS\npoor families receiving basic cash and food assistance that can lessen the\nseverity of their poverty has decreased significantly. The Census data also\n:\nSechier\nThe Aspen Institute\nshow that the assistance programs lifted substantially fewer children out\nSepuiveds. Jr.\nof poverty in 1997 than in 1995 or 1996.\nThe Common Enterprise/\nSan Antonio\nWHilans Julios Wilson\nHarvard University\n- more -\n09/25/98\n13:59\nCBPP 202 456 5581\nPoverty Rates Fall\nSeptember 24, 1998\nPage 2\nThis lack of greater progress in reducing poverty also reflects a broader, long-\nterm trend - income growth over the past two decades has been unevenly spread.\nAverage household income in 1997 exceeded average income in 1989 only for the top\ntwo-fifths of the population. For the rest of the population, average income was at or\nbelow the 1989 level, after adjusting for inflation. Income gains have been largest for\nthe five percent of households with the highest incomes.\nIncome Gains Largest for High-income Households\nIn 1997, median household\nincome rose to $37,005, about the same\nChange in Average Household Income\nas in 1989, after adjusting for inflation.\n1996 - 1997\nThe incomes of those at the top of the\n5%\nincome spectrum grew more, however,\nthan the incomes of those at the middle\n4%\nor the bottom.\nBetween 1996 and 1997, the\nPercent Change\n3%\n2%\naverage income of the top\n1%\nfifth of households rose 3.9\n0%\npercent, or $4,600, after\nLowest\nSecond\nMiddle\nFounh\nHighest\nTop\n5%\nIncome Quintile\nadjusting for inflation.\nThe average income of the\ntop five percent rose 4.7\npercent, or $9,600.\nChange in Average Household Income\n1996 - 1997\nMeanwhile, the average\n$10,000\nincome of the middle fifth\nrose 2.4 percent, or $880,\n$8,000\nwhile the average income\nof the bottom fifth climbed\nDollar Change\n$8,000\n$4,000\n0.9 percent, or just $80.\n$2,000\nThe Census data also show that\n$0\nevery income group except those at the\nLowest\nSecond\nMiddle\nFourth\nHighest\nTop\n5%\nIncome Quintile\ntop of the income scale received a\nsignificantly smaller share of national\npre-tax income in 1997 than in 1989,\nwhile the top groups received larger shares. In 1997, the 20 percent of households\nwith the highest incomes received nearly half - 49.4 percent - of the national income,\nwhile the other 80 percent of the population divided the other half of the national\n- more -\n09/25/98 14:00\nCBPP\n202\n456\n5581\nPoverty Rates Fall\nSeptember 24, 1998\nPage 3\nincome. Although the 49.4 percent figure did not represent a statistically significant\nchange from the 49 percent figure for 1996, it tied for the largest share of national\nincome that the top fifth of households have received in any year on record. It also\nsignificantly surpassed the share of national income that the top fifth of households\nreceived in 1989. Each one percent of national income equals $51 billion.\nThe top five percent of households received 21.7 percent of the national\nincome, also equal to the highest level on record. Meanwhile, the shares of income\neach of the bottom four fifths of the population received were lower in 1997 than in\nnearly all other years on record. The share going to the middle three-fifths of the\npopulation combined was at a record low level.\nPoverty Rates Decline, Incomes Rise for Blacks and Hispanics\nThe brightest parts of the new Census report are the strong gains registered by\nBlacks and Hispanics. Poverty dropped for both groups in 1997, with the Black\npoverty rate falling from 28.4 percent in 1996 to 26.5 percent in 1997, an all-time low.\nThe Hispanic poverty rate also dropped substantially, declining from 29.4 percent in\n1996 to 27.1 percent last year.\nMedian household income also climbed for both groups, rising 4.3 percent, or a\nlittle over $1,000, for Blacks and 4.5 percent, or $1,150 for Hispanics. These strong\ngains suggest that minorities - the groups with the highest unemployment rates -\nbenefit disproportionately when the overall unemployment rate drops below five\npercent. These data also suggest that keeping unemployment at its current low levels\nis especially important to making continued progress in raising incomes and reducing\npoverty among Blacks and Hispanics.\nPoverty rates for Blacks and Hispanics continue, of course, to be much higher\nthan poverty rates among non-Hispanic whites. Some 8.6 percent of non-Hispanic\nwhites were poor in 1997, a rate less than one-third that for Blacks and Hispanics.\nSimilarly, median household income in 1997 was more than 50 percent higher for\nnon-Hispanic whites than for Blacks and Hispanics.\nPoverty at All-time Low for Elderly, but not for Working-age Adults\nIn 1997, the poverty rate stood at or below its 1989 level for the youngest and\noldest age groups, but not for working-age adults. Children continued to have the\nhighest poverty rate of any age group at 19.9 percent, although this poverty rate has\nreturned to the level of the child poverty rate in 1989.\nmore\n09/25/98 14:00\nCBPP\n202\n450\nPoverty Rates Fall\nSeptember 24, 1998\nPage 4\nThe Census Bureau reported that children constituted 40 percent of all people\nwho were poor in 1997 although they made up only 26 percent of the population. The\nCensus data show an extremely high poverty rate for one group of children - those\nunder age six who live in female-headed families with no spouse present. Their\npoverty rate was 59 percent last year.\nAmong working age adults 18 to 64, the 1997 poverty rate of 10.9 percent\nremained significantly above the 1989 poverty rate of 10.4 percent. This likely reflects\nthe long-term downward trend in wages for lower-paying jobs.\nFor the elderly, the 1997 poverty rate of 10.5 percent ties for the lowest rate on\nrecord. Almost all elderly individuals receive Social Security benefits. Since Social\nSecurity benefits are tied to average wages earned during a worker's career and each\nnew group of retirees has earned higher average wages than previous groups of\nretirees, Social Security benefits have been steadily rising. This pushes down elderly\npoverty rates. The poverty rate for elderly people of 10.5 percent in 1997 compares to\na 24.5 percent rate in 1970 and a rate of approximately 35 percent in 1960. Census data\nshow that in 1997, the elderly poverty rate would be close to 50 percent in the absence\nof Social Security.\nOne group for which the poverty rate trends are less favorable consists of\nindividuals of all ages who live alone or with others to whom they are not related.\nSome 20.8 percent of these people, termed \"unrelated individuals\" by the Census\nbureau, were poor in 1997, a poverty rate substantially above the 19.3 percent poverty\nrate for this group in 1989.\nDecline in Number of People Receiving Assistance Outstrips Decline in Poverty\nThe new Census data show that in recent years, the declines in the number of\npeople receiving basic assistance targeted on needy families have far outstripped the\ndecline in the number of people who are poor. This suggests that sizable numbers of\npeople who are poor are receiving less aid than in the past. The Census report also\nindicates that this decrease in assistance is one of the reasons that poverty rates have\nnot declined more in the past few years amidst a stunning performance by the\neconomy, and it helps to explain why the average poor family has become poorer.\nFrom 1995 to 1997, the number of poor people in female-headed families with\nchildren fell 4.3 percent. But the number of people receiving welfare assistance for\npoor families with children dropped 22.6 percent, or more than five times as large a\npercentage. Just between 1996 and 1997, the number of people receiving welfare\nassistance fell by nine times as large a percentage as the number of poor people in\nfemale-headed families with children; the number of poor people in such families fell\n- more -\n09/25/98 14:01\nCBPP\n202\n430\n5001\nPoverty Rates Fall\nSeptember 24. 1998\nPage 5\n1.7 percent in 1997, while the number\nreceiving welfare assistance in an average\nChange in Number of Poor People versus Change in\nmonth fell 15.7 percent.\nNumber of People Receiving Cash Ald\n0%\n-2%\nOf particular concern are trends in\n-4%\nthe food stamp program, a program for\nwhich most poor households are eligible,\nPercent Decline\n6%\n-8%\nincluding the working poor. Between\n-10%\n1995 and 1996, the number of poor\n-12%\npeople remained statistically unchanged,\n-14%\nbut the number of people receiving food\n-16%\n1995 1996\n1996 1997\nstamps in an average month fell 1.2\nmillion, or nearly five percent. This\nChange in Number of AFDCITANF\nChange in Number of People in Poor\nRecipients\nSingle Mother Femlies\ntrend accelerated in 1997. From 1996 to\n1997, the number of poor people fell\n955,000, or 2.6 percent, while the number receiving food stamps plunged an\nadditional 3.1 million, or more than 12 percent. During the two-year period from 1995\nto 1997, the decline in the number of people receiving food stamps - 4.4 million -\nwas five times greater than the decline in the number of people living in poverty.\nThe food stamp figures are especially noteworthy because the income limit for\nfood stamps is slightly above the poverty line; as a result, families moving from\npublic assistance to low-wage work that leaves them in poverty do not lose eligibility\nfor food stamps. These data indicate that the reductions in the number of households\nreceiving food stamps have exceeded reductions in need and that the proportion of\npoor people receiving basic food assistance to help them secure an adequate diet has\ndeclined.\nCenter director Robert Greenstein noted that anecdotal evidence suggests that\nmany families no longer receiving cash assistance are not receiving food stamps\neither. \"Practices in some states to dissuade families from receiving welfare aid may\nbe having the unintended effect of discouraging many working poor families from\nreceiving food stamps even though they remain eligible for this assistance,\"\nGreenstein said.\nThe effects of these declines in public assistance and food stamp receipt show\nup clearly in unpublished Census data released today on poverty rates under\nalternative measures of poverty that count non-cash benefits such as food stamps as\nincome. These Census data show that means-tested programs such as food stamps\nand cash welfare assistance lifted 850,000 fewer children out of poverty in 1997 than in\n1995.\nmore\n09/25/98\n14:01\nCOPT\nCUC\nJJO1\nPoverty Rates Fall\nSeptember 24, 1998\nPage 6\nThese data also show that the percentage of poor children receiving food\nstamps, as well as the percentage receiving cash welfare assistance, has declined\nsignificantly in the past two years. For example, in 1995, some 61.5 percent of poor\nchildren received cash assistance, while in 1997, some 53.3 percent did.\nThe Census Bureau's alternative measures of poverty also show strong positive\neffects from the expansions of the Earned Income Tax Credit enacted in 1990 and 1993.\nDue to the EITC expansions, federal tax policy lifted 400,000 more children out of\npoverty in 1997 than in 1995 and 1.4 million more children out of poverty last year\nthan in 1993. The effects of the ETTC in lifting children out of poverty are unlikely to\ngrow much further as the EITC expansions enacted in 1993 were phased in fully by\n1997. Food stamp and welfare caseloads, by contrast, continue to decline.\nEmployment and Minimum Wage Increases Reduce Poverty and Raise Incomes\nThe new Census data also show that although median weekly earnings of full-\ntime workers rose in 1997, these earnings remain below their level for most of the\nperiod since 1970. These long-term trends are particularly unfavorable for male\nworkers. For men working full-time year-round, wages remain $1,500 below 1989\nlevels, after adjusting for inflation. (For women working full-time, year-round, wages\nwere $750 higher in 1997 then in 1989.) Median household income is higher than in\nany year except 1989 despite these less favorable trends in wages because of large\nincreases in the number of people working and the number of hours worked.\nLabor Department data show that the proportion of adults who worked in 1997\nreached the highest level ever recorded. In addition, data from the Economic Policy\nInstitute indicate that the amount of time that families work increased significantly\nbetween 1989 and 1997, with some increase occurring between 1996 and 1997. In\nshort, increased hours of work have offset declines in wages.\nOne other factor appears to have helped raise wages and family incomes for\nlower-paid workers in 1997 - the increase in the minimum wage from $4.25 an hour\nto $5.15 an hour, instituted in two stages in October 1996 and September 1997. A\nrecent Economic Policy Institute study found that the minimum wage increase has\ncontributed to faster growth in the wages of low-wage workers.\nThe Center on Budget and Policy Priorities is a nonpartisan research organization and policy institute\nthat conducts research and analysis on a range of government policies and programs, and specializes in\nissues related to fiscal policy, social welfare and nutrition policy. It is supported primarily by\nfoundation grants.\n####\nROBERT RECTOR\nMONA CHAREN\nHow poor are the\nDespite frequent claims of wide-\nn 1963, a 23-year-old man with\nper-capita real income, labor-force\nspread hunger in the United States,\nI\na prior arrest record, who had\nMiranda\nparticipation, live births to unmar\n84 percent of the \"poor\" report\ndropped out of the ninth grade,\nried mothers, and levels of urban-\ntheir families have \"enough\" food to\nwas picked up by the Phoenix\nization and the distribution of\npoor among us?\neat, 13 percent say they \"some-\npolice for questioning in the kid-\ncrimes in large and small cities\ntimes\" do not have enough to eat,\nnapping and rape of an 18-year-old\nbeyond\nhave not had as measurable an\nand only 3 percent say they \"often\"\nwoman. At the end of a two-hour\neffect on crime clearance as the\ndo not have enough to eat.\ninterrogation, Ernesto Miranda\nMiranda decision.\nthe U.S. Census Bureau\nago; indeed, most are better housed,\nThe average consumption of pro-\norally confessed to the crime,\nAccording to Mr. Cassell, there\nT\nreleased a report on Sept. 24\nbetter fed, and own more personal\ntein, vitamins and minerals is vir-\ndescribed the rape and signed a\nwere between 56,000 and 136,000\nclaiming that 36 million\nproperty than average Americans\ntually the same for poor and mid-\nits time\nstatement certifying that the con-\nmore unsolved and therefore\nAmericans are \"living in\nthroughout much of this century.\ndle-class children, and in most\nfession was voluntary, that no\nunpunished violent crimes in 1995\npoverty.\" Can this alarming statis-\nThe following are facts about\ncases is well above recommended\nthreats or intimidation had been\nversity of Utah College of Law\nbecause of Miranda. For property-\ntic really be true?\npeople defined as \"poor\" by the\nnorms. Most poor children today\nused, and that he fully understood\nwhich argues that the critics were\ncrimes, the figure is between\nThe answer is \"no.\"\nCensus Bureau, taken from various\nare in fact super-nourished, grow-\nhis rights. He was tried, convicted\nright: Miranda has hampered the\n72,000 and 299,000. Since the\nThe Census report dramatically\ngovernment reports:\ning up to be 1 inch taller and 10\nand sentenced to 20 years in prison.\nability of the police to solve crimes\nSupreme Court recommended the\nundercounts the incomes of less-\nIn 1995, 41 percent of all \"poor\"\npounds heavier than the GIs who\nMiranda appealed his conviction\nand has resulted in significant per-\nMiranda warnings as a safeguard,\naffluent Americans, making them\nhouseholds owned their own\nstormed the beaches of Normandy\non the grounds that his attorney\ncentages of criminals going unpun-\nnot as a constitutional right, Mr.\nseem more destitute than they real-\nhomes. The average home owned\nin World War II.\nhad not been present during ques-\nished.\nCassell argues that the court\nly are. Government surveys show\nby the \"poor\" is a three-bedroom\nClearly the material living stan-\ntioning and, accordingly, his con-\nThe statistics on crime clearance\nmight now wish to reconsider.\nthat spending by low-income U.S.\nhouse with one-and-a-half baths, a\ndards of \"poor\" Americans have\nfession could not be treated as truly\nrates (or solving crimes) shows a\nThe irony is that in 1965, coer-\nhouseholds greatly exceeds their\ngarage, and a porch or patio. More\nimproved dramatically over time,\nvoluntary. The Supreme Court\nmarked decline in the years fol-\ncive questioning methods by\nincome as reported by the Census\nthan three-quarters of a million\nbut this should not be regarded as\nagreed and in 1965 issued perhaps\nlowing the Miranda decision. Vio-\npolice were already in desuetude.\nBureau. For example, Census\n\"poor\" people own homes worth\na victory for anti-poverty programs.\nthe most famous criminal decision\nlent-crime clearance rates before\nEven the court's opinion acknowl-\nclaimed in 1995 that the lowest-\nmore than $150,000, and nearly\nLiving conditions were improving\nin history, Miranda VS. Arizona.\n1965 hovered at around 60 percent.\nedged that such practices were\nincome fifth of households had an\n200,000 own homes worth more\ndramatically and poverty was drop-\nThe Miranda warnings are famil-\nBut in the years following Miranda,\n'undoubtedly the exception\naverage income of $8,350. But the\nthan $300,000.\nping sharply long before Lyndon\niar not just to lawyers and judges\nnow.\" Besides, as Justice John\nLabor Department showed that\nOnly 7.5 percent of \"poor\"\nJohnson launched the War on\nbut to anyone who has ever watched\nMarshall Harlan's dissent point-\nthese same households spent\nhouseholds are overcrowded. Near-\nPoverty. Indeed, the main effect of\na cop show or movie: \"You have the\ned out, the Miranda warnings\n$14,607. That's $1.75 in spending\nly 60 percent have two or more\nthe War on Poverty (cost: $7 tril-\nright to remain silent. Anything you\nThe irony is that in 1965,\nwould do nothing to cure police\nfor every $1 in income.\nrooms per person. The average\nlion) has been to displace work with\nsay can and will be held against you\n\"poor\" American has a third more\ndependence on government. By\ncoercive questioning\nmisconduct: \"Those who use\nBut even the Labor Department\nin a court of law. You have the right\nthird-degree tactics and deny\nfigure is too low, because it\nliving space than the average\nmaking fathers economically\nto talk to a lawyer and have him pre-\nexcludes the value of government\nunnecessary, it has also had a\nsent while you are being ques-\nmethods by police were\nthem in court are equally able\nJapanese and 4 times as much liv-\nand destined to lie as skillfully\nhousing subsidies and medical\ning space as the average Russian.\ndeeply corrosive effect on mar-\ntioned. If you cannot afford to hire\nalready in desuetude.\nabout warnings and waivers.\"\nassistance received by the less\nNote: These comparisons are to\nriage. Today, 1 of every 3 children\na lawyer, one will be provided for\nSince society is paying a\naffluent. When these are counted,\naverage Russians and Japanese, not\nis born out-of-wedlock.\nyou. Do you understand these\nheavy price in increased crime\nspending among the lowest-income\nto those classified as poor.\nThe Census Bureau's inaccurate\nrights?\"\ndue to Miranda, and since\nfifth of Americans rises to $20,335\nSeventy percent of \"poor\" house-\npoverty report was created as a\nWhen Miranda was decided, sup-\nthe rates dropped steeply, to 55\nMiranda was designed to cure a\nper household. This means low-\nholds own a car; 27 percent own two\npublic relations gimmick to boost\nporters of the decision hailed its\npercent in 1966, 51 percent in 1967\nproblem that was already solv-\nincome households are spending\nor more cars.\nsupport for increased government\nprotections against coerced con-\nand 47 percent in 1968. Violent-\ning itself, alternatives deserve\nan average of $2.43 for every $1 of\nTwo-thirds of \"poor\" households\nspending on welfare. But today,\nfessions and police brutality. But\ncrime clearance rates have never\nnew attention. Videotaping all\nincome the Census Bureau says\nhave air conditioning. By contrast,\nthe biggest crisis facing low-\ncritics warned that the decision\nrebounded to pre-Miranda highs.\ninterrogations, as Mr. Cassell\nthey have.\n30 years ago only 36 percent of the\nincome communities is not mate-\nwould make it more difficult for the\nProperty crimes are cleared at\nsuggests, would avoid the rubber-\nFor most Americans the term\nentire U.S. population enjoyed air\nrial poverty but behavioral prob-\npolice to solve crimes. (Miranda\nslightly higher rates than violent\nhose problem. So would the pres-\n\"poverty\" means destitution: an\nconditioning.\nlems: illegitimacy, crime, school\nwas retried - without the confes-\ncrimes but, again, nowhere near\nence of a magistrate. But the Miran-\ninability to provide a family with\nNinety-seven percent of \"poor\"\nfailure, and drug abuse. Higher\nsion -and convicted. He was\nthe rates that prevailed pre-\nda warnings have had the effect of\nnutritious food, adequate clothing\nhouseholds have a color television;\nwelfare spending will do nothing\nparoled in 1972 and was killed in a\nMiranda.\ndiscouraging all defendants\nand reasonable shelter. In reality,\nnearly half own two or more color\nto fix these problems, and may\nbar fight. Ironically, his attacker\nUsing standard statistical analy-\nthose stricken with conscience or\nonly a small fraction of people clas-\ntelevisions. Nearly three-quarters\nmake them worse.\nwas questioned and released.That\nsis techniques, Mr. Cassell argues\ntemporarily too scared to lie -\nsified as \"poor\" by the Census\nhave a VCR; almost 1 in 5 have two\ncrime was never solved.)\nthat other factors, including num-\nfrom confessing.\nBureau fit this description. The\nVCRs. Sixty-four percent own\nNow, more than 30 years later,\nber of police, money spent of polic-\nbulk of the \"poor\" live in material\nmicrowave ovens, half have a stereo\nRobert Rector is senior policy\nthe National Center for Policy\ning, overall crime rate, number of\nconditions considered comfortable\nsystem, and more than a quarter\nanalyst for welfare and poverty\nAnalysis has issued a report by Pro-\njuveniles in the population, the\nMona Charen is a nationally syn-\nor well-off just a few generations\nhave an automatic dishwasher.\nissues at the Heritage Foundation.\nfessor Paul G. Cassell of the Uni-\nunemployment rate, disposable\ndicated columnist.\nThe Washington Times\nTHURSDAY, OCTOBER 8, 1998\n9/28\nAnd at Home\nT\nHE INCOME and poverty figures the\nfigure in a recession?\nCensus Bureau released the other day\nThe people who wrote the 1996 welfare bill\nweren't a lot of help in answering the\npanned for gold in the statistics and found a\nmain income and poverty questions the country\nlittle. \"Incomes are up for female-headed fami-\nfaces. They showed pretty much what you\nlies, many of whom have left welfare for work,\"\nwould expect, given the economic conditions\nsaid Rep. Clay Shaw, a principal author. But the\nthat prevailed last year. With unemployment at\nCenter on Budget and Policy Priorities, a think\na 24-year low, but inflation remaining pleasantly\ntank that opposed the bill, drew a different\nlow as well, real incomes were up, and poverty\nlesson. It noted that, on average, poor families\nwas down. Income inequality remained high but\nwere farther below the poverty line last year\nstable.\nthan the year before. \"This increase in the depth\nThat's mostly good news, except that last\nof poverty\nappears to be related to weaken-\nyear wasn't much of a test. The current\ning of safety net programs,\" it said; \"the decline\nexpansion has been going on since early 1991.\nin the number of families receiving assistance\nThe people at the lower end of the income\nwas much greater than the decline in the\ndistribution still haven't gotten as much of a lift\nnumber of families that [were] poor. The\nfrom it as those at the top; not close. Nor is it\nproportion of poor families receiving basic\nclear what will happen to either income inequal-\nassistance\nhas decreased significantly. The\nity or poverty when the business cycle reasserts\ndata\nshow that the assistance programs\nitself and the economy turns down. Twenty\nlifted substantially fewer children out of poverty\npercent of U.S. households now have half the\nin 1997 than in 1995 or 1996.\"\nincome; the other 80 percent split the rest. Does\nThe fact is that no one knows what effect the\nthat figure get better or worse when the\nwelfare bill may have had on poverty last year,\neconomy falters? After six-plus years of steady\nmuch less the effect it may have in a tougher\ngrowth, a fifth of the children in the country\nfuture. Last week's sunny reports do not\nlived in poverty last year. What happens to that\ncontain the answer.\nPHOTOCOPY\nPRESERVATION\nWashington and Baltimore: Partly\nsunny, highs from the upper 80's. To-\nnight, muggy, lows in the 60's. Tomor-\nrow, humid with near-record warmth,\nhigh near 90. Weather map, page A13.\nONE DOLLAR\nAMERICANS LACKING\nHEALTH INSURANCE\nPUT AT 16 PERCENT\n2\nHIGHEST LEVEL IN DECADE\nIncrease Is Attributed to Shift\nof People From Welfare and\ng\nto Cuts by Companies\ny\ny\non\nBy ROBERT PEAR\n1.\nWASHINGTON, Sept. 25 - Despite\nhe\nthe booming economy, the number of\na\npeople without health insurance rose\nbe-\nsharply last year, to 43.4 million, and\nMr.\nthe proportion of Americans lacking\nt its\ncoverage reached the highest level in\nility,\na decade, 16.1 percent, the Census\nress\nBureau reported today.\nsan-\nAfter rising slightly more than 1\npeo-\nmillion a year on the average in the\nlast decade, the number of uninsured\nam-\npeople was up 1.7 million last year,\nago,\nthe largest increase since 1992.\nwith\nThe data seem surprising at first.\n:ain\nRobert L. Bennefield, a statistician\nRe-\nat the Census Bureau, said, \"In a\nto-\nhealthy economy, you'd think you\nent\nwould have more people with jobs,\nrks\nand that would tend to increase COV-\nek,\nerage, so you'd see fewer people un-\nair\ninsured.'\nhis\nBut he and other experts said\nite-\nthere were several logical explana-\ntions for the rising number of unin-\nay\nsured. Medicaid rolls are down as\nhis\nstringent new laws prod people to\n10-\nmove from welfare to work and the\nfi-\nlow-paying jobs they find often do not\nin\noffer health benefits. Some employ-\nit,\ners have said they are cutting back\nip-\nhealth benefits, especially for de-\nat\npendents of employees, because of\nId\nrising medical costs.\n'e-\nEven people with higher incomes\ne-\nare going without insurance. House-\nin-\nholds with annual incomes of $75,000\nle-\nor more accounted for half the in-\nth-\ncrease in the number of uninsured,\nthe bureau said. The number of peo-\ner,\nple in these upper-income households\ned\nwithout insurance rose last year by\nise\n852,000, to 4.9 million.\nay-\nThe Census Bureau said 8.1 per-\nto\ncent of these higher-income house-\non\nholds were uninsured last year, up\nbli-\nfrom 7.6 percent in 1996. Economists\nnd-\nsaid many of these people were prob-\nof\nably self-employed or worked for\nsmall businesses that did not provide\ncoverage.\nThe number of poor people without\ninsurance stayed about the same,\n11.2 million. Nearly one-third of all\npoor people - 31.6 percent - were\nuninsured last year, about the same\nas in 1996.\nThe Government said more than\none of every five people was unin-\nsured last year in six states: Texas,\nArizona, Arkansas, New Mexico, Cal-\nifornia and Mississippi. By contrast,\nHawaii, Wisconsin, Minnesota and\nPHOTOCOPY\nVermont had the highest rates of\ncoverage, with fewer than 10 percent\nPRESERVATION\nof their residents uninsured.\nExpanding coverage has been a\nContinued on Page A10\nLack of Health Insurance\nAffects 16% of Americans\nContinued From Page Al\nq Welfare rolls have been shrink-\ning for several years. People on wel-\nfare automatically get Medicaid. But\ntop priority for President Clinton\nwhen they leave welfare, they often\nsince he took office in 1993. Since his\ntake low-paying jobs with no health\nproposal for universal health insur-\nbenefits. These workers or their chil-\nance died in September 1994, he has\ndren may still be eligible for Medic-\nannounced dozens of initiatives to\naid, but they do not realize it.\nachieve that goal. But he has been\nq Small businesses are creating\nunable to stop the erosion in cover-\nmost of the nation's new jobs. But\nage, and Congress, which has passed\nthese businesses are far less likely\nseveral laws to provide health bene-\nthan big companies to provide health\nfits in recent years, appears unlikely\ninsurance.\nto do more in the near future.\nq Health care and insurance costs\nAdministration officials maintain\nare on the rise. Cost is the reason\nthat the situation would be even\nmost often cited, by individuals and\nworse without their efforts to guar-\nemployers, for not buying insurance.\nantee coverage for children and for\nDiane Rowland, executive director\nworkers who change or lose jobs.\nof the Kaiser Commission on Medic-\nMr. Clinton has ordered Federal\naid and the Uninsured, said: \"We are\nofficials to redouble efforts to locate\nin a time of transition and turmoil in\nchildren who are eligible for Medic-\nwelfare. While many states are try-\naid but who are not enrolled. Repub-\ning to simplify Medicaid enrollment\nlicans and insurance companies,\nprocedures, there are still many bar-\nwhich helped to kill Mr. Clinton's\nriers. Caseworkers seem to be under\nplan in 1994, say they want to create\ngreater pressure to find people jobs\nnew tax breaks to help people buy\nthan to assure they have health in-\nprivate insurance, but Congress has\nsurance coverage.\"\nhad difficulty finding the money to\nNew York City has begun inspect-\npay for such incentives.\ning the homes of some people who\nThe Census Bureau said that 10.7\napply for Medicaid, to see if they\nmillion children were uninsured last\nmisrepresented their income, assets\nyear, about the same number as in\nor living arrangements. City officials\n1996. Because of Medicare, nearly all\ndefend the technique as a way to\npeople 65 and older have insurance\nprevent fraud, but some advocates\ncoverage. So it was people 18 to 64\nfor the poor say it is one more obsta-\nyears old who accounted for the in-\ncle, to getting health insurance.\ncrease in the uninsured.\nMs. Rowland said that changes in\nPeople 18 to 24 years old are least\nwelfare and immigration law had\nlikely to have coverage, the bureau\ndeterred some people from applying\nsaid. Thirty percent of these young\nfor Medicaid. \"Noncitizens often shy\nadults were uninsured last year, up\naway from enrolling in Medicaid,\"\nfrom 28.9 percent in 1996.\nshe said. \"And noncitizen parents\nHispanic Americans had the high-\nmay be reluctant to seek Medicaid\nest chance of being uninsured. Thir-\neven for children who were born in\nthis country and are eligible for Med-\nicaid as citizens.\"\nThe Census Bureau's report is\nThe uninsured\nbased on interviews with 50,000\nhouseholds chosen to be representa-\npopulation rose by\ntive of the nation as a whole.\nSome people who have insurance\n1.7 million last year.\nare unaware of it and do not report\ncoverage, the bureau said. But such\nunderreporting has affected Federal\nsurveys for years and would not ex-\nty-four percent of Hispanic people\nplain the increase in the uninsured\nlacked insurance last year, com-\nlast year, officials said.\npared with 21.5 percent of blacks and\nThe Government said that 43.3 per-\n12 percent of non-Hispanic whites.\ncent of the poor were covered by\nThe Census Bureau had been plan-\nMedicaid at some time last year,\nning to issue a report on the data on\ndown from 45.5 percent in 1996.\nMonday. But the raw data were post-\nMany poor people do not qualify\ned on the Internet on Thursday. Phy-\nfor Medicaid. Many states set in-\nsicians for a National Health Pro-\ncome limits far below the poverty\ngram, a small organization of doc-\nlevel. Childless adults are often ineli-\ntors, tabulated and analyzed the data\ngible even if they have very low\nand issued its findings today.\nincomes.\n\"What's startling is the magnitude\nThe Census Bureau found that the\nof the increase when the economy\nnumber of people with employer-\nwas booming,\" said Dr. Steffie Wool-\nsponsored health insurance rose last\nhandler, a co-founder of the organi-\nyear, to 165.1 million, from 163.2 mil-\nzation. The group advocates univer-\nlion in 1996. More people are work-\nsal access to health care.\ning, and employers may be providing\nCensus officials and health policy\nhealth benefits for some of those\nexperts suggested several reasons\nworkers, even as they eliminate\nfor the rising number of uninsured:\nbenefits for some dependents.\nSecond Setback for Advocates of (\nBy DAVID STOUT\nsued on Aug. 24 by a special panel for\nWASHINGTON, Sept. 25 - Fed-\nthe United States Court of Appeals\neral judges in Virginia have dealt\nfor the District of Columbia Circuit.\nanother setback to the Clinton Ad-\nThe Supreme Court has agreed to\nministration's plans to use statistical\ntake up the issue in its next term.\nsampling in the 2000 census, agree-\nThe wording in the 1976 law dif-\n:\ning with judges in Washington that\nfered from that in earlier census\nPHOTOCOPY\nuse of the technique would be illegal.\nlegislation, in a way that the plain-\n1\nPRESERVATION\nA special three-judge panel of the\ntiffs argued was meant to prohibit\nUnited States Court of Appeals for\nsampling. Agreeing, the Virginia\nthe Fourth Circuit, which heard ar-\ncourt referred to Supreme Court\nguments in Roanoke last month,\nprecedent that a statute must be\nt\nruled unanimously on Thursday that\nconstrued \"in such fashion that ev-\nWelfare Reform Q&A on 1998 Census Income and Poverty Numbers\nSeptember 24, 1998\nQ:\nWhat do these new numbers tell us about the impact of welfare reform?\nA:\nWhile it is still early to see the full effects of welfare reform, the evidence so far is very\nencouraging. Clearly there is no increase in poverty; poverty has decreased. In fact, the\nCensus data show continued strong trends in the movement from welfare to work: the\npercentage of people on welfare in one year who were working in the following year has\nincreased by nearly one-third since 1996, the year the President signed the welfare reform\nlaw. This is occuring at the same time that welfare caseloads continue to decline\ndramatically.\nBackground\nThe percentage of people who were on welfare in one year and working the following year\nincreased by 28% -- from 26.5% in March 96 to 33.8% in March 1998 The 3/98 figure reflects\npeople who said they were receiving welfare during 1997 and were working in March 1998.\nThese data are included in the CPS files, but are not part of the information Census released\npublicly today.\nCaseloads have declined 41% since the President took office, and 32% since he signed the\nwelfare reform law (using most recent data from June 98, which HHS released in August 98).\nMetal Chile\nAs you Vivou McCan legrs\nsupportal upproach\nused for prem\nof prof ams\nSuch an approach would\nbe anaptable a\nBruce N. Reed\n09/24/98 09:15:31 AM\nRecord Type:\nRecord\nTo:\nAndrea Kane/OPD/EOP, Cynthia A. Rice/OPD/EOP, Elena Kagan/OPD/EOP\nCC:\nSubject: What new CPS numbers tell us about employment of welfare recipients\nThat's great. By my math, that's a 28% increase since March 96. Do you know how many people\nthat translates to? 2 million? (Weren't we at 1.7 million before?)\nAlso, can you figure out how much we've gone up since the beginning of the administration? It\nwould be nice to get one welfare reform fact into Gene's briefing -- whether it's for the first time,\nmore than a third of people who were on welfare in one year were working the next, or the %\nworking has gone up by (40%? 50%?) since we took office, or the 2 million number, or whatever.\nI think he and Janet are briefing around noon\nForwarded by Bruce N. Reed/OPD/EOP on 09/24/98 09:11 AM\nAndrea Kane\n36258.28\nRecord Type:\nRecord\nTo:\nBruce N. Reed/OPD/EOP, Elena Kagan/OPD/EOP, Cynthia A. Rice/OPD/EOP, Laura Emmett/WHO/EOP\nCC:\nSubject: What new CPS numbers tell us about employment of welfare recipients\nThanks to good cooperation from Census staff and hard work on the part of Richard Bavier at OMB,\nwe've been able to take a preliminary look at what the March 1998 CPS data show on\nemployment of welfare recipients. The news looks good -- the percentage of people receiving\nwelfare in 1997 who reported they were working in March 1998 continues to grow, even while\ncaseloads continue to fall dramatically. Even as we get to the harder part of the caseload, we are\nnot yet seeing any slowdown in people to move from welfare to work\nFYI, the increase between 97 and 98 is not nearly as dramatic as the \"nearly 30% increase\"\nbetween 96 and 97 that the President talked about at the August 4th event and is reported in the\nTANF Report to Congress. I don't think we're ready to talk about the numbers yet -- but here they\nare for your information.\nWhat was in TANF report to Congress and POTUS announcement 8/4\nMarch 96 March 97\n% Change\nPrevious yr\nAFDC recipients\nemployed the\nfollowing March\n24.6%\n31.5%.\n28%\nMarch 98 CPS numbers, using slightly different series to account for change in question\nMarch 96 March 97 % Change March 98 % Change\nPrevious yr\ncash welfare\nrecipients\nin families w/ kids 26.5%\n31.8%\n20%\n33.8%\n6%\nWe need to do some more work to figure out what's going on, and how to talk about it. It could\npartly reflect a change in the way Census asked the question. Also, the CPS experts say you can't\nconclude much from relatively small year to year jumps due to the relatively small sample (several\nthousand people) -- rather what's important is the trend.\nAndrea Kane\nRecord Type:\nRecord\nTo:\nBruce N. Reed/OPD/EOP, Elena Kagan/OPD/EOP, Cynthia A. Rice/OPD/EOP, Laura Emmett/WHO/EOF\nCC:\nSubject: What new CPS numbers tell us about employment of welfare recipients\nThanks to good cooperation from Census staff and hard work on the part of Richard Bavier at OMB,\nwe've been able to take a preliminary look at what the March 1998 CPS data show on\nemployment of welfare recipients. The news looks good -- the percentage of people receiving\nwelfare in 1997 who reported they were working in March 1998 continues to grow, even while\ncaseloads continue to fall dramatically. Even as we get to the harder part of the caseload, we are\nnot yet seeing any slowdown in people to move from welfare to work\nFYI, the increase between 97 and 98 is not nearly as dramatic as the \"nearly 30% increase\"\nbetween 96 and 97 that the President talked about at the August 4th event and is reported in the\nTANF Report to Congress. I don't think we're ready to talk about the numbers yet -- but here they\nare for your information.\nWhat was in TANF report to Congress and POTUS announcement 8/4\nMarch 96 March 97\n% Change\nPrevious yr\nAFDC recipients\nemployed the\nfollowing March\n24.6%\n31.5%.\n28%\nMarch 98 CPS numbers, using slightly different series to account for change in question\nMarch 96\nMarch 97\n% Change\nMarch 98\n% Change\nPrevious yr\ncash welfare\nrecipients\nin families w/ kids 26.5%\n31.8%\n20%\n33.8%\n6%\nWe need to do some more work to figure out what's going on, and how to talk about it. It could\npartly reflect a change in the way Census asked the question. Also, the CPS experts say you can't\nconclude much from relatively small year to year jumps due to the relatively small sample (several\nthousand people) -- rather what's important is the trend.\nHits Rept to\nTable 3:2:\nCongress\nEmployment Status of Single Mothers and Previous Year AFDC Recipients\nCategory\n1992\n1993\n1994\n1995\n1996\n1997\nAll previous -year AFDC\n18.8\n21.0\n21.9\n22.6\n24.6\n31.5\nrecipients: employed\nSingle Mothers Under 200% of\n44.1\n46.0\n46.1\n48.2\n51.1\n54.4\nPoverty with Kids under 18:\nemployed\nSingle Mother Under 200% of\n34.8\n39.1\n39.4\n42.6\n44.4\n50.4\nPoverty with kids under 6:\nemployed\nMarried Mothers Under 200% of\n41.0\n41.8\n43.7\n44.2\n44.4\n44.6\nPoverty with kids under 18:\nemployed\nMarried Mothers Under 200% of\n35.3\n36.0\n38.47\n39.1\n39.0\n39.7\nPoverty with kids under 6:\nemployed\nWED 16:47 FAX 2023957230\nBAB\nMarch 98 CPS\n4:02 PM 9/23/98\nmid-March status\n1988\n1989\n1990\n1991\n1992\n1993\n1994\n1995\n1996\n1997\n1998\nall previous-year cash\nwelfare recipients in\nfamilies with children\n3,062,058\n3,800,003\n3,866,352\n4,131,697\n4,525,916\n4,490,980\n4,877,206\n4,555,990\n4,155,768\n3,869,922\n3,084,000\n24.1%\n-3.5%\n12.7%\n9.5%\n-0.6%\n8.6%\n-6,6%\n-8.8%\n-6,4%\n-20.7%\nwhite (non-hispanic)\n39,2%\n41.2%\n41.7%\n43.4%\n44.4%\n44.0%\n41.0%\n42.3%\n38.5%\n41.6%\n39,4%\nblack (non-hispanic)\n43.0%\n38.6%\n38.8%\n36.2%\n35.1%\n36.0%\n36.1%\n33.9%\n34.8%\n33.3%\n32.7%\nhispanic\n15.1%\n14.8%\n14.8%\n16.5%\n16.1%\n16.5%\n18.7%\n19.1%\n20.9%\n20.2%\n23,1%\nother (non-hispanic)\n2,7%\n5.3%\n4.7%\n4.9%\n4.4%\n3.4%\n4.2%\n4.6%\n5.7%\n4.8%\n4.6%\nall previous-year cash welfare recipients In families with children\nemployed\n21.0%\n20,7%\n21.4%\n20.5%\n19.9%\n21.5%\n23.0%\n23.7%\n26.5%\n31.6%\n33.8%\nunemployed\n14.3%\n12.1%\n121%\n12,2%\n13.1%\n12.5%\n13.5%\n11.9%\n13.0%\n13,8%\n14.8%\nnot in labor force\n64,5%\n67.1%\n66.5%\n67.1%\n67,0%\n65.9%\n63.5%\n64.4%\n60.4%\n54.4%\n51.4%\nwhite (non-hispanic)\nemployed\n26,3%\n25.6%\n27,9%\n26.4%\n25,4%\n26.5%\n26.3%\n31.4%\n36.4%\n36.8%\n36.2%\nunemployed\n15.2%\n10.3%\n11.4%\n11,9%\n13.6%\n12,8%\n10.5%\n10.3%\n11.4%\n10.4%\n12.5%\nnot In labor force\n56.3%\n63.7%\n60.8%\n61.4%\n60.9%\n60.4%\n61.2%\n58,2%\n53.2%\n50.7%\n49.3%\nblack (non-hispanic)\nemployed\n18.3%\n18.0%\n16.1%\n16.9%\n16.5%\n16.8%\n22.3%\n19.4%\n23,1%\n30.8%\n33,2%\n1\nunemployed\n16.8%\n16.8%\n14.8%\n15.5%\n14.0%\n13.3%\n18.0%\n13.3%\n15.1%\n19,1%\n19.3%\nnot In labor force\n64.7%\n64,6%\n67.1%\n67.7%\n69.6%\n67.9%\n59.7%\n67.3%\n61.6%\n49.9%\n47.5%\nhispanic\nemployed\n11.2%\n13.7%\n13.6%\n14.2%\n13,0%\n16.2%\n14.2%\n16.4%\n18.4%\n21.3%\n28.9%\nunemployed\n6.1%\n7.0%\n9.6%\n7.2%\n10.7%\n11.1%\n11.9%\n13.1%\n11.8%\n12.7%\n11.8%\nnot in labor force\n82.8%\n79.3%\n76.8%\n78.2%\n76.3%\n72.7%\n73.9%\n70.4%\n68.8%\n68.1%\n69.3%\nprevious-year cash welfare recipients with no work in previous year\n550\npercent of all cash welfare\n65.5%\n66,0%\n66.3%\n64.9%\n68,8%\n66.4%\n65.3%\n62.8%\n61.0%\n59.3%\n50.0%\nemployed\n4.9%\n6.0%\n4.8%\n3.9%\n4.4%\n5.6%\n6,7%\n5.5%\n5.8%\n9.7%\n9.2%\nunemployed\n12.6%\n10.7%\n10.4%\n9,1%\n10.7%\n10,3%\n11.4%\n10,3%\n10.4%\n12.2%\n13.8%\nnot In labor force\n82.5%\n83.2%\n84.6%\n87.0%\n84.9%\n84.2%\n61,9%\n84.2%\n83,7%\n78.1%\n77.0%\nmarital status mid-March in year after cash welfare receipt\nmarried\n20.8%\n21.0%\n24.3%\n23.9%\n24.7%\n24.0%\n23.5%\n24.2%\n24.7%\n22.5%\n21.1%\nnever married\n42.7%\n43.0%\n40,7%\n42.2%\n42.4%\n42.0%\n44,8%\n42.3%\n43.9%\n44.9%\n47.9%\nother\n36.5%\n36.0%\n35.0%\n33.9%\n32.9%\n33.9%\n31.7%\n33.5%\n31.4%\n32.6%\n31.0%\nwhite (non-hispanic)\nmarried\n32.6%\n28.6%\n32.6%\n35.0%\n33.6%\n32.0%\n31.2%\n33.5%\n31.5%\n30,7%\n24.5%\nnever married\n21.4%\n27.1%\n24.4%\n26.8%\n27.4%\n26.7%\n29.2%\n20.0%\n28.4%\n30.8%\n32,5%\nother\n46.0%\n44.3%\n43.1%\n38.2%\n38.9%\n40.7%\n39,6%\n37.6%\n40.1%\n38.5%\n43.0%\nblack (non-hispanic)\nmerried\n8,4%\n7.8%\n11.4%\n7.1%\n8.6%\n10.2%\n9,3%\n8.0%\n10.3%\n9.3%\n9.3%\nnever married\n64.9%\n65.0%\n62.4%\n64.9%\n64.4%\n61.8%\n65.5%\n62.7%\n66.2%\n67.6%\n71.6%\nother\n26.7%\n27.2%\n26.1%\n28,0%\n27.0%\n26.1%\n25.2%\n29.2%\n23,5%\n23.1%\n18.8%\nhispanic\nmarried\n20.0%\n25,5%\n28.0%\n25.9%\n29,0%\n27.9%\n29.4%\n26.4%\n29.2%\n22.4%\n27.6%\nnever married\n39.0%\n36.6%\n36.0%\n36,3%\n37.4%\n41.7%\n41.8%\n36.1%\n36.6%\n40.9%\n43.0%\nother\n41.0%\n38.0%\n37.4%\n37.8%\n33.6%\n30,4%\n28.6%\n36.6%\n32.3%\n36.7%\n29.4%\ndid not complete high school\n47.3%\n43,5%\n42.4%\n41.6%\n42.5%\n42.2%\n42.6%\nwhile (non-hispanic)\n39.0%\n35.5%\n34.3%\n32.1%\n20.2%\n31.4%\n28.3%\nblack (non-hispanic)\n47,3%\n43.4%\n39.6%\n39.7%\n42.1%\n40.8%\n42.4%\nhispanic\n69.1%\n62.0%\n64,1%\n62.4%\n65.7%\n65.6%\n82.9%\nother (non-hispanic)\n50.2%\n58.9%\n48.8%\n56.6%\n50.3%\n49.1%\n88.0%\nwork limitation\n14.7%\n16.9%\n16.7%\n17,5%\nwhite (non-hispanic)\n15.4%\n20.4%\n20.2%\n21.8%\nblack (non-hispanic)\n17.4%\n15,2%\n15.0%\n15.6%\nhispanic\n8,9%\n13.7%\n11.5%\n12.7%\nother (non-hispanic)\n13.1%\n14.8%\n19,5%\n18.8%\nsummary welfearn.xls\nFrom:\nRichard B. Bavier on 09/23/98 03:10:57 PM\nRecord Type:\nRecord\nTo:\nAndrea Kane/OPD/EOP, hrolston @ acf.dhhs.gov @ inet\ncc:\nEdward.j.Welniak.Jr @ ccmail.census.gov @ inet, Charles.t.Nelson @ ccmail.census.gov @ inet,\nDoelleri @ osaspe.dhhs.gov @ inet\nSubject: 1997 cash welfare recipients working in March 1998\nMy preliminary calculation is that 33.8 percent of 1997 cash welfare recipients with children were\nemployed in March 1998. The share not in the labor force was down to 51.4 percent. I don't\nexpect these numbers to change. However, some more analysis is needed.\nI will try to figure out how to formulate the right test of statistical significance for the increase in\nthe share working from March 1997 to March 1998, but I doubt very much if the difference will be\nstatistically significant. I hope Census will do the same calculation, because they have a lot more\nexperience in this than I do. In other words, I expect that the difference between last year's 32\npercent employed and this year's 34 percent employed may be due to chance, that's even leaving\naside the survey question changes. It would be safer to just say that last year's strong gains are\nbeing sustained.\n..\nIn the CPS data, at least, the weighted number of recipients working the following March is a little\nlower in March 1998 than March 1997. Although the percentage is up, the denominator is smaller.\nThe weighted number of non-SSI cash welfare recipients with children is down 21 percent in the\nMarch 1998 CPS from March 1997. March 1995 saw a similar decline from March 1994, but the\ndeclines in 1996 and 1997 were 9 percent and 6 percent. These represent annual ever-ons (with\nunder-reporting) and are hard to compare with administrative reports of mean monthly participation.\nThe fact that the number isn't higher than last year isn't bad news in itself. However, if the\nnumber working as Howard calculates it is higher while the number working in the CPS is lower\n(which could happen if the denominator in the administrative data didn't decline as much as in the\nsurvey data) critics might find fault with combining the survey percentage and the administrative\ncaseload totals.\nThe share of recipients reporting a work limitation seems to be creeping up, but the sample\nnumbers are too small to know for sure. An increase might be expected as the caseload declines.\nIn fact, the shares with a work limitation probably would be expected to increase more than they\nappear to be.\nThe share of ever-ons represented by hispanic recipients appears to be growing. The share\nrepresented by black recipients is not.\nThe share of never-married recipients apparently increased sharply last year. As with the other\nchanges, I haven't done a significance test yet. Given what research shows about the relation\nbetween marital status and dependency, this is a worrisome number.\nI'm redoing the whole Set 2 tables I e-mailed and will circulate them as soon as I can. Ed pointed\nout that I need to include the \"other income\" responses in the AFDC and cash welfare counts. I'm\nless confident in the \"other income\" responses, but am going back and including them so that all\nyears tie to the Census tables.\nFrom:\nRichard B. Bavier on 09/23/98 10:21:45 AM\nRecord Type:\nRecord\nTo:\nAndrea Kane/OPD/EOP\nCC:\nEdward.J.Welniak @ ccmail.census.gov @ inet, Susanne D. Lind/OMB/EOP, Hugh T.\nConnelly/OMB/EOP, hrolston @ acf.dhhs.gov @ inet\nSubject: Re: CPS\nThe tables Census did for you selected all persons who said they received public assistance during\n1996, the previous calendar year. The total is 4.6 million. I have done two sets of tables, neither\nof which corresponds exactly to the Census runs.\nSet 1 on the earlier e-mail, which was the basis of the 1.7 million welfare parents working the\nfollowing March, selected persons who said they received AFDC, 3.6 million, a subset of those who\nsaid they received any public assistance. I selected those who answered yes to receiving public\nassistance and yes to receiving either AFDC or AFDC plus some other kind.\nSet 2 are persons who answered yes to receiving public assistance and had children in their families\nas of the March interview, 3.8 million. This is also a subset of all those receiving public assistance.\nIn the last e-mail exchange, I suggested using Set 2 for the update with March 1998 CPS, because\nof the change in the cash welfare question. Does that sound like the way you'd like to do it?\nI\nwouldn't be hard to select all public assistance recipients. However, that would tend to include\nmore people who were not AFDC/TANF recipients.\nFrom:\nRichard B. Bavier on 09/21/98 09:43:11 AM\nRecord Type:\nRecord\nTo:\nhrolston @ acf.dhhs.gov @ inet, Doelleri @ oaspe.dhhs.gov @ inet\nCC:\nAndrea Kane/OPD/EOP, Susanne D. Lind/OMB/EOP, Hugh T. Connelly/OMB/EOP, charles.t.nelson @\nccmail.census.gov @ inet\nSubject: Getting ready for Thursday release of March 1998 CPS data\nBelow are tables showing characteristics of cash welfare recipients over the last several years. The\ntop set is the one that Howard used to calculate 1.7 million more AFDC recipients working in March\n1997. Andrea has asked for an update with March 1998, as soon as those data are released.\nTo generate Set 1, I identified all persons who reported AFDC in the preceding year, whether or not\nthey had children present on the day of the interview. In March 1998, the income and program\nparticipation reference period was calendar year 1997. Many state programs had changed names.\nIn anticipation, a workgroup devised new wording for the cash welfare question, and that wording\nwas used in March 1998.\nWe hope the new wording did a good job, but in any case it won't be sensible to simply continue\nthe series in Set 1. So I reran the tables after selecting all persons who reported cash welfare in\nthe preceding calendar year and lived with related children as of the March interview. That could\ninclude some families who are not TANF. The results are in Set 2 below. I am open to suggestions\nabout a better way to select the population of interest.\nAs everybody would expect, Set 2 tracks Set 1 pretty closely.\nI added some rows showing the proportion of recipients who reported \"a health problem or a\ndisability which prevents him/her from working or which limits the kind or amount of work.\" The\nuniverse of that question changed in March 1995, so the series is comparable only back that far.\nThere may be an upward trend. I'm curious about the March 1998 numbers.\nIf parents remaining on the rolls tend to be the less employable, the number and percentage\nemployed the following March would stop rising eventually.\nSet 1: AFDC recipients\nMUN\n9:18 AM 9/21/98\nmid-March status\n1988\n1989\n1990\n1991\n1992\n1993\n1994\n1995\n1996\n1997\nall previous-year AFDC recipients\nwhite (non-hispanic)\n40.4%\n40.2%\n41.8%\n43.8%\n44.6%\n43.6%\n40.9%\n41.4%\n38.3%\n41.8%\nblack (non-hispanic)\n38.1%\n39.6%\n39.2%\n36.9%\n35.7%\n36.6%\n36.9%\n35.5%\n35.1%\n32.8%\nhispanic\n17.2%\n14.8%\n14.5%\n14.7%\n15.7%\n16.2%\n18.5%\n18.6%\n21.1%\n20.4%\nother (non-hispanic)\n4.4%\n5.4%\n4.6%\n4.6%\n4.0%\n3.6%\n3.8%\n4.5%\n5.5%\n5.0%\nall previous-year AFDC recipients\nemployed\n20.2%\n18.9%\n20.7%\n20.8%\n18.8%\n21.0%\n21.9%\n22.6%\n24.6%\n31.5%\nunemployed\n14.0%\n12.2%\n12.3%\n12.4%\n13.4%\n12.7%\n13.6%\n12.2%\n13.1%\n14.3%\nnot In labor force\n65.7%\n69.0%\n67.0%\n66.8%\n67.8%\n66.4%\n64.5%\n65.1%\n62.3%\n54.2%\nwhite (non-hispanic)\nemployed\n25.6%\n22.1%\n27.6%\n26.3%\n23.7%\n26.1%\n26.1%\n29.8%\n31.3%\n38.0%\nunemployed\n15.4%\n11.5%\n10.7%\n11.8%\n14.4%\n13.5%\n11.1%\n10.5%\n11.7%\n11.0%\nnot in labor force\n58.9%\n66.4%\n61.7%\n61.9%\n61.8%\n60.4%\n62.8%\n59.8%\n57.0%\n51.1%\nblack (non-hispanic)\nemployed\n18.7%\n18.2%\n17.3%\n17.1%\n15.4%\n18.0%\n21.8%\n19.8%\n23.1%\n30.8%\nunemployed\n17.0%\n15.6%\n15.8%\n16.2%\n14.0%\n13.3%\n17.0%\n13.2%\n14.2%\n19.7%\nnot in labor force\n64.1%\n66.1%\n66.9%\n66.6%\n70.6%\n68.6%\n61.2%\n67.1%\n62.6%\n49.5%\nhispanic\nemployed\n14.4%\n13.5%\n12.5%\n15.1%\n13.2%\n16.4%\n13.5%\n14.7%\n18.1%\n22.0%\nunemployed\n6.0%\n7.6%\n9.3%\n7.2%\n9.6%\n9.9%\n12.2%\n14.3%\n12.6%\n13.6%\nnot in labor force\n79.6%\n78.9%\n78.2%\n77.7%\n77.2%\n73.7%\n74.3%\n71.0%\n69.4%\n64.3%\nchent\nprevious-year AFDC recipients with no work in previous year\npercent of all AFDC\n66.8%\n66.7%\n66,9%\n64.8%\n67.7%\n67.0%\n66.2%\n64.1%\n62.6%\n59.3%\n554\nemployed\n5.3%\n5.3%\n4.7%\n4.4%\n4.2%\n5.5%\n6.7%\n5.6%\n5.7%\n9.8%\nunemployed\n12.0%\n10.8%\n10.4%\n9.3%\n10.8%\n10.5%\n10.9%\n10.5%\n10.9%\n12.9%\nnot in labor force\n82.8%\n83.9%\n84.9%\n86.4%\n84.9%\n84.0%\n82.4%\n83.9%\n83.4%\n77.3%\nmarital status mid-March in year after AFDC receipt\nmarried\n20.6%\n18.9%\n21.8%\n22.0%\n22.1%\n21.5%\n20.5%\n21.0%\n21.7%\n20.4%\nnever married\n42.9%\n44.5%\n41.6%\n42.7%\n43.8%\n44.3%\n46.8%\n43.6%\n46.4%\n46.0%\nother\n36.4%\n36.7%\n36.6%\n35.3%\n34.1%\n34.2%\n32.7%\n35.5%\n31.9%\n33.6%\nwhite (non-hispanic)\nmarried\n27.3%\n25.0%\n28.9%\n31.3%\n30.9%\n28.9%\n27.3%\n28.4%\n26.6%\n26.3%\nnever married\n25.6%\n29.3%\n26.3%\n27.2%\n29.0%\n29.2%\n32.2%\n30.3%\n31.8%\n33.7%\nother\n47.1%\n45.7%\n44.8%\n41.5%\n40.0%\n41.9%\n40.5%\n41.4%\n41.6%\n40.0%\nblack (non-hispanic)\nmarried\n8.3%\n7.0%\n10.5%\n7.4%\n8.1%\n9.5%\n8.2%\n7.7%\n9.1%\n9.6%\nnever married\n65.8%\n64.9%\n61.0%\n64.1%\n64.5%\n62.7%\n65.9%\n62.4%\n67.9%\n67.9%\nother\n26.0%\n28.1%\n28.5%\n28.4%\n27.4%\n27.7%\n25.9%\n29.9%\n23.0%\n22.5%\nhispanic\nmarried\n25.9%\n24.4%\n23.3%\n24.6%\n24.4%\n24.5%\n25.7%\n22.3%\n26.9%\n20.1%\nnever married\n37.3%\n38.9%\n38.9%\n37,8%\n40.0%\n45.3%\n43.7%\n40.2%\n39.8%\n41.5%\nother\n36.8%\n36.7%\n37.8%\n37.6%\n35.6%\n30.3%\n30.6%\n37.5%\n33.3%\n38.4%\ndid not complete high school\n47.6%\n43.2%\n43.1%\n41.6%\n41.9%\n42.4%\nwhite (non-hispanic)\n41.5%\n36.3%\n34.8%\n32.4%\n29.9%\n33.3%\nblack (non-hispanic)\n46.7%\n42.2%\n40.2%\n38.5%\n39.7%\n39.9%\nhispanic\n67.0%\n62.0%\n65.9%\n64.6%\n64.2%\n64.8%\nother (non-hispanic)\n48.1%\n52.8%\n49.5%\n55.5%\n52.8%\n43.8%\nwork limitation\n15.7%\n16.1%\n17.5%\nwhite (non-hispanic)\n16.8%\n20.8%\n21.6%\nblack (non-hispanic)\n18.3%\n13.7%\n15.6%\nhispanic\n8.7%\n12.9%\n11.2%\nother (non-hispanic)\n13.4%\n10.9%\n20.8%\nsummary adcearn.xls\nMUN\n9:46 AM 9/21/98\nmid-March status\n1988\n1989\n1990\n1991\n1992\n1993\n1994\n1995\n1996\n1997\nall previous-year cash welfare recipients in families with children\nwhite (non-hispanic)\n39.2%\n41.0%\n41.7%\n43.3%\n44.3%\n43.5%\n43.8%\n42.4%\n38.4%\n41.7%\nblack (non-hispanic)\n38.5%\n38.9%\n38.9%\n36.4%\n35.2%\n36.4%\n34.1%\n34.0%\n34.9%\n33.1%\nhispanic\n17.3%\n14.9%\n14.7%\n15.6%\n16.1%\n16.6%\n17.7%\n19.0%\n20.9%\n20.4%\nother (non-hispanic)\n4.9%\n5.1%\n4.7%\n4.7%\n4.4%\n3.5%\n4.3%\n4.6%\n5.8%\n4.8%\nall previous-year cash welfare recipients in families with children\nemployed\n20.5%\n20.3%\n21.2%\n20.5%\n19.8%\n21.2%\n22.5%\n23.5%\n26.2%\n31.6%\nunemployed\n13.4%\n12.1%\n12.1%\n12.1%\n13.1%\n12.7%\n13.4%\n12.0%\n13.1%\n13.9%\nnot in labor force\n66.0%\n67.4%\n66.6%\n67.3%\n67.1%\n66.0%\n64.1%\n64.5%\n60.7%\n54.5%\nwhite (non-hispanic)\nemployed\n27.2%\n25.4%\n28.0%\n26.3%\n25.2%\n26.0%\n27.2%\n31,5%\n34.6%\n38.4%\nunemployed\n14.8%\n10.3%\n11.5%\n11.9%\n13.7%\n13.2%\n10.8%\n10.3%\n11.5%\n10.6%\nnot in labor force\n57.8%\n64.0%\n60.4%\n61.6%\n61.0%\n60.7%\n61.9%\n58.3%\n53.8%\n51.0%\nblack (non-hispanic)\nemployed\n18.3%\n18.5%\n17.8%\n16.8%\n16.4%\n18.8%\n21.5%\n19.3%\n23.0%\n30.9%\nunemployed\n16.4%\n16.9%\n14.7%\n15.5%\n13.9%\n13.3%\n17.1%\n13.4%\n15.2%\n19.5%\nnot in labor force\n65.1%\n64.6%\n67.5%\n67.6%\n69.7%\n67.9%\n61.4%\n67.2%\n61.6%\n49.5%\nhispanic\nemployed\n14.1%\n13.4%\n13.3%\n14.1%\n12.9%\n16.3%\n14.6%\n15.9%\n19.4%\n21.3%\nunemployed\n5.8%\n7.1%\n9.4%\n7.1%\n10.8%\n11.2%\n12.2%\n13.2%\n11.6%\n12.7%\nnot in labor force\n80.1%\n79.4%\n77.4%\n78.5%\n76.3%\n72.6%\n73.3%\n70.8%\n68.9%\n66.0%\nprevious-year cash welfare recipients with no work in previous year\npercent of all cash welfar\n66.1%\n66.1%\n66.3%\n64.9%\n66.9%\n66.6%\n65.8%\n62.8%\n61.3%\n59.4%\nemployed\n5.1%\n5.8%\n4.9%\n4.0%\n4.5%\n5.5%\n6.5%\n5.5%\n5.8%\n9.7%\nunemployed\n11.2%\n10.8%\n10.3%\n9.0%\n10.7%\n10.4%\n10.9%\n10.3%\n10.5%\n12.3%\nnot in labor force\n83.7%\n83.4%\n84.8%\n87.0%\n84.9%\n84.1%\n82.6%\n84.2%\n83.7%\n78.0%\nmarital status mid-March in year after cash welfare receipt\nmarried\n22.4%\n21.0%\n24.0%\n23.5%\n24.6%\n23.8%\n22.2%\n24.1%\n24.5%\n22.4%\nnever married\n41.7%\n43.0%\n41.0%\n42.5%\n42.4%\n42.3%\n44.2%\n42.5%\n44.2%\n44.8%\nother\n35.9%\n36.0%\n35.0%\n34.0%\n33.0%\n34.0%\n33.6%\n33.4%\n31.4%\n32.8%\nwhite (non-hispanic)\nmarried\n31.2%\n28.8%\n32.5%\n34.4%\n33.7%\n32.2%\n28.4%\n33.4%\n31.0%\n30.5%\nnever married\n23.0%\n27.0%\n24.6%\n27.1%\n27.2%\n26.8%\n31.0%\n28.9%\n28.7%\n31.0%\nother\n45.8%\n44.1%\n42.8%\n38.5%\n39.1%\n41.0%\n40.6%\n37.7%\n40.3%\n38.5%\nblack (non-hispanic)\nmarried\n8.3%\n7.7%\n11.1%\n6.8%\n8.5%\n10.2%\n8.8%\n7.9%\n10.1%\n9.5%\nnever married\n65.2%\n65.0%\n62.5%\n65.0%\n64.6%\n61.8%\n63.3%\n63.1%\n66.7%\n67.0%\nother\n26.4%\n27.3%\n26.4%\n28.2%\n27.0%\n28.1%\n28.0%\n29.0%\n23.3%\n23.5%\nhispanic\nmarried\n25.9%\n24.9%\n26.2%\n25.9%\n28.8%\n27.8%\n28.0%\n25.4%\n29.1%\n22.4%\nnever married\n36.6%\n36.5%\n36.5%\n36.5%\n37.6%\n41.9%\n42.2%\n38.5%\n38.5%\n41.2%\nother\n37.5%\n38.5%\n37.3%\n37.6%\n33.7%\n30.3%\n29.8%\n36.1%\n32.3%\n36.4%\ndid not complete high school\n47.3%\n43.8%\n42.3%\n41.7%\n42.7%\n42.2%\nwhite (non-hispanic)\n39.1%\n35.9%\n34.6%\n32.4%\n29.5%\n31.4%\nblack (non-hispanic)\n47.3%\n43.4%\n39.7%\n39.7%\n42.3%\n40.5%\nhispanic\n69.1%\n62.2%\n64.7%\n62.8%\n65.7%\n65.5%\nother (non-hispanic)\n50.4%\n59.2%\n48.3%\n56.6%\n50.4%\n47.5%\nwork limitation\n14.8%\n16.9%\n16.7%\nwhite (non-hispanic)\n15.6%\n20.6%\n20.0%\nblack (non-hispanic)\n17.3%\n15.2%\n15.0%\nhispanic\n9.1%\n13.6%\n11.6%\nother (non-hispanic)\n12.9%\n14.8%\n20.1%\nsummary welfearn.xls\nBlack and Hispanic Poverty Falls,\nReducing Overall Rate for Nation\nAI\nBy ROBERT PEAR\nWASHINGTON, Sept. 24 - The\nMany Democrats have predicted\nproportion of Americans living in\nhouseholds rose 4.3 percent last year,\nthat cuts in welfare programs, espe-\npoverty declined last year, mostly\nto $25,050, and since 1993 it has in-\ncially time limits on the payment of\nbecause of reductions in poverty\ncreased by 15 percent, or $3,354, after\ncash assistance, will tend to increase\namong black and Hispanic families,\nadjusting for inflation. The number\npoverty. On the other hand, many\nthe Census Bureau reported today.\nof households above the median is\nRepublicans say poverty will decline\nThe data reflected three consecu-\nthe same as the number below it\nas mothers move from welfare to\ntive years of growth in income, which\nwork and fathers pay more child\nFor Hispanic households, the me-\nhave restored household incomes\nsupport. In any event, it will be diffi-\ndian income rose 4.5 percent last\nand poverty to the levels recorded in\ncult to separate the specific effects of\nyear, to $26,628, and has risen 4.8\n1989, just before the last recession.\nthe 1996 welfare law from changes in\npercent since 1993. But Hispanic in-\nThe poverty rate was 13.3 percent\nthe overall economy.\ncome appears to have stagnated and\nlast year, down from 13.7 percent in\nis about the same, after adjusting for\nThe Census Bureau found surpris-\n1996 and 15.1 percent in 1993. The\ninflation, as in 1972, the first year\ningly robust growth in income even\nnumber of people in poverty, 35.6\nsuch data were collected.\namong families headed by women, a\nmillion last year, has dropped by 3.7\nmillion since 1993.\ngroup whose poverty has long\nIn its report, the Census Bureau\nseemed intractable. The incomes of\nalso made these points:\nThe poverty rate for non-Hispanic\nhouseholds headed by women rose\nq Median household income rose\nwhites was unchanged at 8.6 percent\nlast year. But the rate for blacks\nlast year by 8 percent for blacks, 10.3\nlast year by 1.9 percent, to $37,005\npercent for Hispanic Americans and\nfrom $36,306, after adjusting for in-\ndeclined to 26.5 percent, the lowest\nsince the Government began collect-\n3 percent for whites. Among non-\nflation.\ning data on poverty among African-\nHispanic whites, hardly any change\nq State poverty rates, measured\nAmericans in 1959. The rate among\nwas seen.\nby three-year averages, ranged from\nblacks was 28.4 percent in 1996 and\nThe poverty rate for children was\nan extraordinary low of 6.9 percent\n33.1 percent in 1993.\nunder 20 percent last year for the\nin New Hampshire to a high of 24\nAnd the poverty rate for Hispanic\nfirst time since 1989, and Mr. Clinton\npercent in New Mexico. The next\nAmericans declined to 27.1 percent,\nsaid the child poverty rate had de-\nhighest rates were found in Missis-\nfrom 29.4 percent in 1996 - the larg-\nclined more since 1993 than in any\nsippi, 20.2 percent, and Louisiana,\nest one-year drop in Hispanic pov-\nother four-year period since the late\n18.8 percent.\nerty since 1977.\n1960's.\nThe data were a tonic for Presi-\nBut the poverty rate for people 18\nq The poverty rate for 1995 to 1997\naveraged 8.8 percent in New Jersey,\ndent Clinton, battered by eight\nto 64 years old was higher last year\nmonths of embarrassing disclosures\nthan in 1987-89. And for households\n10 percent in Connecticut and 16.6\nabout his affair with a young White\nheaded by people 35 to 54, income has\npercent in New York.\nHouse intern.\nnot kept pace with inflation, so real\nq The poverty rate for children\nincome was lower last year than in\nlast year, 19.9 percent, was nearly\nMr. Clinton said the statistics vin-\n1989, the bureau said.\ntwice the rate for people 65 and older,\ndicated his economic policies and\nPoliticians have repeatedly de-\n10.5 percent. Of the 32 million elderly\nshowed that low-income people were\nfinally sharing the fruits of a vibrant\nnounced growing inequality in in-\nAmericans, 3.4 million live below the\ncome distribution. But Census Bu-\npoverty line, and 2.1 million are just\neconomy. \"Our growing economy is\ngiving more and more families a\nreau officials said their data suggest-\nabove it, with incomes exceeding the\ned that such inequality had stabi-\nofficial poverty level by no more\nchance to work their way out of\nlized.\nthan 25 percent.\npoverty,\" he said in the Rose Garden\nof the White House. \"After six years,\n\"This is the fourth consecutive\ng The number of blacks in poverty\nit can't be an accident anymore.\"\nyear in which there was no year-to-\ndropped last year to 9.1 million, from\nPresidents generally get credit for\nyear change in overall income in-\n9.7 million in 1996, while the poverty\neconomic growth and are blamed if\nequality,\" said Daniel H. Weinberg,\nrate for blacks fell to 26.5 percent,\n- the economy declines. Mr. Clinton\nchief of the Census Bureau office\nfrom 28.4 percent. The number of\nfought successfully for increases in\nthat collects income data.\nHispanic people in poverty declined\nthe minimum wage, which took ef-\nStill, Robert D. Reischauer, for-\nto 8.3 million, from 8.7 million. The\nfect in 1996 and 1997, and in the\n:\nmer director of the Congressional\npoverty rates for blacks and Hispan-\nearned-income tax credit available\nBudget Office, said he found it re-\nic people are nearly the same The\nto low-income workers. White House\nmarkable that \"income inequality\nhas not been reduced after. two years\nnumber of poor non-Hispanic whites\nofficials said those changes had\nin which we've enjoyed the healthiest\nwas about the same in 1997 as in 1996\nhelped reduce poverty.\n- 16.5 million.\neconomy in more than three dec-\nEconomists said that much of the\nades.\"\nq A majority of poor families are\ndecline in poverty was attributable\nMr. Weinberg said the bureau's\nheaded by women. The nation has 7.3\nto the overall strength of the econ-\nfield interviewers probably missed\nmillion poor families, 4 million of\nomy, resulting from prudent man-\nmany people with very high incomes,\nwhich are headed by women.\nagement of Federal spending and\njust as they missed homeless people.\nThe report also said the poverty\ninterest rates.\nIn addition, he said, anyone who re-\nrate for noncitizens, 25 percent, was\nBlacks have been among the Pres-\nports income of more than $1 million\ndouble the rate for people born in the\nident's most steadfast supporters in\na year is listed as having $1 million of\nUnited States.\nrecent months, and today's data\nincome.\nshow that blacks have fared well in\nThe data in the report are drawn\nthe Clinton years.\nfrom interviews with residents of\nOver all, the number of families in\npoverty declined last year by 384,000,\n50,000 households chosen to be repre-\nto 7.3 million from 7.7 million in 1996.\nsentative of the nation. A family of\nBlack families accounted for more\nfour was classified as poor if it had\nthan half of the decrease.\ncash income of less than $16,400 in\nThe welfare rolls are declining\n1997. The threshold for a family of\nmuch faster than the number of peo-\nthree was $12,802. Income, as offi-\npie in poverty. But Rebecca M.\ncially defined, does not include capi-\nBlank, a member of the President's\ntal gains, health insurance or Gov-\nCouncil of Economic Advisers, said,\nernment benefits like food stamps,\n\"It's way too early to look at these\nMedicaid and housing subsidies.\nnumbers and conclude very much\nThe Census Bureau data show that\nabout the successes of welfare re-\nthe income of black households, after\nform.\"\nadjusting for inflation, was higher in\nThe York Times\n1997 than at any other time in the last\nFRIDAY, 25, 1998\nthree decades.\nThe median income of black\nCensus reports find\npoverty rates down\nU.S. enjoys larger incomes, fewer poor\nMaryland was third, with an\nBy Cheryl Wetzstein\nTHE WASHINGTON TIMES\naverage median income of $44,970,\nafter second-highest New Jersey,\nAmericans are bringing home\nwhich had $47,612.\nabout as much real income as they\nVirginia was 12th highest, with\ndid before the recession of the\n$40,405, while the District was\nearly 1990s, and poverty rates are\n39th, with $32,314. The national\ndrifting down, the Census Bureau\nthree-year figure was $36,399.\nsaid yesterday in its annual re-\nSeven states - Alabama, Dela-\nports.\nware, Kansas, Louisiana, Okla-\nThe decline in the overall pov-\nhoma, Virginia and Washington -\nerty rate was \"mostly caused\" by\nsaw more than 6 percent income\nlower poverty rates among black\ngrowth over the three years.\nand Hispanic Americans, the bu-\nreau said.\nThe bureau said the national\nPresident Clinton and congres-\npoverty rate fell to 13.3 percent in\nsional leaders hailed the news as\n1997, from 13.7 percent in 1996.\nevidence that their social policies\nThe number of people who lived\nsuch as welfare reform and earned\nin poverty in 1997 was statistically\nincome tax credits were working.\nunchanged at 35.6 million, the\nThe reports show \"that our\nCensus Bureau said. The poverty\ngrowing economy is giving more\nthreshold in 1997 for a family of\nand more families a chance to\nfour was $16,400 a year.\nwork their way out of poverty,\" Mr.\nClinton said at a Rose Garden\nThe report garnered criticism\nceremony yesterday.\nfrom several quarters.\nThe poverty rate for black\n\"For most Americans, the word\nAmericans fell to 26.5 percent,\n'poverty' means destitution - an\n\"another record low,\" he said. The\ninability to provide a family with\nHispanic poverty rate fell to 24.7\nsufficient food, clothing and shel-\npercent, \"the largest one-year\nter,\" said Robert Rector of the\ndrop in two decades,\" he added.\nHeritage Foundation.\n\"Poverty is down, welfare rolls\nBut Americans who are consid-\nare down and incomes are up,\nered poor today are \"better\nwhich is just great news,\" said Rep.\nhoused, better fed and own more\nE. Clay Shaw Jr., Florida Repub-\npersonal property than average\nlican and a lead architect of wel-\nAmericans throughout most of this\nfare reform. The reform's welfare-\ncentury,\" he said, adding that\nto-work requirements helped\nabout 75 percent of poor people\nboost incomes for female-headed\nown a videocassette recorder, 41\nfamilies and push child poverty\npercent of poor people own their\nrates down for the fourth year.\nThe Washington Times\nFRIDAY, SEPTEMBER 25, 1998\nhomes and 27 percent own two or\nThe bureau said that the 1997\nmore cars.\nU.S. median average household in-\ncome was $37,005, virtually the\nOthers said the Census Bureau\nsame amount families brought\npoverty numbers don't capture\nhome in 1989, before the 1990-91\nreal home economics bacause they\nrecession.\nfail to account for expenses associ-\nThe median is the point at which\nated with child care, employment\nhalf of households have more in-\nand medical costs.\ncome and half have less.\nWithout such data, the bureau's\nThe Census Bureau averaged\npoverty measure is \"anachronis-\npersonal incomes from 1995 to\ntic\" and \"flawed to the point of be-\n1997 to track income growth. It\ning embarrassing,\" University of\nfound that Alaska had the highest\nChicago professor Robert Michael\naverage median income over three\ntold a recent seminar by the Joint\nyears, with $50,829 a year.\nCenter for Poverty Research.\nWhile the poverty rate among\nIncomes\nchildren didn't change last year, the\nrate among African Americans fell by\n2 percentage points, to 26.5 per-\ncent-a drop of 600,000 people. And\nAre Up as\nthe figure for Hispanics dropped 2.3\npercentage points, to 27.1 percent.\nThose rates remain high relative\nto the population generally, but econ-\nPoverty\nomists see the declines as evidence\nthat in the current tight labor market,\nemployers are reaching out to work-\nRate Falls\ners who are often overlooked in a less\nvibrant economy.\nIt isn't just the poorest minorities\nwho are faring better: The median\nGains Cross Racial,\nincome in households headed by an\nAfrican American rose 4.3 percent,\nRegional Divides\nand for Hispanics it rose 4.5 percent,\nwhile for whites it increased by 2.5\nBy BARBARA VOBEJDA\nAI\npercent. That still left whites earning\nWashington Post Staff Writer\nsignificantly more-$38,972, com-\npared to $25,050 for African Ameri-\nIncome for the typical American\ncans and $26,628 for Hispanics.\nhousehold rose at nearly twice the\nAsians had the highest median\nrate of inflation in 1997 while the\nhousehold income: $45,249.\npercentage of people in poverty de-\nPresident Clinton, in a Rose Gar-\nclined, the Census Bureau reported\nden news conference, cited the report\nyesterday, pointing to the wide-\nas evidence that \"economic growth\nspread benefits of a growing econo-\ncontinues to raise incomes, lift mil-\nmy across the population.\nlions out of poverty and extend\nThe income and poverty figures\nopportunity.\" But, he said, \"inequali-\nreturned to levels the nation hasn't\nty is still too high. And it simply\nseen since before the last recession\nmeans there are too many American\nnearly a decade ago, with median\nfamilies out there working hard,\nhousehold income rising for the third\ndoing everything we could possibly\nconsecutive year. The shrinking pov-\nask of them and still having a hard\nerty rate was driven by declines\ntime getting ahead.\"\namong African Americans and His-\nThe report also prompted a debate\npanics, with poverty at an all-time\nabout whether welfare reform, the\nlow among blacks.\ntwo-year-old legislation requiring\nThe findings in the government's\nadults on public assistance to find\nannual income report were consid-\njobs, had driven down poverty rates\nered significant because economists\nor boosted income levels.\nhad feared that the benefits from the\nCensus officials said the number of\nnation's long-running economic ex-\nhouseholds receiving cash welfare\npansion were flowing overwhelming-\nhad declined nearly 19 percent, but\nly to the rich. The new figures show\ncautioned that it was impossible to\nthat income inequality did not in-\ndraw conclusions about whether this\ncrease and that virtually all sectors of\nwas the effect of new welfare rules or\nthe population-across races, among\na strong economy.\nboth single mothers and married\nRep. E. Clay Shaw Jr. (R-Fla.), the\ncouples, and in most geographic\nauthor of the welfare law, noted that\nregions-are enjoying some positive\nthe drop in the welfare rolls comes as\nreturns from the continuing job\nincomes are up and poverty is falling.\ngrowth and low inflation.\n\"Incomes are up for female-headed\n\"It's a cliche, but a rising tide raises\nfamilies, many of whom have left\nall ships,\" said Henry J. Aaron, an\nwelfare for work,\" he said.\neconomist at the Brookings Institu-\nThe Children's Defense Fund not-\ntion. \"This has been such a smashing-\ned that more families may be work-\nly good economy that if poverty\ning, but many are still poor.\ndidn't go down, it would be a very\n\"With an economy this healthy, we\ndisturbing sign that inequality was\nshouldn't still have 9,6 million chil-\nheaded steadily upwards.\"\ndren living in poverty even though\nWhile the gap between rich and\ntheir families are at work,\" said\npoor did not widen between 1996\nDeborah Weinstein, family income\nand last year, it nevertheless remains\ndirector for the child advocacy group.\nan issue of particular concern to\nWhen an alternative poverty meas-\nmany Americans. And the new fig-\nure is used that subtracts taxes and\nThe Washington Post\nures underscore the problem: House-\ncounts noncash benefits, such as food\nFRIDAY, SEPTEMBER 25, 1998\nholds in the top fifth earned nearly\nstamps, the poverty rate falls to 10\nhalf of the national income, while the)\npercent.\nshare going to the poorest fifth was\nFor the first time since 1991, men\nless than 4 percent.\nworking full time and year-round saw\nOverall, the median household in-\ntheir real earnings rise, an increase of\ncome adjusted for inflation rose 1.9\n2.4 percent. For women, the figure\npercent between 1996 and 1997, to\nwas 3 percent. But women continue\n$37,005, while the poverty rate fell\nto earn substantially less-74 cents\nfrom 13.7 percent to 13.3 percent.\nfor every $1 earned by men, and that\nPoverty is defined as an income of\nfigure didn't change between 1996\n$16,400 or less for a family of four.\nand 1997.\nUnlike many other economic indi-\ncators, the figures released yesterday,\ncollected from a sample of 50,000\nhouseholds across the country, pro-\nvide a window on how groups within\nthe population are faring. Children,\nfor example, who make up 26 percent\nof the population, account for 40\npercent of the nation's poor.\nFinally, U.S. Median Income Approaches Old Heights\nBy JACOB M. SCHLESINGER\ntive decline-and left the figure just over\nStaff Reporter of THE WALL STREET JOURNAL\nCatching Up, At Last\nthe 13% level of 1988, the best point of the\nWASHINGTON-The numbers are in,\n1980s boom. The poverty rate hit a 1990s\nand Americans are finally better off than\nthey were at the beginning of the decade.\nIncome Passes 1990 Levels*\npeak of 15.1% in 1993, just after the last re-\nWhile the Poverty Rate Falls\ncession. The federal poverty level for a\nMedian household income last year, ad-\nIn thousands\nfamily of four is $16,400 in annual house-\njusted for inflation, surpassed the 1990\n$38\n16%\nhold income.\nlevel. And the poverty rate fell to its lowest\nThe poverty rate dropped to 26.5% for\npoint since that year.\n36\nblacks from 28.4% in 1996, and to 27.1% for\nAmericans haven't quite caught up to\n14\nHispanics from 29.4%. For whites, the level\nthe record median income reached in 1989.\n34\ndipped only slightly, to 11% from 11.2%.\nAnd the nation's richest are still grabbing a\nThe poverty rate for children fell to 19.9%\nlarger share of the pie than everybody else.\n12\nfrom 20.5%. That was the lowest level since\nStill, the Census Bureau's annual re-\n32\n1989.\nport on U.S. income and poverty, released\nStill, the poverty rate remains much\nyesterday, marked a symbolic turning\n30\n10\nhigher than the 11% of the early 1970s, the\npoint. The 1990s economic expansion has\n1967\n'77\n'87\n97\n1967\n'77\n'87\n'97\nTHE WALL STREET JOURNAL\nlast time the unemployment rate was at the\nlong been derided for channeling gains\n*Inflation-adjusted median household income\nSource: Census Bureau\ncurrent 4.5%. And some analysts assert\nmainly to the richest Americans while\nthat the figures show recent cuts in welfare\nFRIDAY, SEPTEMBER 25, 1998\nsqueezing the lower and middle classes.\nprograms have blunted gains achieved by\nThe report \"shows that economic\nover the past year,\" said Jared Bernstein,\nwhile that going to the top 20% rose to 49.4%\nthe strong economy.\ngrowth continues to raise incomes, lift mil-\nan economist with the left-leaning Eco-\nfrom 49% in 1996. \"Inequality is still too\n\"The decline in the number of families\nlions out of poverty and extend opportu-\nnomic Policy Institute in Washington.\nhigh.\" Mr. Clinton said, adding that, on\nreceiving assistance was much greater\nnity,\" President Clinton said at a Rose\nHowever, while Americans are now\nthat score, \"we have more to do.\nthan the decline in the number of families\nGarden news conference called to trumpet\nmaking as much as they did at the peak of\nDriving the broad-based gains was the\nthat are poor,\" the liberal Center on Bud-\nthe findings.\nthe last economic expansion, Mr. Bern-\neconomy's remarkable performance. With\nget and Policy Priorities said in an analy-\nIndeed, the news was particularly good\nstein calculates-using other government\nunemployment at early 1970s levels, even\nsis of the report.\nfor groups often excluded from the nation's\ndata not included in the census report-\nmany of the poorest workers are finding\n\"We're only halfway there,\" said Debo-\neconomic progress. From 1996 to 1997, the\nthat people are working harder to accom-\njobs. And with inflation at 1960s levels,\nrah Weinstein of the Children's Defense\nmedian income for black households rose\nplish that. \"While the gains in family in-\ntheir paychecks are going farther. Recent\nFund. \"The economy's strong, but sup-\nby 4.3%, while Hispanics enjoyed a 4.5%\ncome are impressive, they come in part\nincreases in the minimum wage have also\nports for working poor families are weak.\"\ngain. Whites, by contrast, saw income\nfrom the consistent increase in family\nboosted pay for lower-income workers.\nBy region, the South and West were the\ngrowth of only 2.5% during the same pe-\nwork hours,\" he said. He estimates the typ-\nThe 1.9% increase in median household\nbiggest beneficiaries of last year's boom.\nriod. Men working full time saw a 2.4%\nical family worked 64 hours a week last\nincome to $37,005 in 1997 from $36,306\nIncomes in the South rose by 3.6% and in\nearnings gain, their first increase since\nyear, 4% longer than it did at the start of\nfrom 1996-was the third consecutive an-\nthe West by 3.1%. The poverty rate in both\n1991. Women's earnings rose even more,\nthe decade.\nnual rise. That brought the figure to just\nregions also fell the most, though remained\nby 3%.\nIncome inequality, meanwhile, rose\nunder the $37,303 median for 1989, the peak\nhigher than the national average. Incomes\nEven liberal critics, who have tried to\nslightly to a new historic high, though Cen-\nin the last expansion. The median income\nin the Midwest, meanwhile, rose 2.4% and\ntemper the economic ebullience of recent\nsus officials said that rise wasn't statisti-\nfell to $34,700 in 1993.\nwere virtually unchanged in the Northeast.\nyears, celebrated yesterday's news. \"It's a\ncally significant. The share of national in-\nThe drop in the poverty rate to 13.3%\nIn the 1980s, it was the Northeast that en-\nvery positive report, particularly the gains\ncome going to the lowest-earning 80% fell.\nfrom 13.7%-marked the fourth consecu-\njoyed the biggest gains.\nU.\nDate is set\n200 dead;\nfor vote on\nthousands\nimpeachment\nflee in Fla.\nBy Deborah Sharp\ninvestigation\nUSA TODAY\nstrength\nMIAMI BEACH - Hurri-\nBy Jessica Lee\ncane Georges roared toward\njobless rate of 4.5%, the pover-\nty rate is higher now than in\nthe 1970s, when unemploy-\nment averaged 6%, says Bob\nGreenstein of the Center on\nBudget and Policy Priorities.\nAnd the long-term trend to-\nward income inequality contin-\nues. Average income of the\nrichest 5% of households rose\n4.7% in 1997 VS. a 2.4% gain for\nthe middle 20% and a 0.9%\ngain for the poorest 20%.\nUSA TODAY\nsouthern Florida Thursday, in-\ntensifying in strength, after\nWASHINGTON - House Ju-\nravaging the Caribbean, killing\ndiclary Committee chairman\nnearly 200 people with hun-\nHenry Hyde set the timetable\ndreds still missing.\nThursday for a decision on a\nThe storm swept past Cuba\nformal impeachment Inquiry\nThursday and strengthened as\neven as a new poll suggested\nit churned over the ocean.\ndeclining public support for\nForecasters said Georges prob-\nPresident Clinton's removal.\nably would cut through the\nA USA TODAY/CNN/Gal-\nKeys today with winds of about\nlup Poll shows that 29% of\n100 mph or more as it hugs the\nIncomes rebound as poverty rate slips\nThe poverty rate for Afri-\ncan-Americans dropped for\nthe fifth straight year to 26.5%\n(9.1 million), the lowest level\nThe Hispanic poverty rate\nfell to 27.1% (8.3 million), the\nlargest 1-year drop in 20 years.\nMedian income for wom-\nthose surveyed Wednesday\nGulf Coast.\nen-headed households rose\n4.4% even as many single\nmothers left welfare rolls.\nBut despite a 24-year-low\nand Thursday say Clinton\n\"This storm looks like it's all\nshould be impeached and re-\nset to explosively intensify\nmoved. The number was 35%\nonce the eye gets over water,\"\non record.\nlast Sunday, the day before his\nsaid Jerry Jarrell, director of\ntestimony was broadcast.\nthe National Hurricane Center\nAnd Republican support in\nin Miami. If winds reach 115\nthe November congressional\nmph, the storm could cause\nelections took a hit this week.\nmajor damage to mobile\nThe poll shows Democrats with\ntranced\" by the idea of a con-\ngressional censure in place of\ngaining\nhomes and small buildings.\na 51%-45% lead among likely\nGeorges began its trek\nvoters if the election was held\nacross the Caribbean on Mon-\ntoday. The margin of error is\nday. In the Dominican Repub-\n+/-3 percentage points.\nlic alone, rescue workers re-\nBut Hyde said he's not guid-\ncovered 80 bodies Thursday,\ned by polls and he's \"not en-\nbringing the death toll there to\nhours of work for middle-\nincome families rose 4%, or\n129 hours a year, says Jared\nBernstein of the Economic Pol-\nicy Institute think tank.\nMedian household income\nat least 150.\nIn 1997:\nrose 1.9% to $37,005.\nThe poverty rate fell to\n13.3% from 13.7%. That means\n35.6 million people continue to\nlive in poverty, earning $16,400 a a\nyear or less for a family of four.\nBad news mounted from\nimpeachment proceedings.\nthroughout the Caribbean: 27\nThe schedule: The Judiciary\ndead in Haiti; $2 billion in dam-\nCommittee will vote Oct. 5 or 6\nage in Puerto Rico; three dead\non whether to start such an in\nand two missing in St. Kitts; two\nquiry. If the vote is yes, the ful\nkilled in Cuba.\nHouse will vote Oct. 8 or 9. Con\nIn Florida, as many as\ngress will then recess for the\n690,000 people were urged to\nelections.\nevacuate along the Atlantic\nThe panel is reviewing a re-\ncoast as far north as Fort Lau-\nport from independent counsel\nderdale and along the Gulf\nKen Starr that concludes Clin-\nCoast to the Tampa Bay area.\nBlack and Hispanic house-\nThe roughly 80,000 people in\nholds had the strongest gains.\nMainly because of slow job\nton committed 11 impeachable\noffenses related to his relation-\nGeorges\nthe low-lying Florida Keys\ndent Clinton said.\ngrowth early in the recovery, it\nhas taken eight years for in-\ncomes to return to levels before\nthe 1990-91 recession. Since\nWorld War II, that process has\ntaken an average of five years.\nSome of the income gains\ncame from working longer\nhours. Since 1989, average\nship with former White House\nwere ordered out on Wednes-\nintern Monica Lewinsky. Clin-\nday, but only about half of\nton's lawyers say nothing he\nthem left.\ndid warrants impeachment.\n\"We're extremely con-\nThe panel will meet today to\ncerned that the land areas will\nreview 16 remaining boxes con-\nbe inundated with water and\ntaining about 60,000 pages of in-\nwe'll lose a lot of folks down\nformation supplied by Starr.\nthere,\" Jarrell said. Georges\nThat information, which in-\nwas about 200 miles southeast\ncludes Linda Tripp's tapes of\nof Key West late Thursday.\nher telephone conversations\nThose who stayed in the\nwith Lewinsky, is expected to\nKeys were told to take shelter.\nU.S. households finally have\nregained the income lost in the\neconomic downturn of the ear-\nly 1990s, the Census Bureau re-\nRobust growth and low un-\nemployment reduced poverty\nand raised household incomes\nacross the USA in 1997, Presi-\nbe made public next week.\nOfficials closed the two-lane\nCongressional Democrats\nhighway that connects the 100-\nBy Beth Belton\nand Richard Wolf\nUSA TODAY\nported Thursday.\ncomplained about the schedule\nmile strand of islands, the ar-\noutlined by Hyde.\nea's only outlet by land.\n\"This is an effort to run out\n\"We've warned them, but\nthe clock so that the election\nwe can't throw them out of\ncomes and goes with this total-\ntheir houses,\" said Cire Andino\nly unresolved,\" said Rep. Bar-\nof the Miami-Dade County\nney Frank of Massachusetts, a\nemergency operation center.\nsenior committee member.\nUnless Georges unexpected-\nAsked whether he saw any\nly dies down or turns, it will be\nway out of an impeachment in-\nthe first major hurricane in\nquiry, Clinton told reporters\nsouthern Florida since Andrew,\nthat Congress should concen-\nwhich caused $25 billion in\ntrate on \"what's best for the\ndamage in Florida alone in 1992\nAmerican people.\"\nand killed 26 people in the USA.\nUSA TODAY\nFRIDAY, SEPTEMBER 25, 1998\ntelephone calls to his wife. As part of the settlement, Potter will\nencourage poor families off the welfare rolls, many who would\nreceive a $90,000 cash settlement, a promotion to a supervisorial job\nqualify for food stamps and Medicaid benefits are not signing\nand a transfer to Seattle.\nthem, and are therefore poorer than they should be. As a result\nA 1993 agency task force report on the charges found that the INS'\nsafety net is lifting fewer out of poverty than it used to,\" Greenstein\nnearly 2,000 black employees nationwide representing about 11\nsaid.\npercent of the agency's total work force were underrepresented in\nmanagement ranks. Blacks were almost invisible at the highest\nechelons. Both sides in the lawsuit agree that the prospects for\nSouth Florida Braces for Georges' Arrival (Miami) By Mike\nblacks in the INS have improved markedly in the past five years.\nClary (c) 1998, Los Angeles Times\nThe INS settlement, lawyers said, is among several other high-profile\nMIAMI With millions of south Floridians hunkered down, many\ndiscrimination cases against federal agencies. Black agents of the\nboarded up homes well-larded with emergency supplies, a relentic\nBureau of Alcohol, Tobacco and Firearms received some $6.5 million\nHurricane Georges began lashing the U.S. coastline with high wir\nin both back pay and damages to settle a discrimination case against\nand squally rains late Thursday. Already blamed for more than :\nthat agency, said Shaffer, the Washington attorney who handled the\ndeaths in a rampage through the Caribbean, a rejuvenated storm\ncase. But the ATF agents, unlike their INS counterparts, agreed not to\nexpected to cross the vulnerable Florida Keys early Friday with W\nseek additional compensatory damages. So potentially, the plaintiffs in\nas great as 100 mph. `This storm looks like it's all set to explos\nthe INS suit could later collect more money.\nintensify once the eye gets over water,\" Jerry Jarrell, director of\nMiami's National Hurricane Center, said as Georges moved off th\nnorth coast of Cuba in mid-afternoon. \"I think we have a develop\nCensus Bureau: More Blacks, Latinos Are Escaping Poverty\nsituation.\" The first signs here of the massive storm a caldron 0\n(Washn) By Melissa Healy (c) 1998, Los Angeles Times\nthunderstorms and vicious winds swept through parts of greater\nWASHINGTON The Census Bureau reported Thursday that\nMiami and the upper Florida Keys near sunset. Although no lor\npoverty declined slightly in 1997, with the economic lots of blacks and\nas powerful as the storm that destroyed homes, uprooted trees and\nLatinos improving most dramatically. Experts said the booming\ncaused massive flooding in Puerto Rico, Haiti, the Dominican\neconomy with the lowest unemployment rate in almost a\nRepublic and Cuba, Georges was expected to pose a danger,\nquarter-decade is the clearest reason for the figures. But they noted\nespecially to those who chose to ignore evacuation orders ed\nthat welfare reform also may be contributing to the decline in poverty,\nthe Florida Keys and low-lying areas of greater Miami.\n'We're\nas welfare recipients, prodded by new federal rules and by new state\nextremely concerned that the land areas will be inundated with WI\nprograms, leave public assistance rolls for better-paying.\nand we'll lose a lot of folks down there,\" Jarrell said. But evacus\nprivate-sector work. In general, the economic snapshot captures a\norders are not enforceable, and many Keys residents said they\nnation now fully emerged from a stubborn recession, with median\npreferred to take their chances. We got a full house, all locals tr\nhousehold incomes back to where they were before the recession\nto get one good meal in before a 9 o'clock curfew,\" said waiter Vi\nbegan in 1990 just above $37,000. And while blacks and Latinos\nBosco at the Harbor Lights Seafood Restaurant in Key West. ``I\ncontinue to lag far behind whites economically, the two minority\nthink people are too concerned. We've taken all the precaution\ngroups outpaced whites both in moving out of poverty and in boosting\nBosco said, and now we're just waiting to see what happens.\"\ntheir median income levels overall. President Clinton on Thursday\nHurricane warnings were posted early Thursday for four south Fl.\ntouted the census findings, calling them one more year's worth of\ncounties, affecting 4 million residents, and five more counties alo\ncompelling evidence that this economic strategy is working This\nthe state's Gulf Coast were under a hurricane watch. But the entir\nreport also shows that our growing economy is giving more and more\nstate remained on alert. As blustery winds rolled in, Miami\nfamilies a chance to work their way out of poverty.\" The census\nInternational Airport canceled all flights in and out as of 9 p.m.\nfound that in 1997, 8.3 million people of Hispanic origin lived below\nAt Miami's Metrozoo, all but blown apart by Hurricane Andrev\nthe poverty line of $16,400 for a family of four, down from 8.7 million\n1992, animals were locked down inside their nighttime quarters.\nin 1996. And the proportion of Latinos living in poverty dropped from\ncafes along Ocean Drive in fashionable south Miami Beach, shee\n29.4 percent in 1996 to 27.1 percent last year. That is the largest\nplywood went up over the windows and awnings came down. A\none-year drop in poverty among Latinos in two decades. In the same\nCape Canaveral, 200 miles north, the National Aeronautics and S\nyear, 9.1 million blacks lived in poverty, reflecting a drop of two\nAdministration decided to leave the space shuttle Discovery on th\npercentage points to 26.5 percent in poverty rates for the group.\nlaunch pad after first recalling it to the hangar. The ship is schedu\nThe median income the level that marks the midpoint of household\nto blast into orbit next month with a crew that includes Sen. John\nearnings in 1997 stood at $38,972 (up 2.5 percent since 1996) for\nGlenn, D-Ohio. As winds in the Miami area picked up through\nwhites, $26,628 for Latinos (a 4.5 percent increase) and $25,050 (up\nevening, Georges remained on a northwest course that would brin\n4.3 percent) for blacks. Asian and Pacific Islanders, an ethnically\neye of the storm over the Florida Keys early Friday with\ndiverse group that includes those of Chinese, Japanese and Indian\nhurricane-force winds, while raking a broad area of south Florida\norigin, enjoyed the highest median income of $45,249, though it\ngales and heavy rains.\nremained unchanged in 1997. Between 1996 and 1997, poverty\nForecasters predicted the hurricane would continue to move\nrates among black and Latino households led by a single woman\nnorthwest in the Gulf of Mexico through the weekend, hammerin\ndeclined by 3.9 and 3.3 percentage points respectively. And the\nwest coast of Florida, from Naples to the Tampa Bay area, with h\nmedian income of all female-headed households rose 3.2 percent\nwinds, heavy rains and tidal surges of up to 6 feet above normal.\nbetween 1996 and 1997. For black and Latino families headed by a\nEventually, Georges could make landfall again along the Gulf COI\nsingle mother, the rise in median income was nothing short of\nanywhere from the Florida Panhandle to Texas. In its slow but\nremarkable: the median income for black households with a female\ndeadly swath over Puerto Rico, Hispaniola and Cuba, Georges lo\nhead and no husband present grew 6.3 percent between 1996 and\nmuch of its punch. Winds dropped from 130 mph to just 75 mph\n1997. And for Latina-led families, that income figure grew 13.2\nmaking it a minimal hurricane. But with plenty of 80-degree wat\npercent. This year's income and poverty assessment from the Census\nahead in the Florida Straits, the storm was expected to bulk up b.\nBureau was the first since the passage of a landmark welfare reform\nhitting Florida. The storm was moving northwest at about 14 mp\nlaw in August 1996. In the 10 months from August 1996 to June 1997\nPuerto Rico's 3.8 million residents remained without electricity\nroughly the same period as that measured by the census the nation's\nthree-quarters of homes had no running water. An estimate of the\nwelfare caseloads dropped by some 1.7 million, dipping to just under\ndamage caused by the pounding Georges gave to the U.S.\n10.5 million people. That point marked the first time since 1969 that\ncommonwealth rose to $2 billion. After meeting with Gov. Pec\nless than 4 percent of the U.S. population relied on welfare payments.\nRossello, U.S. Housing Secretary Andrew Cuomo said the islanc\nRobert Greenstein, who heads the Washington-based Center on\nwould receive $39 million in emergency grants to repair public\nBudget and Policy Priorities, saw good news and bad in the census\nhousing. Puerto Rico will also be able to call on $300 million\nfigures. On the positive side, Greenstein suggested that paid work,\npreviously set aside for disaster relief to repair roads and public\nespecially in an economy where unemployment has fallen below 5\nservices. Three deaths were blamed directly on Georges' 8\npercent, appears to be lifting the incomes of many who are leaving the\nPuerto Rico. At least 28,000 people remained in public shelters.\nwelfare rolls for full-time jobs or combining work and welfare, as\nRescue workers in the Dominican Republic recovered at\n8(\nmany states allow. At the same time, Greenstein warned, as states\nmore bodies Thursday, pushing the death toll there to nearly 200\nNEW YORK TIMES REPORT ON NUMBER OF UNINSURED INCREASES\nQ: HOW DO YOU RESPOND TO TODAY'S NEW YORK TIMES ARTICLE?\nA: We are concerned about any report that shows any increase in the number of Americans who\nare uninsured. Addressing this chronic problem has been and continues to be a priority for\nthe President and his Administration.\nMost of the additional people who are uninsured appear to be Americans who are working,\nwith income above the poverty level but in firms that are not providing affordable coverage.\nDespite these disturbing findings, it is encouraging to note, however, that the number of\nuninsured children did not rise. Reducing the number of uninsured children in this nation has\nalways been focal point of the President and First Lady. Their efforts, including approval of\nan unprecedented number of Medicaid waiver expansions and an emphasis on outreach to\neligible but unenrolled children, contributed to ending the unacceptable trend of more\nchildren becoming uninsured. Previously, children made up the vast majority of the increase\nin the number of uninsured.\nIn every budget, the President has proposed expanding health insurance coverage. He has\napproved over a dozen Medicaid waiver expansions; signed the Kassebaum-Kennedy law\nthat makes keeping insurance when changing jobs easier; and enacted the Children's Health\nInsurance Program (CHIP) last year, which will contribute toward the President's goal of\ncovering up to 5 million uninsured children. This year, the President proposed new insurance\noptions for people ages 55 to 65, greater funding and flexibility for states to target uninsured\nchildren eligible but not enrolled in Medicaid and CHIP; and a comprehensive tobacco bill\nthat would encourage states to expand coverage. Unfortunately, it appears that Congress will\nadjourn this year without taking action on any of these critically important initiatives.\nQ. ISN'T THE INCREASE THE RESULT OF WELFARE REFORM LEGISLATION\nTHAT YOU SIGNED INTO LAW IN 1996?\nA. There is not yet enough information to draw final conclusions about why the number of\nuninsured increased. However, the increase in the uninsured occurred not among the poor or\nchildren, but among working adults. While some of these people may be former welfare\nrecipients who are employed in low-wage jobs without affordable coverage, it is more likely\nthat this reflects the general trends in employer-based coverage. Although overall employer-\nbased coverage has not declined, it may be that more workers are employed in jobs that\ntraditionally do not offer affordable coverage (e.g., in small to mid-sized firms or in part-time\njobs). We intend to look more closely into these trends.\nBecause of his commitment to insurance coverage, the President insisted that a provision be\nincluded in the welfare reform bill that requires states to provide Medicaid to people who\nwould have been eligible under the old system. This provision also provides $500 million for\noutreach to families to make sure they know about this coverage. In addition, as recently as\nlast month, the President announced a new regulation, called the \"100 hour rule,\" that allows\nstates to cover working parents who earn too much to be eligible for Medicaid. Finally,\nreflecting the President's commitment to maintaining and expanding for children, he\nincluded $900 million for children's outreach provisions in this year's budget.\nBACKGROUND. On Tuesday, the Census Bureau will release its estimates of the health\ninsurance coverage of Americans for 1997. Although embargoed, they were reported in the New\nYork Times today. Highlights include:\nNumber of uninsured has increased by 1.7 million: About 43.4 million people had no\nhealth insurance coverage in 1997, up from 41.7 million in 1996 and 38.6 in 1992.\nNumber of uninsured children remained constant at 10.7 million.\nNumber of uninsured poor also did not increase. About 11.2 million poor Americans\nwere uninsured, unchanged from 1996. The proportion of all uninsured who are poor\ncontinues to fall -- showing that this is an increasingly middle-class problem.\nKEY FACTS on CENSUS INCOME AND POVERTY REPORT\nSeptember 24, 1998\nTODAY, THE CENSUS BUREAU RELEASED THEIR ANNUAL REPORT ON INCOME\nAND POVERTY IN AMERICA FOR 1997. HERE ARE SOME OF THE RESULTS:\nBroad-Based Income Gains:\nTypical Household Income Up 1.9 Percent in 1997. Income for the median household\nrose $699, from $36,306 in 1996 to $37,005 in 1997, adjusted for inflation.\nTypical Family Income Up $3,517 Since 1993. Another measure of income -- family\nincome, which excludes single individuals and counts only related members in any\nhousehold -- shows a similar trend. Last year, the median family's income, adjusted for\ninflation, increased 3.0 percent (or $1,297) -- the fourth consecutive annual rise. Since\nPresident Clinton's Economic Plan passed in 1993, median family income has increased\nfrom $41,051 in 1993 to $44,568 in 1997 -- that's a $3,517 increase in income, adjusted\nfor inflation. From 1988 to 1992, median family income fell $1,835, adjusted for\ninflation.\nUnder President Clinton, The Typical African-American Household's Income Is Up\n$3,354. The median income of African-American households rose 4.3 percent (or $1,029)\nlast year. And since 1993, the median income of African-American households has increased\nfrom $21,696 to $25,050 -- that's $3,354 or a 15-percent increase, adjusted for inflation,\nbetween 1993 and 1997.\nIncome of Typical Hispanic Household Up $2,553 in Past Two Years. In 1997, the\nincome of the median Hispanic household, adjusted for inflation, increased from $25,477\nin 1996 to $26,628 in 1997 -- that's an increase of $1,151 or 4.5 percent. Over the past\ntwo years, the income of the typical Hispanic household has risen $2,553 -- or nearly 11\npercent -- the largest two-year increase in Hispanic income on record.\nAfter Rising Sharply for 20 Years, Inequality Has Stabilized. After rising for nearly\n20 years, income inequality has not changed significantly over the past four years. Since\n1993, every income group -- from the most well-off to the poorest -- experienced a real\nincrease in their income.\nEarnings for Typical Workers Up. Last year, the earnings of the median full-time,\nyear-round male rose 2.4 percent, from $32,882 in 1996 to $33,674 in 1997 and the\nearnings of the median full-time, year-round female rose 3.0 percent, from $24,254 in\n1996 to $24,973 in 1997. This means that the female-to-male ratio remained at 74\npercent -- its all-time high.\nReductions in Poverty:\nPoverty Rate Fell To 13.3 Percent in 1997 -- Down from 15.1 Percent in 1993. In 1997,\nthe poverty rate dropped to 13.3 percent from 13.7 percent the year before. Since President\nClinton signed his Economic Plan into law, the poverty rate has declined from 15.1 percent in\n1993 to 13.3 percent last year. That means that there are 3.7 million fewer people in poverty\ntoday than in 1993. (In 1997, the poverty threshold was $16,400 for a family of four.)\nThe African-American Poverty Rate Down To Its Lowest Level on Record. While\nthe African-American poverty rate is still far above the poverty rate for whites, it\ndeclined from 28.4 percent in 1996 to 26.5 percent in 1997 -- that's its lowest level.\nrecorded since data were first collected in 1959. Since 1993, the African-American\npoverty rate has dropped from 33.1 percent to 26.5 percent -- that's the largest four-year\ndrop in African-American poverty in more than a quarter century (1967-1971).\nLast Year, Largest Hispanic Poverty Drop In Two Decades. Last year, the Hispanic\npoverty rate dropped from 29.4 percent to 27.1 percent -- that's the largest one-year drop\nin Hispanic poverty since 1978. While there is still more work to do, since President\nClinton took office, Hispanic poverty has dropped from 30.6 percent to 27.1 percent.\nUnder President Clinton, Largest Four-Year Drop in Child Poverty Since 1960s.\nWhile the child poverty rate remains high, in 1997, it declined from 20.5 percent to 19.9\npercent. Under President Clinton, the child poverty rate has declined from 22.7 percent\nto 19.9 percent -- that's the biggest four-year drop in nearly 30 years (1965-1969).\nElderly Poverty Rate As Low As It's Ever Been. In 1997, the elderly poverty rate\ndropped to 10.5 percent, from 10.8 percent in 1996. The elderly poverty rate is now as\nlow as it's ever been -- it was also 10.5 percent in 1995.\nChild Poverty Among African-Americans Down To Lowest Level on Record. In 1997,\nthe African-American child poverty rate fell from 39.9 percent to 37.2 percent -- its lowest\nlevel on record (data collected since 1959). Since 1993, the child poverty rate among\nAfrican-Americans has dropped from 46.1 percent to 37.2 percent -- that's the biggest four-\nyear drop on record.\nHispanic Child Poverty Dropped More Last Year Than Any Year on Record. In\n1997, the Hispanic child poverty rate dropped from 40.3 percent to 36.8 percent -- that's\nthe largest one-year drop on record (data collected since 1976). Since 1993, the child\npoverty rate among Hispanics has declined from 40.9 percent to 36.8 percent.\n4.3 Million People Lifted Out of Poverty By EITC -- Double The Number in 1993. In\n1993, President Clinton expanded the Earned Income Tax Credit, providing a tax cut for low-\nincome working families. In 1997, the EITC lifted 4.3 million people out of poverty -- that's\ndouble the number of people lifted out of poverty by the EITC in 1993. In 1997, the EITC\nlifted 2.2 million children, 1.1 million African-Americans, and nearly 1.2 million Hispanics\nout of poverty.\nQ - What is the basis for the claim that 1.5 million family heads that received TANF in\n1997 were working in March of 1998?\nA - The number is derived from an analysis of two Census surveys along with\nAFDC/TANF administrative records.\nBackground\nIn the Census' March, 1998 Current Population Survey (CPS), 33.8% of family heads\nwith children under 18 who said they had received cash assistance in the previous\nyear reported that they were working in March. Although the CPS proportion should\nbe accurate, it undercounts total TANF receipt. Therefore, we used the very accurate\nadministrative count of TANF cases.\nAccording to administrative records, 3.70 million families received TANF in the 50 states\nplus the District in an average month of 1997.\nAn analysis of ten years of the Census' Survey of Income and Program Participation\nrevealed that the number of families that receive AFDC at any time during the year is\nabout 1.34 times the number that receive assistance in an average month. In the\nabsence of any other information, we assume the ratio is similar for TANF, and thus,\nin 1997 about 4.96 million families received TANF (1.34 times 3.70).\nAbout 22.6% of families who received TANF assistance in the nine-month period\nSeptember, 1996 to July, 1997 (the closest period for which we have data comparable\nto CY1997) did not include an adult recipient. Since the CPS question is ambiguous\nas to whether a person would appropriately answer \"yes\" to the question of whether\nthey received cash assistance, if in fact they had received it on behalf of a child, but\nnot on behalf of themselves, we eliminated half of child-only cases in estimating what\nthe total number of families were to which the CPS percentage would apply. This\nreduced the 4.96 million families to 4.40 million (4.96 times .887).\n33.8% of 4.40 million is 1.49 million, or rounding up, 1.5 million.\n[NOTE: Because of the change from AFDC to TANF, it was necessary to do the\nanalysis differently, but the numbers are not affected very much. Using the\ndifferent series, the increase in the percentage between 1997 and 1998 was from\n31.6% to 33.8%. Because of the small sample size, it is likely that this apparent\npercentage increase is statistically insignificant. The total number is reduced, of\ncourse, because there were so many (16%) fewer cases.]\nLast Year's--for comparison purposes\nQ - What is the basis for the claim that 1.7 million family heads that received AFDC in\n1996 were working in March of 1997?\nA - The number is derived from an analysis of two Census surveys along with\nAFDC/TANF administrative records.\nBackground\nIn the Census' March/April, 1997 Current Population Survey (CPS), 31.5% of family\nheads who said they had received AFDC in the previous year reported that they were\nworking in March. Although the CPS proportion should be accurate, it tends to\nsignificantly undercount total AFDC receipt. Therefore, we used the very accurate\nadministrative count of AFDC cases.\nAccording to administrative records, 4.39 million families received AFDC in the 50\nstates plus the District in an average month of 1996\nAn analysis of ten years of the Census' Survey of Income and Program Participation\nrevealed that the number of families that receive AFDC at any time during the year is\nabout 1.34 times the number that receive assistance in an average month. Thus, in\n1996 about 5.88 million families received AFDC (1.34 times 4.39).\nAbout 21.5% of those families did not include an adult recipient. Since the CPS question\nis ambiguous as to whether a person would appropriately answer \"yes\" to the question\nof whether they received AFDC, if in fact they had received it on behalf of a child,\nbut not on behalf of themselves, we eliminated half of child-only cases in estimating\nwhat the total number of families were to which the CPS percentage would apply.\nThis reduced the 5.88 million families to 5.24 million (5.88 times .892).\n31.5% of 5.24 million is 1.65 million, or rounding up, 1.7 million.\nRecent Trends in Health Insurance: Embargoed Until 9/29/98\n1994\n1995\n1996\n1997\nOVERALL\nUninsured (millions)\n39.7 m\n40.6 m *\n41.7 m **\n43.4 m **\nUninsured\n15.2%\n15.4% *\n15.6% *\n16.1% **\nPrivate coverage\n70.3%\n70.3%\n70.2%\n70.1%\nMedicaid\n12.1%\n12.1%\n11.8%\n10.8%\nPOOR\nUninsured (millions)\n11.1 m\n11.0 m *\n11.3 m\n11.2 m\nUninsured\n29.1%\n30.2%*\n30.8% *\n31.6%\nProportion of uninsured who\n27.8%\n27.1%\n27.0%\n25.9%\nare poor\nMedicaid\n46.2%\n46.4%\n45.5%\n43.3%\nUNINSURED BY AGE\n0 to 17 years\n14.2%\n13.8%\n14.8%\n15.0%\n18 to 24 years\n26.7%\n28.2%\n28.9%\n30.1%\n25 to 34 years\n22.0%\n22.9%\n22.3%\n23.3%\n35 to 44 years\n16.0%\n16.6%\n16.3%\n17.3%\n45 to 64 years\n13.3%\n13.3%\n13.7%\n14.1%\n65 + years\n0.9%\n0.9%\n1.1%\n1.0%\nUNINSURED BY INCOME\n< $25,000\n23.2%\n23.9%\n24.3%\n25.4%\n$25,000 49,999\n15.4%\n16.2%\n16.6%\n18.1%\n$50,000-74,999\n8.7%\n9.3%\n10.0%\n10.1%\n$75,000 +\n7.0%\n6.7%\n7.6%\n8.1%\nWORKERS WITH EMPLOYER-SPONSORED INSURANCE\nAll firms\n53.3%\n53.2%\n53.1%\n53.0%\n< 25 workers\n27.9%\n28.3%\n28.2%\n28.4%\n25-99 workers\n52.6%\n53.7%\n53.9%\n52.4%\n100-499 workers\n63.2%\n63.5%\n63.1%\n61.8%\n500-999 workers\n67.4%\n65.1%\n66.1%\n66.7%\n1000 + workers\n67.9%\n67.7%\n67.1%\n66.6%\n* Insignificant change; ** Significant change; if no asterisk, no test available.\nUninsured Children Less than 18 Years Old\n1995\n1996\n1997\nOVERALL UNINSURED\nTotal (number)\n9.8\n10.7 **\n10.7 *\nTotal\n13.8%\n14.8% **\n15.0%\nPrivate\n66.1%\n66.3%\n66.9%\nMedicaid\n23.2%\n21.8%\n20.5%\nPOVERTY AND THE UNINSURED\nPoor uninsured (number)\n3.1 m\n3.4 m *\n3.4 m *\nPoor uninsured\n21.4%\n23.3% *\n23.8%\nUNINSURED BY AGE\n<6 years\n13.3%\n13.8%\n14.4%\n6 to 11 years\n13.5%\n14.6%\n13.9%\n12 to 17 years\n14.5%\n16.1%\n16.7%\nUNINSURED BY RACE\nWhite\n13.4%\n13.9%\n14.1%\nBlack\n15.3%\n18.6%\n18.9%\nHispanic\n26.8%\n28.9%\n28.6%\n* Insignificant change; ** Significant change; if no asterisk, no test available.\nHealth Coverage Status of Poor Persons\nAbsolute change in the number of poor people by health status:\n1996\n1997\nChange (#)\nChange (%)\nMedicaid\n16.6\n15.4\n- 1.2\n- -7.4%\nMedicare\n4.5\n4.7\n+0.2\n+4.4%\nMilitary\n.8\n.5\n-0.3\n-38.0%\nPrivate Plan\n8.1\n8.3\n+0.2\n+2.5%\nEmployment\n5.3\n5.5\n+0.2\n+3.7%\nBased Plan\nTotal covered\n25.3\n24.4\n- -0.9\n- -3.6%\n(Total poor-\nuninsured)\nUninsured\n11.3\n11.2\n- 0.1\n- - 0.9%\nTotal poor\n36.5\n35.6\n- 0.9\n-2.5%\nThe drop in poor people with any form of coverage corresponds to the drop in total poor\npeople both are 900,000.\nMost of the 1.2 million drop in the number of people enrolled in Medicaid seems to be\nexplained by the 900,000 drop in the number of poor people.\nSince there is actually a negligible decrease in the number of poor people who are\nuninsured, it appears that the drop in Medicaid coverage is offset by increases in other\nforms of coverage, although it's impossible to tell which of these are the same people.\nDistribution of poor people by health status:\n1996\n1997\nChange\nMedicaid\n54.5%\n52.2%\n-4.2%\nMedicare\n12.4%\n13.2%\n+6.5%\nMilitary\n2.1%\n1.5%\n-29.0%\nPrivate Plan\n22.1%\n23.2%\n5.0%\nEmployment\n14.6%\n15.5%\n6.2%\nBased Plan\nTotal covered\n69.3%\n68.5%\n- 1.1%\n(Total poor-\nuninsured)\nUninsured\n30.8%\n31.6%\n2.6%\nThe percentage of poor people covered by private and employment-based plans is\nincreasing, in contrast to the slight decline for the total population. This likely reflect the\nincreased employment rates of poor people.\nThe percent of poor people who are uninsured increased slightly.\nThe percentage drop in medicaid coverage is greater than the percentage drop in health\ncoverage or the increase in uninsured, so it appears that some people leaving Medicaid\nhave moved to other forms of coverage.\nECONOMICS\nUNITED STATES DEPARTMENT OF\nAND\nCOMMERCE\nSTATISTICS\nADMINISTRATION\nNEWS\nBUREAU OF THE\nWASHINGTON, DC 20230\nCENSUS\nEMBARGOED UNTIL: 12:01 A.M. EDT, SEPTEMBER 29, 1998 (TUESDAY)\nPublic Information Office\nCB98-172\n301-457-3030/301-457-3670 (fax)\n301-457-4067 (TDD)\ne-mail: [email protected]\nRobert Bennefield\n301-457-3242\nNumber of Americans Without Health Insurance Coverage\nIncreases in 1997, Census Bureau Reports\nAn estimated 43.4 million people in the United States had no health insurance coverage in\n1997, an increase of 1.7 million from the previous year, according to a report released today by\nthe Commerce Department's Census Bureau.\nAbout one-half, or 49.2 percent (2.6 million), of poor full-time workers were uninsured in\n1997, down from 52.2 percent in 1996.\n(The embargoed report, Health Insurance Coverage: 1997, P60-202, and tabulations may be\naccessed at <http://www.census.gov/dcmd/www/embargo/embargo.html> Call the Public\nInformation Office to obtain access information. After the release time, go to <http://\nwww.census.gov/hhes/www/hlthin97.html>.)\n\"Groups most likely. to be without health insurance coverage include young adults between\nthe ages of 18 to 24, persons of Hispanic origin, those with lower levels of education, part-time\nworkers and persons who are foreign born,\" said Robert Bennefield, the report's author.\nThe share of the population without health insurance increased from 15.6 percent in 1996 to\n16.1 percent in 1997. Health care coverage of children remained unchanged in 1997 -\n10.7 million children under 18 years of age (15.0 percent of all children) were uninsured.\n(more)\nCensus Bureau releases and most reports also are available on their release date through the Bureau's\nInternet homepage. The address is http://www.census.gov.\n-2-\nOther highlights from the report:\nMedicaid notwithstanding, 11.2 million poor people, nearly one-third (31.6 percent) of all\npoor people, had no health insurance in 1997.\nPeople of Hispanic origin were the most likely among race and ethnic groups to be\nwithout coverage throughout 1997. The uninsured rate for Hispanics was 34.2 percent,\ncompared with 12.0 percent for non-Hispanic Whites.\nAmong the poor, African Americans and non-Hispanic Whites had the lowest uninsured\nrates (27.4 percent and 29.0 percent, respectively); many poor African Americans were\ncovered by Medicaid.\nBased on comparisons of two-year averages (1996-97 versus 1995-96), noncoverage rates\nfell in five states (Louisiana, Missouri, New Mexico, Rhode Island and Vermont) and\nrose in 16 (Alabama, Alaska, Arizona, Arkansas, Connecticut, Florida, Idaho, Michigan,\nNebraska, New Jersey, New York, North Dakota, South Carolina, South Dakota, Utah\nand West Virginia).\nAmong the general population of 18-to-64 year olds, full- and part-time workers, were\nmore likely to be insured than nonworkers. Among the poor, however, workers were less\nlikely to be insured than nonworkers.\nIn 1997, the percentage of people without health insurance ranged from 8.1 percent for\npeople in households with incomes of $75,000 or more to 25.4 percent for those in\nhouseholds with incomes of less than $25,000.\nData are from the March 1998 Current Population Survey. As in all surveys, the data are\nsubject to sampling variability and other sources of error.\n-X-\nThe Census Bureau - pre-eminent collector and provider of timely, relevant and quality data about the\npeople and economy of the United States. In more than 100 surveys annually and 20 censuses a decade,\nevolving from the first census in 1790, the Census Bureau provides official information about America's\npeople, businesses, industries and institutions.\nEMBARGOED\nTIL9/24\nIncome and\nPoverty: 1997\nSeptember 1998\nU.S. Department of Commerce\nEconomics and Statistics Administration\nCensus Bureau\nHighlights\nIncrease in real median household income of 1.9 percent\nfrom 1996 to 1997\n$37,005 in 1997\nNow at 1989 level\nDecline in poverty rates; no change in number of poor\n35.6 million poor\n13.3 percent poverty rate\nPoverty rate now down to 1989 level\nNo change in income inequality from 1996 to 1997\nSource: Census Bureau, March Current Population Survey.\nMedian Household Income by\nRegion: 1996 and 1997\n1996\n1997\n(In 1997 dollars)\n$37,005\n$38,264\n$38,929\n$38,316\n$39,162\n$36,306\n$37,418\n$37,977\n$33,166\n$34,345\nUnited States\nNortheast\nMidwest\nSouth\nWest\n(1.9% increase)\n(no change) (2.4% increase) (3.6% increase) (3.1% increase)\nSource: Census Bureau, March Current Population Survey.\nMedian Household Income by\nRegion: 1996 and 1997\n(In 1997 dollars)\nRegion\n1996\n1997\nUnited States\n$36,306\n$37,005\nNortheast\n$38,264\n$38,929\nMidwest\n$37,418\n$38,316\nSouth\n$33,166\n$34,345\nWest\n$37,977\n$39,162\nSource: Census Bureau, March Current Population Survey.\nMedian Household Income: 1967-1997\n(In 1997 dollars)\nThousands of dollars\nRecessionary periods\n38\n$37,303\n$37,005\n36\n34\n$34,700\n32\n$31,583\n30\n0\n1967\n1977\n1987\n1997\nSource: Census Bureau, March Current Population Survey.\nMedian Household Income: 1967-1997\n(In 1997 dollars)\nMedian\nMedian\nYear\nhousehold\nYear\nhousehold\nincome\nincome\n1997\n$37,005\n1981\n$33,978\n1996\n36,306\n1980\n34,538\n1995\n35,887\n1979\n35,703\n1994\n34,942\n1978\n35,819\n1993\n34,700\n1977\n34,467\n1992r\n35,047\n1976\n34,278\n1991\n35,608\n1975\n33,699\n1990\n36,880\n1974\n34,627\n1989r\n37,303\n1973\n35,745\n1988\n36,937\n1972\n35,053\n1987\n36,820\n1971\n33,619\n1986\n36,460\n1970\n33,942\n1985\n35,229\n1969\n34,173\n1984\n34,626\n1968\n32,964\n1983\n33,655\n1967\n31,583\n1982\n33,864\nr Revised. Income data for 1989, 1992 and later years reflect 1990 census population controls. The 1990 Census based estimates are not\navailable for income years 1990 and 1991. The 1990 and 1991 income estimates were derived through ratio estimation.\nSource: Census Bureau, March Current Population Survey.\nPeriods of Recession\nPeak month\nYear\nTrough month\nYear\nNovember\n1948\nOctober\n1949\nJuly\n1953\nMay\n1954\nAugust\n1957\nApril\n1958\nApril\n1960\nFebruary\n1961\nDecember\n1969\nNovember\n1970\nNovember\n1973\nMarch\n1975\nJanuary\n1980\nJuly\n1980\nJuly\n1981\nNovember\n1982\nJuly\n1990\nMarch\n1991\nSource: National Bureau of Economic Research, Inc.\nPeople in Poverty by Region:\n1996 and 1997\n1996\n1997\nNumber (millions)\n36.5\n35.6\nRates (percent)\n15.1%\n13.7%\n14.6%\n15.4%\n14.6%\n13.3%\n12.7% 12.6%\n10.7%\n10.4%\nUnited States\nUnited\nNortheast\nMidwest\nSouth\nWest\nStates\n(no change)\n(0.5% decrease¹) (no change)\n(no change)\n(no change)\n(no change)\n1 As a result of rounding, some differences may appear to be slightly higher or lower\nthan the differences of the reported rates.\nSource: Census Bureau, March Current Population Survey.\nPeople in Poverty by Region: 1996 and 1997\n1996\n1997\nChange\nUnited States Number (millions)\n36.5\n35.6\n(no change)\nUnited States Rates (percent)\n13.7\n13.3\n(0.5% decrease*)\nNortheast\n12.7\n12.6\n(no change)\nMidwest\n10.7\n10.4\n(no change)\nSouth\n15.1\n14.6\n(no change)\nWest\n15.4\n14.6\n(no change)\n*As a result of rounding, some differences may appear to be slightly higher or lower than the\ndifferences of the reported rates.\nWeighted Average Poverty\nThresholds in 1997\nSize of family unit\nThreshold\nOne person (unrelated individual)\n$8,183\nUnder 65 years\n8,350\n65 years and over\n7,698\nTwo people\n$10,473\nHouseholder under 65 years\n10,805\nHouseholder 65 years and over\n9,712\nThree people\n$12,802\nFour people\n16,400\nFive people\n19,380\nSix people\n21,886\nSeven people\n24,802\nEight people\n27,593\nNine people or more\n32,566\nSource: Census Bureau, March Current Population Survey.\nPoverty: 1959-1997\nMillions/Percent\nRecessionary periods\n50\n40\n39.3 million\n35.6\n32.4 million\nmillion\n30\nNumber in poverty\n20\n15.1%\n13.1%\n13.3%\n10\nPoverty rate\n0\n1959\n1965\n1970\n1975\n1980\n1985\n1990\n1995 1997\nSource: Census Bureau, March Current Population Survey.\nPoverty: 1959-1997\nMillions/Percent\nNumber\nPoverty\nNumber\nPoverty\nYear\nin poverty\nrate\nYear\nin poverty\nrate\n1959\n39.5\n22.4\n1979\n26.1\n11.7\n1960\n39.9\n22.2\n1980\n29.3\n13.0\n1961\n39.6\n21.9\n1981\n31.8\n14.0\n1962\n38.6\n21.0\n1982\n34.4\n15.0\n1963\n36.4\n19.5\n1983\n35.3\n15.2\n1964\n36.1\n19.0\n1984\n33.7\n14.4\n1965\n33.2\n17.3\n1985\n33.1\n14.0\n1966\n28.5\n14.7\n1986\n32.4\n13.6\n1967\n27.8\n14.2\n1987\n32.2\n13.4\n1968\n25.4\n12.8\n1988\n31.7\n13.0\n1969\n24.1\n12.1\n1989\n32.4\n13.1\n1970\n25.4\n12.6\n1990\n32.7\n13.2\n1971\n25.6\n12.5\n1991r\n34.7\n13.9\n1972\n24.5\n11.9\n1992\n38.0\n14.8\n1973\n23.0\n11.1\n1993\n39.3\n15.1\n1974\n23.4\n11.2\n1994\n38.1\n14.5\n1975\n25.9\n12.3\n1995\n36.4\n13.8\n1976\n25.0\n11.8\n1996\n36.5\n13.7\n1977\n24.7\n11.6\n1997\n35.6\n13.3\n1978\n24.5\n11.4\nr Revised. Poverty data for 1989, 1992 and later years reflect 1990 census population controls. The 1990 Census based\nestimates are not available for 1990 and 1991. The 1990 and 1991 poverty estimates were derived through ratio\nestimation.\nSource: Census Bureau, March Current Population Survey.\nMedian Household Income by\nRace and Hispanic Origin:\n1996 and 1997\n1996\n1997\n(In 1997 dollars)\n$44,269\n$45,249\n$38,014\n$38,972\n$26,628\n$25,050\n$25,477\n$24,021\nWhite\nBlack\nAsian and\nHispanic origin\nPacific Islander\n(of any race)\n(2.5% increase)\n(4.3% increase)\n(no change)\n(4.5% increase)\nSource: Census Bureau, March Current Population Survey.\nMedian Household Income by Race and\nHispanic Origin: 1996 and 1997\n(In 1997 dollars)\n1996\n1997\nChange\nWhite\n$38,014\n$38,972\n(2.5% increase)\nBlack\n$24,021\n$25,050\n(4.3% increase)\nAsian and Pacific Islander\n$44,269\n$45,249\n(no change)\nHispanic origin (of any race)\n$25,477\n$26,628\n(4.5% increase)\nSource: Census Bureau, March Current Population Survey.\nPoverty Rates of People by\nRace and Hispanic Origin:\nProportion of People Below\n1996 and 1997\nPoverty by Race: 1997\n1996\n(Percent)\n1997\n29.4%\n28.4%\n27.1%\n26.5%\nOther races\n14.5%\n5.8%\n14.0%\n11.2% 11.0%\nBlack 25.6%\nWhite\nBlack\nAsian and\nHispanic\nPacific\nOrigin\nIslander\n(of any race)\nNote: People of Hispanic origin are 23.4 percent\nof the poor.\n(no change) (2.0% decrease)* (no change)\n(2.3% decrease)\n* As a result of rounding, some differences may appear to be slightly higher or lower than the differences of the reported rates.\nSource: Census Bureau, March Current Population Survey.\nPoverty Rates of People by Race and Hispanic Origin:\n1996 and 1997\nPercent\n1996\n1997\nDifference\nWhite\n11.2\n11.0\n(no change)\nBlack\n28.4\n26.5\n(2.0% decrease)*\nAsian and Pacific Islander\n14.5\n14.0\n(no change)\nHispanic Origin (of any race)\n29.4\n27.1\n(2.3% decrease)\n* As a result of rounding, some differences may appear to be slightly higher or lower than the\ndifferences of the reported rates.\nProportion of People Below Poverty\nby Race: 1997\nPercent\nWhite\n68.6\nWhite, Hispanic\n22.2\nWhite, not Hispanic\n46.4\nBlack\n25.6\nOther races\n5.8\nNote: People of Hispanic origin are 23.4 percent of the poor.\nSource: Census Bureau, March Current Population Survey.\nPoverty Rates by Age: 1959-1997\nRecessionary periods\nPercent\n40\nData not available\nfor 1960 to 1965\n35\n30\n65 years and over\n25\nUnder 18 years\n20\n19.9%\n15\n10.9%\n10\n10.5%\nData not available\nfor 1960 to 1965\n18 to 64 years\n5\n0\n1959\n1965\n1970\n1975\n1980\n1985\n1990\n1995 1997\nSource: Census Bureau, March Current Population Survey.\nPoverty Rates by Age: 1959\n-\n1997\nPercent\nUnder\nUnder\n18 years\n18 to\n65 years\n18 years\n18 to\n65 years\nof age\n64 years\nand over\nof age\n64 years\nand over\n1959\n27.3\n17.0\n35.2\n1979\n16.4\n8.9\n15.2\n1960\n26.9\n(NA)\n(NA)\n1980\n18.3\n10.1\n15.7\n1961\n25.6\n(NA)\n(NA)\n1981\n20.0\n11.1\n15.3\n1962\n25.0\n(NA)\n(NA)\n1982\n21.9\n12.0\n14.6\n1963\n23.1\n(NA)\n(NA)\n1983\n22.3\n12.4\n13.8\n1964\n23.0\n(NA)\n(NA)\n1984\n21.5\n11.7\n12.4\n1965\n21.0\n(NA)\n(NA)\n1985\n20.7\n11.3\n12.6\n1966\n17.6\n10.5\n28.5\n1986\n20.5\n10.8\n12.4\n1967\n16.6\n10.0\n29.5\n1987\n20.3\n10.6\n12.5\n1968\n15.6\n9.0\n25.0\n1988\n19.5\n10.5\n12.0\n1969\n14.0\n8.7\n25.3\n1989\n19.6\n10.2\n11.4\n1970\n15.1\n9.0\n24.6\n1990\n20.6\n10.7\n12.2\n1971\n15.3\n9.3\n21.6\n1991\n21.8\n11.4\n12.4\n1972\n15.1\n8.8\n18.6\n1992\n22.3\n11.9\n12.9\n1973\n14.4\n8.3\n16.3\n1993\n22.7\n12.4\n12.2\n1974\n15.4\n8.3\n14.6\n1994\n21.8\n11.9\n11.7\n1975\n17.1\n9.2\n15.3\n1995\n20.8\n11.4\n10.5\n1976\n16.0\n9.0\n15.0\n1996\n20.5\n11.4\n10.8\n1977\n16.2\n8.8\n14.1\n1997\n19.9\n10.9\n10.5\n1978\n15.9\n8.7\n14.0\nSource: Census Bureau, March Current Population Survey.\nNA Not available.\nWomen's Earnings as a Percentage\nof Men's Earnings: 1960-1997\n(Full-time, year-round workers)\nPercent\nRecessionary periods\n100\n90\n80\n74%\n70\n61%\n60\n50\n0\n1960\n1965\n1970\n1975\n1980\n1985\n1990\n1995 1997\nSource: Census Bureau, March Current Population Survey.\nWomen's Earnings as a Percentage of Men's Earnings: 1960-1997\n(Full-Time, Year-Round Workers)\nMedian Earnings\nMedian Earnings\n(In 1997 dollars)\n(In 1997 dollars)\nYear\nWomen\nMen\nPercent\nYear\nWomen\nMen\nPercent\n1997\n$24,973\n$33,674\n74\n1978\n22,232\n37,402\n59\n1996\n24,254\n32,882\n74\n1977\n21,886\n37,144\n59\n1995\n23,693\n33,170\n71\n1976\n21,884\n36,356\n60\n1994\n24,048\n33,415\n72\n1975\n21,430\n36,435\n59\n1993\n24,155\n33,774\n72\n1974\n21,555\n36,686\n59\n1992\n24,453\n34,545\n71\n1973\n21,542\n38,037\n57\n1991\n24,220\n34,670\n70\n1972\n21,339\n36,879\n58\n1990\n24,341\n33,989\n72\n1971\n20,828\n35,001\n60\n1989\n24,294\n35,376\n69\n1970\n20,686\n34,844\n59\n1988\n23,886\n36,165\n66\n1969\n20,274\n34,442\n59\n1987\n23,893\n36,658\n65\n1968\n18,975\n32,628\n58\n1986\n23,770\n36,985\n64\n1967\n18,349\n31,755\n58\n1985\n23,305\n36,090\n65\n1966\n17,992\n31,261\n58\n1984\n22,831\n35,866\n64\n1965\n17,965\n29,979\n60\n1983\n22,423\n35,260\n64\n1964\n17,474\n29,542\n59\n1982\n21,849\n35,386\n62\n1963\n16,990\n28,823\n59\n1981\n21,378\n36,090\n59\n1962\n16,696\n28,156\n59\n1980\n21,836\n36,297\n60\n1961\n16,371\n27,631\n59\n1979\n22,017\n36,902\n60\n1960\n16,234\n26,757\n61\nSource: Census Bureau, March Current Population Survey.\n1997 Compared to 1989\nAt or Above 1989 Median\nIncome Level (In 1997 dollars)\nHouseholds\nAll households\nWhite\n*\nBlack\nAsian and Pacific Islander\nWhite, not Hispanic\n*\nAll family households\n*\nMarried-couples\nFamily households maintained by women with no husband present\nNonfamily households maintained by women\n25 to 34 year old householders\n*\n55 to 64 year old householders\n65 year old and over householders\n*\nOutside metropolitan areas\n* Midwest\n*\nSouth\nWest\n* Surpassed 1989 level.\nSource: Census Bureau, March Current Population Survey.\n1997 Compared to 1989\nAt or Below 1989 Poverty Rate\nPeople\nAll people\nWhite, not Hispanic\n*\nBlack\nAsian and Pacific Islander\nHispanic origin\nUnder 18 years\n*\n65 years and over\n* Midwest\n*\nSouth\nInside metropolitan areas\nInside central cities\nOutside metropolitan areas\nFamilies\nAll families\n*\nMarried-couple\nFemale householder, no husband present\n*Below the 1989 level.\nSource: Census Bureau, March Current Population Survey.\nShare of Household Income: 1967-1997\nLowest 20%\nMiddle 60%\nPercent\nPercent\n60\n60\n45\n45\n47.1%\n30\n30\n15\n15\n4.0%\n3.6%\n0\n0\n1967\n1997\n1967\n1997\n*\n*\nHighest 20%\nHighest 5%\nPercent\nPercent\n60\n60\n43.8%\n49.4%\n45\n45\n30\n30\n17.5%\n21.7%\n15\n15\n0\n0\n1967\n1997\n1967\n1997\n*\n*\n* Introduction of computer-assisted personal interviewing (CAPI) and increased reporting limits\nfor selected sources of income for 1993 affect comparability.\nSource: Census Bureau, March Current Population Survey.\nShare of Household Income: 1967 to 1997\nShares of aggregate income\nShares of aggregate income\nLowest\nMiddle\nHighest\nHighest\nLowest\nMiddle\nHighest\nHighest\nYear\n20 percent\n60 percent\n20 percent\n5 percent\nYear\n20 percent\n60 percent\n20 percent\n5 percent\n1997\n3.6\n47.1\n49.4\n21.7\n1981\n4.2\n52.0\n43.8\n15.6\n1996\n3.7\n47.4\n49.0\n21.4\n1980\n4.3\n52.1\n43.7\n15.8\n1995\n3.7\n47.6\n48.7\n21.0\n1979\n4.2\n51.9\n44.0\n16.4\n1994\n3.6\n47.3\n49.1\n21.2\n1978\n4.3\n52.0\n43.7\n16.2\n1993*\n3.6\n47.6\n48.9\n21.0\n1977\n4.4\n52.1\n43.6\n16.1\n1992\n3.8\n49.4\n46.9\n18.6\n1976\n4.4\n52.3\n43.3\n16.0\n1991\n3.8\n49.7\n46.5\n18.1\n1975\n4.4\n52.4\n43.2\n15.9\n1990\n3.9\n49.5\n46.6\n18.6\n1974\n4.4\n52.4\n43.1\n15.9\n1989\n3.8\n49.3\n46.8\n18.9\n1973\n4.2\n52.2\n43.6\n16.6\n1988\n3.8\n49.9\n46.3\n18.3\n1972\n4.1\n52.1\n43.9\n17.0\n1987\n3.8\n50.0\n46.2\n18.2\n1971\n4.1\n52.4\n43.5\n16.7\n1986\n3.9\n50.4\n45.7\n17.5\n1970\n4.1\n52.7\n43.3\n16.6\n1985\n4.0\n50.6\n45.3\n17.0\n1969\n4.1\n52.9\n43.0\n16.6\n1984\n4.1\n51.0\n44.9\n16.5\n1968\n4.2\n53.0\n42.8\n16.6\n1983\n4.1\n51.2\n44.7\n16.4\n1967\n4.0\n52.3\n43.8\n17.5\n1982\n4.1\n51.4\n44.5\n16.2\n* Introduction of computer-assisted personal interviewing (CAPI) and increased reporting limits for selected sources of income for 1993 affect comparability.\nSource: Census Bureau, March Current Population Survey.\nChanges by State 1995-1997\nTwo-year moving averages\nMedian Household Income\nIncrease\nDecrease\nAlabama\nNorth Carolina\nHawaii\nDelaware\nOklahoma\nIowa\nIndiana\nSouth Carolina\nMaine\nKansas\nUtah\nWisconsin\nLouisiana\nVirginia\nNew Mexico\nWashington\nPoverty Rate\nDecrease\nIncrease\nAlabama\nArkansas\nMississippi\nNew Hampshire\nSouth Carolina\nSource: Census Bureau, March Current Population Survey.\nPoverty Rates Using Alternative\nDefinitions of Income: 1959-1997\nPercent\nRecessionary periods\n25\n20\nOfficial Money Income\n(Def 1)\n15\n13.3%\n10\n10.0%\nComprehensive Income\n(Def 14)\n5\n0\n1959\n1965\n1970\n1975\n1980\n1985\n1990\n1995 1997\nSource: Census Bureau, March Current Population Survey.\nPoverty Rates Using Alternative Definitions of Income: 1959 - 1997\nPercent\nIncluding value\nIncluding value\nof noncash\nof noncash\nOfficial\nbenefits:\nOfficial\nbenefits:\nMoney\nComprehensive\nMoney\nComprehensive\nIncome\nIncome\nIncome\nIncome\nYear\n(Def. 1)\n(Def. 14)\nYear\n(Def. 1)\n(Def. 14)\n1959\n22.4\n(NA)\n1979\n11.7\n8.9\n1960\n22.2\n(NA)\n1980\n13.0\n10.1\n1961\n21.9\n(NA)\n1981\n14.0\n11.5\n1962\n21.0\n(NA)\n1982\n15.0\n12.3\n1963\n19.5\n(NA)\n1983\n15.2\n12.7\n1964\n19.0\n(NA)\n1984\n14.4\n12.0\n1965\n17.3\n(NA)\n1985\n14.0\n11.7\n1966\n14.7\n(NA)\n1986\n13.6\n11.3\n1967\n14.2\n(NA)\n1987\n13.4\n11.0\n1968\n12.8\n(NA)\n1988\n13.0\n10.8\n1969\n12.1\n(NA)\n1989\n12.8\n10.4\n1970\n12.6\n(NA)\n1990\n13.5\n10.9\n1971\n12.5\n(NA)\n1991\n14.2\n11.4\n1972\n11.9\n(NA)\n1992\n14.8\n11.9\n1973\n11.1\n(NA)\n1993\n15.1\n12.1\n1974\n11.2\n(NA)\n1994\n14.5\n11.1\n1975\n12.3\n(NA)\n1995\n13.8\n10.3\n1976\n11.8\n(NA)\n1996\n13.7\n10.2\n1977\n11.6\n(NA)\n1997\n13.3\n10.0\n1978\n11.4\n(NA)\nSource: Census Bureau, March Current Population Survey.\nNA Not available.\nTHE WHITE HOUSE\nOffice of the Press Secretary\nFor Immediate Release\nSeptember 29, 1997\nREMARKS BY THE PRESIDENT\nON INCOME AND POVERTY REPORT\nThe Briefing Room\n11:03 A.M. EDT\nTHE PRESIDENT: I don't know if I can go on. (Laughter.)\nGood morning. This Friday will mark the sixth anniversary of the\nday I announced my intention to run for President of the United States.\nOn that day, I challenged America to embrace an urgent mission for the\n21 st century, to preserve the American Dream, restore the hopes of the\nforgotten middle class, and reclaim the future for our children.\nAs President, I have worked hard to set America on that track, to\nfulfill that mission, putting in place a bold strategy to shrink the\ndeficit, invest in our people, and expand the sales of America's\nproducts and services abroad. I am pleased to announce today that we\nhave more evidence that our economic strategy is succeeding.\nThis morning, the Census Bureau released its annual Survey of\nIncome and Poverty in America. It shows that last year the typical\nfamily benefitted from a significant increase in income for the third\nyear in a row. Since we launched our economic plan in 1993, the typical\nfamily's annual income has risen by nearly $2,200 a year. That's an\nextra $2,200 that hard-working families can put toward their children's\neducation, a down payment on a home, or even a much needed vacation.\nAfter years and years of stagnant family incomes, today's report proves\nthat America's middle class, no longer forgotten, is rising fast.\nIt should be noted that these figures do not reflect several other\ndividends of prosperity we have delivered for the American people. They\ndon't reflect the $500 per child tax credit, the $1,500 HOPE\nScholarship, the education IRAs, the real benefits of lower interest\nrates and mortgage costs worth $1,000 a year or more to millions of\nhomeowners.\nAnd rising incomes are also lifting families out of poverty. The\nreport shows that while there is clearly much more to be done, the\nAfrican American poverty rate has fallen to its lowest level ever; the\nincome of the typical Hispanic household grew more last year than in any\nsingle year on record; the child poverty rate has dropped in the past\nthree years, more than in any three-year period since the 1960s. And\nthe earned income tax credit, which we have dramatically expanded and\nthen fought hard to preserve, has raised more than 4 million people out\nof poverty last year.\nThe report also shows we have more to do to extend opportunity to\nall Americans. Starting in the 1970s income inequality rose sharply.\nNow, it has stabilized. Since 1993, every income group has seen its\nincome rise, with those in the lowest 20 percent showing the fastest\ngains -- thanks, in part, to the minimum wage, to more jobs, and to the\nearned income tax credit, which is not measured in the statistics. But\nwe still have to do more to grow together in the 21st century.\nLet me say that this report also underscores another important\nchallenge, one that I have been concerned about for a long time. Last\nyear, there were 800,000 more children without health insurance than the\nyear before. However, thank goodness, many of these children will now\nbe eligible for coverage under the balanced budget's historic $24\nbillion child health initiative, which takes effect this week.\nTwo years ago we were fighting hard to save Medicaid's guarantee\nto 4 million children. Now we're looking forward to extending child\nhealth insurance to another 5 million children. We have to work\ntogether to encourage the states to take full advantage of this\nopportunity and to make sure that the funds are spent actually insuring\nchildren who do not have health insurance today.\nTo ensure that all our people benefit from the growing economy we\nalso have to make sure that our people have access to the world's best\neducation, with high standards in the basics. And we have to address\nthe pressing issue of child care. That is another thing that would help\nto alleviate pressures on middle and lower income working families'\nhouseholds.\nThe first ever White House Conference on Child Care will be held\nlater this fall. It will focus on how we can help parents to succeed at\nhome and work through quality, affordable child care. In all these ways\nwe can continue to fulfill what I started out to do six years ago --\npreserving the American Dream, restoring the middle class, reclaiming\nthe future for our children. But this is good news. And now, Janet\nYellen and Gene Sperling will be able to answer questions about the\ndetails of the proposals. Thank you.\nQ What do you think is the chance of getting campaign finance\nreform through this session this year?\nTHE PRESIDENT: Well, I hope it's good. It's certainly better\nthan it was a month ago. Obviously, there is still strong opposition to\nit in the leadership of the Republican Party and they're in the majority\nin Congress. But I've seen some encouraging signs in the Senate and,\nfrankly, I've seen some encouraging signs in the House with some\nRepublican members willing to speak up and say that we ought to do\nsomething. So I'm quite hopeful that we will get something.\nI know this -- if we just -- the way these things work, if we can\nsucceed in keeping the public spotlight on the debate, then the pressure\nwill build to come out with something positive. And I have done what I\ncould and I'm very proud of our caucus in the Senate for doing what it\nhas done. The Democrats have clearly come out unanimously for some --\nfor campaign finance reform. And we've just go to keep the public\nspotlight on this and keep going until we get legislation.\nQ Mr. President, many states -- California, Texas, Florida --\nacknowledge that they're going to fail the first real test of the new\nwelfare law, the requirement that they have 75 percent of two-parent\nwelfare families in jobs and job training by this week. Will HHS impose\nfines that -- on the states? And what does it shake your confidence,\nthis failure -- shake your confidence in the new welfare law?\nTHE PRESIDENT: No, because, first of all -- let me answer the\nsecond question first. It doesn't shake my confidence in the law,\nbecause we have succeeded, I think, beyond anybody's expectations,\npartly from the growing economy and partly from welfare reform efforts,\nin reducing the welfare rolls more than they have ever been reduced in a\ncomparable time period, ever.\nWe've had 20 years of immigration in our country at high levels.\nMany of the immigrants coming here come without many resources and they\nwant to work their way into the American Dream, so we've had a lot of\npeople coming in here, and yet we've been successful in having the\nsmallest percentage of our people on welfare since 1970.\nSo my answer to you is, I want to keep high standards and I want\nthem enforced, because we've block-granted the money to the states they\nasked for. After all, they supported the law. They said we could keep\nthe federal guarantee for health care and food stamps, nutrition, which\nI insisted on, but they pointed out they already had the freedom to set\ndifferent welfare reimbursement levels every month, so they wanted\ncontrol of that pot of money so they would have more flexibility to move\npeople from welfare to work. And in return, they agreed to these\ntargets.\nSo I think we just need to keep pushing ahead. In terms of what\nshould be done, obviously I want to consult with our people at HHS and\nothers to do what is best. But I think most states really are working\nhard and in good faith to try to do this. I think that they know that's\nwhat the voters want and most importantly, that's what the people on\nwelfare want. So we don't want to just forget about our high standards,\nespecially when we've proven we can hire a lot more people than we ever\nthought we could.\nQ You mentioned Republicans in the House. This weekend, Speaker\nGingrich was unusually caustic, accusing your staff and your lawyers of\nblocking pursuit of the truth in law. Have you looked back at your\nrecords and the phone calls that you have made and come to any new\nconclusion about your own involvement?\nTHE PRESIDENT: First of all, I think -- no, I have not come to\nany new conclusion. But I think the remarks this weekend were an\nattempt to divert the public attention from the fact that the leadership\nof the Republican Party in the House opposes campaign finance reform,\nand has consistently, and continues to do so.\nBut I am encouraged that along with our Democrats who are\nsupporting it, there are an increasingly vocal band of brave Republicans\nwilling to stick up and be for it. And again, this is our chance to\npass this bill and I think we'd all be making a mistake to be diverted.\nI don't intend to be.\nThank you.\nQ Mr. President, any reason to believe Arafat is moving against\nHamas?\nTHE PRESS: Thank you.\nEND\n11:13 A.M. EDT\nTHE WHITE HOUSE\nOffice of the Press Secretary\nFor Immediate Release\nSeptember 29, 1997\nPRESS BRIEFING BY DIRECTOR OF THE NATIONAL ECONOMIC\nCOUNCIL GENE SPERLING AND CHAIRMAN OF THE\nCOUNCIL OF ECONOMIC ADVISORS JANET YELLEN\nThe Briefing Room\n11:15 A.M. EDT\nMS. YELLEN: As the President mentioned, the Commerce Department\nis releasing its annual report, has released it this morning on income\nand poverty statistics for 1996. Today's report suggests that American\nliving standards continue to rise, and that's good news. At this same\ntime, however, the report suggests that there are still challenges\nfacing our economy.\nThe typical American family's income increased from 1995 to 1996;\npoverty declined slightly. Blacks experienced relatively large\nincreases in income and earnings, and the black poverty rate is at its\nlowest level recorded.\nThese economic gains in 1996 build on the progress begun in 1993.\nIn the two decades prior to 1993, median income was stagnant, and income\ninequality was increasing. From 1993 to 1996, median income has\nincreased substantially and income inequality has stabilized. But,\nclearly, there are still some challenges our nation faces. Although the\nchild poverty rate fell this year, it is still too high and we still\nhave too many children without health insurance, so it is clear that we\nneed to continue to focus on improving the economic well-being of\nchildren in the United States.\nI'd like to now quickly review some of the key details in today's\nreport, first beginning with some facts about income gains. Median\nfamily income increased by nearly $500 between 1995 and 1996, after\nadjusting for inflation. That builds on an even larger increase of $750\nbetween 1994 and 1995.\nIn 1996, the median family had nearly $2,200 more income in real\nterms than in 1993. And the gains are particularly striking for blacks,\nwho have experienced increases in median household income of nearly\n$2,300 since 1993. Per capita income increased by $400 between 1995 and\n1996, again after adjusting for inflation. And per capita income grew\ntwice as rapidly for blacks and Hispanics, about five percent for both\ngroups.\nIncome inequality has been roughly flat since 1993, and that\narrests a trend for the previous 20 years in which it had been rising.\nBlacks' median earnings as a fraction of whites' median earnings for\nmale, full-time, year-round workers rose from 76 percent in 1995 to 80\npercent in 1996. That gap in earnings between black and white workers\nwas at its lowest level in the last 30 years.\nWith respect to the poverty rate, overall poverty rates declined\nslightly from 1995 to 1996, and the poverty rate in 1996 is now 1.4\npercentage points lower than it was in 1993. In 1996, the black poverty\nrate hit a new low. The black poverty rate has declined by nearly five\npercentage points since 1993, and it is now at the lowest level since\nthe Census developed its poverty measure using the current population\nsurvey.\nIn 1996, the child poverty rate fell, but it still remains high,\nand it is notable that 15 percent of all children still don't have\nhealth insurance. So let me conclude by saying that our economy\ncontinues to move ahead at a healthy pace. Jobs are being created;\nunemployment is low; growth is solid and inflation is in check. And\ntoday's numbers clearly illustrates the benefits that accrue from that\nhealthy economy.\nBut there are challenges that remain. We need to reduce childhood\npoverty and make sure that children are insured. We have made a start.\nIncluded in this year's balanced budget deal, of course, was $24 billion\nto cover up to 5 million additional uninsured children. So as we\ncontinue to build on gains in family income, certainly more needs to be\ndone to protect our most vulnerable populations.\nLet me stop there.\nMR. SPERLING: Let me just walk through a couple of these and then\nwe'll be happy to take questions. Obviously, when we came into office\nwe had just had a four-year period where median family income had fallen\n$1,795. So when you look at the switch from a drop of $1,795, going to\na $2,200 or $2,169 increase over the last three years since the economic\nplan passed, you do have a very significant change.\nWe've also tried to focus on how what we've done in the balanced\nbudget actually does even more for people's take-home pay or after-tax\nincome for a middle income family with two kids, they would have $1,000\nin addition to this, based on the tax cut even if -- child tax credit\neven if they did not use the education tax cut.\nAs the President mentioned, the interest rates, which averaged 8.2\npercent, 30-year rates, in the previous four years before we took\noffice, and now have averaged in the sixes, and are now at a very low\nrate -- near 6.4 percent -- is having very significant mortgage savings\nfor many families.\nSo the overall story is certainly a positive one. We certainly\nhave a long way to go to make up for two decades of stagnation that\npreceded us, but this is significant progress.\nJust want to stress a couple of other points. If there had been\none statistic that had probably been the most disturbing in the past had\nbeen that Hispanic family income had not been up over the last couple of\nyears. This year, Hispanic income was up $1,371, 5.8 percent, which is\na very strong increase, a really dramatic one-year increase, and now\nensures that every group has seen the real income go up since the\npassage of the '93 plan.\nThe other thing that should be gratifying to us is that if you\nlook at the different quintiles, the bottom 20 percent to the top 20\npercent, since 1993 each of those quintiles, each income group has seen\ntheir income increase. And I think that the chart that we may have\nshowed at the end, that shows that for the bottom 20 percent, the\nincrease has been the greatest -- 6.8 percent.\nSo it is the case that all groups have been joining in the\nprosperity. On this year, the statistics -- for this one year,\nstatistics are somewhat mixed, while over the last three years it is a\nvery positive number. This year, if you look at pre-tax income, the\nbottom 20 percent was down slightly. If you look at after-tax income,\nwhich takes into account the earned income tax credit increases the\nPresident had, you see that even the bottom 20 percent had a 3.3 percent\nafter-tax increase. So in terms of their take-home income, all\nquintiles benefited, and the lowest 20 percent has seen the fastest rate\nof growth since 1993.\nAs Janet mentioned, child poverty, which is certainly a major\nconcern, was at 22.7 percent in 1993. It was at 20.8 percent last year.\nNow it is at 20.5 percent. Again, all of these are very positive\nmovements in the right direction. The levels are still -- should be\ndisturbing to all Americans. It should be disturbing and hurtful to all\nAmericans that one out of five American children live in poverty. And\nit should be especially disturbing to all of us that African American\nchild poverty is almost double that rate. Again, though, the important\nthing is that all these are moving in the right direction, but it is\nalso important to recognize that there is still further to go,\nsignificantly further to go.\nWhen you look at the poverty rate, they do not include the earned\nincome tax credit. However, the Census shows an alternative definition\nso that if you wanted to know what was the degree -- what impact would\nthe earned income tax credit have made, or our increases in the earned\nincome tax credit have made, if that was counted in the poverty numbers,\ntable C-4 does show those alternative definitions. And what it shows\nwas that in 1993, the earned income tax credit at that time lifted 2.1\nmillion families -- 2.1 million people out of poverty.\nIn 1996, with the significant increases in the earned income tax\ncredit, that number is up to nearly 4.3 million. So you've had 2.2\nmillion more taxpayers not in poverty because of the earned income tax\ncredit increases. And I think that for us and for the President, I\nthink it very much affirms the importance of the battles that we have\nhad over the last several years not only in increasing the earned income\ntax credit, but also in repeated battles to protect those increases. In\nthe battles to protect Medicaid as a guarantee, food stamps as a\nguarantee, the increase in the minimum wage, and as the President\nmentioned, the important $24 billion for children's health care are all\npart of our effort going forward to deal with the high levels that still\nexist, even with the significant improvements we've had.\nOne final point I would make is on health care. You would note\nthat people between the age of 25 and 44 actually saw their health\ninsurance rates improve slightly. The reason why overall number of\npeople's health insurance rate got worse is at the youngest and oldest\nlevels and with nearly two-thirds of it being children. And so I think\nthat this number confirms very much the appropriate attention that the\nPresident and the Congress addressed in the $24 billion children's\nhealth care initiative.\nAnd with that, Janet and I would be happy to take any questions.\nQ Many liberals argue that economic inequality is continuing to\ngrow. Can you explain your methodology, what you're comparing to say\nthat it's leveled off?\nMR. SPERLING: I'll let -- there's a coefficient measure that's\nused. I think that you see that it will have gone up. Over the last\nfew years it's gone down a little, up a little bit, but kind of in the\nrange that the Census would call flat because of their statistical\nsignificance tests.\nSo as you note, the President addressed that in the portion of his\nspeech where he was saying there was more to do. It is certainly an\nimprovement having inequality flattened as opposed to sharply\nincreasing, but that's not good enough for us and it shouldn't be good\nenough for other Americans. Our goal should be to see inequality\nmeasures improve.\nBut I think that for most Americans, they would deeply care about\nthe fact that everybody is benefiting, and the chart that shows that at\nall quintiles, the median family at all quintiles or median household at\nall quintiles have seen growth since 1993 certainly shows all groups are\nbenefiting and inequality has flattened out. And for those who say that\nwe should do more to improving it, we say we agree.\nQ Speaking of family income, what did the President think about\nthe congressional testimony about IRS excesses and abuses against\ntaxpayers? And does he support this bipartisan proposal that's floating\naround in Congress to take the -- what is it -- shift responsibility for\nwatching over the IRS from the Treasury to a new board of directors?\nMR. SPERLING: First of all, nobody who can watch the IRS hearings\ncannot be extremely disturbed by the accounts that were told. The IRS\nhave said so; clearly, every American looking at that would be appalled\nby some of the abuses. And Treasury has been active in trying to\nimprove things and streamline and making it easier for people to file.\nThe IRS, as you know, announced very specific measures that they were\ngoing to do.\nSo I don't think there is any disagreement that the examples used\nwere appalling and that we need to take further steps, that there have\nbeen reforms in the right direction, but that much more needs to be done\nat the IRS.\nIn terms of the management, the Treasury Department has a very\nsound new management proposal that does rely on an advisory board that\nincludes top experts. But in terms of the proposal that would turn over\nmanagement of the IRS to a part-time, outside private board, we think\nthat is extremely misguided. It has been criticized by past Republican\nIRS commissioners, by the Brookings Institution. It is a recipe for\nconflicts of interest, and the notion that the right way to deal with\nthese problems with the IRS is to decrease accountability and have\npart-time managers who would be themselves involved in a range of\nfinancial transactions would be a serious step backwards.\nSo I think that the Treasury Department has important reforms in\nplace, a new board, and we'll be supporting that. And we will\nvigorously oppose the efforts to turn over the IRS management to\npart-time outside private people who, again, we think would lead to a\nrecipe for conflicts of interest, a less accountability and less trust.\nQ But, Gene, just to follow up on that, do you think the examples\nthat were presented at the hearing were representative of the IRS, or do\nyou think that they were isolated?\nMR. SPERLING: Well, I think in any big organization, there are\ngong to be disturbing cases that will happen. I think that -- but for\nany of us who are in any kind of position of responsibility, that\nshouldn't be an excuse for trying to take action to reduce those.\nOn the other hand, people should not forget that the overall\nmajority of people who work at the IRS are honest, hard-working\nAmericans who themselves pay taxes and themselves found the examples\nthere disturbing. IRS agents have been the targets of violent attack\nover recent time. So I think that, from our point of view, the\nimportant thing is that there are serious problems and we should address\nthem. Of course, that should not take away from the fact that there's\nbeen many positive reforms and that there are many -- that the overall\nmajority of people who work there are fine civil servants.\nQ -- on the size of the reorganization, but there were quotas, for\nexample. That isn't just some guy out there --\nMR. SPERLING: I'm sorry if anything I've said would be\ninterpreted that way. I said we believe that there are problems and\nthat we should be addressing them, and if there are -- if there is\npressures to target poor people who cannot defend themselves, that is\nappalling and that should be rooted out of the system. If there --\nthose type of enforcement quotas almost in any organization we've seen\nin the past tend to lead to pressure that leads to abuse. But I think\nthat the people in the IRS have recognized that and said that they\nrequire serious efforts and are taking those efforts.\nI felt the question was, did I feel that represented everything\nthere, and I think that it's responsible for all of us as we're talking\nabout this and reporting on this to not create a situation where we\nstart creating a caricature of many fine people who work in any\norganization where there can be serious problems. Again, I said that's\nnot an excuse for not taking action, and we have a very strong reform\nagenda for that.\nQ\nCan the President do anything by --\nQ Do you think that reform is enough to take care of the public\nconcerns about what they heard last week? I mean, they fired a couple\nof people and they're putting in some of these reforms -- that should\nsatisfy people's complaints of the IRS?\nMR. SPERLING: I think people will look and see -- they'll look\nfor results. I think the test will be whether there is good reform and\npositive results that root out these abuses. So I think people are\ngoing to look and see whether they see significant effort and\nsignificant improvement.\nQ\nWhat are you expecting out of the -- meeting tomorrow given the\nhealthy state of the U.S. economy? (Laughter.)\nMR. SPERLING: Oh, good question. You know we can't say much on\nthat. I'm not even a former FED member, so what would I -- (Laughter.)\nQ Can the President do anything about -- by executive order, to do\nanything about IRS? And why did all this stuff come out in three days\non the Hill? I mean, it's obviously been going on for so long.\nMR. SPERLING: Well, long before this, the Treasury Department has\nhad an IRS management reform proposal, so this was not the motivation\nfor our reforms. Secretary Rubin and Deputy Secretary Summers have been\nworking on this; they have brought in a new IRS Commissioner who they\nthink is outstanding. So we have been at work -- as you know, they have\ndone significant reforms that have made it easier for people to file.\nWe have a new initiative to reduce error rates in the earned income tax\ncredit that is in the budget right now. So to the extent of whether\nthere should have been additional oversight hearings in the past, that's\na question for the members of Congress.\nQ Gene, getting back to the Census Income and Poverty report real\nquick. First of all, what's the typical income -- not income, the\ntypical, I guess, family -- what you're saying -- typical family?\nMR. SPERLING: The typical family -- when we said it rose to 490,\nit was rising for a family for $42,300.\nQ No, I just need the typical family, I'm sorry -- the typical\nfamily, what does that consist of?\nMS. YELLEN: Oh, what is the typical family? It's the median\nincome of families, all families.\nQ When I say typical family, father, mother, how many children --\nthat's what I'm talking about.\nMS. YELLEN: These statistics are based on income over all\nfamilies, and it's the median of all families. It includes all kinds of\nfamilies.\nQ\nSo you don't have a breakdown of the family type?\nMS. YELLEN: I mean, there are breakdowns of different kinds of\nfamilies, the numbers of each type, but this statistic when we say\nthat's gone up, median family income simply takes all families and looks\nat the median. So it's not for --\nQ Okay. And the second part of this question -- with the gains\nthat you're reporting, wouldn't the proposed multi-box check-off for the\nproposal for the Census disenfranchise minority numbers and, in essence,\nmake another whole race of minorities if that were to happen and this\nwould kind of disenfranchise your numbers?\nMR. TOIV: She's talking about Sally Katzen's work, OMB's work.\nMR. SPERLING: Oh, I understand. I would let Sally Katzen answer\nthat. I'm sorry. Barry, maybe you can --\nMR. TOIV: Yes, we can hook her up.\nQ How confident are you that these figures, these gains aren't\njust going to disappear in the next recession? I mean, we've made up\nground, we lost it -- median family income fell nearly $2,000 from '88\nto '92. Now, in the last three or four years, we've basically made up\nthose gains that were lost the last time around. Is there any sense of\npermanence to this, or do you -- are you going to lose -- do you have\nany sense of what a recession would do to these figures?\nMR. SPERLING: Well, I mean, I think the important thing is that\nthe fundamentals in the economy continue to be exceptionally sound --\nyou know, 4.9 percent unemployment, inflation is low, productive\ninvestment has been in double digits. If you look at the blue chip, the\n50 people in the blue chip, not a single one of them projects recession\nnext year -- not a single one. Not a single one even projects\nunemployment over six percent.\nSo I think that we feel that there have been some important\nstructural improvements in the sense of the deficit. If you look at our\ndeficit projection now as opposed to 1993, you're talking about having a\nprojected less debt of $2 trillion over a period of seven to 10 years.\nThat has a significant impact on the strength of the economy and you can\nsee it in the fact that even though growth is stronger now, unemployment\nis lower, long-term interest rates are almost two points lower than they\nwere during the previous administration, even with the weak economy.\nQ You discussed that none of us should be satisfied with the rates\nof poverty of children and particularly black children. What is the\nadministration working on to have less than just a gradual effect on\nthese number? Are there any plans to make more dramatic improvement in\nthose areas that you say are still we should all consider hurtful?\nMR. SPERLING: I think that we certainly -- it had tremendous\neffect on what we fought for at the end of the budget. If anybody here\nwill remember, the last two items for us that held up the balanced\nbudget agreement was getting the full $24 billion for children and, as\nyou recall, making sure that the child tax credit went to lower-income\nworkers. So when we were fighting for the balanced budget, we certainly\nhad in mind the fact that we were going to make sure that every income\ngroup was benefiting from the plan or we wouldn't have gone along with\nthe agreement.\nRight now, we are going through, obviously, our next budget\nprocess and we will go through what our new initiatives are and I think\nthere were most certainly be efforts in the area of children to do more\nin this account. But a lot of it is making sure the things we've set\nwork. You have $24 billion for children's health care; we want to make\nsure that's implemented and works. We have to fight, unfortunately,\nhard every year just to protect the earned income tax credit increases\nwe have. We have a goal of getting to a million kids in Head Start by\nthe year 2002. We've had over a 40-percent increase in Head Start\nfunding since we've been in office. We spend over $1 billion more on\nWIC.\nSo this is something that we fight for every year. When we do our\nbudget every single year, we have things in there for children, even in\na deficit reduction context, that we are fighting hard for. And right\nnow we're fighting very hard for America Reads and for our testing\ninitiative, which we also think are very important to the overall\nbenefit of children and their education.\nQ But, Gene, are you saying that things which are not included in\nthese statistics -- are they going to make dramatic improvements in the\nchild poverty rate? Things that are in the budget that you said aren't\nreflected in these numbers -- are they going to have a dramatic effect?\nMR. SPERLING: First of all, as you said, it has gone down from\n22.7 to 20.5, so there has been improvement. That does not count the\nearned income tax credit, so that would make it lower. Obviously, some\nof the important things are keeping the strength of the economy, getting\nimportant investments for children, making sure that welfare reform is\nimplemented in a way that it works and gets people into the work force\nand parents into the work force so they're supporting -- making more\nmoney and supporting their income, and all the things that we are doing\nin terms of fiscal responsibility, open trade, and investment that we\nthink are important, to a strong economy. A strong economy and a tight\nlabor force helps wage raises and helps families move out of poverty and\ncertainly pulls on the marginal worker -- when the unemployment rate is\ntight, it pulls on the marginal worker into the work force and helps\nraise those incomes.\nAnd just, finally, I'd say, we just had the second half of the\nminimum wage increase take place on September 1st, which now, if you\nlook from the two years before, would help a minimum wage worker by\n$1,800 from the 25 increase to the 515 increase.\nMS. YELLEN: I certainly agree with everything that's on Gene's\nlist. I think those are the things that we can have a positive\ninfluence on that will work to reverse what has been a very disturbing\nlong-term trend. But to expect miracles overnight in that kind of number\nI think would probably be unrealistic. But we're certainly doing a lot,\nand everything that we can to move that number in the right direction.\nMR. SPERLING: Obviously, many of these issues will be discussed\nin the White House Conference on Child Care that will be coming up, and\ncertainly will -- something we'll all be listening to and may very well\ninform some of the budget decisions that we will make in next year's\nbudget.\nQ According to one newspaper, present growth of top 20 is higher\nthan the second and middle and -- That's income differences between the\ntop and upper class has been more big. Are there any problems in the\nUnited States?\nMS. YELLEN: I'm sorry, I didn't --\nQ Sorry. Present growth of top 20 is higher than second, middle\nand -- class. That's different incomes, differences between top and\nupper class as being more big?\nMS. YELLEN: There is in the numbers that Gene passed out, there\nis a slight difference, a slightly higher income growth since 1993 for\nthe top. It doesn't -- I don't think it's particularly large. I think\nwhat's striking about the graph that Gene pointed out is the enormous\ngains for the bottom quintile when viewed over that entire period.\nQ Thank you.\nMR. SPERLING: Thank you.\nEND\n11:43 A.M. EDT"
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