Drop In U.S. Poverty Rate Largely Attributable To Improved Economic Outlook For Latinos

Shoppers in Miami, Florida. (AP Photo/Felipe Dana)

Bringing a bit of good news to American households, especially Latino homes, the poverty rate in the United States has dropped for the first time since 2006, with Hispanics being the ethnic group that experienced the most significant change in income.

U.S. Census figures showed that among all major racial and ethnic groups, only Latinos experienced a significant change in the poverty rate – falling about two percentage points to 23.5 percent last year – with the number of Latinos living in poverty falling to 12.7 million, a drop of 870,000.

Charles T. Nelson, a Census Bureau official told the New York Times that the employment rate and income of parents with dependent children rose dramatically. Hispanics in the U.S. skew younger and have more children than the national average.

The poverty rate for non-Hispanic whites was 9.6 percent in 2013, and there were 18.7 million non-Hispanic whites living in poverty. The 2013 poverty rate was 27.2 percent for blacks and 10.5 percent for Asians, and there were 11 million blacks and 1.8 million Asians in poverty.

The median household income for Latinos also showed positive signs as it rose 3.5 percent to $40,960, marking the first such increase for the demographic since 2000. Conversely, incomes in households of non-Hispanic whites, blacks and Asian households showed no significant change in 2013.

The poverty rate and median income for Latinos, however, are still disproportionate to the overall figures across the U.S.

The Census Bureau said that the overall poverty rate in 2013 was 14.5 percent, down from 15 percent in 2012.

In a recent attempt to measure people's health insurance coverage levels better, the Census Bureau adopted a new set of questions for respondents. As a result, the report revealed, the bureau estimated that 42 million people - or some 13.4 percent of the population - was uninsured during all of 2013.

The decrease in the poverty rate was attributed to the growth in year-round employment by 2.8 million jobs in the United States, government officials said. The median household income for families was $65,587 in 2013, and $31,178 non-family households, which also was not statistically different from the 2012 levels.

White House officials cheered the positive information in the census release.

"There is reason to believe that this progress has continued into 2014, as the labor market has strengthened and millions have gained health insurance coverage," said Jason Furman and Betsey Stevenson, members of the White House Council of Economic Advisers. "At the same time, the data also offer a clear illustration of the large amount of work that remains to strengthen the middle class in the wake of the worst recession since the Great Depression."

Officials also say that the number of children under 18 in poverty declined from the previous year for the first time since 2000.

The number of children in poverty dropped from 21.8 percent in 2012 to 19.9 percent in 2013, and the number of children in poverty also declined from 16.1 million to 14.7 million.

The official poverty level is based on a government calculation that includes only income before tax deductions. It excludes capital gains or accumulated wealth, such as home ownership. As a result, the rate takes into account the effects of some government benefits, such as unemployment compensation. It does not factor in noncash government aid such as tax credits and food stamps.

A family of four is considered to be living in poverty if it brings in less than $23,830 in a year. A person is considered to be living in poverty if he or she makes less than $11,890.

Officials also said the percentage of people without health insurance coverage for the entire 2013 calendar year was 13.4 percent, which equaled 42 million people. Census officials said those numbers cannot be compared with previous year numbers because they changed the way they asked the question on their surveys.

Because the main coverage expansion under the Affordable Care Act didn't take effect until 2014, the latest census numbers offer a baseline number of uninsured by which increased coverage and effectiveness of the law will be measured.

Based on reporting by The Associated Press.