American Consumers Newsletter

by Cheryl Russell, Editorial Director, New Strategist Press
August 2007

Household Income Up, Earnings Down

1. Hot Trends, Part 1: HOUSEHOLD INCOME UP, EARNINGS DOWN
2. Hot Trends, Part 2: DECLINE IN HEALTH INSURANCE COVERAGE
3. Hot Trends, Part 3: THE POVERTY RATE IS DOWN
4. Books from New Strategist: WHO HAS MONEY AND HOW THEY SPEND IT

 

1. HOT TRENDS, PART 1

Household Income Is Up, Earnings Are Down

This morning the Census Bureau released the latest report on the finances of American households–the results of the Current Population Survey’s Annual Social and Economic Supplement. Taken every March, the Census Bureau releases the survey’s findings at this time each year, tracking income, health insurance, and poverty trends. The findings might not attract as much media attention as the stock market’s ups and downs, but they are probably a more important indicator of the health of the economy.

And it is not looking good. This year’s results are disturbing. To find the trouble spots, you have to look beyond the headlines. Here is our analysis of the numbers.

Household income is up. Median household income in 2006 stood at $48,201, a 0.7 percent increase since 2005 after adjusting for inflation. This sounds good until you consider the following: The 2006 median is still 2.1 percent below the peak reached in 1999, after adjusting for inflation.

The number of households with incomes of $100,000 or more is at a record high. The share of households with six-figure incomes reached 19.1 percent in 2006. This sounds promising, but here’s the hitch: Workers are losing ground. Household incomes are growing only because more people are working full-time. In fact, earnings are falling for American workers. The $42,261 median earnings of men working full-time in 2006 were 1.1 percent less than in 2005, after adjusting for inflation. Men’s earnings today are 5 percent below their peak, reached decades ago in 1978. Women with full-time jobs are also losing ground. Their median earnings of $32,515 in 2006 were also 1 percent less than in 2005, after adjusting for inflation.

How could household incomes grow as earnings fall? This seeming contradiction is explained by the fact that the average household has more earners than ever before. Between 2005 and 2006, the number of households grew by 1.6 million, but the number of full-time workers expanded by nearly 3 million. Household incomes are rising because Americans are working harder to keep up with the rising cost of living.

By Cheryl Russell, editorial director, New Strategist Publications
If you have any questions or comments about the above findings, e-mail New Strategist at mailto:demographics@newstrategist.com

2. HOT TRENDS, PART 2

Health Insurance Coverage Has Declined

There is more bad news emerging from the 2007 Current Population Survey results. The percentage of people without health insurance climbed to 15.8 percent in 2006, up from 15.3 percent in 2005. The number of people without health insurance increased to 47 million, an increase of 2 million during the past year.

What explains the growing proportion of Americans without health insurance? Behind the increase is the loss of private, employment-based coverage, the foundation of our health insurance system. Only 59.7 percent of the population had employment-based health insurance in 2006, down from 64 percent a few years ago. Only 9 percent of Americans privately purchase health insurance, an all-time low. Medicaid (the government’s health insurance program for the poor) covers 13 percent of the population, and Medicare (the government’s health insurance program for the elderly) covers 14 percent.

The percentage of people without health insurance ranges from a low of 11 percent among non-Hispanic whites to a high of 34 percent among Hispanics. Among children under age 18, the percentage without health insurance climbed from 10.9 to 11.7 percent between 2005 and 2006. Perhaps most disturbing, the percentage of people aged 55 to 64 who do not have health insurance climbed to 12.7 percent in 2006. In this age group, health problems not only become more frequent, but also more costly.

The percentage of Americans without health insurance grew in every household income group, with middle-income households experiencing the biggest increase. Fourteen percent of Americans with household incomes between $50,000 and $74,999 do not have health insurance.

By Cheryl Russell, editorial director, New Strategist Publications
If you have any questions or comments about the above findings, e-mail New Strategist at mailto:demographics@newstrategist.com

3. HOT TRENDS, PART 3

The Poverty Rate is Down

There is some good news to be found in the numbers released today: The nation’s poverty rate fell from 12.6 percent in 2005 to 12.3 percent in 2006. Today’s rate remains higher than the low of 11.3 percent reached in 2000, but the trend is in the right direction.

The poverty rate ranges from a low of 9.4 percent among the elderly to a high of 17.4 percent among children under age 18. The poverty rate of the elderly has been lower than that of children since 1974.

Non-Hispanic whites are least likely to be poor. In 2006, only 8.2 percent had incomes below the poverty level (which was $20,444 for a family of four). Blacks are most likely to be poor, with a poverty rate of 24.2 percent. The black poverty rate is much lower than it used to be. Before 1995, more than 30 percent of blacks lived in poverty. The Hispanic poverty rate of 20.6 percent is slightly below the black rate and the lowest on record since the Census Bureau first collected statistics on Hispanics in 1972. Among Asians, 10.3 percent are poor.

The poverty rate has declined for the same reason median household income has grown. More people are working full-time. In 2006, only 2.7 percent of people with full-time jobs lived in poverty.

 

4. Books from New Strategist

Remember-we do the work for you

The sixth edition of American Incomes: Demographics of Who Has Money explores and explains the economic status of Americans and includes an analysis of hard-to-get discretionary income figures, produced by New Strategists statisticians specifically for this book. The first edition of American Incomes was selected as a Best Reference Source by Library Journal. (89.95; ISBN 978-1-933588-26-1)

Best Customers: Demographics of Consumer Demand, 4th edition, reveals the best customers for hundreds of products and services ranging from alcoholic beverages to gasoline, bedroom linens, and cell phone service. It identifies which households spend the most on a product or service and which control the largest share of spending. ($89.95; ISBN 978-1-933588-06-3)

The 11th edition of the annual Household Spending: Who Spends How Much on What gives you detailed analyses of consumer spending on hundreds of products and services by the demographics that count–age, income, household type, region of residence, race and Hispanic origin, and education. The book begins with an overview chapter, then goes on to examine spending on apparel, entertainment, financial products and services, food and beverages, gifts, health care, household operations, shelter and utilities, transportation, personal care, reading, education, and tobacco. ($94.95; ISBN 978-1-933588-05-6)

The Who’s Buying Series, which is based on the 11th edition of Household Spending, gives you even more demographic detail about how much Americans spend by the demographics that count–age, income, household type, race and Hispanic origin, region of residence, and education. To round out the spending picture, you also get “who are the best customers” analyses of the data. Get the entire 14-volume series (ISBN 978-1-933588-25-4) for $750, less an extra 15%, or just get the title you need:

  • Who’s Buying Apparel, 2nd ed. ($59.95; ISBN 1-978-933588-08-7)
  • Who’s Buying Alcoholic and Nonalcoholic Beverages, 3rd ed. ($59.95; ISBN 1-978-933588-11-7)
  • Who’s Buying Entertainment, 3rd ed. ($59.95; ISBN 1-978-933588-12-4)
  • Who’s Buying Groceries, 4th ed. ($59.95; ISBN 1-978-933588-13-1)
  • Who’s Buying Health Care, 3rd ed. ($49.95; ISBN 1-978-933588-14-8)
  • Who’s Buying Household Furnishings, Services, and Supplies, 4th ed. ($59.95; ISBN 1-978-933588-15-5)
  • Who’s Buying Information, 3rd ed. ($59.95; ISBN 1-978-933588-08-7)
  • Who’s Buying for Pets, 4th ed. ($49.95; ISBN 1-978-933588-17-9)
  • Who’s Buying by Race and Hispanic Origin, 2nd ed. ($59.95; ISBN 1-978-933588-18-6)
  • Who’s Buying at Restaurants and Carry-Outs, 4th ed. ($49.95; ISBN 1-978-933588-19-3)
  • Who’s Buying Transportation, 3rd ed. ($59.95; ISBN 1-978-933588-20-9)
  • Who’s Buying for Travel, 3rd ed. ($49.95; ISBN 1-978-933588-21-6)
  • Who’s Buying: Executive Summary of Household Spending, 2nd ed. ($59.95; ISBN 1-978-933588-22-3)
  • Who’s Buying by Age ($59.95; ISBN 978-1-933588-04-9)

You can order a hard copy or instant-delivery pdf version of every title at http://www.newstrategist.com, where you can also see tables of contents and sample pages. Or call toll free 800/848-0842 (or 607/273-0913), fax your order to 607/277-5009, or mail your order to New Strategist Publications, P.O. Box 242, Ithaca, NY 14851.Earn a 15% discount by ordering four or more titles.