The U.S. Census Bureau reported today that the median income in Massachusetts grew slightly between 2011 and 2012, although it is still 5.4 percent lower than it was before the recession began. Despite this slight increase in median income, the statewide poverty rate did not improve, and more than 1 in 7 Massachusetts children continue to live below the poverty line.
The 5 charts below provide a snapshot of the new information on median income, poverty, child poverty, health insurance coverage for all residents, and health coverage for children.
1) Median Income
- Median household income in Massachusetts grew to $65,339 in 2012. This is a statistically significant increase of $1,167 or 1.8 percent from the 2011 level of $64,172 (adjusted to 2012 dollars).
- For the U.S. as a whole, the ACS data show median household income stood at $51,371 in 2012, which is essentially unchanged from 2011.
- Since 2007 (in the final month of which the nation officially fell into recession), median household income in Massachusetts dropped an inflation-adjusted $3,723 or 5.4 percent. During the same period, U.S. median household income fell $4,818 or 8.6 percent.
- The overall poverty rate in Massachusetts was 11.9 percent in 2012. This does not represent a statistically significant difference from its 2011 level.
- Similarly, the overall U.S. poverty rate did not increase from 2011 to 2012, remaining flat at 15.9 percent.
- Since the start of the recession in 2007, the rate of poverty in Massachusetts has risen from 9.9 to 11.9 percent, a statistically significant increase. Although the rate remained basically level this year and last (after showing a dramatic increase from 2009 to 2010), the fact that the poverty rate sits near 12 percent some three years after the end of the recession demonstrates the weakness of the current recovery.
3) Health Insurance
Massachusetts continues to lead the nation when it comes to health insurance coverage.
In 2012, 96.1 percent of the state’s population was covered by health insurance. This is a statistically significant improvement over last year’s numbers, which estimated coverage at 95.7 percent.
- There are still approximately 240,000 people lacking health insurance throughout the Commonwealth.
4) The Impact on Kids
- Child poverty in the Commonwealth remains unchanged since last year, stuck at 15 percent.
- Slightly more than one out of every seven children in Massachusetts lives in poverty.
- Child poverty has grown since the onset of the recession. The child poverty rate in Massachusetts was 11.6 percent in 2008, the last year before the state’s poverty rates started to reflect the impact of the most recent recession.
Once again, Massachusetts leads the nation in the percent of children with health care coverage, with almost every single child in Massachusetts covered by health insurance.
- In 2012, 98.6 percent of children had health insurance, essentially unchanged from last year’s estimate of 98.3 percent of children with coverage.
- Approximately 20,000 children are still uninsured in the Commonwealth.
Differences between the CPS and the ACS
The Census Bureau’s recent data on household income derive from two main sources: the Current Population Survey (CPS) and the American Community Survey (ACS). The CPS is the older of the two surveysdating back to the 1940sand is therefore a more reliable source for making comparisons over longer periods of time (though, due to sample size constraints, data is best pooled over two or three years to do so). The CPS is also the official source for national level poverty and income data. However, the ACS is based on a larger sample and is thus able to provide information on a state and sub-state basis that does not have to be pooled over multiple years.
Median household income is a statistical measure indicating the exact middle of the range of all household incomes, such that half of all households have incomes below the median and half have incomes above the median. Under the Census Bureau’s methodology, income refers only to before-tax money income and therefore does not include reductions (or increases) in net, take-home income due to tax liabilities (or credits), or the value of non-cash benefits such as Medicaid or food stamps.
To determine the poverty rate the Census Bureau counts all money income earned by a family before taxesin other words, non-cash benefits such as Medicaid and Supplemental Nutrition Assistance Program (SNAP) benefits are excluded, as are tax liabilities and credits. The federal poverty threshold varies depending on the size and composition of the family and is updated each year for inflation. For 2012, the poverty threshold was just under $11,950 for a single person under the age of 65 and just over $23,280 for a family of four (thresholds for individuals and couples over the age of 65 are somewhat lower). The poverty thresholds do not vary by geography and thus do not reflect differences in cost of living among states. The Census Bureau has begun to provide national-level data using an alternate poverty measure that takes into account taxes (including the value of the Earned Income Tax Credit) and non-cash support such as Supplemental Nutrition Assistance Program (SNAP) benefits.
Measuring Health Care Coverage
There are a number of sources for health insurance coverage data, each of which has slightly different characteristics and each of which produces slightly different results. Nevertheless, all of these surveys have shown a sharp drop in the number of uninsured people following passage of the Massachusetts health reform law. The three main surveys are:
Current Population Survey
The Current Population Survey (CPS) is an ongoing survey that focuses on wages and employment. The CPS also includes an Annual Social and Economic Supplement (ASEC), conducted mainly in March of each year, which includes more detailed questions about income, health insurance, and other demographic measures. The ASEC uses a much smaller sample sizeabout 100,000 addresses across the countrythan the ACS, but it has been conducted over a longer period of time. The survey asks about health coverage in the year preceding each March, and has tended to result in under-reporting of health insurance coverage and thus higher reported rates of uninsurance in the past, although CPS has made some adjustments to account for this problem. The CPS data can be used to look at historical trends on the national level and, with some caution, on the state level (for instance it is generally advisable to pool two or three years of data when looking at state-level numbers).
American Community Survey
The American Community Survey (ACS), which is conducted on an ongoing basis, contacts over 3 million households each year and asks questions about a variety of demographic measures, including age, income, employment, health insurance coverage status and type, and racial characteristics. The Census Bureau began conducting the ACS in 2000, and added questions about health insurance coverage in 2008. Because of its large sample size the ACS provides reliable single year data on the state level, as well as other geographical units (e.g., counties) with populations over 65,000, making it a useful source of information when comparing state health insurance coverage rates. However, because health insurance questions have only been asked since 2008 (and the survey methodology was changed in 2009), the ACS data cannot currently be used to analyze historical trends in coverage.
Massachusetts Health Insurance Survey
The Massachusetts Health Insurance Survey (MHIS) began in 1998 and has been conducted annually since 2006. The survey reaches about 5,000 households in Massachusetts and is usually conducted in the spring of each year. Survey results for 2011 are not yet available. In earlier years the survey appeared to under-report the number of people without health insurance coverage. Changes in the survey’s methodology were made in 2008 and data from that and subsequent surveys cannot be compared to earlier survey results.
Note on Statistical Significance
The CPS and ACS data come from surveys of a random sample of households and thus one cannot be certain that the estimates produced by the sample reflect the actual rates for the entire population. Results will vary from one sample to another to a certain extent, depending on sample size and the particular characteristic that is being measured.
When comparing two measuresfor instance, the poverty rate in two different years or two different statesit is important to consider how this sampling variability affects the difference between the two measures. If the difference between the two rates would occur due to sampling variability less than 10 times out of 100, then we can say that we have a 90 percent level of confidence that the difference between the two rates reflects a true difference and is not due to this potential variation. In other words, the chance that the difference between the two estimates is simply the result of random chance is less than 10 percent.
While different levels of confidence (e.g., 95 or 99 percent) can be used to measure significance, the 90 percent level is typically used when analyzing CPS and ACS data, and that is the measure we use here when defining a difference as significant. For more on calculating levels of confidence and testing for significance, see Appendix 4 in the ACS user guide.