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Poverty report is a grim reminder of hard times in 2009

Recession leads to record high poverty, uninsured rates

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By Ken McCall, Staff Writer 10:45 PM Thursday, September 16, 2010

In a nation and state obsessed with the economy, the Census Bureau income and poverty report released Thursday was a grim reminder of just how bad things were last year.

Health insurance coverage, poverty and median household income all went in the wrong direction, the bureau’s Current Population Survey found.

The uninsured in Ohio grew by 2 percentage points. The two-year average for 2008-2009 reached 12.9 percent, according to the report. (The Census Bureau recommends using two-year averages at the state level, because the survey sample in a state is too small in a single year.)

Only 12 states had significantly higher rates of uninsured.

Median household income in Ohio declined by $3,493 in 2008-09. The median income for state households dropped from $49,811 in 2006-2007 to $46,318.

Ohio’s poverty rate increased by 1 percent over the same time frame, to reach 13.5 percent. That increase, though, was not larger than the survey’s margin of error.

The census numbers were another reminder of the “severity of the Great Recession,” said Heidi Shierholz, an economist with the Washington, D.C.-based Economic Policy Institute.

“The unemployment rate increased from 5.8 percent in 2008 to 9.3 percent in 2009,” she said. “That was the biggest increase in the unemployment rate on record since World War II.”

The numbers reflect “the depths of the recession,” she said, and mostly do not reflect the effects of federal stimulus spending.

The American Recovery and Reinvestment Act passed in February 2009 and was just ramping up by the end of the year. Most of the stimulus spending occurred this year and is not in the data, she said.

David Johnson, chief of housing and household economic statistics for the Census Bureau, said the extended unemployment insurance contained in the stimulus package kept an estimated 3.3 million people out of poverty in 2009.

In addition, Johnson said, an increase in Social Security actually caused a decline in the poverty rate (from 9.7 percent in 2008 to 8.9 percent in 2009) for people older than 65.

Analysts also said the drop in health insurance coverage — which is mostly provided by employers — was primarily due to the drop in employment.

Close to 1.5 million Ohioans were estimated to be without health insurance in the 2008-2009 period, according to the Census Bureau. The bureau’s figures showed that while government-sponsored health care — such as Medicare, Medicaid, and coverage for indigent children and the military — increased in 2009, employer-based and private insurance decreased.

Emily Campbell, a public policy fellow at the Cleveland-based Center for Community Solution, a left-leaning research group, said the drop in employer-sponsored coverage not only reflects layoffs, but also workers going from full-time to part-time and losing their coverage.

“It shows why federal health reform is so very important to people here in our state,” Campell said. “We are expecting that 32 million more people nationwide will gain coverage through Medicaid or health insurance exchanges.”

But Mark Mayer, president of the right-leaning Buckeye Institute, doesn’t believe it.

“The Obamacare early results show it’s driving health care costs even higher, which won’t mean more coverage,” Mayer said.

“It will likely drive more people to Medicaid, which is what we least can afford,” he said.

Mayer noted that the state had about twice the percent income loss as the nation and four times the gain in uninsured.

“Once again,” he said, “Ohio is well behind the U.S. when it comes to key measures of prosperity.”

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