The U.S. Census Bureau released its annual report, Income, Poverty, and Health Insurance Coverage in the United States 2006 on Aug. 28. The report, which covers the most recent Current Population Survey (CPS) data, showed slight overall improvement in income and poverty, but continued declining rates of health insurance coverage. The headline numbers — a 0.7 percent increase in median household income and a 0.3 percent decline in poverty — are undermined, however, by the underlying story that middle- and low-income working Americans are not seeing substantial gains from the current economy. Upon release of the Census data, President Bush used the veneer of apparent improved living standards to tout "low" taxes and "in check" government spending. He also erroneously claimed the Census report "confirms that more of our citizens are doing better in this economy, with continued rising incomes and more Americans pulling themselves out of poverty." His claims, however, are not supported by even a cursory examination of the data. For a third year in a row, men and women both saw their annual earnings decrease. From 2005 to 2006, median income for men declined from $42,743 to $42,261; women saw their income fall from $32,903 to $32,515. Therefore, the $356 rise in median household income (from $47,845 to $48,201) is attributed not to robust economic gains accruing to the middle-class, but rather to the fact that more members of the average household are working. The trend in income is even more disturbing when income levels in 2006, five years into an economic recovery, are compared to income levels in 2001, when the last recession bottomed out. An analysis by the Center on Budget and Policy Priorities shows median, working-age household income was $1,336 lower in 2006 than it was in 2001. The analysis also reports those same families are $2,375 off their peak income from 2000, immediately prior to the most recent recession. Perhaps the most troubling statistic uncovered in the Census data is that the trend in poverty follows that of income. An apparent improvement over the prior year's measurement of poverty is strongly tempered when put into the context of past economic performance. During worst part of the mild 2001 recession, 32,907,000 people were poor, a poverty rate of 11.7 percent. In 2006, well into the recovery, the poverty rate was 12.3 percent (a 0.6 percent increase) with over 3 million more people living in poverty. And, according to the CBPP analysis:

The findings that poverty remains higher, and median income for working-age households lower, than in 2001 when the last recession hit bottom, are the latest evidence that the current economic recovery has been exceptionally uneven and that an unusually small share of the gains has reached low- and middle-income families.

Table 2: Key Changes in Poverty, Income, and Health Insurance   2005 to 2006 2001 to 2006 Poverty Rate -0.3 percentage points* +0.6 percentage points* Number Poor -490,000 +3.6 million* Real Median Household Income +$356* -$110 Real Median income of non-elderly households +$725* -$1,336* Percentage of Americans without Health Insurance +0.5 percentage points* +1.7 percentage points* Number without Health Insurance +2.2 million* +7.2 million* *  denotes a statistically significant change (source Center on Budget and Policy Priorities) More troubling than the income and poverty data, however, was Census data on health insurance coverage. The number of Americans with health insurance continued its six-year decline as 46,995,000 Americans went without coverage in 2006. Fortunately, there is an opposite trend in the number of people covered by government health care. For the ninth year in a row, coverage of individuals by Medicare, Medicaid, military health care, or other government health care programs, like the State Children's Health Insurance Program, has increased. Private health insurers continued to cover a smaller portion of the population, falling from 60.2 percent in 2005 to 59.7 percent in 2006. This year's CPS data report is far from good news, and for many Americans, the data show an economy in which workers continue to fall behind. The rise in household income from 2005 to 2006, when viewed in the context of recent economic history, is rather disappointing as the median household income has yet to catch up with that of the trough of the 2001 recession. The poverty data, marking the second year of a reverse in the upward trend in the poverty rate, is a positive indicator, but both the poverty rate and the number of poor people are still above their respective levels of the lowest point of the 2001 recession. Meanwhile, gains in household income are mitigated by declining rates of health insurance coverage. Declines in wages are exacerbated as families lose health insurance and are forced to spend more of their paychecks on health care. Although the Census report shows improvements in household income and the poverty rate, it marks only the beginning of a reversal of troublesome trends and an economy that has left too many working families behind.