New Orleans had the nation’s highest official poverty rate among the 50 largest metro areas in 2017, according to Census data released Thursday. Incredibly, the city’s 18.6 percent poverty rate actually brings down the average poverty rate for the state. With 19.7 percent of its residents living in poverty, Louisiana is tied once again for the second highest poverty rate in the country, behind only Mississippi. LBP Executive Director Jan Moller spoke with Route Fifty’s Bill Lucia about what these numbers show about the state:
“Louisiana has struggled with poverty for a long time and continues to. [The state] remains a very good place if you have a college degree, or if you’re in oil and gas, or if you’re kind of in the economic elite. But it remains a very tough place for a very significant percentage of our population.”
The distance between the incomes of wealthy people in the state and those of people earning low incomes was also greater in Louisiana than the national average. While income inequality is greater in Louisiana than in the average U.S. State, the nation’s wealthiest residents as a whole continue to take home larger slices of the economic pie.
While the economy is thriving right now according to a number of metrics, including a low unemployment rate that is around 3.9 percent, not everyone is reaping the same benefits. For instance, analysis from the left-leaning Economic Policy Institute showed that cumulative gains in annual household income were about 9 percent between 2000 and 2017 for the top five percent of earners, a group that included those earning $237,034 last year. In contrast, they found that earners in the median income group saw income decline by about 0.8 percent over that same time period. “Most families have just barely made up for lost ground over the past decade,” Elise Gould, a senior economist with the institute said during a call with reporters. Valerie Wilson, director of the Program on Race, Ethnicity and the Economy for EPI noted that “income growth has stalled among black households” and was essentially flat last year. Hispanic household income did not follow the same trend and grew by about 3.7 percent.
Analysis from the Center for Law and Social Policy, shows that this gap in earnings hits kids and young adults the hardest.
The Census report shows particularly grim results for children and young adults—America’s next generation of students and workers. The poverty rate for children remains the highest for all age groups at about one in six children (17.5 percent), with no change from 2016, and significantly contrasting with major progress from 2014 to 2016. For young adults, ages 18-24, the poverty rate also remained flat at 16.1 percent after a steep decrease in the previous two years and remains higher than average poverty rates for all. The profound consequences of poverty, especially for young children, are well documented and include negative outcomes during childhood and in education, employment, and earnings into adulthood.
In 2016, nearly one in three children in Louisiana lived in poverty, including half of all African-American children.
Medicaid expansion is working for Louisiana
While the news about poverty remains grim, the Census data released this week showed real improvement in a key measure of our state’s wellbeing: the health insurance coverage rate. As LBP Policy Director Jeanie Donovan explains, Louisiana’s decision to expand Medicaid coverage to low-income adults has brought the state’s uninsured rate to a record low and below the national average:
The good news in the latest Census data underscores the importance of the state’s investment in the Louisiana Medicaid program, and how critical it is to maintain consumer protections established in the federal health care law. Having health insurance and access to health care is an important factor in keeping Louisiana families healthy and financially secure, which is why the continued drop in the share of Louisianans without health insurance is a welcome trend. The state’s uninsured rate is 8.4 percent, down from 10.3 percent in 2016 and 16.6 percent in 2013, the year before the Affordable Care Act (ACA) took effect. That’s a 49.4 percent drop in the rate of uninsured in just five years.
Louisiana’s gains come at a time when other states – particularly those that have rejected Medicaid expansion – are headed in the opposite direction. Robert Greenstein of the Center on Budget and Policy Priorities points a finger at the Trump administration for erecting obstacles to Affordable Care Act implementation:
The stalled progress in reducing the number of uninsured is particularly noteworthy, marking a change from the historic coverage gains of recent years after the Affordable Care Act (ACA) was implemented. Moreover, it comes in a year when the share of Americans working full time rose, which should itself cause coverage rates to rise, and when continued strong outreach efforts to bring more of the eligible people into Medicaid and the marketplaces could have boosted coverage further. The stagnation in health coverage likely reflects, at least in part, Trump Administration actions throughout 2017 to place obstacles in the way of successful ACA implementation. Some 8.8 percent of Americans (28.5 million people) lacked health coverage last year, unchanged from 2016.
Progressive tax reform could reduce inequality
While the Tax Cuts and Jobs Act, passed last year, offered huge tax cuts to rich people, another plan proposed in 2017 shows a way forward for tax policy that would help Americans earning low incomes. The Grow American Incomes Now (GAIN) Act, introduced by U.S. Sen. Sherrod Brown and Rep. Ro Khanna, would substantially increase the Earned Income Tax Credit, leaving more money for working families to meet their basic needs and save for the future and would ensure enough revenue to fund the programs that help families weather tough times. The Institute on Taxation and Economic Policy describes how this would work:
The contrast between the impact of the TCJA and the GAIN Act is stark. Ninety-four percent of the benefits of the GAIN Act would go to the bottom 60 percent of taxpayers. In contrast, they receive 13 percent of the benefits under the TCJA while the top 5 percent of taxpayers receive 53 percent of the benefits. Under the GAIN Act, the very richest Americans, who continue to accrue a greater share of the nation’s wealth as it is, would receive no additional tax cuts. In dollar terms, the poorest 20 percent would receive an average break of $1,620 under the GAIN Act versus the $80 on average that they receive this year from the TCJA. The Top 1 percent receive an average tax break of $52,310 under the TCJA, whereas they would receive no break under the GAIN Act.
12,800 migrant children still in detention
Much attention has focused on family separations at the border following the Trump administration’s implementation of a zero-tolerance migration policy last year. Meanwhile, a different rule change has kept thousands of children in federal custody and away from their families in the U.S. Reporting by the New York Times reveals a dramatic increase in the number of children held by American authorities:
Population levels at federally contracted shelters for migrant children have quietly shot up more than fivefold since last summer, according to data obtained by The New York Times, reaching a total of 12,800 this month. There were 2,400 such children in custody in May 2017. The huge increases, which have placed the federal shelter system near capacity, are due not to an influx of children entering the country, but a reduction in the number being released to live with families and other sponsors, the data collected by the Department of Health and Human Services suggests.
Fear created by a new Trump administration policy explains the decrease in children being released to families and other sponsors already living in the United States:
The delays in vetting sponsors relate, in part, to changes the Trump administration has made in how the process works. In June, the authorities announced that potential sponsors and other adult members of their households would have to submit fingerprints, and that the data would be shared with immigration authorities. Traditionally, most sponsors have been undocumented themselves, and therefore are wary of risking deportation by stepping forward to claim sponsorship of a child. Even those who are willing to become sponsors have had to wait months to be fingerprinted and otherwise reviewed.
Evidence from the border suggests the administration’s policies, while exposing thousands of children to traumatic separations from their families, have done little to deter migration. Many immigrants arrive at the southern border in flight from deteriorating conditions in Central America.
Number of the Day:
899,039 – Number of Louisiana residents living below the poverty line in 2017, nearly one in five people in the state (19.7%). (Source: American Community Survey)