The 2018 Poverty, Income, and health coverage results: a tale of three forces.

Jared Bernstein

Jared Bernstein Senior Fellow, Center on Budget and Policy Priorities

This morning, the Census Bureau released new data on health insurance coverage, poverty, and middle-class incomes. While the data are for last year, they shine an important light on key aspects of families’ living standards that we don’t get from the more up-to-date macro-indicators, like GDP and unemployment.

As the economic recovery that began over a decade ago persisted through 2018, poverty once again fell, by half-a-percentage point, from 12.3 percent to 11.8 percent. Other results from the report show that anti-poverty and income support programs lifted millions of people out of poverty, including 27 million through Social Security alone. Though the real median household income—the income of the household right in the middle of the income scale—increased slightly less than 1 percent last year, the increase was not statistically significant. Median earnings of full-time men and women workers both rose significantly, by over 3 percent for each (for reasons discussed below, sometimes earnings rise significantly but income does not).

Health coverage, however, significantly deteriorated last year, as the share of the uninsured rose for the first time since 2009, from 7.9 percent to 8.5 percent. In total, 27.5 million lacked coverage in 2018, an increase of 1.9 million over 2017. This result is partially driven by actions of the Trump administration to undermine the Affordable Care Act (note that Medicaid coverage was down by 0.7 percentage points), and in this regard, it should be taken as a powerful signal of the impact of conservative policy on U.S. health coverage.

Taken together, the poverty, income, and health coverage results tell a tale of three powerful forces: the strong economy, effective anti-poverty programs, and the Trump administration’s ongoing attack on affordable health coverage. A strong labor market is an essential asset for working-age families, and the data are clear that poor people respond to the opportunities associated with a labor market closing in on full employment. Anti-poverty programs are lifting millions of economically vulnerable persons, including seniors and children, out of poverty. But while a strong labor market and a responsive safety net help to solve a lot of problems, the history of both U.S. and other countries shows that it takes national health care policy to ensure families have access to affordable coverage. The ACA was and is playing that role, but efforts to undermine its effectiveness are evident in the Census data.

Poverty, Income, Inequality

The Census provides two measures of poverty: the official poverty measure (OPM) and the Supplement Poverty Measure (SPM). The latter is a more accurate metric as it uses an updated and more realistic income threshold to determine poverty status, and it counts important benefits that the OPM leaves out. While the two measures often track each other, year-to-year, that wasn’t the case last year, as the SPM rose an insignificant one-tenth of a percent, from 13.0 to 13.1 percent, while the OPM fell a significant half-a-percent, from 12.3 to 11.8 percent. Because the SPM has a higher income threshold than the OPM, 4.4 million more people were poor by that more accurate measure.

Because it counts anti-poverty policies that the official measure leaves out, one particularly useful characteristic of the SPM data is that it breaks out the millions of people lifted out of poverty by specific anti-poverty programs. For example, refundable tax credits, such as the Earned Income Tax Credit and the Child Tax Credit lifted about 8 million people out of poverty in 2018; SNAP (food stamps) lifted 3 million more out each, and Social Security was the most powerful poverty reducer, lifting 27 million out of poverty in 2018, 18 million of whom were elderly (65 and older).

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Trump Labor Board Appointees Rule Against Workers Unfairly Labeled Independent Contractors

Mark Gruenberg

Mark Gruenberg Editor, Press Associates Union News

The Trump-named GOP majority on the National Labor Relations Board “celebrated” Labor Day a few days before the actual date – by giving bosses, not workers, another gift-wrapped ruling.

By a 3-1 vote on Aug. 29, over the strong dissent of sole Democrat Lauren McFerran, the majority declared that just because the boss arbitrarily declares workers are “independent contractors” does not mean the boss automatically breaks labor law.

The ruling is important for the nation’s workers, especially when the so-called “gig economy” is growing. Firms in that sector, such as AirBnB and the ride-sharing firms Uber and Lyft, arbitrarily declare their workers “independent contractors.”

When workers are “independent contractors” under labor law, unions can’t organize them. The boss also doesn’t have to pay workers comp, Social Security and Medicare payroll taxes or money to cover unemployment benefits.

If a worker is an “employee” under labor law, the law covers the worker. And that includes the right to organize, as well as Social Security, Medicare, workers’ comp and jobless benefits payments by the firm for all the covered workers.

The board majority used a case involving Jeannie Edge, a driver for Velox Express, Inc., a transporter of medical specimens from Arkansas and western Tennessee to a lab. Velox arbitrarily called all its drivers “independent contractors.”

The drivers complained they were really employees, since Velox controlled everything about the job, except for ordering them to buy their own vehicles. Edge spoke for the group and Velox fired her in retaliation three years ago.

The board used the case to discuss the whole independent contractor dodge. The AFL-CIO, the Teamsters, the Plumbers and Pipefitters and the Carpenters all filed briefs backing Edge. So did the National Employment Law Project. The Chamber of Commerce, other corporate lobbies and one right-wing ideological group sided with Velox.

The NLRB’s administrative law judge found Velox broke the law by arbitrarily classifying all the drivers as contractors and by firing Edge. The judge ordered her reinstated with back pay and ordered Velox to post a we-won’t-do-it-again notice. The board majority agreed with the judge. It said the drivers are really employees – but that the arbitrary decision to call them contractors does not, by itself, automatically break labor law. 

“The board has never previously found an employer’s misclassification of its employees as independent contractors standing alone, is a per se violation of the (National Labor Relations) Act.” the board’s GOP majority, led by Chairman John Ring, said. “An employer does not violate the act by misclassifying its employees as independent contractors.”

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California Protects Precariat Workers

From the AFL-CIO

In a historic win for California’s workers, the California Legislature approved a bill Sept. 13 that makes the misclassification of employees as independent contractors more difficult.

Sponsored by the California Labor Federation, Assembly Bill 5 codifies and expands on a 2018 California Supreme Court decision.

The bill also will help curb the rampant exploitation of workers by unscrupulous employers and give California’s working people the basic rights and protections we all deserve. Gov. Gavin Newsom is expected to sign the bill into law.

 “The time is up for unscrupulous employers who claim their workers are ‘independent’ in order to cut corners on costs,”  California Assembly member Lorena Gonzalez said about A.B. 5

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Congress to Examine the Health and Safety Risks of China’s “Grip” on Medicine

Elizabeth Brotherton-Bunch

Elizabeth Brotherton-Bunch Digital Media Director, Alliance for American Manufacturing

A little over a year ago, AAM President Scott Paul chatted with health care expert Rosemary Gibson for an episode of The Manufacturing Report podcast. Gibson had just co-authored a new book examining an overlooked part of America’s trade relationship with China.

The book’s title says it all. In “China Rx: Exposing the Risks of America’s Dependence on China for Medicine,” Gibson and co-author Janardan Prasad Singh outline how China now dominates pharmaceutical manufacturing — and why that is such a big problem for the United States.

Along with making a significant amount of medication, China also has a virtual monopoly on many of the essential ingredients that go into the pharmaceuticals that Americans depend on, including everything from over-the-counter vitamins to cancer meds to almost every antibiotic and blood pressure medication.

China’s dominance of the pharmaceutical supply chain means it has the power to cut off access to many of the medications Americans need to, um, live.

Think tariffs on cotton sweaters and bed linens are bad? Think about what would happen If China decided to cut off our medicine.

Pharmacy shelves would sit empty. Hospitals would close. People would die.

“Children and adults with cancer will suffer without vital medicines,” Gibson recently told the U.S.-China Economic and Security Review Commission. “For people on kidney dialysis, treatment would cease, a veritable death sentence.”

It’s all very scary stuff. Keep you awake at night kind of stuff.

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