AGE OF HEAD OF HOUSEHOLD Source: Unpublished data from the Current Population Survey, The differences in the income distributions of single elderly persons compared to those of elderly couples imply that marital status change, particularly due to the death of a spouse, is an important factor contributing to age cohort differences in income among the elderly. More than half of the population aged 65-74 is married, while nearly three-quarters of those aged 85 and older are widowed. RACE AND INCOME MINORITY ELDERLY HAVE LOW MONEY INCOMES Black and Hispanic elderly have substantially lower money incomes than their white counterparts. As shown in table 2-5, in 1987, the median income of black males age 65-plus ($7,167) was 58 percent of white males ($12,398), and that of Hispanic males age 65 plus ($6,803) was 55 percent of white males. Black and Hispanic women also had lower median incomes than their white counterparts. The median income of black women age 65-plus ($4,494) was 64 percent of white women ($7,055) and that of Hispanic women of the same ages ($4,526) was 64 percent of white females. TABLE 2-5.-MEDIAN INCOME OF PERSONS AGE 65 AND OLDER BY AGE, RACE, HISPANIC ORIGIN, Source: Current Population Survey, March 1988. Data prepared by the Congressional Research Service. As shown in table 2-6, poverty rates are much higher among minority elderly than among white elderly. In 1988, the poverty rate among black elderly (33.2 percent) was nearly triple, and among Hispanic elderly (22.4 percent), more than double the poverty rate among white elderly (10 percent). Poverty rates are higher for persons who are not living in families (unrelated individuals). The highest poverty rates are exhibited by minority women not living in families. In 1988, over half of elderly, black females not living in families (56.5 percent) and older Hispanic female unrelated individuals (53.6 percent) had incomes below the poverty level (table 2-6). Although the information is presented in slightly different formats, the 1987 data displayed in table 2-6 and chart 2-10 indicate the economic disparities among various elderly subpopulations according to sex, race, and family relationships. TABLE 2-6.-NUMBER AND PERCENT OF ELDERLY BELOW POVERTY BY RACE, HISPANIC ORIGIN, SEX, AND LIVING ARRANGEMENT: 1987 Source: Current Population Survey, March 1988. Data prepared by the Congressional Research Service. Chart 2-10 MEDIAN INCOME OF ELDERLY MALES AND Source: Current Population Survey, March, 1988. Data prepared by the Congressional Research Service SOURCES OF INCOME, RESIDENCE, EDUCATION, AND MULTIPLE FACTORS PRODUCE VERY HIGH POVERTY RATES As noted above, the elderly population as a whole has a higher poverty rate than the balance of the adult population, but some subgroups of this population have even higher poverty rates. The subgroups that have been growing most rapidly in numberwomen, minorities, and those who live alone-have poverty rates above the average for all older people. These subgroups represent 7 of every 10 noninstitutionalized older people but 9 of every 10 elderly poor persons. The oldest of the old also have poverty rates well above the average for the elderly. Other groups with high poverty rates within the older population include people who did not work in the previous year, residents of nonmetropolitan areas or of poverty areas in large cities, widows, people with little formal education, the ill or disabled, and people who rely on Social Security as their sole source of income (chart 211). People with several of these characteristics have an even greater chance of being poor. For example, over half (55 percent) of blacks who did not work in 1987 and reported that they were not working because of illness or disability reported incomes below the poverty level. Furthermore, nearly two of every three black women (64 percent) who lived alone and were 72 years of age or older were poor. Poverty is also more likely to be long-term among the elderly than among the general population. Studies on long-term family income trends conducted by the Institute for Social Research at the University of Michigan suggest that the greater permanency of poverty experienced by older Americans as compared to the rest of the population exists because the elderly poor have limited opportunities to escape poverty through the two most common means—a decent job or marriage.3 Chart 2-11 PERCENT OF ELDERLY BELOW THE POVERTY Social Security is the only source of income. Source: Current Population Reports, Series P-60, No. 161. Unpublished data from the March 1988 Current Population 3 Duncan, Greg J. Years of Poverty, Years of Plenty: The Changing Economic Fortunes of American Workers and Families. Institute for Social Research, University of Michigan (1984). TRENDS IN INCOME AND POVERTY: 1960-74 MOST OF THE RELATIVE GAINS IN INCOME FOR THE ELDERLY WERE ACCOMPLISHED BETWEEN 1960 and 1974 In 1960 one in every three older Americans was poor-a rate of poverty twice that of nonelderly adults. During the 1960's and early 1970's, substantial gains occurred in the average income of the elderly due to a general increase in the standard of living and specific improvements in Social Security and employer-sponsored pension benefits. Those retiring during the period also increasingly benefited from lengthening periods of coverage under Social Security and pension plans. The most noticeable gains in the average income of the elderly came as a result of benefit increases enacted in Social Security between 1969 and 1972. Legislated cost-of-living increases from 1968 to 1971 raised benefits by 43 percent while prices increased by only 27 percent. The 1972 Social Security amendments mandated another 20-percent increase in benefits. The resulting improvements in the economic status of the elderly was significant. The poverty rate among those 65 and older was cut in half, declining from 28.5 percent in 1966 to 14.6 percent in 1974. During this period, the poverty rate among nonelderly adults declined less substantially from 10.6 percent in 1966 to 8.5 percent in 1974 (chart 2-12 and table 2-7). Source: Congressional Research Service. 1985-1987 data (12.2) (10.8) |