Wednesday, October 29, 2008

Who Needs Social Security?

Percentage of people aged 65 or older who receive at least half their income from Social Security: 68.

Source: Congressional Research Service, Income and Poverty Among Older Americans in 2007

Eating Our Young

Percent change in median weekly earnings of full-time wage and salary workers, 2000 to 2007 (in 2007 dollars)

Men aged 20 to 24: -15.9
Men aged 25 to 34: -12.5
Men aged 35 to 44: -5.7
Men aged 45 to 54: +1.1
Men aged 55 to 64: +12.4
Men aged 65 or older: +17.9

Source: Bureau of Labor Statistics, Highlights of Women's Earnings

Wednesday, October 22, 2008

Physician Visits Decline

This is news: The number of times Americans went to the doctor fell in 2006, a surprising reversal of a long-term trend--especially considering the aging of the population. According to the National Center for Health Statistics, physician visits fell from 964 million in 2005 to 902 million in 2006 (the latest data available)--a 6 percent decline.

The physician visit rate, or the number of visits per 100 persons per year, fell by an even larger 7 percent between 2005 and 2006--from 331.0 to 306.6.

Because of the decline in physician visits, doctors wrote fewer prescriptions--1.9 billion in 2006, down from 2.0 billion in 2005. The percentage of visits in which the doctor provided a prescription did not change, at 71 percent.

Americans are tightening their belts, and doctors and pharmaceutical companies are feeling the pinch.

Source: National Ambulatory Medical Care Survey: 2006 Summary

Monday, October 13, 2008

Don't Blame Main Street

Americans are standing with their mouths agape as the stock market lurches. They lie awake at night worrying about what the future holds for their jobs, their families, and their communities. Who is to blame for this unfolding financial crisis? The finger of blame is pointing in many directions, but one place that does not deserve the blame is Main Street.

Just in time to provide some perspective, the Census Bureau has released the latest American Housing Survey, with data collected only a few months ago in 2007. You can't get much more current than that. And what do the 2007 numbers tell us? They tell us that the average American has been betrayed by financial institutions that should have known better.

No doubt you have heard many a pundit exclaim--in print and on TV--that Americans did this to themselves. We bought houses we could not afford, we used our homes as ATM machines, and we have fallen so deeply in debt that millions of us face foreclosure. Our bad behavior has brought the nation's financial institutions to their knees.

Just because newspapers and television say so does not make it true. In fact, the average American has been careful with his money. But the institutions in which we entrusted our dollars gambled them away.

The 2007 American Housing Survey provides the evidence.

First, let's take a look at mortgages. In 2007, the 51 million American homeowners with mortgages remained well above water. They owed a modest median of $100,904 on their homes--just 54 percent of their home's value. This statistic has not changed much in years--it was 55 percent 10 years ago in 1997. Granted, home values have dropped since 2007 and are likely to fall even more. Still, for most homeowners a substantial cushion remains. Only 3 percent of homeowners owe more than their house is worth. The great majority of homeowners with mortgages have 30-year fixed-rate loans carrying a median interest rate of 6.4 percent. Things on Main Street appear to be in order.

Second, let's take a look at home equity loans. The way it is reported, you would think everyone has a home equity loan. But among the nation's 76 million homeowners, only 14 million had a home equity loan or line of credit in 2007. Do the math, and that translates into just 19 percent of homeowners. Or put it this way: 81 percent of homeowners do not have a home equity loan. Even those who have tapped into their equity have not been using their home as an ATM machine. The median amount owed on home equity loans is a reasonable $25,934. Again, nothing exciting to report on Main Street.

Third, let's take a look at foreclosures. Most of the foreclosure numbers in the press come from Realtytrac, an online business that sells foreclosed properties--and in the process of doing so, collects foreclosure data. Realtytrac provides foreclosure statistics to much of the media, including the Wall Street Journal. Not surprisingly, its data show a big increase in foreclosures. In 2007, says Realtytrac, "more than 1 percent of all U.S. households were in some stage of foreclosure." That sounds like trouble on Main Street. But read the fine print in the methodology, and you will discover that the definition of Realtytrac's "households" is the Census Bureau's count of "housing units." There is a big difference between the two concepts. When a household faces foreclosure, a family loses its home. A household is defined as an occupied housing unit--meaning that someone lives there. In contrast, many housing units facing foreclosure are vacant, owned by flippers and developers who gambled on rising prices and lost.

In 2007, 14 percent of the nation's housing units were vacant--a record high. Overbuilt, overpriced, and financed by cheap money, these housing units are the crux of the crisis--a crisis caused by lax lending standards. It was not Main Street, but Wall Street that drank the Kool-aid. Main Street, however, is paying the price.

How Many Have Health Insurance Through Their Own Employer?

Surprisingly few Americans have health insurance through their own employer. In 2007, the figure was just 31 percent, according to the Census Bureau's Current Population Survey. The percentage covered through the plan of a parent or spouse's employer is almost as large, at 28 percent. Another 28 percent of Americans are covered by government health insurance--either Medicaid, Medicare, or military. Just 9 percent buy their own private plan.

By age, only 45-to-54-year-olds are likely to be covered by their own employer's health insurance plan. Fifty-one percent of people aged 45 to 54 have their own employment-based health insurance. In every other age group, less than half have insurance in their own name.

Males are more likely than females to have their own insurance--35 versus 27 percent. Among non-Hispanic whites, 35 percent have health insurance through their own employer. The figure is 31 percent among Asians and 27 percent among blacks. Hispanics are least likely to have health insurance through their own employer, at 20 percent. A larger 32 percent of Hispanics have no health insurance.

Since 2000, the percentage of Americans covered by their own employer's health insurance plan has fallen by 2 percentage points.

Percentage of people covered by their own employer's health insurance plan by age, 2007:

under age 18 0.3%
aged 18 to 24 19.0
aged 25 to 34 47.3
aged 35 to 44 48.9
aged 45 to 54 51.2
aged 55 to 64 49.9
aged 65 or older 25.7