Some disappointing news in today's income data from Census. The NY Times sets the table:
Downward Mobility, Editorial, NY Times: If you’re still harboring the notion that the economy is “good,” prepare to be disabused...
On to the news:
Young College Grads in Free Fall, by Michael Mandel, Economics Unbound: Today's income release from Census was filled with all sorts of interesting numbers. Real median household income rose for the first time since 1999. But it turns out that all of the gain came from foreign-born households--immigrants in other words. The income of native households remained "statistically unchanged." That will give both the pro-immigrant and anti-immigrant forces plenty to talk about.
More disturbingly, the numbers show that young college grads face a steadily worsening future of falling wages. The real earnings of workers aged 25-34 with a BA dropped by 3.3% in 2005. All told, the earnings of young college grads are down by almost 8% since 2002.
Isn't this a horrible looking graph?
The Center on Budget and Policy Priorities (CBPP) examines income and poverty statistics:
Poverty Remains Higher, and Median Income for Non-Elderly is Lower, Tthan When Recession Hit Bottom, CBPP: Summary Overall median household income rose modestly in 2005, while the poverty rate remained unchanged. For the first time on record, poverty was higher in the fourth year of an economic recovery, and median income no better, than when the last recession hit bottom and the recovery began.
In addition, the 1.1 percent increase in median income in 2005, which was well below the average gain for a recovery year, was driven by a rise in income among elderly households. Median income for non-elderly households (those headed by someone under 65) fell again in 2005, declining by ... 0.5 percent. Median income for non-elderly households was $2,000 (or 3.7 percent) lower in 2005 than in 2001.
In a related development, the median earnings of both male and female full-time workers declined in 2005. Median earnings for men working full time throughout the year fell for the second straight year, dropping ... 1.8 percent, after adjusting for inflation. The median earnings of full-time year-round female workers fell for the third straight year, declining by ... 1.3 percent.
Furthermore, the poverty rate, at 12.6 percent, remained well above its 11.7 percent rate in 2001, while median household income was $243 lower than in 2001 (not a statistically significant difference). In addition, both the number and the percentage of Americans who lack health insurance climbed again and remained much higher than in 2001. Four million more people were poor, and 5.4 million more were uninsured, than in 2001. The percentage of children who are uninsured rose in 2005 for the first time since 1998.
The Poor Become Poorer
The poor also became poorer. The amount by which the average person who is poor fell below the poverty line ($3,236) in 2005 was the highest on record, as was the share of the poor who fell below half of the poverty line....
Results Disappointing for this Stage of an Economic Recovery “Four years into an economic recovery, the country has yet to make progress in reducing poverty, raising the typical family’s income, or stemming the rise in the ranks of the uninsured...” Center executive director Robert Greenstein said. “It is unprecedented in recoveries of the last 40 years,” he noted, “for poverty to be higher, and the typical working-age household’s income lower, four years into a recovery...”
Greenstein observed that, “These disappointing figures on median income and poverty are the latest evidence that the economic growth of the past few years has had an unusually limited reach. Many middle- and low-income families are not sharing in the gains.”...
Developments so far in 2006 do not offer much cause for optimism. Job growth has been slightly slower so far in 2006 than in 2005. In addition, in the first quarter of 2006, wages and salaries reached their lowest level on record as a share of the economy...
Table 2: Change in Median Income During First Four Years of Economic Recoveries Four Year Period: Dollar Change by Fourth Year of Recovery (In 2005 Dollars) Percentage Change 1970-1974 +$748 + 2.0% 1975-1979 +$3,279 + 8.7% 1982-1986 +$3,244 + 8.3% 1991-1995 +$1,238 + 2.9% 2001-2005 - $243 -0.5%
Next, figures on health insurance, also from the CBPP:
The Number of Uninsured Americans is at an All-Time High, CBPP: Data released today by the Census Bureau show that the number of uninsured Americans stood at a record 46.6 million in 2005, with 15.9 percent of Americans lacking health coverage. ... Census data show that 46.6 million Americans were uninsured in 2005, an increase of 1.3 million from the number of uninsured in 2004 (45.3 million). The percentage who are uninsured rose from 15.6 percent in 2004 to 15.9 percent in 2005. The number of children who are uninsured rose from 7.9 million in 2004 to 8.3 million in 2005.
“The increase of 360,000 in the number of uninsured children is particularly troublesome,” Greenstein said. “Since 1998, the percentage of uninsured children has been dropping steadily, from a high of 15.4 percent to 10.8 percent in 2004. The new Census data show that the uninsured rate among children moved in the wrong direction in 2005, rising to 11.2 percent.”...
Key Findings from the New Census Data
- The percentage of Americans without insurance rose to 15.9 percent in 2005, higher than the 15.6 percent level in 2004 and much higher than the 14.9 percent level in 2001.
- The percentage of Americans who are uninsured rose largely because the percentage of people with employer-sponsored coverage continued to decline, as it has in the past several years.
- The percentage of children under 18 who are uninsured rose from 10.8 percent in 2004 to 11.2 percent in 2005, ... an increase of 360,000.
- Lack of insurance is much more common among people with low incomes. Some 24.4 percent of people with incomes below $25,000 were uninsured in 2005, almost triple the rate of 8.5 percent among people with incomes over $75,000.
- African-Americans (19.6 percent uninsured) and Hispanics (32.7 percent) were much more likely to be uninsured than white, non-Hispanic people (11.3 percent).
- The percentage of native-born citizens who were uninsured rose in 2005, while the percentage of non-citizen immigrants who lacked coverage was unchanged. Nonetheless, non-citizen immigrants were far more likely to be uninsured (43.6 percent uninsured) than native-born citizens (13.4 percent). The principal reason so many immigrants lack insurance is that they are less likely to be offered health insurance by their employers.