Median Income Has Dropped 6% During Bush Administration: Census

excerpt from article by By RICK LYMAN article in N.Y. Times, August 30, 2006

The nation's median household income rose slightly faster than inflation last year for the first time in six years, the Census Bureau reported yesterday. The rise, however, had little to do with bigger paychecks — in fact, both men and women earned less in 2005 than 2004. Rather, census officials said, more family members were taking jobs to make ends meet, and some people made more money from investments and other sources beyond wages.

The glimmer of improvement came after years in which the economy slogged through the bursting of the 1990's stock market boom, a brief economic downturn, the aftershocks from the 2001 terrorist attacks, a series of corporate scandals and growing evidence of a deepening divide between rich and poor.

While the economy has been "strong" by most statistical measures for the past several years, its benefits have not translated into improvements in the standard of living for many people. In New York, the proportion of city residents living below the poverty level has not changed in the last five years.

Nationally, the small uptick in median household income reported yesterday, 1.1 percent, was not enough to offset a longer-term drop in median household income — the annual income at which half of the country's households make more and half make less. That figure fell 5.9 percent between the 2000 census and 2005, to $46,242 from $49,133, according to an analysis of the data conducted for The New York Times by the sociology department of Queens College.

Census officials pointed out that the number and percentage of those living below the poverty line held steady in 2005 after four consecutive annual increases.

"Today's census report confirms that most working families have not been able to make much economic progress in the last year, and they still have not made up the ground lost since President Bush took office," said Senator Jack Reed of Rhode Island, the ranking Democrat on the Joint Economic Committee.

The new data also showed continuing erosion in the percentage of Americans covered by health insurance. In 2005, an estimated 46.6 million people had no coverage, up 1.3 million since 2004 and increasing the percentage of Americans without health coverage from 15.6 percent of the population to 15.9 percent.

After recent decreases in the numbers of children without health insurance, this year's data found that their numbers grew between 2004 and 2005, rising from 10.8 percent of those under 18 to 11.2 percent.

The 5.9 percent drop in median household income since 1999 was not shared equally around the country. In Michigan, median household income fell 11.9 percent between 1999 and 2005. In North Carolina, it was 11.2 percent, in Utah 10.4 percent and in Indiana 9.5 percent.

But in some states, the impact was not nearly so great: a drop of 2.5 percent in New York, 2.4 percent in South Dakota and 1.9 percent in New Hampshire.

David Johnson, chief of the housing and household economic statistics division, also noted some persistent signs that Americans from different income groups were not sharing equally in the country's recent "economic good fortune."

He pointed out that slightly more than half of the nation's income was going to the top 20 percent of wage earners at the same time that the number living in poverty remained essentially unchanged, at about 37 million people.

"That could represent an increase in inequality," Mr. Johnson said.

In 2005, the poor accounted for 12.6 percent of the population, roughly the same as in 2004. The only racial group that saw any improvement in their poverty rate over the year was non-Hispanic whites, a group that had 8.7 percent below the poverty line in 2004 and 8.3 percent in 2005. And advocates for the poor pointed out that, although the numbers living below the poverty line held steady between 2004 and 2005, there has been a sharp increase in those living in extreme poverty.

The average person living in poverty actually earned $3,236 less than the poverty line — $19,971 for a household of four — in 2005, the highest such gap ever measured by the Census Bureau, said Robert Greenstein, executive director of the Center on Budget and Policy Priorities. And 43 percent of the poor earned less than half of the poverty limit, Mr. Greenstein said, again the highest such percentage ever recorded.

"This is further evidence that the nation's economic recovery has had very limited reach, with many low- and medium-income families not sharing in the game," he said.

The new census data also helped paint a picture of those living at the top and bottom of the nation's income ladder in 2005.

Those in the top fifth in income were overwhelmingly more likely to live in metropolitan areas than rural ones, 90.8 percent to 9.2 percent. But within those metro areas, they were significantly more likely to be found in the suburbs, with 29.3 percent living within the dominant city limits and 61.5 percent living outside.

Wealthy Americans were also much more likely to be part of a married couple living in a single-family household (79 percent of those in the top fifth), to be a non-Hispanic white (81.2 percent) and to have two or more wage earners in the household (76.3 percent).

Meanwhile, those living in the bottom fifth in income could be found in disproportionate numbers in rural areas (21.2 percent of this group lived outside metro areas compared with 9.2 percent of the wealthiest) and to live in non-family households (59 percent of the poor compared with 12.5 percent of the wealthy).

A study of the data by the Carsey Institute at the University of New Hampshire found that children in rural areas were particularly hard hit, with the percentage living in poverty in 41 states higher in 2005 than it was five years before.

Blacks made up 20.6 percent of those living in the bottom fifth, compared with 5.8 percent of those in the top fifth. Hispanics were 13.4 percent of the bottom group and 5.9 percent of the top one.