The Census Bureau released its latest report on income, poverty and health insurance in the United States. The stress on the middle class continues. These are the real job creators. Consumer spending accounts for 70 percent of the economy. Whether we should have an economy more based on production is undeniable but a topic for another day.
Some key data points: Median household income fell for the second straight year, down 1.5 percent. This also fell during the the Bush years, so it’s a long-standing trend. According to the Economic Policy Institute, the median earnings for a man working full time have fallen from $50,622 in 1973 to $48,202 in 2011. For a woman, they rose from $28,699 to $37,118.
Inequality is stark. Income for the top 5 percent grew by 4.3 percent last year compared with 2011, and 1.6 percent for the top fifth. But income fell for the second, third and fourth quintiles. Income inequality increased last year. The data for poverty, a subject neither presidential candidate is speaking about, were also sobering.
Fifteen percent of the population was in poverty ($22,811 or less for a family of four with two children) and 21.9 percent of children under 18. This translates to 42.6 million of our fellow citizens. Forty-four percent of the poor were in “deep poverty”, or below half of the poverty line. On the other hand, Social Security kept 21.4 million out of poverty. Unemployment benefits, which are starting to expire for the long-term jobless, kept another 2.3 million out of poverty.
The number of Americans without health insurance fell. That’s the one piece of good news.
Both sides can make much of these numbers. But the reality is that America has been headed into this mess for decades, and for complex reasons. We need constructive answers, not trolls calling names. And tax cuts? We’ve tried that for nearly the entire period of the middle class decline.
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Today’s Econ Haiku:
The iPhone rally
Made in China, bought by us
Yes, time to take stock