Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.
September 24, 2013 at 10:13 AM
Last week, I reported on the latest Census data for poverty nationally: The poverty rate in 2012 was 15 percent, with 46.5 million living below the official poverty line. That’s 2.5 percentage points higher than in 2007 and close to a post-War on Poverty record. Of this, 43 percent were in “deep poverty,” with half below the poverty line. In 2000, the rate of poverty was 11.3 percent. In the late 1950s, before LBJ’s War on Poverty began, the rate was above 22 percent. Now we have data for states and metropolitan areas. In Washington, 13.5 percent were below the poverty line; Oregon, 17.2 percent; Idaho, 15.9 percent, and Alaska, 10.1 percent. These were little changed from the previous year. In 2000, Washington’s poverty rate was 11.6 percent.
Among the largest metropolitan areas last year, Seattle-Tacoma-Bellevue logged in 11.7 percent, also little changed. Among the hardest hit metros were Detroit, California’s “Inland Empire” and Phoenix.
Another report from the U.S. Bureau of Economic Analysis showed the most recent metro gross domestic product. Seattle-Tacoma-Bellevue posted $258.8 billion in GDP compared with $243.8 billion in 2011. Spokane’s rose to $20.3 billion from $19.7 billion. For Portland, 2012 GDP was $147 billion vs. $138.5 billion. Of the 10 biggest metros, the three with the fastest real GDP growth were San Francisco (7.4 percent), Houston (5.3 percent), and Dallas-Fort Worth (4.3 percent). Technology and oil.
And Don’t Miss: High-speed rail transforms China | NY Times
Today’s Econ Haiku:
Blackberry was hot
That was so 2008
Burned up on the vine
September 17, 2013 at 11:13 AM
The Census Bureau reported today that median household income was essentially stagnant last year, at $51,017. Adjusted for inflation, that leaves income 8.3 percent lower than where it stood in 2007 before the recession. The poverty rate was 15 percent, with 46.5 million of our fellow citizens living at or below the official poverty line. That’s 2.5 percentage points higher than in 2007 and close to a post-War on Poverty record. Of this, 43 percent were in “deep poverty,” with half below the poverty line. In 2000, the rate of poverty was 11.3 percent. In the late 1950s, before LBJ’s War on Poverty began, the rate was above 22 percent.
The Gini ratio, which measures income inequality was basically unchanged at 0.477. Still, it is at a record high. In the late 1960s, it stood around 0.39. As was reported recently, the top 1 percent made up all their losses from the downturn and have accumulated a record share of national income.
Breaking down the numbers reveals a grim picture of not just stagnation, but in many cases a retrograde move. The typical American family makes less than it did in 1989.
March 19, 2013 at 10:44 AM
The Wall Street Journal reports today, “Workers and employers in the U.S. are bracing for a retirement crisis, even as the stock market sits near highs and the economy shows signs of improvement.” According to a report by the Employee Benefit Research Institute, 57 percent of workers surveyed had less than $25,000 in total household savings and investments (excluding their homes), up from 49 percent with so little in 2008. According to the report, “Retirement savings may be taking a back seat to more immediate financial concerns: Just 2 percent of workers and 4 percent of retirees identify saving or planning for retirement as the most pressing financial issue facing most Americans today. Both workers and retirees are most likely to identify job uncertainty (30 percent of workers and 27 percent of retirees) and making ends meet (12 percent each).” Only 18 percent were very confident they would have a financially secure retirement.
This is only the latest evidence of the challenges facing large numbers of aging Americans. This is the first generation that will retire heavily dependent on the social experiment called 401(k)s — and they’re proving to be a disaster. In 2010, the median household retirement account balance for those between 55 and 64 was only $120,000. And that’s if they have a 401(k) or set up an IRA in an era of diminishing wages and benefits: One third of households don’t have a retirement account of any kind. The average monthly Social Security benefit of $1,230 won’t go far.
The Great Recession destroyed 40 percent of Americans’ personal wealth — unless you’re in the 1 percent — and, as the Washington Post reported:
For the first time since the New Deal, a majority of Americans are headed toward a retirement in which they will be financially worse off than their parents, jeopardizing a long era of improved living standards for the nation’s elderly, according to a growing consensus of new research.
September 12, 2012 at 10:05 AM
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.
January 31, 2012 at 10:15 AM
A new study by the Manhattan Institute finds that all-white enclaves are “effectively extinct.” The New York Times found a bevy of experts to second the motion, albeit with some caveats. Yet this is highly misleading.
Consider Columbia, S.C. The city is 52 percent white and 42 percent black, with a median household income of $38,272. Yet the city is highly segregated, with whites living in older gentrified neighborhoods of grand old houses and some new subdivisions, and blacks living in poor areas. Meanwhile, once-rural Lexington County next door has seen a huge influx of affluent whites. It’s 79 percent white and 14 percent black with a median household income of $52,205.
Dayton, Ohio, once named one of America’s most segregated cities, is another example. The west side remains nearly all black. White flight has shrunk the city while once-rural counties nearby have ballooned with mostly white, better-off populations. Phoenix’s once all-white, middle-class automobile suburb of Maryvale is now mostly poor and Hispanic. New suburban Gilbert is pretty close to an all-white enclave. Sprawl has been a great enabler of the new segregation, which is not only heavily determined by race but especially by economic means. Poverty has spread to older suburbia, engulfing all ethnic groups caught in its trap.
November 7, 2011 at 10:15 AM
The Brookings Institution has released a study of poverty in America’s 100 largest metros, and as you can guess the data aren’t pretty. More Americans are living in extremely high poverty areas. “After declining in the 1990′s, the population living in very poor areas increased by one-third between 2000 and the time period of 2005-09,” the report states. “The suburbs saw a rise in that number more than twice as fast as in the cities. The jump in poverty brought on by the recession suggests that more than 14 percent of poor people lived in extreme-poverty neighborhoods in 2010.”
The country saw the poor population grow by 12.3 million over the first decade of the 2000s. That pushed the total number of Americans in poverty to a historic high of 46.2 million. By 2009, more than 15 percent of the population lived below the federal poverty line, which was $22,314 for a family of four in 2010. Poverty rose twice as fast in the suburbs as in core cities.
Poverty increased in Seattle, although compared with most metros its not highly concentrated. The metro area ranked 93rd in neighborhood poverty rates from 2005 to 2009; the city ranked 89th and the suburbs 65th. More than 17,000 people are living in extreme poverty tracts. Metro Portland ranked 97th. Boise ranked 92nd. By comparison, for example, metro Phoenix ranked 43rd and 32nd in the suburbs. El Paso ranked No 2 while McAllen, Texas, came in at No. 1.