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Monday, August 28, 2006
2005 Income, Poverty Stats Due Out Tomorrow
Tomorrow morning at 10 a.m., the Census Bureau will release its annual report card on the nation's economic well-being, with a consolidated report on personal income, poverty health insurance coverage and other data for 2005.
Last year, the New York Times
reported, was the first time on record that household incomes failed to increase for five straight years. Median pretax income, $44,389, was at its lowest point since 1997, after inflation. And OMB Watch noted that poverty rose for the fourth straight year. Will these sad trends continue?
Excellent materials that provide a context and benchmarks for the figures to be released are available from the Center on Budget Policy and Priorities (CBPP) and an article by EPI’s Jared Bernstein in TomPaine.com
CPBB focuses us on the appropriate historical point of comparison — other years when the economy was in its fourth year of recovery:
2005 marked the fourth year of an economic recovery. History shows that by the fourth year of a recovery, median household income always is well above — and poverty always is below — the levels attained when the economy was in recession and the recession hit bottom.
How will 2005 measure up? It is distinctly possible that the new Census data will show that poverty declined and median income rose in 2005, but that poverty still was higher — and median income lower — than in 2001, when the last recession hit bottom. If so, this ... will mark the worst performance in recent decades for poverty and median income during an economic recovery.
Bernstein uses the same benchmark and remarks on how unlikely we are to see a return to the low poverty rate and high median income levels of the pre-Bush days:
2005 is the fourth full year of an economic recovery that began in late 2001.... Poverty rose and household income fell in that recessionary year. But the negative trend has persisted in each recovery year since, and that has taken us by surprise.
The poverty rate, for example, rose each year from 2002 through 2004, a historically unprecedented trend. Since 2000, when poverty bottomed out at 11.3 percent, it has climbed to 12.7 percent in 2004, adding 5.4 million persons, including 1.4 million children to the ranks of the poor.
But there is almost no way the 2005 results will repair the damage done thus far. The income of the median household is down $1,700 (in 2005 dollars) since 2000, and it would take an unusually large gain to make that up in one year. Poverty is likely to decline by only a few tenths of a point, and will remain well above its 2001 level of 11.7 percent.
Posted by Dana Chasin
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