U.S. Poverty Rate Was Up Last Year

An article in the New York Times this morning

[What better way to end a blurb on rich and poor than with the government announcing an unprecidented 5th straight year in failure for household incomes to increase. ]

The census's annual report card on the nation's economic well-being showed that a four-year-old expansion had still not done much to benefit many households. Median pretax income, $44,389, was at its lowest point since 1997, after inflation.

After the report's release, Bush administration officials said that the job market had continued to improve since the end of 2004 and that they hoped incomes were now rising and poverty was falling. [as opposed to those who heard the report and hope incomes will lower and poverty will rise]The poverty rate "is the last, lonely trailing indicator of the business cycle," said Elizabeth Anderson, chief of staff in the economics and statistics administration of the Commerce Department. [It's completely normal for it to drag behind for 5 years?]

The census numbers also do not reflect the tax cuts passed in President Bush's first term, which have lifted the take-home pay of most families.
[An average 2.2% increase that they will eventually have to pay for. Eventually, the government must cover its bills, either by raising taxes or by cutting spending. Financial markets will not tolerate persistent large and unsustainable deficits.]

But the biggest tax cuts went to high-income families already getting raises, Democrats said Tuesday. The report, they added, showed that the cuts had failed to stimulate the economy as the White House had promised.

While the economy is supposedly looking better and unemployed have decreased fewer people are getting health insurance form their employers while medical costs are going up. Raises are trailing behind inflation and the only way for a family to keep from falling behind is to work more hours. Family members who used to work part time are now working full time and still the median pay of a full time male or female worker dropped 2 and 1 percent respectively.

"It looks like the gains from the recovery haven't really filtered down," said Phillip L. Swagel, a resident scholar at the American Enterprise Institute, a conservative research group in Washington. "The gains have gone to owners of capital and not to workers."

The trend is likely to continue unless the job market becomes as tight as it was in the late 1990's and companies decide they must offer health insurance to retain workers, said Paul Fronstin, director of the health research program at the Employee Benefit Research Group, a nonpartisan organization in Washington.

The numbers released Tuesday showed a slight decline in median income, but the bureau called the drop, $93, statistically insignificant. Incomes were also roughly flat among whites, blacks, Hispanics and Asian-Americans.

The Midwest, which has been hurt by the weak manufacturing sector, was the only region where the median income fell and poverty rose. [Somehow they'll still figure out a way to be a red state] Elsewhere, they were unchanged.

Since 1967, incomes have failed to rise for four straight years on two other occasions: starting in the late 1970's and in the early 1990's [Like father like son]. The Census Bureau does not report household income for years before 1967, but other data show that incomes were generally rising in the 40's, 50's and 60's.

"The growth in the economy is not going to families," said Senator Jack Reed, Democrat of Rhode Island. "It's in stark contrast to what happened during the Clinton administration." ...