Today’s Census data on poverty, income, and heath insurance.

September 12th, 2017 at 1:23 pm

A solid report, showing gains across the spectrum. But inequality’s up too, and median earnings, not so much…

My data dive in the WaPo underscores the clearly favorable results in the report, but here are a few other factoids to consider:

–While this isn’t the best data for inequality analysis, for reasons I note in the WaPo, my piece points out the relative difference between gains at the 10th and 95th percentile. That observation is correct, but the 10th %’ile is a bit of a negative outlier. Better to look at a more stable statistic, the average real income gain for the bottom fifth, up 2.6% last year, compared to a 5.6% gain among the richest 5% of households. The bottom half gained last year, but not as much as the top.

–It’s also true that incomes shares going to the middle and low income households are at all time lows, as the figure reveals. (See note in WaPo piece, however, re the impact of the 2013 survey change on comparisons like this. I think it’s a legit comparison, and it comports with other, better inequality data–where better means inclusive of more data sources, including taxes, more transfers, and capital gains–showing even more growth in inequality.)

Source: Census Bureau

–The lack of change in real median earnings for full-time, full-year workers last year is worth noodling over a bit. It surely reflects a composition effect as lower-paid were drawn into the sample last year, pulling down the median (see here for how this works). But even considering that reality, look at this series for men since 1960:

Source: Census Bureau

Sure, there’s composition effects embedded in there, but they don’t explain away the very long-term stagnation of the series. I mean the median full-time guy earns about the same in 2016 as in 1970!

The trend for women is considerably more positive, but it too hasn’t gone much of anywhere since around 2000.

Source: Census Bureau

So, it’s a really solid report, no question, but structural problems persist.

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2 comments in reply to "Today’s Census data on poverty, income, and heath insurance."

  1. Smith says:

    Obama had eight years to change exempt status and didn’t. George Bush who everyone said wasn’t as smart, did. You could say it was the Bush advisors running the show, not Bush, but I don’t see how that takes Obama off the hook. And don’t give me it was Republicans blocking NLRB appointments, that could have been addressed much, much sooner.
    Men are partly stagnating because of women entering the market and getting less pay. How could they not? Perhaps the only reason they don’t sink down to the women’s level is downwardly nominal wage rigidities.
    Your household income shares appear to be way off base, possibly inaccurate or misleading at best. Saez as of June 2016 shows the top 5% taking nearly 40% of all income. https://eml.berkeley.edu/~saez/saez-UStopincomes-2015.pdf Go to Table 2 and add the top 5-1% and the top 1%. How do you, or the US census bureau wind up with the top 5% only taking 23 when the top 1% alone is grabbing that portion. While Saez excludes Social Security, and includes capital gains, those differences cannot account for the much smaller inequality measurements you display.
    Also, not enough emphasis is given to the fact additional income to second wage earners in a household most likely accounted for nearly all of the reported wage gains.
    One thing that not enough people know about is just how skewed distribution is around the median. By not discussing this you’re hiding probably the most important feature of income distribution, which is the big bump, the most frequent income earned, is way to the left of the median. Also median household income hides inequality by not distinguishing between two full time wage earners and one. For starters, median income of a full time worker is around $40,000 to $45,000, but the greater number below the median earn closer to $35,000.
    Finally, I’d address an important philosophical and rhetorical difference in discussing government programs to help the poor. They alleviate poverty, they don’t lift anyone out of poverty per se. Long term they give the poor a better chance to rise since a starving person usually has more trouble earning money or improving their circumstances than one who is fed. Government handouts to need based recipients are by definition in existence only because of that need, the existence of poverty. I support them, and their counter cyclical nature, but it makes no sense to say they defeat poverty. Eliminating the need for need based programs would be poverty’s defeat. A rich country like the U.S. should be ashamed it can’t figure out how, and find a better way to do this.


  2. Sieglinde K Smith says:

    Great points, “Smith”. Thanks for your effort to inject telling detail.


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