Poverty, median income, hth ins #’s for 2015 out tomorrow AM

September 12th, 2016 at 9:31 am

Tomorrow the Census Bureau releases its annual report that allows us to drill down on how many different family types are doing in the current expansion. I’ve written up my expectations over at WaPo.

As you see, I believe the combination of very low inflation last year and the tightening job market will have lowered poverty and lifted middle-class incomes. It’s also important to look at the alternative poverty measure that the Census Bureau will release tomorrow, since it captures more policy inputs (the value of SNAP benefits, refundable tax credits) than the official rate.

I strongly suspect the Census data to show the ongoing decline in the percent of Americans without health insurance. Numerous other data sources have already revealed this finding for 2015 (see figure below, e.g.), prompting this text which I excerpt here as well:

I don’t mean to be dramatic, but given that health-care reform — Obamacare, if you prefer — is a complex policy thrown into a complex sector in a complex world, I think an objective person would be hard-pressed to find a more dramatic example of a policy having its intended consequence of reducing the share of Americans without health coverage. No one’s saying the Affordable Care Act doesn’t need some work — recalibration is how I think of it. But trust me when I tell you, that trend reversal you see in the figure below — a trend I believe will be further corroborated in tomorrow’s data — is one of the greatest successes of modern politics and policy.

I hope to have my write-up of tomorrow’s results up at WaPo a few hours after the 10AM release.

 

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3 comments in reply to "Poverty, median income, hth ins #’s for 2015 out tomorrow AM"

  1. Peter K. says:

    “I believe the combination of very low inflation last year and the tightening job market will have lowered poverty and lifted middle-class incomes.”

    I usually agree with Mr. Bernstein on the politics and economics of the subjects being discussed, but feel here it might be helpful to provide a little context about low inflation. I think I get what you’re saying: higher inflation would eat into paychecks, but inflation has been too low for too long and that signals a macro problem and slack or too loose labor markets, which also effects incomes. Yes things are moving in the right direction, but consider if you replaced “very low inflation” with “deflation.” Both are bad and would signal that macro policy makers (monetary, trade, and fiscal) are failing. Deflation would help boost the spending power of workers who have jobs, but overall it’s a bad phenomenon as is very low inflation.

    A general reader of the Washington Post might be more inclined to see low inflation as an overall good thing than a well-read purveyor of blogs.


    • Jared Bernstein says:

      Excellent point which I’ve made in other contexts. My point here is explaining the role in low inflation in my forecasts re tomorrow’s data. Also, you’re really talking about core inflation, which leaves out energy (and has also been too weak in the macro sense you raise). The Census data run off topline inflation. (CPI-RS, btw, which is now the same as CPI-U but not if you go back far enough.)


  2. Smith says:

    Three points:
    1) Median income doesn’t adequately reflect incomes in the U.S. because income distribution is shaped like a children’s slide not a bell curve. Median is better than average (pun intended), but the dollar figure grossly distorts the true picture because so many incomes are bunched near the bottom. Learn what the shape of this curve means https://en.wikipedia.org/wiki/File:Distribution_of_Annual_Household_Income_in_the_United_States.png 1/4 of all households making $25,000 or less.
    2) Saying that wages rose because of low inflation due almost entirely to a drop in oil prices is nothing to crow about. It is instead evidence of continued weak labor market, insufficient labor power, and inadequate economic policy. The Democrats are reaping the one time benefits of fracking, a weak global economy (less demand for oil), and OPEC’s inability to not respond with increased production.
    3) Saying that poverty dropped because of the safety net is inaccurate. I’m all in favor of a strengthened safety net, but an honest measure of poverty is one taken before benefits. We do not add the $10,000 to $20,000 per pupil per year benefit of free public education less property taxes, heavily discounted for lower incomes, in figuring out poverty. If it’s too difficult to comprehend the difference between relying on public assistance vs. having a job with an adequate wage, you are living up to conservative caricature of a liberal. Unlike conservatives I don’t see a safety net as inherently self defeating, but like them, I want to see them cut, but unlike them only due to lack of need. (an aside, Stiglitz apparently favors EITC, a gross error not backed up by data).


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