The US Census Bureau released median income, poverty and insurance stats today, all of which have a 90% confidence interval, meaning that there’s a fairly high margin for error. Still, the trends in median income are not encouraging, although the insurance stats bucked that trend.
Here are the really bad median income statistics:
Median family household income declined by 1.7 percent in real terms between 2010 and 2011 to $62,273. The change in the median income of nonfamily households was not statistically significant.
In 2011, real median household income was 8.1 percent lower than in 2007, the year before the most recent recession, and was 8.9 percent lower than the median household income peak that occurred in 1999. The two percentages are not statistically different from one another.
The long-term trend is the problem here. Median income has been falling for TWELVE YEARS. Throughout that time, Americans have been getting poorer in real terms. By contrast, the US gross domestic product for 1999 was $8.7 trillion, while in 2011 it rose to $14.4 trillion. Workers did not see any of the benefits of the nearly $6 trillion in gains; in fact, they lost ground.
Median earnings for women remain 77 cents on every dollar of the median earnings for men, essentially unchanged from 2010. This all comes at a time when the Lilly Ledbetter Fair Pay Act is in place. It has not led to a closing of the gender pay gap.
Income inequality also increased in 2011:
Based on the Gini index, income inequality increased by 1.6 percent between 2010 and 2011; this represents the first time the Gini index has shown an annual increase since 1993, the earliest year available for comparable measures of income inequality. The Gini index was 0.477 in 2011. (The Gini index is a measure of household income inequality; zero represents perfect income equality and 1 perfect inequality.)
Income inequality also increased between 2010 and 2011 when measured by shares of aggregate household income received by quintiles. The aggregate share of income declined for the middle and fourth quintiles. The share of aggregate income increased 1.6 percent for the highest quintile and within the highest quintile, the share of aggregate income for the top 5 percent increased 4.9 percent. The changes in the shares of aggregate income for the lowest two quintiles were not statistically significant.
So while the median wage is declining, wages at the top are increasing. And median wage declines have been masked somewhat by the institution of the payroll tax cut, which is almost guaranteed to expire at the end of the year. President Obama came into office with a vow to “make work pay” permanently, but by the end of this year, the middle-class tax cuts he put into place will be gone. That wouldn’t be as big a problem if median wages weren’t declining.
As for poverty, around 15.0% of all families sat in poverty in 2011, including 31% of families with a female head of household. Poverty is described as a family of four making $23,021 or less. This is all basically a holding pattern for poverty.
The health insurance statistics represented an improvement. Nearly four million more Americans gained health coverage from 2010 to 2011. The percentage of Americans with health insurance increased from 83.7% to 84.3%. Coverage in private insurance remained steady, after decreasing for the last 10 years. Government insurance coverage increased from 31.2% to 32.2%, led by increases in Medicare and Medicaid. Overall there are 48.6 million Americans without health insurance, a decline from 2010 (when it was 49.9 million).
The biggest factor is the measure in the Affordable Care Act extending coverage to children on their parent’s plans up to age 26. The ranks of the uninsured from people 19-25 declined by over 500,000, or 2.2%. That decline jumps out relative to all the other figures.
The Administration has worked to reduce the ranks of the uninsured through policy. These statistics show that they need to show the same urgency on median income.