Income Stagnated and Poverty Rose in 2004, Census Figures Show - New York Time

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Subject:[Zepps_News] Income Stagnated and Poverty Rose in 2004, Census

Figures Show - New York Time

 

 

 

 

http://www.nytimes.com/2005/08/30/politics/30cnd-census.html?hp & ex=1125460800 & en\

=8592bc3cfe0ad83b & ei=5094 & partner=homepage

 

 

 

 

Income Stagnated and Poverty Rose in 2004, Census Figures Show

 

By DAVID LEONHARDT

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01 & td=sysdate & sort=newest & ac=DAVID%20LEONHARDT & inline=nyt-per>

Published: August 30, 2005

 

WASHINGTON, Aug. 30 - Even as the economy was growing, income stagnated

last year and the poverty rate rose, the Census Bureau reported today.

This is the first time on record that household income has failed to

increase for five straight years.

 

The portion of Americans without health insurance remained roughly

steady at 16 percent, according to the bureau. Fewer people were covered

by their employers, but three big government programs - Medicare,

Medicaid and military insurance - all grew.

 

The Census Bureau's annual report card on the nation's economic

well-being showed that the economic expansion of the last few years had

still not done much to benefit many households. Median pretax household

income, at $44,389 last year, was at its lowest point since 1997, after

accounting for inflation.

 

Though the reasons are not wholly clear, economists say that technology

and global trade appear to be holding down pay for many workers. The

rising cost of health care benefits has also eaten into pay increases.

 

After the report's release, Bush administration officials noted 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. The poverty rate

" is the last, lonely trailing indicator of the business cycle, " said

Elizabeth Anderson, chief of staff in Commerce Department's economics

and statistics administration.

 

The Census numbers also do not reflect the tax cuts passed during

President Bush's first term, which have lifted the take-home pay of most

families.

 

But the biggest tax cuts went to high-income families already getting

raises, Democrats said today. The report, they added, showed that the

tax cuts had failed to stimulate the economy as the White House had

promised.

 

" The growth in the economy is not going to families, " Senator Jack Reed,

Democrat of Rhode Island, said. " It's in stark contrast to what happened

during the Clinton Administration. "

 

The main theme of the Census report seemed to be the surprising weakness

in the labor market for people with jobs, even as the ranks of the

unemployed have dwindled. Fewer people are getting health insurance from

their employer or from a family member's employer, while pay raises have

generally trailed inflation.

 

Last year, households kept their income from falling by working more

hours than they had in 2003, the Census data showed. The median pay of

full-time male workers declined more than 2 percent, to $40,800; for

women, the median dropped 1 percent, to $31,200. When some people switch

from part-time work to full-time, they can keep household incomes from

dropping even when the pay of individual workers is declining.

 

" 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 in Washington. " The gains have gone to owners of

capital and not to workers. "

 

There has always been a lag between an the end of a recession and the

resumption of pay raises, Mr. Swagel added, but the length of this lag

has been confounding.

 

In addition, the poverty rate rose last year for working-age people,

those between 18 and 64. The portion of elderly people in poverty fell,

while child poverty was essentially flat.

 

Over all, the poverty rate increased to 12.7 percent, from 12.5 percent

in 2003. Poverty levels have changed only modestly during the last three

decades rising in the 1980's and falling in 1990's after having dropped

sharply in the 1960's. They reached a low of 11.1 percent in 1973, from

more than 22 percent in 1960.

 

The poverty rate in New York rose last year to 20.3 percent, from 19

percent, making it the only city of more than one million with a

significant change. Among large counties, the Bronx had the

fourth-highest poverty rate, trailing three counties on the Texas-Mexico

border.

 

Many economists say the government's statistics undercount poverty in

New York and other big cities because the numbers are not adjusted for

cost of living. A family of two parents and two children is considered

poor if it earns s less than $19,157 a year, regardless of whether that

family lives in a city where $500,000 buys a small apartment or a mansion.

 

Later this year, the Census will release a number of broader poverty

measures, but all have the same thresholds for different regions.

 

The decline in employer-provided health benefits has come after four

years of rapidly rising health costs. Some of the increase comes from

inefficiencies in the health care system; others are a result of new

treatments that improve health and prolong life but are often expensive.

 

Either way, though, the bill for health care has risen and a growing

number of companies are deciding not to pay it for some workers. The

percentage of people getting health insurance from an employer fell to

59.8 percent last year, from 63.6 percent in 2000.

 

 

 

 

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