If you think you’re worse off now, you’re right and not alone

From CBPP

I put this article from yesterday’s NYTimes in the comments section of my thread yesterday. I’m not sure every one read it so I thought I’d front page it. It’s on the increasing poverty and median income declines in the U.S. as reported by the Center on Budget and Policy Priorities (CBPP) and the Census Bureau. The depressing reality of The Great Recession and the Dubya years has set in and there’s several obvious trends. First, the the nation’s poverty rate climbed from 12.5 percent in 2007 to 13.2 percent in 2008. This is the highest level since 1960 and the highest rate since 1997. The number of people in poverty is 39.8 million. Second, there’s been decline in employer-provided health insurance coverage for adults. It would’ve been bad for children and the poor too, but the increased participation in SCHIP and MEDICAID offset that. (You’re probably aware that I support de-linking employment and health insurance coverage since this is happening any way and switching to means-tested payments with basic plan provision for all.) Third, median income declined.

In another sign of both the recession and the long-term stagnation of middle-class wages, median family incomes in 2008 fell to $50,300, compared with $52,200 the year before. This wiped out the income gains of the previous three years, the report said.

Adjusted for inflation, in fact, median family incomes were lower in 2008 than a decade earlier.

“This is the largest decline in the first year of a recession we’ve seen since the Census Bureau started collecting data after World War II,” said Lawrence Katz, an economist at Harvard University, referring to household incomes. “We’ve seen a lost decade for the typical American family.”

The share of American residents who said they lacked health insurance throughout the entire year remained steady, at 15.4 percent, or 46.3 million people. But the total masked some more worrisome trends that are helping to drive the debate over a national health care overhaul.

Continuing an eight-year trend, the number of people with private or employer-sponsored insurance declined, while the number of people relying on government insurance programs including Medicare, Medicaid, the children’s insurance program and military insurance rose.

The numbers are not expected to get better since the unemployment in 2009 is much worse than anything experienced in 2008. Unemployment is expected to trend upwards well into 2010. This should be sending major signals to policy makers on direction and choice of policy. So far, I’ve yet to see a realization in Washington, D.C. that reflects the reality in these numbers. The stimulus program my have assuaged some of the damage, but these trends will continue unabated for some time. The focus of the Health Plan has been to drive people into Private Insurance programs which are costly. The focus of the stimulus has not be job creation.

In the analysis provided by CBPP, we find what we’ve known all along. The Dubya years enriched and enabled the uberriche Bonus Class.

The disappointing performance of the last economic expansion reflects, in part, the fact that the fruits of the economic growth during that expansion were heavily skewed to people high on the income scale rather than being broadly shared. Economists Thomas Piketty and Emmanuel Saez have found the top 1 percent of households received two-thirds of the growth in national income that occurred during the recovery, a larger share than in any other economic expansion since the 1920s.

The Census data showed that poverty, deep poverty, and median income declines occurred across all races and ethnicities. Again, this summary of that trend by CBPP.

Median income declined for all racial and ethnic groups in 2008, including for Hispanics (who experienced a stunning 5.6 percent decline), Asians (a 4.4 percent decline), blacks (a 2.8 percent decline), and non-Hispanic whites (a 2.6 percent decline). In addition, the poverty rate rose from 21.6 percent to 23.2 percent for Hispanics, from 10.1 percent to 11.8 percent for Asians, and from 8.1 percent to 8.6 percent for non-Hispanic whites. The poverty rate for blacks 24.7 percent in 2008 — was statistically unchanged from the year before but remained the highest of the racial/ethnic groups.

There was also disturbing news about “deep poverty”. This is also from CBPP.

Deep poverty” reached its highest point in 14 years, and poor families became poorer. In 2008, the share of Americans who live in “deep poverty” — that is, whose cash incomes fall below half of the poverty line — reached its highest level since 1994. Some 5.7 percent of Americans — or 17.1 million of them — had incomes below half of the poverty line. Half of the poverty line in 2008 was $8,582 for a family of three and $11,013 for a family of four. (Today’s Census report defines poverty as family income less than $22,025 a year for a family of four.) In addition, poor families became poorer — they fell an average of $252further below the poverty line in 2008 than poor families did in 2007.

It is clear that America in the 21st Century is not providing the same opportunities and outcomes for all of its peoples. We need public policy that reverses these disturbing trends. It’s not clear to me that we’re getting it.

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