As a snapshot of a nation recovering from one of its worst recessions ever, the census report had both shadows and highlights. Median household income declined $777, to $50,054 before taxes. But the poverty rate, which many experts had predicted would rise to rates unseen in nearly half a century, inched down a hair to 15 percent, a decline of about 100,000 people. And fewer Americans were without health insurance, largely because of a provision in the 2010 health-care law allowing young adults to stay on their parents’ policies.
The new census statistics, coming out just two months before the presidential election, should fuel the ongoing debate over the shrinking middle class, income inequality and a gnawing fear that for many, the American dream is receding out of reach. This week, the Pew Research Center said a third of Americans now identify themselves as lower class or lower-middle class, up from a quarter four years ago. Among young adults, the percentage who see themselves as occupying the bottom of the heap is even higher.
For many economists, the most troubling statistics were those on income inequality underscoring the middle-class squeeze.
The 60 percent of households earning between roughly $20,000 and $101,000 collectively earned 46.6 of all income, a 1.5 percent drop. In 1990, they shared over 50 percent of income.
In contrast, the census data show, the top fifth rose 1.6 percent in 2011 after several years of decline during the recession. The biggest gains went to the top 5 percent, who earn more than $186,000; their share of income jumped almost 5 percent in a single year.
Scholars said the disparate numbers underscore the many prisms through which different groups of people view the anemic economic recovery.
“It explains the disconnect between the numbers saying there’s slow improvement and job growth, and the way people feel, because they haven’t recovered,” said Sarah Burd-Sharps, co-director of Measure of America at the Social Science Research Council. “It’s partly because the recovery has mostly been felt at the top.”
Tim Smeeding, director of the Institute for Research on Poverty at the University of Wisconsin at Madison, said the working class, whose pay tops out about $62,000, are bearing the brunt of the income squeeze.
“Their pay rate has gone down, the number of hours that everyone in the house works has gone down, their homes have lost value,” he said. “These are the people really ravaged by the recession.”
The political reaction to the census data was immediate.