The typical American family's income reached an all-time high last year, even when adjusted for inflation, as the still-strong economy wiped out most vestiges of the recession of the early 1990s, the Census Bureau reported yesterday.
Median household income reached $38,900 last year, exceeding the previous inflation-adjusted high of 1989, the year before the recession began claiming jobs and paychecks.
The new figures also show that the poverty rate hit a record low in the South but changed little anywhere else. Median household incomes rose in every geographic region of the country for the first time since such measurements began in 1975, census officials said in releasing their annual report on incomes and poverty.
President Clinton called the news an "economic milestone" and "further evidence that our economic strategy, fiscal discipline, investment in our people and expanded trade is working."
Despite the abundance of good economic news, the report found pockets where Americans continue to struggle economically. While the overall poverty rate for children was down, more than half of all children younger than 6 and living in a female-headed household remained in poverty, the report said. Poverty rates were basically unchanged everywhere except in the South.
The nation's overall poverty rate--12.7 percent--was the lowest in two decades. Some liberal groups applauded that gain, but noted that the poverty rate still is higher than it was during much of the 1970s when adjusted for inflation.
"For an economy this strong, the poverty rate is still too high," said Robert Greenstein, director of the Center on Budget and Policy Priorities. The 1998 poverty threshold for a family of four was $16,600 in income.
Hispanic families remain among the nation's poorest, but they made significant gains in 1998, the census report found. Their median household income climbed by 4.8 percent, to $28,300. The poverty rate for Hispanic families fell to 22.7 percent, from 24.7 percent in 1997.
Median household incomes for non-Hispanic whites reached a record $42,400, while black households held steady at $25,400.
Poverty rates ranged from a low of 8.4 percent in New Hampshire to 22.7 percent in the District of Columbia. Only Virginia and New Mexico showed a statistically significant drop in poverty from 1996 to 1998, said the report, which uses two years of data for such measures.
University of Virginia economist John L. Knapp said the high-technology boom in Northern Virginia, home to more than a quarter of the state's population, has driven incomes higher and helped cut statewide poverty statistics.
The census report ranked Maryland as third-highest in median household income, at $48,714. Virginia ranked eighth at $43,490, and the District ranked 41st, at $32,895.
The report concluded that the gap between rich and poor families--or "household income inequality"--did not worsen from 1997 to 1998. The poorest 20 percent of the nation's households had a median income of $9,223 last year, while the wealthiest 20 percent had $127,529. The middle 20 percent had a median household income of $38,967.
"It seems clear that income inequality rose substantially between 1967 and the early 1990s, but has remained unchanged since then," the census report said.
Some conservative groups said actual income gaps are less pronounced because tax policies and non-cash benefits such as food stamps help low-income families. Moreover, said a Heritage Foundation study, the census exaggerates income differences by focusing on households rather than individuals. "Low-income households are small, often single persons," the Heritage study said. "By contrast, upper-income households are, in general, large, married-couple families."
But Greenstein said the income gap is real and problematic. "It ought to be narrowing during a recovery" such as the one the nation has enjoyed for the past several years, he said.
Greenstein said a key reason for the overall income growth in America is that inflation-adjusted wages rose in 1998 for low-paid workers, something that did not occur during much of the 1970s and '80s. "The increase in wages at the bottom of the income scale is a product of both the low unemployment and the increase in minimum wage," which was $5.15 for all of 1998.
The census report found that, on average, women working full time and year-round earned 73 percent as much as men, unchanged since 1997. The gap was most pronounced among those holding professional degrees, with median earnings of $90,653 for men in 1998 and $55,460 for women.
Foreign-born persons are among the nation's poorest residents, the census report found. Their poverty rate is 18 percent, compared with 12.1 percent for native-born residents.