The Census Bureau has just released its 2013 edition of “Income and Poverty in the United States,” sometimes called the nation’s “economic report card.” It depicts a country that is slowly — but convincingly — recovering from a calamitous slump. As always, the report bulges with figures. Let me highlight five trends that seem significant.
● Middle-class incomes have dropped to levels of the late 1980s or early 1990s. In a recent column based on a study from the Federal Reserve, I showed that this was the case. The Census report confirms it. In 2013, the income of the median household — the one exactly in the middle — was $51,939. Though level with 2012, this was down from $56,436 in 2007, just before the financial crisis, and was nearly identical to the 1990 median of $51,735. This is sobering. (All figures are adjusted for inflation and given in “2013 constant dollars.”)
● There have been steady gains in full-time employment. From 2007 to 2010, the number of full-time, year-round workers dropped from 108.6 million to 99.5 million, while the number of part-timers and seasonal workers rose from 50.2 million to 54.1 million. These trends have reversed. In 2013, full-time, year-round workers totaled 105.8 million and part-time or part-year workers fell to 52.3 million. The shifts may explain why the official poverty rate inched down from 15 percent in 2012 to 14.5 percent in 2013. This is encouraging.
● Women’s pay is catching up to men’s. In 2013, women employed full-time and year-round earned 78 percent of what men did. That’s a record high, reflecting a shift that began in the 1980s. In 1960, women’s pay was about 60 percent of men’s; in 1980, it was still about 60 percent. Since then, women have moved into better-paying jobs. Studies suggest that much (though not all) of the remaining gap reflects career choices, time taken off for parenting and average work hours. This is (and has been) transformational.
● Economic inequality isn’t easing. The poorest fifth of Americans received only 3.2 percent of the nation’s pretax income in 2013 — a record low matched in 2012 and 2011. Meanwhile, the richest fifth received 51 percent of pretax income and, within this group, the richest 5 percent received 22.2 percent. (Census counts cash income but excludes fringe benefits, such as employer-provided health insurance and many non-cash government benefits, such as food stamps.) Though it has worsened, inequality has always been acute. In 1967, the poorest fifth received 4 percent of pretax income and the richest fifth 43.6 percent. This is disturbing.
● Upper-middle-class America is still well-off by any historical standard. In 2012, 22.5 percent of U.S. households had inflation-adjusted pretax incomes exceeding $100,000 and another 11.9 percent had incomes between $75,000 and $100,000. Although these figures are slightly below 2007 levels (24.5 percent were then above $100,000), they are much higher than in 1980, when only 13.1 percent were over the $100,000 threshold. This is astonishing.
The annual income and poverty report reminds us of our economic strengths and weaknesses. Long-standing racial and ethnic differences remain. In 2013, median household incomes for blacks and Hispanics were only 59 percent and 70 percent of that of non-Hispanic whites. On the other hand, there’s ample evidence of underlying resilience. Overall, I’d grade us at a B-minus.
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