By Cecilio Morales
The Census used to take reporters to its headquarters in the Maryland hinterlands for its annual income and poverty rate unveiling. You gathered at the National Press Building and climbed in a little bus with a number of folks, many of whom had drawn short straws for the trip.
This year, on Sept. 13, it was all on the web.
Census folk, I believe they are a species all their own, effectively recited the release, as always, a few actually managing something close to Shakespearean inflection. Then came questions, mainly from twinkies; these are broadcast critters who wouldn’t know a poverty rate if it came to shake its hand.
You’ve heard the headline news: it was good. Household median income up 5.2 in 2015 compared with 2014; official poverty rate down from 14.8 percent in 2014 to 13.5 percent in 2015 (it was a little over 11 percent after the “failed” War on Poverty, down from 19 percent before, but never mind).
Here’s a key fact the statisticians tried hard to get across: income inequality didn’t budge.
The Gini index, a statistical measure of income inequality ranging from 0 to 1, posted as 0.479 for 2015 (it had been 0.480 in 2014). Trudi Renwick, assistant division chief for economic characteristics in the Census Bureau’s Social, Economic and Housing Statistics Division, called that “flat.”
Did you read “flat” in newspaper headlines or on the TV nooze? I bet you didn’t.
Let’s put it in other terms. Only 6.1 percent of households had earnings of $200,000; 11.5 percent took in less than $15,000. Moreover, the big income boost was actually the first since 2007. Thank you very much for flat household income for seven years! In addition, it still was 1.6 percent lower than in 2007, the year before the Great Recession—actually, a depression, but that’s another discussion.
So we’re celebrating like it’s the 2008 we should have had … eight years later.
Then there’s the red herring of poverty rate measurement. Don’t fall for it.
The conservative or “neoliberal” argument is that we should measure consumption, not income, particularly since there is that mass of lazy people who get some kind of public assistance. I have actually read Heritage Foundation papers claiming that anyone who has air-conditioning or power steering in their cars should not be deemed poor.
The liberal—read: centrist—take (adopted by the National Academy of Sciences in 1995) is: Okay, we’ll add the dollar value of noncash housing subsidies and food aid, but take off taxes, work expenses and medical costs.
End result: by the “supplemental poverty measure” the poverty rate in 2015 was 14.3 percent. It moved down just about as much as the official measure. Thomas Aquinas, not a Marxist philosopher by any means, would have called it “a distinction without a difference.”
One need not claim the Census jimmied the numbers to make things look good for President Obama, which I believe is false, to conclude that a lot of the economic news presented to the public is absurdly misleading.
The real news wasn’t that good. Don’t believe me, believe the Federal Reserve, which passed on raising interest rates this month; even though Fed Vice Chairman Stanley Fischer came out of the Jackson Hole, Wyo., powwow on Sept. 30 claiming the labor market “is very close to full employment.”
Why didn’t they raise rates? Obviously, they see we’re in no danger of galloping inflation. Of course not; with earnings of most people stuck at pre-depression levels there is no demand pressure for goods.
Cecilio Morales is executive editor of Employment & Training Reporter
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