At Least the Economy is Doing Well

[Jim]

A Sobering Census Report: Americans' Meager Income Gains

The New York Times | Editorial

 

Wednesday 29 August 2007

 

The economic party is winding down and most working Americans never even got near the punch bowl.

 

The Census Bureau reported yesterday that median household income rose 0.7 percent last year - it's second annual increase in a row- to $48,201. The share of households living in poverty fell to 12.3 percent from 12.6 percent in 2005. This seems like welcome news, but a deeper look at the belated improvement in these numbers - more than five years after the end of the last recession - underscores how the gains from economic growth have failed to benefit most of the population.

 

The median household income last year was still about $1,000 less than in 2000, before the onset of the last recession. In 2006, 36.5 million Americans were living in poverty - 5 million more than six years before, when the poverty rate fell to 11.3 percent.

 

And what is perhaps most disturbing is that it appears this is as good as it's going to get.

 

Sputtering under the weight of the credit crisis and the associated drop in the housing market, the economic expansion that started in 2001 looks like it might enter history books with the dubious distinction of being the only sustained expansion on record in which the incomes of typical American households never reached the peak of the previous cycle. It seems that ordinary working families are going to have to wait - at the very minimum - until the next cycle to make up the losses they suffered in this one. There's no guarantee they will.

 

The gains against poverty last year were remarkably narrow. The poverty rate declined among the elderly, but it remained unchanged for people under 65. Analyzed by race, only Hispanics saw poverty decline on average while other groups experienced no gains.

 

The fortunes of middle-class, working Americans also appear less upbeat on closer consideration of the data. Indeed, earnings of men and women working full time actually fell more than 1 percent last year.

 

This suggests that when household incomes rose, it was because more members of the household went to work, not because anybody got a bigger paycheck. The median income of working-age households, those headed by somebody younger than 65, remained more than 2 percent lower than in 2001, the year of the recession.

 

Over all, the new data on incomes and poverty mesh consistently with the pattern of the last five years, in which the spoils of the nation's economic growth have flowed almost exclusively to the wealthy and the extremely wealthy, leaving little for everybody else.

 

Standard measures of inequality did not increase last year, according to the new census data. But over a longer period, the trend becomes crystal clear: the only group for which earnings in 2006 exceeded those of 2000 were the households in the top five percent of the earnings distribution. For everybody else, they were lower.

 

This stilted distribution of rewards underscores how economic growth alone has been insufficient to provide better living standards for most American families. What are needed are policies to help spread benefits broadly - be it more progressive taxation, or policies to strengthen public education and increase access to affordable health care.

 

Unfortunately, these policies are unlikely to come from the current White House. This administration prefers tax cuts for the lucky ones in the top five percent.

 

[Fairweather]

[KaskadskyjKozak]

 

Just wait until Billary tries to nationalize health care again.

[Fairweather]

This time (assuming she's elected - far from a certainty) she'll attempt to do it hand-in-hand with media restrictions via the "fairness doctrine". If she has her way, this go'round you won't likely see advertisements countering any ongoing health-care socialism "debate".

[catbirdseat]

Just wait until Billary tries to nationalize health care again.

Well, KK, here I am still unemployed. My six months of health coverage that was covered by my employer has expired. I will now write a check for COBRA coverage for $1500 each month.

[ericb]

Just wait until Billary tries to nationalize health care again.

Well, KK, here I am still unemployed. My six months of health coverage that was covered by my employer has expired. I will now write a check for COBRA coverage for $1500 each month.

 

Option A: Sit around complaining and bitching about what the government is not doing for you - vote democrat in hopes that you won't have to.....

 

Option B: Get a job

[KaskadskyjKozak]

Well, KK, here I am still unemployed. My six months of health coverage that was covered by my employer has expired. I will now write a check for COBRA coverage for $1500 each month.

 

Welcome to the club... been there, done that.

 

BTW, 1500?? WTF? Have you shopped around? Apply for coverage yourself - COBRA is likely far more expensive.

[Fairweather]

Just wait until Billary tries to nationalize health care again.

Well, KK, here I am still unemployed. My six months of health coverage that was covered by my employer has expired. I will now write a check for COBRA coverage for $1500 each month.

 

I sympathize, Catbird. But I refuse to believe someone with your skills and education is unable to find employment.

[catbirdseat]

I've been trying. I'll have to move out of the Seattle area to find work. There are lots of jobs in California. If I get "lucky" I'll get to move to Spokane.

[Fairweather]

Lower your standards and move down here to Tacoma with the right-thinking people.

[JayB]

Just wait until Billary tries to nationalize health care again.

Well, KK, here I am still unemployed. My six months of health coverage that was covered by my employer has expired. I will now write a check for COBRA coverage for $1500 each month.

 

 

I assume that you've looked into a catastrophic plan?

 

I was paying ~400 a month for 3-4 months before I realized that I should have gone with a catastrophic plan with a $2K deductible instead. Could have almost covered the full deductible with my premiums if I would have done that from the get-go. Catastrophic premiums were ~50/month, and when I did need care and paid out of pocket I got the benefit of in-network rates.

 

Also - are you still eligible to get retroactive coverage 60 days out when the company stops paying the premiums? You might be able to arrange for a cat-plan to start on the day the 60 day window closes and spare yourself $3K worth of premiums without forsaking coverage for a single day. Not sure if you can pull this off without mucking with all of the continuous coverage business, though.

[JayB]

The biotech job-market in Seattle seems to have been plummeting into oblivion from the late-90's onward.

 

Is anyone out there still smoking the "Biotech will replace the IT/aerospace jobs in Seattle" crack?

[KaskadskyjKozak]

I've been trying. I'll have to move out of the Seattle area to find work. There are lots of jobs in California. If I get "lucky" I'll get to move to Spokane.

 

A friend of mine is in the same boat. A very solid researcher in biotech who was consulting for years and finally was unemployed has had a hell of a time finding work.

 

Biotech in Seattle seems to have died slowly over the last 5 years. I used to be in the industry and wish I still were, but the jobs are not there, so I switched to plain old vanilla software dev - not as intellectually interesting or technologically as cool - that's for sure. I miss the days where I actually wrote software whose domain could keep my intellectual flame lit.

 

Good luck, man!

 

[Fairweather]

JayB - I think the Cobra rules have recently changed to narrow or close the no risk retro loophole. I might be wrong.

[JayB]

I've been trying. I'll have to move out of the Seattle area to find work. There are lots of jobs in California. If I get "lucky" I'll get to move to Spokane.

 

You'd probably get hired in about 6 hours and qualify for a paid move if you decided to look in the greater Boston area.

[KaskadskyjKozak]

I've been trying. I'll have to move out of the Seattle area to find work. There are lots of jobs in California. If I get "lucky" I'll get to move to Spokane.

 

You'd probably get hired in about 6 hours and qualify for a paid move if you decided to look in the greater Boston area.

 

I could never live anywhere East of the rockies... don't know how you do it, Jay.

[JayB]

JayB - I think the Cobra rules have recently changed to narrow or close the no risk retro loophole. I might be wrong.

 

Good to know. I'll have to start looking into this more closely before the planned unemployment commences next July.

[JayB]

I've been trying. I'll have to move out of the Seattle area to find work. There are lots of jobs in California. If I get "lucky" I'll get to move to Spokane.

 

You'd probably get hired in about 6 hours and qualify for a paid move if you decided to look in the greater Boston area.

 

I could never live anywhere East of the rockies... don't know how you do it, Jay.

 

Lots and lots of alcohol...

 

In my case, the thing that complicated my "never live East of the Rockies" plan was marrying someone who had to move to Boston for a 3-year residency. If all goes according to plan, the 36-month-long nightmare will be over at 12:00AM on June 31st of next year.

 

Having said all of that, and despite loathing Boston with a pathological intensity, I have to say that if someone put a gun to my head and forced me to live the rest of my life East of the Rockies, I'd probably choose New England - but I'd be in New Hampshire, Maine, or Vermont, or the Adirondacks instead.

[archenemy]

Poor planning.

The glass is twice as big as it needs to be.

[KaskadskyjKozak]

Poor planning.

The glass is twice as big as it needs to be.

 

He supersized it.

[KaskadskyjKozak]

Lots and lots of alcohol...

 

In my case, the thing that complicated my "never live East of the Rockies" plan was marrying someone who had to move to Boston for a 3-year residency. If all goes according to plan, the 36-month-long nightmare will be over at 12:00AM on June 31st of next year.

 

Having said all of that, and despite loathing Boston with a pathological intensity, I have to say that if someone put a gun to my head and forced me to live the rest of my life East of the Rockies, I'd probably choose New England - but I'd be in New Hampshire, Maine, or Vermont, or the Adirondacks instead.

 

I'd rather live in Canada.

 

Or France.

 

That says a lot.

[ClimbingPanther]

I'd rather live in Canada.

 

Or France.

 

That says a lot.

 

France? Really? You do realize that you have to have a big stick up your butt to live in France, right?

[Jim]

Gotta say however, after visiting some relatives in England this summer, we're getting hosed over here regarding health care. I brought up the subject numerous times with relatives, neighbors, and their friends. No one had a bad story. They were appalled about hearing the costs involved in care over here and that there are so many folks without coverage.

 

Even went to the clinc and pharmacy with my cousin. She's 65 and on several medications for diabetes. No charge for the checkup, about $10 charge for a months worth of insulin that included her insulin meter pipettes.

 

Neighbors had a baby, no charge; friend had heart surgey, no charge; broken ankle, no charge. I didn't see MM's "Sicko" until I got back. Man we are being swindled big time by the insurance companies. Duh - why do you think we're the only industrial country not to have a universal system.

 

Sad to say it will not come from Hillary - take a look at her donar list these days.

 

My Irish citizenship papers are in the works (will have dual) and as part of the EU that keeps options open.

[Jim]

[quote=JayB

Having said all of that, and despite loathing Boston with a pathological intensity, I have to say that if someone put a gun to my head and forced me to live the rest of my life East of the Rockies, I'd probably choose New England - but I'd be in New Hampshire, Maine, or Vermont, or the Adirondacks instead.

 

I grew up on the east coast and New England is a great place. If I couldn't live out west it would be the place to be. The scale of the landscapes are a bit smaller but there are some great climbing (rock and ice) and some really wonderful rivers. Came very close to taking a biologist position with NY state in New Paltz 20 yrs ago. Probably would never have learn the tele-turn if that happened. But would have been pulling over some great overhangs!

[JayB]

Gotta say however, after visiting some relatives in England this summer, we're getting hosed over here regarding health care. I brought up the subject numerous times with relatives, neighbors, and their friends. No one had a bad story. They were appalled about hearing the costs involved in care over here and that there are so many folks without coverage.

 

Even went to the clinc and pharmacy with my cousin. She's 65 and on several medications for diabetes. No charge for the checkup, about $10 charge for a months worth of insulin that included her insulin meter pipettes.

 

Neighbors had a baby, no charge; friend had heart surgey, no charge; broken ankle, no charge. I didn't see MM's "Sicko" until I got back. Man we are being swindled big time by the insurance companies. Duh - why do you think we're the only industrial country not to have a universal system.

 

Sad to say it will not come from Hillary - take a look at her donar list these days.

 

My Irish citizenship papers are in the works (will have dual) and as part of the EU that keeps options open.

 

Not a snide comment - but did you discuss the economic reforms that the Irish have made over the past ~20 years with any Irish people, since it sounds like you have some connections there?