September 26, 2003

Better News Than I Thought We Would Get

Ah. The Census Poverty Report is better news than I thought we would get. The rise in poverty in 2002 over 2001 was small, as was the fall in median income.

Poverty rises, incomes fall in latest Census report - Sep. 26, 2003: Poverty in the United States rose for the second straight year in 2002, while median incomes fell for the third straight year, the government said Friday. The percentage of Americans living in poverty rose to 12.1 percent from 11.7 percent in 2001, the Census Bureau reported, the highest rate since 12.9 percent in 1998. Median household income fell 1.1 percent to $42,409 from $42,900 in 2001. Median income was $43,848 in 2000 and $43,915 in 1999.... About 34.6 million people were in poverty in 2002, 1.7 million more than in 2001.

Posted by DeLong at September 26, 2003 09:02 AM | TrackBack


I know a recession is a complicated thing, but if I had to pick one statistic to look at it in determining one it would probably be median income.

Posted by: theCoach on September 26, 2003 09:43 AM


"Better?" I think "Less bad" may be more appropriate.

Posted by: don freeman on September 26, 2003 10:02 AM

Who's Poor? Don't Ask the Census Bureau

Today the Census Bureau will release the official poverty rate for 2002. While that figure is likely to indicate that the ranks of the poor have increased, it unfortunately won't really tell us much of anything about the true extent of poverty in America.

The problem is that the official definition of poverty no longer provides an accurate picture of material deprivation. The current measure was created 40 years ago by a government statistician, Mollie Orshansky, and hasn't much changed since. "Anyone who thinks we ought to change it is perfectly right," Ms. Orshansky told an interviewer in 2001.

The current procedure takes the 1963 poverty thresholds for each given family size devised by Ms. Orshansky and updates them for inflation. For example, if the income of a family of four with two adults and two children fell below $18,244 last year, they were counted as poor by the bureau. Simple, yes, but there are two basic problems.

First, it fails to capture important changes in consumption patterns since the early 1960's....

Second, the current measure leaves out some sources of income and some expenditures that weren't relevant when it was devised....

Posted by: anne on September 26, 2003 10:25 AM

OK, so I'm looking at the Census press release and related data, and I have to say I'm less than cheeful about it.

So, the overall decrease in household median income was 1.1%. But that breaks down into no change for white-only and asian-only households, and bigger declines for all other groups. (2.5% to 4% depending on the precise group).

Also, per capita income declined by 1.8% in real terms, which is the first decline in that series since 1991.

Even if better than you might expect, these are not data I think the Bush administration would want to see in year 3 of an election cycle, especially if the current environment is like that of the early 90s recession. If it is, we can expect another modest increase next year, at which point it's a lock that median income, like overall employment, will be down during the administration. That's not the way to get re-elected...

Posted by: Jonathan King on September 26, 2003 10:25 AM

Related and important analysis ---

New CBO Data On Income And Tax Trends

New data from CBO show that the income of the top one percent of households increased dramatically in both the 1980s and 1990s, and the gaps between these households and other Americans widened substantially. In conjunction with other new data, the CBO data indicate that in 2000, income was more concentrated among the top one percent than since 1929.

Posted by: anne on September 26, 2003 10:32 AM

About 34.6 million people were in poverty in 2002, 1.7 million more than in 2001.

Just 1.7 million more? Hey, get out the party hats!

Posted by: Billmon on September 26, 2003 10:37 AM

Jonathan King

Nicely put! The data per se and direction are troublesome.

Posted by: lise on September 26, 2003 10:44 AM

Anne, the NYTimes article has a good point, but the trend is similar whether or not the assessment methods are the same.

Posted by: bakho on September 26, 2003 12:07 PM


Agreed as usual. The poverty trend is not promising. Note also the cbpp income and tax trend analysis.


Posted by: anne on September 26, 2003 12:27 PM

As one unemployed for 38 months, one can see nothing good in any increase in poverty or any reduction in income.

Both trends are still in the wrong direction and do not portend a recovery that will ameliorate the jobless recovery.

One has two college degrees (MBA, BSEE), is a FAA certified commercial pilot, and has served as an officer the military. Despite interesting experience, training, and education, one has not heard from either a company or recruiter in over 18 months.

Consequently, one must conclude that the economy has not turned the corner and is only showing growth through profligate war spending and overtaxed workers.

Many of us are slowly following the path to outright poverty. What does it say about a nation that discards well educated and experienced workers with such indifference?

Posted by: outsourced on September 27, 2003 06:09 PM
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