So some props are in order today for splashing a good story on a report from the Census Bureau showing that poverty jumped last year and incomes tumbled.
The New York Times also fronts the news, but it buries the median income information in the 22nd paragraph.
Here’s the Journal’s superb lede (I ought to disclose while I’m doling out superlatives that the lead reporter on this, Conor Dougherty, is a pal from our cubicle-neighbor days at 200 Liberty Street):
The downturn that some have dubbed the “Great Recession” has trimmed the typical household’s income significantly, new Census data show, following years of stagnant wage growth that made the past decade the worst for American families in at least half a century.
In just the last two years, median incomes tumbled 4.2 percent. But that’s actually not as bad as you might expect. The Journal has some critical context:
The bureau said that the drop in income in the recent recession, so far, wasn’t much different from those recorded in the early 1990s and early 2000s recessions, and was actually smaller than the 6% drop recorded in the deep recession of the early 1980s.
But there is a difference this time: In the prior three recessions, incomes fell after years of upswing, then resumed growing once the downturn ended. The decline this time comes on top of a long period in which incomes stagnated even through the recovery of 2003 to 2007.
Well, the incomes of the bottom 90 percent of earners stagnated during Larry Kudlow’s “Bush Boom,” anyway. The top 1 percent were just fine, thanks. Their incomes soared 62 percent during the recovery. And the top 0.1 percent nearly doubled their income.
It’s interesting that incomes have fallen less in this deep, sharp recession than they have in previous, less dramatic ones. Why would that be? That’s something to look into.
But because there were virtually no median income gains in the recovery, the median income is now far lower than it was a decade ago:
The inflation-adjusted income of the median household—smack in the middle of the populace—fell 4.8% between 2000 and 2009, even worse than the 1970s, when median income rose 1.9% despite high unemployment and inflation.
Both the Times and Journal do well to include context about the poverty numbers, which jumped by 10 percent or so to 44 million Americans—one in seven. Those numbers don’t account for antipoverty programs like food stamps that protect the poor. The Times says those (at least technically) push eight million people people above the poverty line.
Income stagnation and inequality is the most important economic story of the last ten years. It underlies so much of the flashier stuff that’s happened in the last three.
Good for the Journal for focusing on it.