Downward Mobility
EDITORIAL, NYTimes on
the Web, August 30, 2006
If you’re still harboring the notion
that the economy is “good,” prepare to be disabused.
Even the best number from yesterday’s Census Bureau report for 2005 is bad news
for most Americans. It shows that median income rose 1.1 percent last
year, to $46,326, the first increase since it peaked in 1999. But the
entire increase is attributable to the 23 million households headed by someone
over age 65. So the gain is likely from investment income and Social
Security, not wages and salaries.
For the other 91 million households, the median dropped, by half a percent, or
$275. Incomes for the under-65 crowd were hurt by a decline in wages and
salaries among full-time working men for the second year in a row, and among
full-time working women for the third straight year. In all, median income
for the under-65 group was $2,000 lower in 2005 than in 2001, when the last
recession bottomed out.
Despite the Bush-era expansion, the number of Americans living in poverty in
2005 — 37 million — was the same as in 2004. This is the first time the
number has not risen since 2000. But the share of the population now in
poverty — 12.6 percent — is still higher than at the trough of the last
recession, when it was 11.7 percent. And among the poor, 43 percent were
living below half the poverty line in 2005 — $7,800 for a family of three.
That’s the highest percentage of people in “deep poverty” since the government
started keeping track of those numbers in 1975.
As for the uninsured, their ranks grew in 2005 by 1.3 million people, to a
record 46.6 million, or 15.9 percent. That’s also worse than the recession year
2001, reflecting the rising costs of health coverage and a dearth of initiatives
to help families and companies cope with the burden. For the first time
since 1998, the percentage of uninsured children increased in 2005.
The Census findings are yet another indication that growth alone is not the
answer to the economic and social ills of poverty, income inequality and lack of
insurance. Economic growth was strong in 2005, and productivity growth was
impressive. What have been missing are government policies that help to
ensure that the benefits of growth are broadly shared — like strong support for
public education, a progressive income tax, affordable health care, a higher
minimum wage and other labor protections.
President Bush is unlikely to push for those changes, wed as he is to tax cuts
that mainly benefit the wealthy. But the economic agenda for the next
president couldn’t be clearer.
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