TOPICS > Economy

Parsing the Numbers on Income, Poverty and Insurance from Latest U.S. Census

September 12, 2012 at 12:00 AM EST
Newly released census data paints a mixed picture of America's economy. The poverty rate remained stagnant. Wage gains have fallen below the level of inflation. And income inequality is at its highest in decades. Margaret Warner talks to New York Times' David Leonhardt to parse the numbers on income, poverty, and health care.

TRANSCRIPT

GWEN IFILL: Finally tonight: The U.S. census weighed in today with the latest numbers on income, poverty and the uninsured in America.

And again to Margaret Warner.

MARGARET WARNER: The new report was a sobering reminder of how far the economy fell in the recession and the long road back. Median household income slid for the second year to about $50,000, adjusted for inflation, the lowest level since the mid-’90s. Two million more people were working, but their earnings fell 2.5 percent.

The poverty rate was essentially flat at 15 percent, affecting some 46 million people.

And there was some good news on the health front. The ranks of uninsured Americans fell to 48.6 million, and the percentage with private insurance held steady for the first time in a decade.

To help break this down, we turn to David Leonhardt, Washington bureau chief for The New York Times. He writes frequently on economics.

Now we have sort of had a turnabout, in which we have started to see a recovery in employment, the very beginnings of a recovery, to be sure. We're nowhere near recovered. But wage gains have fallen behind inflation, both because the labor market is so weak that it's hard for workers to get raises, and because, over different periods, we have had increases, particularly in energy prices.David Leonhardt

And, David, thank you for joining us.

Give us the big picture here. What’s the big picture you took from this report in terms of the economic situation for average American families?

DAVID LEONHARDT, The New York Times: Well, the situation is not good. What we have had, essentially, over the last now more than a decade is we had a really mediocre, disappointing economic expansion last decade.

And then we had a terrible crisis that more than erased the gains that people had made. And that explains why, as you said, income is back down to its level of the mid to late 1990s, and the poverty rate is relatively high.

MARGARET WARNER: Which do you find more ominous, that the median household income fell or that, even though more people are working, the average wage also fell?

DAVID LEONHARDT: Well, we have had a little bit of a change here. In the early part of this last few years, in the recession itself, we had huge job loss.

But we also, for people working, still had wages going up more quickly than inflation, in part because inflation was quite low.

Now we have sort of had a turnabout, in which we have started to see a recovery in employment, the very beginnings of a recovery, to be sure. We’re nowhere near recovered. But wage gains have fallen behind inflation, both because the labor market is so weak that it’s hard for workers to get raises, and because, over different periods, we have had increases, particularly in energy prices.

MARGARET WARNER: Are the — is it the new jobs that are being created that are particularly low-wage, or are wages depressed throughout?

DAVID LEONHARDT: We don’t want to overstate the extent to which the new jobs that are being created are low-wage. There are some higher-wage jobs being created.

Look at the unemployment rate for college graduates. It’s still only 4 percent. And so there are good jobs, high-wage jobs being created in the economy.

But the full mix of jobs is not skewed toward high-wage jobs. If anything, there are some high-wage jobs. There are a whole bunch of low-wage jobs, and there are not as many middle-wage jobs as there used to be, in part because manufacturing is — is, again, having a hard time.

MARGARET WARNER: Now, what do you make of the poverty rate? It is at near record levels, but it remained flat. Didn’t many analysts thought — think that would worsen?

DAVID LEONHARDT: They did.

The poverty rate is a really tough statistic to deal with, because on the one hand poverty in this country arguably doesn’t get enough attention and the middle class arguably gets too much attention from those of us in the media. And so you want to use this as what seems like a rare chance to focus on poverty.

But this statistic is so flawed in so many different ways that it’s hard to pay too much heed to it.

The main way in which it’s flawed is that it doesn’t take into account all the things the government tries to do to alleviate poverty. Many of the benefits that the government gives out to the poor, benefits that rise in a recession are excluded from this.

It also doesn’t treat regions differently. So income in New York City is treated little different from income in Kansas. And so you’re right. People expected a little bit of an uptick. You’re right that we got a sort of flattening.

But I would actually say that the right portrait of poverty are not the numbers that come out today. They’re numbers that come out other times of year that give a richer sense of the experiences people are actually having than the poverty rate gives.

MARGARET WARNER: And, David, this report also was another bit of information about income inequality, and that in fact it is rising.

DAVID LEONHARDT: It’s continuing to rise.

This doesn’t give us a picture of the very top of the income distribution. Now, we need other numbers for that. But this does focus all the way up to the 95th percentile.

And what we see is that, by almost any measurement, income inequality is higher than it has been in the decades that the Census Department has been releasing data.

And, so, whether you look at someone at the top, the near top, say the 90th percentile, compared to the middle, or you look at the middle compared to the bottom, from an economic perspective, we are as unequal a country as we have been at least for many decades.

MARGARET WARNER: And then, finally, of course there was some good news on the health insurance front with more — with fewer people being uninsured in actual terms. What explains that?

DAVID LEONHARDT: Two things, really.

One is that, during a downturn, you often have more people go on to Medicaid, which is a government program largely, although not exclusively, for low-income people.

And the second thing is that the health care bill, some parts of it have already taken effect, and so that you have younger people who are able to remain on their parents’ insurance, for example.

And there’s really little doubt that we are seeing the early effects of the health care law in these numbers and that, for all the other grimness, there are people who have health insurance today who wouldn’t if it were not for the health care overhaul that passed in 2010.

MARGARET WARNER: Well, David Leonhardt of The New York Times, thank you. Thank you for helping us sort all this through.

DAVID LEONHARDT: Thank you.

MARGARET WARNER: And we have two blog posts to help you better understand today’s census report.

On our Making Sense page, Paul Solman looks at growing economic inequality and changes in poverty and household income.

And on our Health page, we explore why the number of Americans lacking health insurance fell last year for the first time since the recession began.