As often as not, I devote a column to the Census Bureau’s annual report on “Income, Poverty and Health Insurance Coverage.” It’s a statistical benchmark that traditionally measures our progressor lack of it — in improving the economic well-being of Americans. But this year’s report for 2010, which was released last week, understates the bad news.
Not that the findings are upbeat. Quite the opposite: They’re grim. Median household income was $49,445, down 6.4 percent from 2007, the recent peak, and the lowest since 1996. Comparable declines have occurred in the past; for example, the drop from 1979 to 1983 was 5.7 percent. All these figures are expressed in inflation-adjusted 2010 dollars.
The poverty rate tells a similar story. It was 15.1 percent in 2010, meaning that a little more than one-seventh of the population has pretax income under the government poverty line ($22,314 for a four-person household). That’s about three percentage points higher than in 2006 and, more tellingly, about 10 million more people: 46.2 million versus 36.5 million. Depressing.
But again, not unusual.
Even the employed feel loss, anxiety
From just the numbers, the message seems to be that we’ve been here before. But I don’t think it’s true, and I suspect most Americans agree. The standard trends measured by the Census Bureau don’t fully convey the recession’s effects on Americans’ welfare and psychology.
Excluding the long 1980-82 slump, recessions since World War II have been compartmentalized. Suffering and hardship have concentrated on a small part of the population: the workers who lost jobs and their families; and business owners whose firms failed. Most Americans continued as before.
No more.
Even for millions of Americans with jobs, there’s a palpable sense of loss and anxiety. One reason is the devastating housing slump, subtracting huge amounts from people’s wealth. About half of households also own stocks. The market’s daily gyrations inflict a feeling of vulnerability.
Perhaps as powerful are parents’ fears for their children. The jobless rate for young workers (ages 20 to 24) is always high, but now it is an astronomical 14.8 percent. Studies suggest that young workers who experience intermittent work and low wages in a harsh economy may suffer permanently depressed lifetime earnings.
It’s really worse than survey shows
What’s also changed is the nature of unemployment. Through the early 1980s, many jobless were on temporary layoffs. These workers collected unemployment benefits; most expected to be recalled.
Now, most dismissed workers need new jobs, with the likelihood of lower earnings. And many of the employed worry. The Gallup poll regularly asks workers whether they fear cuts in hours, wages and benefits — or being fired. In August, the responses were, respectively, 30 percent (hours), 33 percent (wages), 44 percent (benefits) and 30 percent (dismissal). Considering some overlap, probably half felt threatened.
A fatalistic sense that the economic slump will never end is often present, as it is now, in the early stages of recovery. Sometime in the future, we may view today’s melancholy similarly. Maybe we’re caught in a pessimism trap. But past recessions often had benefits. Any benefits from the Great Recession are well-hidden.
The Census Bureau study of income and poverty is often called “the nation’s economic report card.” Paradoxically, this year’s low grades actually overstate our performance. History suggests that our grades will improve as the economy improves. Perhaps. But if this slump is different, next year’s grades could be worse.
Robert J. Samuelson is a contributing editor of Newsweek and The Washington Post and writes about business and economic issues.
