Poverty and Income in America
The latest poverty and income figures came out last month and boy are they disturbing: 46 million Americans were living under the poverty line in 2010, the highest number since the Commerce Department started collecting the figures back in 1959.
Here’s another disturbing statistic: the typical American male who works full time and still has a job is earning almost exactly the same now as his counterpart was back in 1972, when Richard Nixon was in the White House.
These aren’t good statistics but if you consider that we’ve been through the deepest recession since the nineteen-thirties, it’s not too surprising to hear that the income of the American household in the middle of the income distribution—is now back to the level it was at in 1996: about $49,500 in inflation-adjusted dollars.
Considering all of the above, it’s pretty clear that the typical American family has made little or no progress since the late nineteen-nineties, a time when I think economic historians will come to look at as one elongated period of recessions and/or very low growth—the end of a great asset price boom.
The figures, which appear in Table A-5 at the back of the Census Bureau’s report (Income in the US Census Report 2010), are these. Median earnings for full-time, year-round male workers: 2010—$47,715; 1972—$47,550. That’s not a typo. In thirty-eight years, the annual earnings of the typical male worker, adjusted to 2010 dollars, have risen by $165, or $3.17 a week.
Is it any wonder Americans are not as optimistic as they used to be?
At some point, both political parties will have to level with the voters and tell them the truth: the postwar Golden Era is gone forever, and the great middle class has gone with it. This is nobody’s fault; it’s just how capitalism has developed. It’s true that deliberate government measures have certainly played a role in our current economic situation: opening America’s markets to cheap foreign competition; attacks on trades unions and labor laws; the practical abandonment of efforts to train (and retrain) large swaths of the non-college-graduate work force. But the major underlying economic trends are what got us to where we are today, and if anything, these trends are strengthening.