Census Bureau poverty distortion

[bfp]

Making Sense of the Census
The truth about the latest income-distribution report.


The Census Bureau released its annual income-distribution report late last week. The good news is that the distribution of income has been essentially unchanged for the last three years. The bad news is that this is because every income group is worse off to about the same degree.


Between 2000 and 2003, the share of total income going to the top quintile (20 percent of households) was exactly unchanged at 49.8 percent. The middle three quintiles — the middle class — were slightly better off, raising their share of aggregate income from 46.7 percent to 46.9 percent. The bottom quintile was slightly worse off, falling from 3.6 percent to 3.4 percent.

However, the real income of every group is down significantly since 2000, including those at the top. Their income is down almost $5,000 (in 2003 dollars), about the same as the lower 80 percent of households in total.

Needless to say, there is no reason to cry for those in the top quintile — often characterized as the “rich.” They are still doing very well, with an average income of $147,078 in 2003. However, it is doubtful that very many people view this as a rich-family’s income, especially when both spouses work.

This fact is even clearer when looking at the income needed to get into the top quintile, which is a mere $86,867. Almost any couple that has both spouses working full time is going to be close to this level. According to the Census Bureau, the median earnings for a male working full time last year were $40,668; for females the median earnings were $30,724. That adds up to a combined income of $71,393.

In short, all it takes to be relatively well-to-do in America today is to work full time and be married to someone else who also works full time.

Of course, it is still appalling that there are so many people who must scrape by on a mere pittance — the average income of those in the bottom quintile was just $9,996 last year. But this figure is deceptive for many reasons.

First of all, it excludes almost everything we do as a society to help the poor. The Census data count money income only and exclude in-kind benefits, such as food stamps, Medicare, Medicaid, and public housing. The poverty data also have this same limitation.

In years past, the Census Bureau has simultaneously released estimates of how the inclusion of in-kind benefits affect income levels and the poverty rate. For some reason, these data were left out of this report.

Another factor that is excluded is wealth. There are many people in this country — mainly the elderly — who have low incomes, but in fact are well off because they may own their homes free and clear and also have other assets.

Finally, these Census data tend to imply that people are stuck in the same income group year after year, when in reality there is substantial upward mobility. Almost everyone spends some time in the bottom quintile when they are starting out in life, and other times because they have suffered a temporary loss. But they move up the income ladder and rebound from setbacks.

In previous years, the Census Bureau has simultaneously released income-mobility data, but has not done so this year. Earlier data have shown that a large fraction of those who were in poverty or a low income quintile one year were out of poverty or in a higher quintile within a year or two.

Most people know this even if the Census Bureau doesn’t say it. A 2003 Gallup poll found that 31 percent of the population believes that it is very likely, or somewhat likely, that they will become rich. No doubt, an even higher fraction believes that their children have a good shot at it.

Indeed, almost every generation of families is better off than the earlier one. Not only have real incomes risen sharply over time, but most people are well aware that they are better off than their parents. A 1996 Reader’s Digest poll found that while 18 percent of people consider themselves to be in the lower class as children, only 6 percent put themselves in that class as adults.

These Census data will probably be grist for the campaign trail, as Democrats charge that Republican tax cuts have worsened the distribution of income. But voters should be aware that these data tell us nothing whatsoever about how taxes affect incomes because taxes are another item excluded from the calculations. All the figures are before taxes.

Thus, not only does the Census Bureau exclude most of what we do to help the poor, it also excludes everything we do to bring down the rich and equalize incomes. In truth, the Census Bureau tells us very little about wealth and poverty in America.

— Bruce Bartlett is senior fellow for the National Center for Policy Analysis. Write to him here.

[MysteryMeat]

hey bfp..... which side are you on again?

[Porkchop Avenger]

Now where is the report on cost of living?

[Adam D]

Wow...that's a basket full of lies about the numbers.

[USAcommitteeX]

hey bfp..... which side are you on again?

Hey MysteryMeat..can one express himself or talk about issues without an ignorant rant from you or Ryan?

[Adam D]

Originally Posted by bfp

Making Sense of the Census
The truth about the latest income-distribution report.


The Census Bureau released its annual income-distribution report late last week. The good news is that the distribution of income has been essentially unchanged for the last three years. The bad news is that this is because every income group is worse off to about the same degree.


Between 2000 and 2003, the share of total income going to the top quintile (20 percent of households) was exactly unchanged at 49.8 percent. The middle three quintiles — the middle class — were slightly better off, raising their share of aggregate income from 46.7 percent to 46.9 percent. The bottom quintile was slightly worse off, falling from 3.6 percent to 3.4 percent.

However, the real income of every group is down significantly since 2000, including those at the top. Their income is down almost $5,000 (in 2003 dollars), about the same as the lower 80 percent of households in total.

I don't know what report he was smoking...I mean, reading because the actual Census data shows that every group except the top 20% fell, while the top 20% rose during 2003.

Needless to say, there is no reason to cry for those in the top quintile — often characterized as the “rich.” They are still doing very well, with an average income of $147,078 in 2003. However, it is doubtful that very many people view this as a rich-family’s income, especially when both spouses work.

This fact is even clearer when looking at the income needed to get into the top quintile, which is a mere $86,867. Almost any couple that has both spouses working full time is going to be close to this level. According to the Census Bureau, the median earnings for a male working full time last year were $40,668; for females the median earnings were $30,724. That adds up to a combined income of $71,393.

In short, all it takes to be relatively well-to-do in America today is to work full time and be married to someone else who also works full time.

Except that's a bad ploy with numbers. The statistical median for a family is only in the $50,000's. Moreover, there's no statistical evidence, or evidence whatsoever, for the author's claim here.

In addition, anybody worth 3 hours in statistical analysis education knows that using median values in this manner proves virtually nothing, simply because median values proves little more than one's ability to count. One would have to know the other values of the data set to be able to determine the validity of such a claim and replicate the original methodology. One would have to examine the data to ensure that the numbers play together in such a simple fashion. For instance, it may be possible that in families with two working spouses the median income for both is lower than if one were working, or that a working woman with a non-working spouse may earn disproportionately more than if her spouse works (or vice versa), or a man may earn disproportionately more single than he would with a spouse.

There's no way of knowing by simply looking at median data.

Of course, it is still appalling that there are so many people who must scrape by on a mere pittance — the average income of those in the bottom quintile was just $9,996 last year. But this figure is deceptive for many reasons.

First of all, it excludes almost everything we do as a society to help the poor. The Census data count money income only and exclude in-kind benefits, such as food stamps, Medicare, Medicaid, and public housing. The poverty data also have this same limitation.

In years past, the Census Bureau has simultaneously released estimates of how the inclusion of in-kind benefits affect income levels and the poverty rate. For some reason, these data were left out of this report.

Another factor that is excluded is wealth. There are many people in this country — mainly the elderly — who have low incomes, but in fact are well off because they may own their homes free and clear and also have other assets.

These assertions have been better responded elsewhere, often by economists and policy analysts who would assert the poverty line is far bellow where it should be.

Finally, these Census data tend to imply that people are stuck in the same income group year after year, when in reality there is substantial upward mobility. Almost everyone spends some time in the bottom quintile when they are starting out in life, and other times because they have suffered a temporary loss. But they move up the income ladder and rebound from setbacks.

In previous years, the Census Bureau has simultaneously released income-mobility data, but has not done so this year. Earlier data have shown that a large fraction of those who were in poverty or a low income quintile one year were out of poverty or in a higher quintile within a year or two.

Ignoring the obvious contradiction with his last contention, this doesn't really prove much, either.

If income is declining and the numbers in poverty is rising, clearly the upward mobility is not there. That's quite obvious. Moreover, the upward mobility data merely proves that as people get older they make more money. That's not exactly rocket science. What it doesn't show is that people are most likely to remain in the same income bracket as their parents. Additionally, it does not reflect upward mobility beyond early adulthood, aside from the combination of assets and income through marriage.

Most people know this even if the Census Bureau doesn’t say it. A 2003 Gallup poll found that 31 percent of the population believes that it is very likely, or somewhat likely, that they will become rich. No doubt, an even higher fraction believes that their children have a good shot at it.

Poll data also shows people believe there are only between 1-2 million people in poverty, and that the poverty line should be drawn at $40,000.

Indeed, almost every generation of families is better off than the earlier one. Not only have real incomes risen sharply over time, but most people are well aware that they are better off than their parents. A 1996 Reader’s Digest poll found that while 18 percent of people consider themselves to be in the lower class as children, only 6 percent put themselves in that class as adults.

There's the sign of a strong argument...Reader's Digest polls. And only a poll, it says nothing of the actual numbers. Not to mention, this poll is 8 years old.

These Census data will probably be grist for the campaign trail, as Democrats charge that Republican tax cuts have worsened the distribution of income. But voters should be aware that these data tell us nothing whatsoever about how taxes affect incomes because taxes are another item excluded from the calculations. All the figures are before taxes.

It shows exactly what the effects of the tax cuts were. The poor and middle class lost and the rich won.

Thus, not only does the Census Bureau exclude most of what we do to help the poor, it also excludes everything we do to bring down the rich and equalize incomes. In truth, the Census Bureau tells us very little about wealth and poverty in America.

Next time, try to roll out a new argument.

[MysteryMeat]

Originally Posted by USAcommitteeX

Hey MysteryMeat..can one express himself or talk about issues without an ignorant rant from you or Ryan?

1. I made a observatory question, not a rant
   
2. I fail to see the ignorance in asking a question
   
3. Try reading the forum rules next time you want to call my POV an 'ignorant rant'
   

I'm sure Peter's going to just love you, my friend.

[Ryan]

Originally Posted by USAcommitteeX

Hey MysteryMeat..can one express himself or talk about issues without an ignorant rant from you or Ryan?

Hey USACommitteeX - can you or bfp ever formulate an argument based upon unbiased facts, rather than simply post an article from a right-wing news source, throw in personal jabs, and then flee the conversation once you are put in your place? I didn't think so.