It News: Census: Rich-poor gap widens

Census: Rich-poor gap widens

By Dennis Cauchon and Paul Overberg, USA TODAY
2012/9/13

The income of American households continued to shift dramatically in 2011, falling sharply for middle-income and working-age people while rising for top earners and seniors, the Census Bureau reported Wednesday.
Overall, median household income fell 1.5% to $50,054 last year, the fourth consecutive annual decline after adjusting for inflation, the bureau said. The typical household has lost ground in seven of the past 10 years and now takes in less cash than it did in 1996 when adjusting for inflation.
The annual income report is a key indicator of the economic health of the USA and its middle class. Median income is the middle point of households — half made more, half made less in 2011. Only a handful of groups did better last year:
•Affluent. The income for the top 5% of households — those making $186,000 or more — rose 5.3% last year, reflecting the growing value of highly educated professionals. Income gains were greatest among the top 1%, said David Johnson, chief of social, economic and housing statistics for the Census Bureau. There is a "widening of the gap between the top and the bottom," he said.
•Seniors. Those 65 and older saw household income rise 2% above inflation last year and 12.8% over the last decade, helped by the steadiness of Social Security checks.

Big losers: people in their prime earning years. All age groups between 25 and 64 suffered income drops in 2011. Households headed by 45- to-54-year-olds — when earnings typically peak — have seen a 13.4% decline in median earnings over a decade, a drop of nearly $10,000 a year.
"You think everything else is going up, so the rate of pay would go up, but it's not," said Brian Wooldridge, 39, of Newport, Del., who's looking for an inventory control job that pays $3 an hour less than he once earned doing the same thing.
Other findings:
•Poverty. An estimated 15% of Americans — 46.2 million — lived in poverty last year, essentially unchanged from 2010.
•Health insurance. The share of Americans without health coverage at any time during the year fell to 15.7% in 2011, down from 16.3% in 2010. The drop partly reflects the early stages of the 2010 health care overhaul, such as allowing parents to insure children up to age 26, Johnson said.
Household income in 2011 was down 4.1% from 2009, when President Obama took office. It was 4.7% lower than in 2008, George W. Bush's last year in office, and 6.7% lower than in 2001, Bush's first year as president.
Census counts as income only cash received on a regular basis, such as wages, Social Security and unemployment checks. It doesn't include the value of Medicare, Medicaid, food stamps, the Earned Income Tax Credit, most employer benefits or capital gains from the sale of stocks or businesses.

Republican presidential nominee Mitt Romney said the numbers show that Obama "pretends that he's the candidate of the middle class," but he's really "the candidate that's pushed the middle class into poverty."
Amy Brundage, a White House spokeswoman, said the data "show that while we have made progress digging our way out of the worst economic crisis since the Great Depression, too many families are still struggling."

Julie Carroll, 38, is one of those joining the growing ranks of people with health insurance. After 15 years working without insurance in food service and construction, she just got a job in August at the Louisville Ford plant. "Now, I definitely have peace of mind," she says.
Before, "it was either eat or insurance," she said. She ran up a $75,000 surgery bill that she's slowly paying off.
The poverty rate in hard-hit Michigan declined. Donna Harrison, 46, of Westland, a Detroit suburb, said she's wasn't surprised. She landed a job last month cleaning machines at a commercial bread bakery. Harrison, a single mother, started at $12 an hour with a raise to $16 an hour after finishing training.
"It's through a temp service now, but there's a possibility of making it permanent after your probationary period," she said.
The Census Bureau reported that 1.4 million people gained health insurance last year.