Census Bureau: Poverty Increases, Median Family Income Decreases –

What If They Gave a Recovery and Nobody Came Except the Rich

The Census Bureau has released its report on poverty and income for 2010, and the results are not very pleasant.  In fact, the results are horrifying.

About 46.2 million Americans lived in poverty last year, marking an increase of 2.6 million over 2009 and the fourth consecutive annual increase in poverty.

In 1993 the U. S. replaced the Reagan/Bush administrations with the Bill Clinton administration.  Poverty rates started to come down.  How have we done since?

The nation’s poverty rate spiked to 15.1 percent in 2010, the highest level since 1993,

That’s correct, after all of the economic growth in the 1990’s and after all of the tax cuts of the George W. Bush administration that were supposed to be so fantastic, the U. S. has returned to the poverty level of 1993.

Median Family Income measures the income of the exact middle income family.  The results for 2010

Income Slides to 1996 Levels

Median Household Earnings Fall for Third Year, Census Says

That’s correct, after all of the economic growth in the 1990’s and after all of the tax cuts of the George W. Bush administration that were supposed to be so fantastic, the income of middle class families in the U. S. has returned to the level of 1996.

Several books could be written on the importance of these numbers.  In terms of the current Great Recession, they explain two very important things. One is that in order to increase consumption in the face of stagnant income, middle income families borrowed heavily, primarily in credit card debt and home mortgage debt.  That this borrowing could not continue indefinitely was borne out by the economic collapse of 2008.  The second point is that without rising incomes, middle class families could not have rising consumption, business could not have rising demand, and so employers had no need to hire a lot of the unemployed.

Of course, then the top fifth of all families take half of all the income, it’s kinda hard for the rest to have all that much.

Meanwhile, the gap between the best-off and worst-off Americans remained largely unchanged. The top fifth of households accounted for 50.2% of all pre-tax income; the bottom two-fifths got 11.8%. In 1999, the top fifth claimed 49.4% and the bottom got 12.5% of the income.

That a real recovery can not take place is evidenced by the fact that median family income fell 2.5% in 2010.  Without rising middle class income no sustained economic recovery can take place.  Without economic policies to raise middle class incomes, rising middle class incomes cannot take place.  Anybody see any economic policies to raise middle class incomes?