Tuesday’s release of Census annual report on poverty and income for 2007 had some news, and it has now been left to experts to decide whether the report bodes ill or good:
• The average American household’s income rose for the third year running;
• Income inequality fell yet again, meaning the gap between the rich and poor decreased;
• Poverty rate inched up very, very slightly from 12.3 percent to 12.5 percent; and
• Every August, economists rush from their vacations to offer their opinions on this report.
In an e-mail reaction, Rea Herderman of the Heritage Foundation hails the report for announcing that last year income inequality had dropped, median household income had increased, and the poverty rate had increased by a statistically-insignificant amount.
“Real median income increased to above $50,000 for the first time since the 2001 recession. While this report contains good news about the economy, the news would be even better if the Census Bureau included in-kind benefits as a way to reveal the true state of poverty,” he says.
He continues: “Unfortunately, this report from the Census Bureau does not include anti-poverty programs such as the Earned Income Tax Credit (EITC), which would increase income to households in the bottom quintiles, or the tax code, which attempts to reduce income inequality with a progressive tax rate structure. A previous report issued in the spring indicates that income inequality would fall even further if the tax codes’ progressivity were taken into account.”
He also notes that “single motherhood continues to be a large factor in why so many children are in poverty. 43 percent of children in single-mother families were in poverty, compared to only 8.5 percent of children in married families.”
Rebecca Blank, a Senior Fellow at the Brookings Institution, suggested to an audience at the DC-based think tank that the poverty data is divorced from economic realities.
“There ought to be a policy to expand the economy and earnings; participation by more people in the creation of wealth; invest in productive citizens; put up a safety net for those not making it in life and to ensure employment grows as unemployment declines,” she said.
She said the poverty story should, of necessity, encompass taxation of the higher classes and re-distribution of national wealth.
Also speaking at Brookings, Lashawn Richburg-Hayes, the senior associate in young adults and post-secondary education policy area at the MRDC, believed there is a greater significance in what the report does not say.
“It does not take into account poverty dynamics. It takes no cognizance of targeted approaches to alleviate poverty across gender, age and race. It is blind to contextualized and well-funded programs for non-traditional students whose status could alter the poverty math,” she said.
So what is the source of the Census’ disservice to the U.S.?
Pat Fagan, a senior fellow at the Family Research Council, described to this writer what he considers to be gaping inconsistencies in this year’s figures.
“In this, its major annual report on poverty and income, it leaves out, deliberately and repeatedly, the income transfers—for which we American invest a huge amount of our taxes and a huge amount of our political effort—thus creating the impression that our poor are as poor as this report states they are. Nothing could be further from the truth,” he says.
And he adds: “Later in the year, as it does annually, Census will give a better—but still significantly incomplete picture, as Robert Rector of The Heritage Foundation reminds them annually—of our poor after income transfers. But by the time this second report comes out the damage will have been done again to our national reputation, for our treatment of our poor will have been misrepresented to the world, and to the American citizen, and even to the American Congressman.”
Perhaps it is not, as they say, in anyone’s interest to revise how poverty is measured.
Jesse Masai is an intern at the American Journalism Center, a training program run jointly by Accuracy in Media and Accuracy in Academia.
