August 30, 2005
ECONOMIC RECOVERY FAILED TO BENEFIT MUCH OF THE POPULATION IN 2004
Despite the fact that 2004 represented the third full year of economic recovery, the Census data released today show that poverty increased again last year and median income failed to rise. The new data are particularly troubling for workers, showing backward movement for American workers on several fronts
[1]: * Real median earnings of full-time year-round male workers fell by nearly $1,000 (from $41,761 to $40,798), a decline of 2.3 percent.
* Real median earnings of full-time year-round female workers fell by over $300, or 1 percent (from $31,550 to $31,223), marking the second consecutive year of decline. This is the first time since 1995 that the median earnings of full-time year-round female workers have dropped for two years in a row.
* Real median income among the working-age population — households headed by adults under 65 — fell by $600 (from $51,559 to $50,923), a decline of 1.2 percent. (Overall median income for all households was unchanged.)
* The number of people who work but live in poverty increased by 563,000. The poverty rate increased among this group from 5.8 percent to 6.1 percent.
* Among people age 18 to 64 who work, the number who were uninsured climbed by 772,000, and the percentage without insurance rose from 18.6 percent to 19.0 percent.
* The percentage of people with employer-based health insurance coverage fell below 60 percent — to 59.8 percent — for the first time since 1993.
The data show that the current recovery has been slow to help low- and middle-income families. Four million more people were poor in 2004 than in 2001, when the economy hit bottom, and 4.6 million more were uninsured. This three-year poverty trend is worse than in all previous recoveries over the last 45 years, except for downturn of the early 1990s.
[2] Median income is about equal to its level in 2001, but remains significantly below pre-recession levels. Income growth between 2001 and 2004 was slower than during all previous recessions over the last 45 years, again with the exception of the downturn of the early 1990s.
In short, the Census data provide new evidence that, as in 2002 and 2003, the recovery in 2004 was neither robust nor broad-based. Developments in early 2005 point toward continued problems, with real wages failing to improve according to the data currently available.
Click to expand...