The Rich Get Richer
Mark Thoma treats us to the CBPP coverage of the latest release of income data from Census:
Overall median household income rose modestly in 2005, while the poverty rate remained unchanged. For the first time on record, poverty was higher in the fourth year of an economic recovery, and median income no better, than when the last recession hit bottom and the recovery began. In addition, the 1.1 percent increase in median income in 2005, which was well below the average gain for a recovery year, was driven by a rise in income among elderly households. Median income for non-elderly households (those headed by someone under 65) fell again in 2005, declining by $275, or 0.5 percent. Median income for non-elderly households was $2,000 (or 3.7 percent) lower in 2005 than in 2001. In a related development, the median earnings of both male and female full-time workers declined in 2005. Median earnings for men working full time throughout the year fell for the second straight year, dropping by $774, or 1.8 percent, after adjusting for inflation. The median earnings of full-time year-round female workers fell for the third straight year, declining by $427, or 1.3 percent.
Kevin Drum picks up on this last point:
The good news is that women are now making 77% as much as men, slightly higher than last year. The bad news is that this is only because the median income of women fell at a slightly lower rate (-1.3%) than the median income of men (-1.8%). Yipee. Needless to say, per capita income increased by 1.5%. In other words, the total money income of the United States increased last year by more than $100 billion, and yet the incomes of the average worker went down. So where do you think that $100 billion went?
Good question! The share of national income received by the highest quintile rose from 50.1% in 2004 to 50.4% in 2005, which pushed the Gini coefficient from 0.466 to 0.469. The Bush economy is indeed great if you are rich.