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Census data shows inequality persists despite improvements

September 15, 2017 / Sadaf Knight / Economic inequality, Economy

The Census Bureau released new data this week on income, poverty, health insurance and over 40 other topics. This new data provides an updated look at the economic condition of Americans. As the Census Bureau states, “These estimates help people, businesses and governments throughout the country better understand the needs of their populations, the markets in which they operate and the challenges and opportunities they face.” Today’s post will focus on a few key statistics.

Income

The national median household income actually increased in 2016 by 3.2 percent, bringing it to $59,039. This is actually good news for those who fall in the middle income category saw an increase, and according to one news headline, “US households are finally making more than they did in 1999.” Income increases were also seen across racial and ethnic groups: 2 percent increase for non-Hispanic white households, 5.7 percent increase for black households, and 4.3 percent increase for Hispanic households. Also, household incomes in the South increased 3.9 percent overall.

Poverty

The national poverty rate fell by 0.8 percent in 2016 to 12.7 percent, with 40.6 million people living below he poverty level. The poverty rate for seniors age 65 and older actually ticked up, while it decreased for all other age groups. Women also experienced greater levels of poverty across age groups, compared to men. The poverty rate for blacks and Hispanics decrease, by 2.1 percent and 2 percent, respectively. Finally, the South had the highest level of poverty compared to other regions, at 15.3 percent.

In addition to measuring the number of people below the poverty level, the Census Bureau also provides additional measures of economic well being that help to determine the depth of poverty. The income-to-poverty ratio shows how close a family’s income is to the poverty threshold. The income deficit or surplus shows the same thing, but measured in dollars– how much, in dollars, is a family above or below the poverty threshold. The deficit helpful in showing how much a family’s income must increase in order for them be at the poverty level.

In 2016, 18.5 million people had family incomes that were below one-half of the poverty threshold, which means that these families are living with incomes that are half of the income at the poverty level, considered “deep poverty.” Those in deep poverty represent 5.8 percent of the overall population and almost half (45.6 percent) of people in poverty. The income deficit averaged $10,505 for families in poverty.

Inequality

While the income and poverty measures have seen sustained increases over the past two years, these improvements have not helped reduce inequality in the US. The highest income earners, those in the top 5 percent, saw a 1.8 percent change in their income between 2015 and 2016, while the lowest income earners saw a 1.1 percent decrease. Those in the top fifth of incomes had over half of all the income earned in the US. And according to another measure of inequality, the Gini coefficient, there was no significant change in income inequality between 2015 and 2016.

Although incomes increased across racial and ethnic lines, the gap that exists between racial groups remains significant. Black households still come in last, with median income of just under $40,000, followed by Hispanic households at $47,675.

Additionally, female-headed households continue to earn much less than male-headed households. The earning gap between men and women also persists, with women earning 80.5 percent of men’s earnings.

Similarly, the decreases in the poverty rates do not mask the extent of poverty and disparity between groups. The poverty rate for blacks (22 percent) and Hispanics (19.4 percent) is more than double that of white, non-Hispanics (8.8 percent). The poverty rate for women is almost 3 percentage points higher than men. Geographically, the South has the highest poverty rate of all regions and non-metro areas have a poverty rate that is almost 4 percentage points higher than in metropolitan areas.

Taken together, these data show again that improvements in year-to-year statistics do little to chip away at the major problems in our economy and society. Inequality not only persists, it is growing.