The Unraveling

The Bandit and his gang are great believers in watershed events, such as the Second Coming. Maybe there's something to those imaginings, as the recent Washington Post/ABC poll shows. The Bandit is definitely not a popular guy, as we learned last week from a WSJ/NBC poll.

The snapshot suggests that the recovering economy, while adding jobs and showing productivity gains since the recession of 2001, isn't paying dividends to everyone. The economy grew by a healthy 3.8% in 2004, but the new Census Bureau report underscores that one unusual feature of the recovery has been sluggish gains in income for many, particularly at the bottom and middle. The share of all income going to the top fifth of households rose slightly to 50.1% last year, matching the 2001 high and well above the 45.2% reported in 1984, the bureau said. (See the full text of the report.)

"Recoveries have taken longer and longer to reach working families," said Jared Bernstein, economist at the Economic Policy Institute, a liberal think tank in Washington. "What's out there to lift workers' bargaining power right now? It is not the unions, minimum wage, trade or offshoring," he said. "Practically every important economic phenomenon has tilted against workers and favored investors."

"It takes several years to recover from a recession," said Ron Haskins, a former Bush administration official now at the Brookings Institution in Washington. "[The] report paints a broad picture of stagnant or slightly declining income and modestly increasing poverty rates since the 2001 recession," he said, though adding that incomes of families at the middle are substantially higher than they were a decade ago. "Although child poverty is still substantially lower than before the economic boom of the 1990s, children and families, especially at the bottom of the income distribution, continue to lose ground," he said. Median household income -- the level at which half the households have more and half have less income -- was $44,389, down 0.21% from 2003 after adjusting for inflation, a change the Census Bureau said wasn't statistically significant. Income was 3.8% below the 1999 peak.

Median income fell most sharply in the Midwest, where it dropped 2.8% to $44,700, though it remains $300 higher than the national average. The drop -- accompanied by a rise in poverty in the Midwest -- partly reflects the disappearance of high-wage manufacturing jobs.

Across the country, the Census Bureau said, median earnings for full-time workers employed year-round dropped significantly last year. Men's earnings declined by 2.3% to $40,798 and women's 1.0% to $31,223. The data, which don't reflect employer-provided health benefits, measure pretax income.

The fraction of Americans living below the official poverty line -- $19,307 for a family of four last year -- rose for the fourth consecutive year to 12.7% in 2004 from 12.5% the year before, the bureau said. Last year, 37 million Americans were living in poverty, about 1 million more than the year before and 5.4 million more than in 2000 when poverty bottomed out as the economy peaked.

The poverty rate rose for non-Hispanic whites -- to 8.6% from 8.2% the year before -- while falling among Asians to 9.8% in 2003 from 11.8%. Among blacks and Hispanics, there wasn't any significant change, the Census Bureau said. The biggest increase was among people between the ages of 18 and 64, rising to 11.3% from 10.8%. Among those 65 and over, the poverty rate fell to 9.8% from 10.2%. The Census Bureau poverty data don't reflect non-cash government benefits, such as health insurance or food stamps.

The Census Bureau also said that the percentage of Americans without health insurance remained stable at 15.7% in 2004. The number lacking insurance increased by 800,000 to 45.8 million while the number with public or private health insurance increased by two million to 245.3 million.