Poverty Data Not Surprising, No Matter How You Spin It

The top 20 percent of households captured more of the nation’s collective income (51 percent) than the rest of population, according to the Census report Income and Poverty in the United States: 2013 released today.

This is consistent with what we know about worsening income inequality in this nation.

Median household income remained relatively stagnant in 2013 at $51,939, a mere $180 more than the previous year, giving average families no more buying power than they had the year before and 8 percent less than they did in 2007, just before the throes of the economic recession.

This is consistent with what working people all over the nation are saying: They work harder and harder, but they can’t get ahead.

The poverty rate dipped by half a percentage point to 14.5 percent, but that number is nothing to cheer about as it still represents generational highs.  

Child poverty declined by 2 percent, one of the bright spots in the report. But overall, what’s most notable about the data is that the numbers aren’t shocking. Troubling? Yes. Surprising? No.

In recent years, myriad studies have affirmed the nation’s growing income divide and economic mobility problem. Just yesterday, Standard & Poor’s released a study that revealed states are struggling to raise enough revenue because of income inequality. Institute on Taxation and Economic Policy experts noted that state tax systems are largely regressive. So, of course, as wealth concentrates at the top states, which tax poor and moderate-income families more than the rich, aren’t able to raise enough money to fully fund basic priorities.

A study released in June by the Russell Sage Foundation revealed that from 2003 to 2013, the net worth of the median American household fell, adjusted for inflation, by more than a third, but the best-off families experienced double-digit growth in their real net worth.  In 2013, a UC Berkeley economist released a study revealing income inequality in the United States is at its highest level since 1928, just before the Great Depression.

Today’s data on poverty and income simply confirms what other data sets have repeatedly revealed. Clearly, we don’t have a problem aggregating and analyzing data in these parts. Our problem is getting lawmakers to agree on policy solutions.

Just as the Census data are predictable, so, too, are the rallying cries. There will be calls for investments in proven poverty-alleviating programs such as job training and early education. At the same time, there will be calls from the extreme right that blame the poor for being poor and call for pull-yourself-up-from-your-bootstraps (even if you have neither boot, nor strap) “solutions.”

As I started writing this piece for taxjusticeblog.org, I envisioned it as a way to highlight how progressive tax policies can play a big role in reducing income inequality. The Institute on Taxation and Economic Policy and Citizens for Tax Justice have plenty of research that supports this, which you can read here, here, here, and here. You’ll want to read these pieces if you have any doubt that tax policy makes a significant difference.    

But we need lawmakers to recognize every day–not just the day some new study reveals a new data set—that worsening income inequality and high poverty is not good for the nation and its families in the short or long term. Child poverty declined, but it’s still high. How many children were born into poverty in the year since the Census’s last report on poverty? And what will the economy look like 20 or more years from now if millions of children and their families continue  lacking the resources it takes to thrive?

Census data will confirm what we already know again next year and the next if policymakers don’t take action. Our elected officials must be willing to explore policy solutions that address widening income inequality and poverty with the same level of urgency that they expend raising money for their next campaign.