- The Washington Times - Wednesday, October 1, 2003

The Census Bureau reported on Friday that the inflation-adjusted median household income declined for the third consecutive year, while the nation’s poverty rate increased for the second year in a row. The median household income declined nearly $500 in 2002, falling by 1.1 percent from $42,900 in 2001 to $42,409 in 2002. it had fallen by nearly $1,000, or 2.2 percent, in 2001. With the number of people living below the poverty level rising by 1.7 million from 32.9 million to 34.6 million, the poverty rate increased from 11.7 percent to 12.1 percent last year. After declining seven years in a row, the poverty rate reached a 25-year low of 11.3 percent in 2000.

“If you look at the historical timeline trend, there is a lag with poverty rates,” Daniel Weinberg, chief of the Census Bureau’s Housing and Household Economic Statistics Division, said at a press conference. “Low points in poverty and income seem to come the year after a recession ends.” In light of the 2001 recession, the aftermath of the September 11 terrorist attacks and the weak labor market that followed both of those 2001 events, the recent trends in income and poverty should not be surprising.

The question is this: Has the cyclical bottom been reached? Over the past three years, the real median household income has fallen by $1,506, or by 3.4 percent. Over the three-year period between 1989 and 1992, which overlapped the previous recession, median household income fell by $2,002, or by 4.9 percent. Unlike the aftermath of earlier recessions, however, median household income fell for a fourth consecutive year in 1993. With the unemployment rate rising so far this year compared to 2002 and with total employment still below its January 2001 level, according to both the household and the nonfarm-payroll surveys through August, median household income may decline during the current year, which would be the fourth consecutive year.

That would have ominous political implications for the White House, which already must be concerned about the states where median household income has been falling most precipitously in recent years. The Census Bureau reported statistically significant declines in several electoral-vote-rich states, including Illinois, Michigan, Missouri, Ohio, North Carolina and Florida.

President Bush’s share of the two-party vote in 2000 was 43.8 percent (Illinois), 47.4 percent (Michigan), 51.7 percent (Missouri), 51.8 percent (Ohio), 56.5 percent (North Carolina) and 50.0046 percent (Florida). If the currently accelerating economy does not soon begin to reverse the three-year decline in median household incomes, the foregoing percentages could be smaller yet.

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