- The Washington Times - Tuesday, February 19, 2008

ANALYSIS/OPINION:

One reason why voters feel so grumpy about the economy can be traced to the fact that the typical middle-class family did not see its inflation-adjusted income rise during the first six years of the Bush administration. In fact, the quintessential middle-class family — the one located precisely in the middle of the income stream — actually earned about $1,000 less in 2006 than it earned in 2000 after adjusting for inflation and recalibrating each year’s income in 2006 dollars.

This negative trend is in marked contrast with the preceding seven years (between 1993 and 2000), when inflation-adjusted family incomes increased each year, rising by a cumulative 17 percent, or by more than $8,600 (measured in constant 2006 dollars). In addition, the inflation-adjusted 2006 median income for year-round, full-time male workers reflected a decline of nearly $600 since 2000 after rising by nearly $3,000 during the previous seven years. Moreover, while the proportion of families living below the poverty level declined for seven consecutive years between 1993 and 2000 — falling from 12.3 percent in 1993 to 8.7 percent in 2000 — in 2006 the proportion of families living below the poverty level was 9.8 percent.

The data underlying these unfavorable trends can be found in Table B-33, “Median money income (in 2006 dollars) and poverty status of families and people, by race, selected years, 1993-2006.” It appears in the 2008 Economic Report of the President, which the White House released last week.

Here is how various categories of median income have changed since 1993, according to data compiled by the Bureau of the Census. All median-income figures are expressed in 2006 dollars:

• In 1993, median family income was $50,782. After rising for seven years in a row, median family income reached $59,398 in 2000. The average annual increase during this period was $1,231; that works out to more than $100 per month. In terms of increased purchasing power, it was as though the quintessential middle-class family received a $100 raise (measured in 2006 purchasing power) every month for 84 months in a row. After 2000, median family income declined four years in a row, falling by $1,700 to $57,705 in 2004 before rising by $700 over the next two years. In 2006, the last year for which data are available, median family income ($58,407) was still nearly $1,000 below its 2000 peak.

• In 1993, the median income for men working year-round and full-time was $42,700. By 2000, it increased to more than $45,500, reflecting an average annual increase of more than $400. By 2006, the median income for year-round, full-time working men was below $45,000, having declined by nearly $600 over six years.

• In terms of the average annual percentage change, the median income of women working year-round and full-time fared better than the median income for men during both periods, although women continue to earn less than men. Between 1993 and 2000, the median income of full-time, year-round working women increased more than $3,200, rising from roughly $30,900 in 1993 to about $34,100 in 2000. Over the next six years, according to the data presented in Table B-33, it had increased an additional $900, reaching about $35,000 in 2006.

The income data for 2007 are not very encouraging. During 2007, i.e., from December 2006 to December 2007, the seasonally adjusted average hourly earnings (adjusted for inflation) for production and nonsupervisory workers, who comprise 80 percent of the private-sector work force, declined by 0.7 percent. And their average weekly earnings were down by 0.9 percent, according to the Labor Department’s report, “Real Earnings in December 2007.” Meanwhile, the Bureau of Labor Statistics reports the following on its Web site: that the inflation-adjusted median weekly earnings for the 108.3 million wage-and-salary workers employed full-time during last year’s fourth quarter were 0.6 percent below median weekly earnings of full-time workers employed during the fourth quarter of 2000.


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