What Are the 'Dynamics of Economic Well-Being'?

DAVID HENDERSON:

"Recently, the Census Bureau reported its findings on 2005 household income for the United States. The August 30 Wall Street Journal's headline for its story on these findings was, 'Median Household Income Rises 1.1%.' The line underneath (what journalists called 'the deck line,' which many people read without reading the whole story) stated, 'Gap Between the Richest and the Poorest Widens; Middle Class Feels Squeezed.'

The article reads as if the reporter, Robert Guy Matthews, had simply read the press releases of the Census Bureau and then called liberal and conservative commentators to get their take. It didn't read as if he had actually downloaded the Census Report and looked at the tables. The New York Times article the same day was headlined 'Census Reports Slight Increase in '05 Incomes' and then went on to cite the findings of the sociology department of Queens College that median income was still not as high as its level in 2000. The Times' reporter, Rick Lyman, seems not to have studied the report's findings either.

That's too bad. Because hidden in plain sight in the report are some data that help one understand the household-income picture in the United States. These data show what it takes to be middle class or above. And they show that staying out of, or getting out of, the lowest quintile is not rocket science.

This ought to be interesting. What does it take to have an income that puts a person above the lowest 20% in the income distribution?

The message is clear: if you want to have an extremely high probability of avoiding the lowest quintile, get a job, ideally a full-time job, and live with someone who has a job.

Wow. Amazing.

Political discussions of poverty tend to assume that many households with the lowest incomes are always households with the lowest incomes. It may even be imagined that the poorest households have both mother and father working, and perhaps it is imagined that father is working two jobs instead of just one. The Census data seems inconsistent with such imaginings for most of the households in the lowest quintile when the data seem to suggest that one full time job is mostly likely going to take the household above the lowest quintile, not to mention the two or three jobs the might be imagined for "the working poor."

Notice that Mr. Henderson suspects the reporters aren't reading the reports they report on. I often tell my students and others that they can't trust what they read and hear from the news industry, and they can't count on those in politics to know or to act on what is really going on. I think these cautions are especially important to heed when the news industry tells us about either the law or the economy. Mr. Henderson offers the same advice:

So next time you see a report on Census data on household incomes, if you want to know what really happened, download the report and actually peruse the tables.

So, if you are interested in seeing for yourself, then here is the link to the Census report Mr. Henderson is discussing.