Because Elections Are Determined by the Median Voter

The folks at the Census Bureau have just finished compiling the most recent data on income distribution. I’m betting that the following chart will get a lot of political play:

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Yes, median real household income was lower last year than in 2000. And yes, it has in fact grown somewhat in the past few years.

My two cents: The real news (and the really sad news) is the rising poverty rate over the same period:

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But I’m betting this will be ignored. With convention season underway, all data entering the public square will be viewed through the lens of electoral politics.

The talking points in the above chart are less crisp for either side (poverty today is higher than in 2000, but lower than in 2004). And more to the point: elections are determined by the median voter, not by the families on the brink of poverty.

There are pages of fascinating reading in the full data release, here.

Mark Thoma rounds up reactions from across the blogosphere, here.

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  1. JH says:

    Justin: can we get a discussion over ACS versus CPS? I mean, according to the ACS, the only state to have increasing poverty was Michigan and the US rate decreased.

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  2. the Gooch says:

    First of all, household income is distorted because the average household has shrunk as marriage has gone out of favor.

    Median individual income would tell a much more relevant story.

    Poverty is also ill-defined. If we wanted to eliminate poverty, we could just require single moms to marry their kids’ fathers. Boom. Poverty gone in most cases.

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  3. Mark B says:

    Let’s not focus on short-term meandering of the data. Inflation adjusted household income is up over the longer term and the official poverty rate is down.

    I agree with Gooch and add that it’s only meaninful to look at poverty rates that take account of benefits recieved.

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  4. Kevin H says:

    I just heard a piece on poverty rates, and how NY is starting to use it’s own poverty line instead of the federal one because ‘We want a measure that will tell us if our programs are actual working’. Do you have any strong feelings on the issue of defining poverty Justin?

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  5. Mike says:

    “The real news (and the really sad news) is the rising poverty rate over the same period.”

    Any statement containing the word, “poverty” is not news. It is rhetoric.

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  6. Ironman says:

    Three things:

    First, the median household income chart would seem to be profoundly affected by the incomes of the Top 1% of households. The years from 2000 through 2005 were enormously bad ones for those households at the top end of the income spectrum.

    Second, that’s not a rising level of poverty. That’s a flat level of poverty with random variation.

    Third, the people at both ends of the income spectrum are constantly changing over time. The most frequent change over time is for those at the lowest end to rise higher (these individuals are most often replace at the low end by recent immigrants.) The second most frequent change is for those at the top end of the income spectrum is to drop lower (actually, they’re more often passed by those below them in any given year.)

    Hope this clarifies things!

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  7. Dennis Garber says:

    As most people are aware, statistics can be totally meaningless. All the anectdotal evidence, as well as the experience of most folk I know, would beg this question. If we took the extremely high wage earners out of the statistics for the top chart, (say, those over $250,000) I’ll bet you would not see the uptick from mid-2004. Also, the “poverty rate” is pretty much bunk. The problem is the difference between the upper class and the lower-economic class; this difference has seen a steady climb since Reagan.

    What is an absolute certainty is the fact that G. W. Bush has done more to ruin this country financially than most of the other presidents put together. Just think of the verifyably good uses, economically stimulating ones, that the trillion bucks spent in Iraq could (should!) have been spent on! From deficit reduction to health care and education, renewable energy stimulus packages, I could go on….

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  8. Dennis says:

    Just what planet is Ironman (#6) living on?

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