"Some clarification about just why the latest income/poverty/insurance report was so bad.
There was a significant rise in income among Americans over 65 — those who get much of their income from Social Security. In fact, they’ve been seeing income gains all through the Bush years.
But working families haven’t.
The picture above shows the median real income of households with the head of household aged 35-44. I’m using that as a proxy for working-age households in general, which the Census unfortunately doesn’t give in an easy-to-use form in its historical tables.
As you can see, income has its ups and downs, but in the past each peak was higher than the last one. That was even true, barely, in the energy-crisis-ridden 1970s. But in this decade, incomes first fell in the recession, then basically flattened out at a level well below its previous peak.
That’s really a miserable performance."
...
According to the data in this Social Security Administration table, 66 percent — 66 percent — of Social Security beneficiaries 65 and older derive more than half their income from the program. A third of beneficiaries derive 90 percent or more of their income from the program.
I can’t quite back it out from either the SSA or the Census data — I’m sure someone has done it — but it looks as if the median elderly household probably gets something like 65% of its income from Social Security.
That’s why incomes of the elderly don’t tell us much about how the economy is doing; it’s the decline in working-age incomes from 2000 to 2007 that’s really revealing.
...
I can’t wait to hear how the White House tries to spin today’s employment report. But to be fair, this is an odd slowdown, by historical norms: no clear decline in GDP, no months of 6-digit job losses. Instead, the economy is being slowly ground down.
What I suspect, however, is that this is what the 21st-century business cycle looks like. The sharp slumps of the past partly reflected an inflation-prone environment, in which the Fed occasionally had to slam on the brakes; it also reflected a mainly goods-producing economy, with lots of inventories, in which recessions had a lot to do with inventory adjustments.
Anyway, what’s in a name? The reality is that the economy is in a lot of distress.
Update: U6 is the broadest measure of un- and under-employment; the BLS says that it’s
'Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers'
And U6 is now worse than it was in the aftermath of the 2001 recession.
