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Census data reveal falling standards of living, more pressure on middle class and poor

Maybe Jobs! Jobs! Jobs! should not be our sole priority despite the mantra of Washington and Tallahassee leaders.

Maybe the startling decline of many Americans' standard of living should be a bigger concern as well.

Bleak Census Bureau numbers out this week show the income of the typical American family fell for the third year in a row. Now it's roughly where it was in 1996 when adjusted for inflation.

That's waaay back when Bill Clinton got re-elected president, when the Summer Olympics were in Atlanta, when gas cost $1.22 a gallon and when the Dow stock market roared upward to close over 6,000.

Nationally, real median household income in 2010 was $49,445, a 2.3 percent drop from 2009. Since 2007, real median household income has dropped 6.4 percent.

In Florida, median household income was $44,243 in 2010. That's down from $45,631 a year earlier and more than $5,000 less than the nation's median household figure.

So here's my question. If the typical household's economic clout has now spiraled down to what we had 15 years ago, how will consumers "buy" our way out of this super-recession?

How do you take a shrunken wallet and cover a barrage of rising costs, from grocery inflation and gasoline prices to rising electricity rates and, at least for some angry Floridians, skyrocketing sinkhole insurance?

We're focused almost exclusively on lowering the jobless rate, which now stands at 9.1 percent nationally, 10.7 percent in Florida and 11.1 percent in the Tampa Bay area.

For many looking for work, a position that pays less — a 1996 wage, for example — may still be a welcome job.

But do not underestimate the economic impact of a falling standard of living. Households by necessity will spend less. And that will ripple through an economy. Fewer bucks will be spent on restaurants or movie theaters or baseball games. Fewer folks will qualify for a mortgage.

Economists refer to our "lost decade." It's a term we heard earlier applied to Japan in the 1990s, when that once-dynamic country began stagnating with little growth and declining wages. There's lively debate that the United States could be vulnerable to falling into the same economic trap.

What is quite clear is the rising pressure on many Americans still trying to maintain the middle class dream with lower income and rising costs.

Consider Tuesday's New York Times front page story that reported on the "two tier" economy of Detroit's auto factories. Older workers earn $28 an hour next to newer hires (under newer union concessions) doing the same exact work for about $14 an hour.

Or consider Monday's Wall Street Journal front page story, which tells how the giant consumer products company Procter & Gamble now bets the squeeze on America's middle class will prove long lasting. So P&G, which sells stuff like Tide and Duracell batteries, is dividing its product lines. One will appeal to upscale buyers. Another will tempt "many of its former middle-market shoppers … trading down to lower-priced goods."

Welcome to the makings of a barbell society where folks cluster on one end or the other of a financial spectrum.

Contact Robert Trigaux at trigaux@sptimes.com.

Census Bureau findings:

» Earnings fell for the typical, full-time male worker and are now lower — adjusted for inflation — than in 1978, 33 years ago.

» For women, median incomes continue to rise in recent years. But women still make 77 cents for every dollar earned by comparably employed men.

» The number of Americans living in poverty has risen to 15.1 percent nationwide and 15.3 percent in Florida.

» Among the nation's children, 22 percent now live below the poverty line, the biggest percentage since 1993.

Source: Census Bureau report: Income, Poverty, and Health Insurance Coverage in the United States: 2010

Census data reveal falling standards of living, more pressure on middle class and poor 09/14/11 [Last modified: Wednesday, September 14, 2011 11:27pm]
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