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Posted by on Sep 13, 2009 in Economy, Society | 68 comments

Poverty Up; Health & Social Problem Worse

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Andrew Sullivan points to Ron Brownstein on the Census Bureau report on income, poverty and health insurance coverage in 2008 to find that on every major measurement…

…the country lost ground during Bush’s two terms. While Bush was in office, the median household income declined, poverty increased, childhood poverty increased even more, and the number of Americans without health insurance spiked. By contrast, the country’s condition improved on each of those measures during Bill Clinton’s two terms, often substantially. […]

That leaves Bush with the dubious distinction of becoming the only president in recent history to preside over an income decline through two presidential terms, notes Lawrence Mishel, president of the left-leaning Economic Policy Institute. The median household income increased during the two terms of Clinton (by 14 per cent, as we’ll see in more detail below), Ronald Reagan (8.1 per cent), and Richard Nixon and Gerald Ford (3.9 per cent). As Mishel notes, although the global recession decidedly deepened the hole-the percentage decline in the median income from 2007 to 2008 is the largest single year fall on record-average families were already worse off in 2007 than they were in 2000, a remarkable result through an entire business expansion. “What is phenomenal about the years under Bush is that through the entire business cycle from 2000 through 2007, even before this recession…working families were worse off at the end of the recovery, in the best of times during that period, than they were in 2000 before he took office,” Mishel says.

I first came upon that census report via John Dickerson in The Slate Political Gabfest. Dickerson was struck by the increase in the poverty rate, to 13.2%, which is the first statistically significant annual increase since 2004. The definition of poverty used for the poverty rate, he explained, is $22,000 for a family of four; $17,000 for a family of three; $14,000 for a family of two.

Think about that for a second. 13.2% of Americans, more than 1 in 10 of us, make that little money.

But it was income inequality (which did not go up from 2007 to 2008) that appears to be why Dickerson paid particular attention to the census report. His example was this WaPo piece that asked 100 Washingtonians from all walks of life what they made. There you can compare Grover Norquist to Sonia Sotomayor or the police chief to the panhandler or Marion Barry to…

I was struck by Dickerson’s observations because back in April I sent the Gabfest folks an email pointing to the book, The Spirit Level: why more equal societies almost always do better. In it two British academics, Richard Wilkinson and Kate Pickett, find that almost every modern social and environmental problem — ill-health, lack of community life, violence, drugs, obesity, teen pregnancy, mental illness, long working hours, big prison populations — is more likely to occur in a less equal society.

The chart at the top of this post is from the book (click for a larger view). Jeff Ritterman, M.D., has read it. He observes:

In the Gilded Age of the robber barons, income distribution in the U.S. was very unequal (see the graphic below). This was one of the causes of the Great Depression. FDR’s New Deal can be interpreted, in large measure, as a program to reverse income inequality.

In a stunningly short time, called the Great Compression by economic historians Claudia Goldin and Robert Margo, America underwent a significant redistribution of income. While historians offer a variety of explanations for the Great Compression, what is clear is that income was much more fairly distributed.

This relative equality produced the middle class America that I grew up in. Of course, there were rich and poor people, but nothing like the extremes of wealth and poverty that we see today. This middle-class America lasted until the late 1970s, when the trend toward greater inequality began to accelerate.

Today, we are faced with the same degree of income inequality as existed during the Great Depression. We can take our cue from FDR. It’s time for another great compression.

I got an email back from Jefferson Pestronk, a now former Gabfest intern, thanking me for my thoughts and assuring me that “Emily, John, and David read every email that comes in to the Gabfest and really value the feedback they receive from all the loyal listeners.” I’m guessing they’ll talk about the book when it’s released in the U.S. on December 22.

Today the topic of income redistribution is red meat for the Palin crowd. But if Wilkinson and Pickett’s research holds up, greater equality holds the key to life expectancy, decreased infant mortality, improved child well-being, reduced obesity, lower homicide rates, decreased school dropout rates, lower teen pregnancy, increased levels of civic trust, improved voter turnout, decreased drug abuse, lower incarceration rates, decreased rates of mental illness, and improved social mobility based on merit.

For more on The Spirit Level, go to Wilkinson and Pickett’s Web site.