Stuck on Main Street

September 02, 2005

THE U.S. Census Bureau's annual economic report card says the incomes of most Americans are stagnant, the poverty rate has increased and the top 20 percent of households receive 50 percent of income. At best, that's a C. Even a president who never cared about mediocre grades should show more concern - along with the business community - when corporations are rolling in cash and able to pay top executives huge salaries while the average worker struggles to make ends meet.

If one just looked at the larger economic picture, as the Bush administration tends to do, things would seem to be humming along - at least they were before Katrina. Overall economic growth is nearly 4 percent, and consumer spending is healthy. But the census numbers confirm what a lot of ordinary people experience every day.

Real median household income stayed about the same - at $44,389 - for an unprecedented fifth straight year. Many people were only able to keep their household income steady from 2003 to 2004 by working more hours. During that same period, the official poverty rate increased from 12.5 percent to 12.7 percent. The number of people with health insurance increased by 2 million, to 245.3 million, but the number of people without health insurance increased by 800,000, to a total of 45.8 million.

Many analysts see increasing cause for concern, citing technology and global trade as key contributors to workers' stagnant pay, as well as the escalating cost of health care benefits that tended to cancel out any pay increases. Experts are also right to worry that the poverty rate remains stubbornly high more than three years into an economic recovery. The persistent lag in incomes suggests that gains being realized from the recovering economy are going to those who own capital, not workers.

Maryland also reflects the national economic paradox. As the third-wealthiest state, behind New Jersey and Connecticut, Maryland can boast of counties such as Montgomery, Howard and Calvert with median incomes in excess of $75,000. Statewide, however, the median household income dropped from $58,710 in 2003 to $57,424 in 2004. And Baltimore became the sixth-poorest area in the country, with a poverty rate that rose from nearly 21 percent in 2003 to nearly 24 percent last year.

The stark contrasts of rich and poor seen in Maryland and throughout the nation should give pause. There's been a lot of lament about stalled wages, rising health care costs and the growing income inequality gap - all of which are underscored by the latest census data. Those who would continue giving tax cuts and tax breaks to the rich while weakening the safety net for the poor need to rethink their economic priorities and pay less attention to Wall Street and more to Main Street.

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