Statistically insignificant?

September 19, 2013

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Earlier this week, the U.S. Census Bureau announced its income, poverty, and health insurance coverage statistics for 2012. According to the numbers, the median household income in the U.S. last year was $51,017, not statistically different in real terms from the 2011 median of $51,100. This followed two consecutive annual declines. OK … in unreal terms, I count three. I suppose I need to sue the educational system for teaching me unrealistic math.

A comparison of real household income over the past five years shows an 8.3 percent decline since 2007, the year before the nation entered an economic recession.

The Bureau also determined that the changes in the real median earnings of men and women who worked full-time, year-round between 2011 and 2012 were not statistically significant. In 2012, the median earnings of women who worked full-time, year-round ($37,791) was 77 percent of that for men working full-time, year-round ($49,398)—not statistically different from the 2011 ratio. The female-to-male earnings ratio has not experienced a statistically significant annual increase since 2007.

I call these statistics stagnation bordering on degradation, and, in real-life terms, an insult to wage earners, particularly women. Perhaps this is one of the reasons women are more likely than men to feel undervalued at work. The latest Randstad U.S. Survey substantiates this probability.  Only 57 percent of women felt that their salary was adequate for their position of responsibility compared to 65 percent of men.

In terms of poverty, the Census Bureau statistics show that in 2012, 13.6 percent of males and 16.3 percent of females were in poverty. “Neither showed a statistically significant change from its 2011 estimate.”

These poverty numbers are somewhat misleading in that they compare the official poverty thresholds to income before taxes.  The government is working on developing a more reliable indicator. “The Census Bureau’s statistical experts, with assistance from the Bureau of Labor Statistics and in consultation with other appropriate agencies and outside experts, have developed a supplemental poverty measure to serve as an additional indicator of economic well-being by incorporating additional items such as tax payments and work expenses in its family resource estimates. It does not replace the official poverty measure and will not be used to determine eligibility for government programs.” So will we then have a real but unofficial poverty count?

What do these statistics mean in real terms? To put it simply, most of us are as stuck as stuck can be and likely sinking.

A recent article on nbcnews.com, ‘Survivors, scrapers’: Why the middle class feels like it just can’t get ahead, noted that after adjusting for inflation, median household income is back to where it was in 1996. Richard Fry, a senior
economist with Pew Research Center, said, ‘There is a sense that in middle-income America … they’ve been treading water for 15 years.’

“A Pew Research Center survey released last year found that 85 percent of Americans who describe themselves as middle class think it’s harder to maintain their standard of living than it was a decade ago.”

D’Vera Cohn, a senior writer with Pew Research Center, said “When people say it’s harder to maintain their standard of living another way to look at it is, ‘Do you have the same amount of money as a decade ago?’ And many people don’t.”

So while the current statistics may be insignificant compared to last year, in real-life terms, they aren’t insignificant at all.

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