Friday, May 9, 2014

2010 Oneida County Retrospective: Income and Poverty (Part 2)

Income Measures: Changes in income on the family, household and per capita levels have been considerable over the last 50 years. Income, in all of its various measures, has grown dramatically, increasing by more than 8  times over what it was in 1960. Per capita income, for example, has gone from a level of about $2,000 in 1960 to more than $25,000 in 2010.

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Family Income Quintiles: Income growth over the last fifty years wasn’t necessarily uniform among all members of the county.  Looking at changes in the growth of family income by quintile can shed some light onto some of these disparities. Even for the lowest quintile, income growth has been significant since 1960. While the mid-value of the lowest family income quintile was around $2,400 in 1960, by the year 2010 it had risen to nearly $17,000. 

There has been, in fact, substantial income growth for all of the county’s families since 1960. As suggested above, Oneida County families in the lowest quintile have seen their income grow by more than 700% over the last 50 years. In comparison those families comprising the top two quintiles have had income growth of 1100% over the same period. 

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Disproportionate Family Income Growth: These massive increases are, however, deceptive on a number of levels. On the surface, looking at the family income data since 1960, it appears as though all quintiles have seen positive growth, and obviously some have seen more than others. The bottom quintile, for example, has seen an increase of about $3,000 in family income each decade over the 50 year period between 1960 and 2010; the top quintile in comparison has seen an average decadal growth in family income of about $26,000. This means income for the families in the top quintile has grown by roughly 8 times that of those in the bottom.

The disparity in income growth has been particularly uneven over the last 30 years. Between 1980 and 2010, decadal increases in income for the top earning families has been more than ten times that of the lowest income quintile. Top quintile families saw their income grow by about $35,000 each decade during the past thirty years; among the lowest quintile, the income growth has been about $3,400 every ten years.

So the growth of income among families has not only been uneven between quintiles over the last fifty years, but in the last 30 years that disparity has grown larger.

Real Income Growth: But even that doesn’t tell the whole story. Income increases are only a good as their ability to outpace rising costs of living. Earning as much as the rising costs of living only allows families to maintain some level of fiscal consistency. It doesn’t provide an increased ability to save for major purchases or to prepare for unexpected costs. The growth of income in terms of its real buying power probably provides a more accurate picture of the fiscal health of families. To do that, income growth for each quintile was compared using the Consumer Price Index (CPI) maintained by the Bureau of Labor Statistics to account for inflation. By employing the CPI, a measurement of “real” income growth can be created which further suggests that there are considerable disparities in the way each quintile has experienced the last 50 years of income growth.
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The chart above shows the real income changes seen by each family quintile from 1960 to 2010. It is evident that the top two quintiles clearly have seen income growth while families in the bottom quintile have seen the buying power of their income eroded. During that 50 year period the top two quintiles have seen their overall income growth in real dollars by 43%. The middle, or third, quintile has seen inflation adjusted income growth of around 27%. Even the 4th, or lower middle income, quintile has seen some real dollar growth during that 50 year span – their family incomes grew by around 12%. The bottom quintile however, has seen its purchasing power eroding over the last half century. In inflation adjusted dollars, their overall income has actually declined by 10%. This is distressing.
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 An even deeper look suggests even more areas of concern. Looking at real dollar income changes over the fifty year timeframe by breaking it into three sub-data sets, shows that it’s not just the lowest quintile that has been losing ground. By examining the data in two twenty year periods from 1960 to 1980 and from 1980 to 2000, and then a twelve year period covering 2000 to 2012, a more problematic pattern emerges for real family income.

To begin, it should be noted that all five quintiles saw real income growth in the first twenty year segment from 1960 to 1980. Family income grew from as little as 9.3% (bottom quintile) to as much as 21.9% (2nd quintile). Regardless, all families experienced a real increase in their buying power during the first twenty years of this period.

During the second phase – from 1980 to the year 2000 – four of the five quintiles still saw their real income grow, although for three of them it grew at a slower pace than in the previous twenty years. Those in the top quintile actually saw their income grow faster from 1980 to 2000 than it had in the previous period from 1960 to 1980 (20% versus 13.7%, respectively).

One quintile, however, actually saw their real income drop during the last two decades of the twentieth century. The bottom quintile families’ income actually declined during this time, by almost 6%. It went from an inflation adjusted value of $20,376 to $19,184.

Between 2000 and 2012, there was of course considerable economic turmoil with what has been termed the “Great Recession.” Undoubtedly that period of economic difficulty had considerable effect on families and their earning power. During the first decade of the new millennium, three of the five family quintiles have seen a decline in real income, with the bottom quintile losing as much as 12.6% of its income value, the 4th quintile’s family income dropping by about 3%, and the middle quintile’s family income declining by about 1% over the last 12 years. Only those families in the very top two quintiles have seen real income growth recently – around 4% increase for families in the 2nd quintile and 5% for those at the top.

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So when looking at the real income growth over the last 50 years as a whole, it appears that those who are the least able to make ends meet - those in the bottom quintile - have been the only ones to see their family incomes actually decline. And when we examine the data more closely the margin dividing those that are seeing real income growth from those that have experienced income loss is more narrow. In fact, over the last decade, three of the five quintiles appear to have lost economic ground.

Poverty: Poverty being a relatively new concept within the census, data reflecting trends in poverty are somewhat limited in the sense that the focus of data collection has changed over the last 40 years. Despite potential data shortcomings, some trends have emerged which are worth noting.

Poverty Among Persons and Families: The number of people and families in poverty in Oneida County has grown considerably since 1970. In both cases the county has seen the numbers grow by about 35%. 

Poverty Rate Changes: Poverty rates within Oneida County have climbed significantly in the last 40 years, rising from about 10% of the population in 1970 to more than 15% by the year 2010. The percentage of families in poverty has seen similar growth. From 1970 to 2010, the percent of families in poverty has risen from about 7% of all families to around 11%.

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Faces of Poverty: While the vast majority people dealing with poverty are adults between the ages of 18 and 64, those who might be the least prepared to deal with the difficulties of poverty are the young, and the elderly. While the young have little say in determining their economic position, the elderly often have difficulty in preparing for life after work. And even for those who have worked full productive lives, poor planning, as well as limited economic growth after retirement, often leaves them in difficult financial straits.

Youth under the age of 18 comprise more than a third (36.4% in 2010) of all of those persons in poverty. This percentage has remained relatively stable since 1980.  Elderly persons, age 65 or older, represent about 10% of all those in poverty. Their percentage has been declined somewhat since 1980. 
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Special Populations in Poverty – Female-headed Families: While obviously all of those in poverty struggle economically, one group that has received considerable attention is female-headed families in poverty. While single fathers are beginning to also get some recognition as experiencing the difficulties of dealing with poverty issues, single mothers have been a focus since poverty was conceived of as a socio-economic measure in the 1960s.

Single-parents obviously have a more limited capacity to address their socio-economic standing than do families with the option, or at least the opportunity, to have dual incomes. Add to that burden the difficulties in arranging for childcare and dealing with the complexities of raising children, and it is no surprise to find that a disproportionately high percentage of families headed by single females are in poverty. It was the case in 1970 just as it is the case in 2010.

While we have seen the percentage of families in poverty grow in Oneida County over the past 40 years from about 7% to around 11%, the rate of poverty for female-headed families is nearly three times that. Between 1970 and 2010, female-headed households have seen their poverty rate increase from 25% to nearly 33% - from one in four families to almost one in three.

While the impact of poverty is clearly more widely felt among single mother headed families, it is important to not lose sight of the rising impact of poverty among all families. The percent of all families in poverty in Oneida County has grown at twice the rate of poverty among single-moms. While single-female headed families are more likely to experience poverty, poverty among two- parent families is growing at a faster rate.