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he
booming late 1990's appear to have left the middle class in the New York
region and California no better off than it was a decade before, an
analysis of Census Bureau data suggests. The poor got a little poorer, the
rich got a lot richer and the large group in the middle emerged slightly
worse off than when the decade began.
The analysis, conducted
for The New York Times, compared income data
from the 1990 census with data from an experimental Census Bureau survey
done in 2000. It found that the median family income clearly declined in
New York, California, Connecticut and Washington, D.C.
Andrew A. Beveridge, a
professor of sociology at Queens College who conducted the analysis, said
he also found that the gap between rich and poor throughout the country had
inched wider during the 1990's. In Washington, D.C., for example, the
average income of families in the wealthiest fifth of the population, once
adjusted for inflation, grew to 24 times the average in the bottom fifth,
up from 18 times.
"There is a worsening
of income inequality," Professor Beveridge said. "And in New York
State, the middle class has not kept up. The poor have treaded water, more
or less. The well-off have made gains. So you have this squeeze in the
middle — people like cops, firemen, people making under $80,000 a
year."
Professor Beveridge's
finding does not mean that particular individuals took home less money in
2000 than they had a decade earlier. It suggests a decline in the average
income of families in the middle — the ever-changing group comprising the
60 percent of all people who at any given time fall in the center of the
income spectrum.
Some economists were
skeptical that the decline was real.
"I would challenge
anybody to find a middle-class family in this region whose economic
condition has declined," said Stephen Kagann, chief economist to Gov.
George E. Pataki. He added, "Nobody's real income goes down during
periods of prosperity — no group of people. Everybody rises, but they rise
at different rates."
Mr. Kagann pointed out
that many middle-class people left New York during the recession of the
early 1990's, and many immigrants moved in, some earning less than the
people who left. "That by itself would bring the median down,"
Mr. Kagann said. "But that does not mean that a middle-class person is
less well- off than they were in 1990. That would simply be untrue."
Meanwhile, the Census
Bureau yesterday released updated estimates of the poverty rate nationally
and state by state, based on several sets of federal data from 1998. When
compared with 1990 census numbers, the new estimates show that the
percentage of people in poverty dropped slightly nationally but crept
upward in New York, New Jersey, California, Connecticut and other states.
What is expected to be
a more definitive picture of state-by-state trends in income will be
available next year, when income statistics from the 2000 census are
scheduled to be released. In the meantime, the results of the experimental
Census Bureau survey, which Professor Beveridge analyzed, are thought by
many to offer a preliminary glimpse at state-level trends in the 1990's.
The bureau has warned
that some of the survey data are not perfectly comparable to data from the
1990 census because the bureau asked slightly different questions of the
two different groups of people surveyed. However, Professor Beveridge said
the Census Bureau numbers released yesterday, and another set of annual
bureau surveys, suggested similar trends.
Bruce Smith, principal
economist for the California Department of Finance, expressed skepticism
similar to Mr. Kagann's. The population studied by the Census Bureau
changed between 1990 and 2000, he said. While the incomes of middle- class
people who were in California in 1990 went up, he insisted, a lot of new arrivals
probably make less that those who were there before.
Others found the
findings less surprising.
Edward N. Wolff, a
professor of economics at New York University who recently concluded from
his own research that most families in the United States saw their net
worth stagnate over the past decade, said that while median family income
had risen in many places since the mid- 1990's, "a lot of this was
simply covering losses that occurred in the early 1990's."
Robert D. Yaro,
executive director of the Regional Plan Association, a civic group that
focuses on the economy in the tristate region, said that much of upstate
New York suffered badly in the 1990's and that eastern Connecticut is still
recovering from the loss of defense and manufacturing jobs in the early
1990's and from changes in the financial sector.
The numbers Professor
Beveridge analyzed came from the Census 2000 Supplementary Survey, a survey
of 700,000 households nationwide that is being used to test the feasibility
of collecting census data in a new way. He compared those data with income
figures from the 1990 census, adjusted for inflation using the index used
by the Census Bureau.
Comparing those two
sets of numbers, he found that median family income in New York State
declined to an estimated $52,313, down $2,876; in California, to $53,037,
off $3,288; in Connecticut, to $64,502, down $3,821; and in Washington,
D.C., to $45,943, down $4,406. Median family income measures the income of
relatives living together.
Median household income
declined in many states, Professor Beveridge found. But some economists
suggested that median family income is a more telling measure of the
position of people in the middle, in part because the nationwide rise in
one- person households may account for much of the drop in household
income, the income of anyone, related or not, in a home.
A similar pattern is
visible in the median household income numbers from another Census Bureau
survey, the annual Current Population Survey, a trusted source of income
and poverty data at the national level. Median household income for the
tristate area around New York rose throughout the 1980's until 1990, then
dropped sharply before turning around in 1996.
Looking more closely at
family income, Professor Beveridge found that the biggest gains occurred
among the most affluent. In New York, the average family income in the
richest fifth of the population rose to $173,418, or 13.6 times the average
income of the poorest fifth. Nationally, the average for the top group rose
to 10.9 times that of the bottom group, up from 10.4 in 1990.
Professor Beveridge
found that average income rose nationally, in part because the average was
pulled upward by large increases in income among the rich. His analysis
looked only at income, not at wealth or overall net worth.
Census Bureau officials
said they could not say how much of any apparent decline in median family
incomes might be attributable to differences in design of the the 1990
census and the 2000 supplementary survey. Ed Welniak, chief of the income
surveys branch, said a test by the bureau found differences in the way
people answered different sets of income questions.
When asked their income
in the previous 12-month period, people tended to give a lower figure than
when asked their income in the previous calendar year, he said. In the 1990
and 2000 censuses, people were asked about the previous calendar year; in
the supplementary survey and the Current Population Survey, they were asked
their income in the previous 12 months.
"What will help us
in understanding what might be going on is when we produce the 2000 census
data," Mr. Welniak said. "We will have two sets of data, both
using the previous calendar year. We will have a much better comparison to
compare the 1990 data with. It will negate that methodologic
difference."
Jared Bernstein, an
economist with the Economic Policy Institute, a liberal research
organization in Washington, who had reservations about comparing the survey
data with the 1990 census, said that even so, there were trends in certain
economic sectors that could shed light on any apparent income decline in a
place like New York.
"Particularly New
York City was very hard hit by the recession in 1990-91," he said.
"For New York, it was a much deeper recession than for other areas of
the country. It didn't really come on line with the economic boom until a
year or two after the rest of the country."
In addition, he said:
"The financial markets and high-rolling bond traders at the very top
of the economic scale did very well over the latter 90's when incomes were
growing quickly. But at the same time, New York generated reams of low-end
service jobs — jobs in retail, cashiers, the tourism industry, hotels and
the low end of health care. If you add a bunch of low-wage workers at the
beginning of the income scale, that lowers the median."
Copyright 2001 The New York Times Company
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