by wasoxygen

I wanted to tag b_b's post with #optimism, because it has a lot of good news: a significant increase in real income, and fewer people in poverty.

But the article also contains this line:

The official poverty rate decreased to 13.5 percent for last year...

13.5% is a lot of people, even if it is 3.5 million people less than last year.

It is hard for me to get a handle on what life is like for people in this country. I see wealth and poverty around me, but only in my little bubble of experience. Statistics like those in this article help me see the bigger picture, though abstractly and imperfectly. An extreme example would be someone like Jérôme Kerviel, who at one point had the lowest net worth of anyone in the world, though I doubt he missed any meals.

More realistically, the 13.5% of people below the poverty line might include new graduates who haven't started working, adults who are between jobs, or entrepreneurs who are in the red this year but have good prospects of future profit. These people should be counted, if that's how the poverty line is defined, but to appreciate the plight of the poor I would want to have a better understanding of chronic poverty, people who seem trapped with little hope of a brighter future.

The NPR article is based on a Census Bureau report, which includes a sidebar on page 3 that gives an important insight into economic mobility.

The Survey of Income and Program Participation (SIPP) provides monthly data about labor force participation and income sources and amounts. The data yield insights into the dynamic nature of these experiences and the economic mobility of U.S. residents. For example, the data demonstrate that using a longer time frame to measure poverty (e.g., 4 years) yields, on average, a lower poverty rate than the annual measures presented in this report, while using a shorter time frame (e.g., 2 months) yields higher poverty rates. Some specific findings include:

• Income data from the 2008 SIPP panel suggested that between 2009 and 2012 households experienced less economic mobility than found in earlier SIPP panels. Overall, 57.1 percent of households remained in the same income quintile between 2009 and 2012, while the remaining 42.9 percent of households experienced either an upward or downward movement across the income distribution.

• Households with householders who had lower levels of education were more likely to remain in, or move into, a lower quintile than households whose householders had higher levels of education.

• During the 4-year period from 2009 to 2012, 34.5 percent of the population had at least one spell of poverty lasting 2 or more months.

• Chronic poverty over the 4-year period from 2009 to 2012 was relatively uncommon, with 2.7 percent of the population living in poverty all 48 months.

It's not all good news, but I am much more comfortable using the optimism tag on the news that less than 3% of the population appears to be trapped in poverty.