August 29, 2007
Incoherent Indicators
Poverty appears to be down, both in the United States as a whole, and in Rhode Island in particular. According to the annual figures released this week by the Census Bureau, the national poverty rate fell from 12.6% to 12.3% and the Rhode Island poverty rate fell from to 12.1% to 10.5% between 2005 and 2006. The good news is that Rhode Island has ended its four-year streak of poverty levels greater than 90% of the national rate. The bad news is that Rhode Island's relative poverty rate still hasn't dropped below the level it was at just before the beginning of welfare reform in 1996…
| Year | US Poverty Rate | RI Poverty Rate | RI Rate as Pct of US Rate |
| 1993 | 15.1% | 11.2% | 74.2% |
| 1994 | 14.5% | 10.3% | 71.0% |
| 1995 | 13.8% | 10.6% | 76.8% |
| 1996 | 13.7% | 11.0% | 80.3% |
| 1997 | 13.3% | 12.7% | 95.5% |
| 1998 | 12.7% | 11.6% | 91.3% |
| 1999 | 11.9% | 10.0% | 84.0% |
| 2000 | 11.3% | 10.2% | 90.3% |
| 2001 | 11.7% | 9.6% | 82.1% |
| 2002 | 12.1% | 11.0% | 90.9% |
| 2003 | 12.5% | 11.5% | 92.0% |
| 2004 | 12.7% | 11.5% | 90.6% |
| 2005 | 12.6% | 12.1% | 96.0% |
| 2006 | 12.3% | 10.5% | 85.0% |
(Interestingly, there was a corresponding spike in the Massachusetts poverty rate, from 10.1% to 12.0% while the RI rate was dropping. Maybe we should ask Jon Keller for his thoughts on this).
A second piece of bad news is that Rhode Island's one-year decline in poverty rate was accompanied by a one-year decline in median income -- the second largest decline observed in the data…
| State | Median Income, 2006 | Change from 2005 |
|
| 1. | Delaware | $52,833 | -$1,574 |
| 2. | Rhode Island | $51,814 | -$1,068 |
| 3. | Maine | $43,439 | -$700 |
| 4. | Iowa | $44,491 | -$495 |
| 5. | Missouri | $42,841 | -$469 |
| 6. | Colorado | $52,015 | -$260 |
| 7. | Michigan | $47,182 | -$251 |
| 8. | Ohio | $44,532 | -$235 |
| 9. | North Dakota | $41,919 | -$168 |
| 10. | Georgia | $46,832 | -$118 |
| 11. | Wyoming | $47,423 | -$90 |
The other 39 states saw their median incomes increase between 2005 and 2006. (Kansas, incidentally, had a median income increase [+$1,133] that was larger than RI's decline, showing that there's really nothing the matter with Kansas -- nor with the 14 states that did better than Kansas in the rankings!)
For both of these metrics, there is a danger of inferring too much from single-year numbers, but a simultaneous, dramatic drop in both poverty rate and median income suggests something unusual. Whether the strangeness is methodological or a real effect is yet to be determined.
You can't get very much from changes in median income. Over the next two decades or so you can expect it to trend downward regardless of policy as the baby boomers begin to retire and consequently, the median worker becomes progressively less experienced. If you were to compare each states median age with the list of changes to median income (which I haven't done) you'll probably see a correlation. I would expect there to be a lot of noise, but the trend should still show up.
Posted by: Mario at August 29, 2007 3:30 PMOh, and Rhode Island is one of the older states, so we would be harder hit.
Posted by: Mario at August 29, 2007 3:35 PMChoco rations are going up from 15 grams to 17 grams per month. Doubleplusgood!!
Posted by: PDM at August 29, 2007 6:20 PMMario,
There appears to be a minor correlation between median age and income change, but it's far from determinative. For example...
- According to 2005 census data, we are #13 in median age. Only 4 of the 12 states older than us showed income decreases.
- Members of our regional cohort, Connecticut and Massachusetts, are about the same age as we are, and managed not to show a huge decline in median income.
- Georgia and Colorado, top-10 youngest states, showed income declines.
PDM,
Was your comment your personal contribution to the general pool of incoherence?