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Median Income Levels Rose But Poor Lost Some Ground

By Faye Fiore and Ronald Brownstein
Los Angeles Times

Incomes rose slightly for the typical American household last year, but the poorest segment of the population fell further behind, the Census Bureau reported Monday.

The bureau's annual reports on income and poverty paint a picture of a nation that continues to gain ground after the recession of the early 1990s but has still not recovered all of the losses it suffered during that downturn.

Though the 1996 median household income increased for the second consecutive year - to $35,492 - it remains slightly lower than it was in 1989 at the peak of the last economic cycle, just before the recession.

Similarly, the poverty rate declined for the third straight year to 13.7 percent. That's still higher than the figure in 1989, even though the ensuing economic boom has been the nation's most robust in 30 years.

Using a poverty threshold of $16,036 for a family of four, the Census found that overall, 36.5 million Americans are poor.

Children remained more prone to poverty than the rest of the population, and the number of children under 18 without health insurance jumped from 9.8 million in 1995 to 10.6 million in 1996, nearly 15 percent of all children, according to the report.

"It's been good news for three years. We must acknowledge this is good, decent progress," said Lawrence Mishel, research director at the Economic Policy Institute, a Washington think tank. "But we are still not out of the hole."

The 1996 median income of $35,492 represented a 1.2 percent increase, in inflation-adjusted dollars, from 1995, but was still lower than the 1989 pre-recession high of $36,575.

The median income is the amount earned by the typical family at the center of the income scale: half the families earn more, and half less.

Incomes for some groups within the population have fully recovered from the declines of the early 1990s, the Census found. Married couples are earning 2.2 percent more than before the recession, while households run by blacks, single mothers and people 55 to 65 had all caught up with their pre-recession earnings.

At a morning news conference, President Clinton celebrated the Census Bureau's report, calling it "more evidence that our economic strategy is succeeding." He pointed specifically to the data showing that a "typical family" income has risen $2,200 since 1993.

"That's an extra $2,200 that hard-working families can put toward their children's education, a down payment on a home, or even a much-needed vacation," Clinton said. "After years and years of stagnant family incomes, today's report proves that America's middle class, no longer forgotten, is rising fast."

Still, the modest 1.2 percent increase in the median income continued a quarter-century trend of relatively slow gains for the average American family.