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U.S. Reports Small Increase In Median Income For 2005

By Rick Lyman

The United States’ median household income rose slightly faster than inflation last year for the first time in six years, the Census Bureau reported Tuesday.

The rise, however, had nothing to do with bigger paychecks — in fact, both men and women earned less in 2005 than 2004 — and everything to do with more family members taking jobs to make ends meet and some people making more money from investments and other sources beyond wages.

The glimmer of improvement came after years in which the economy slogged through the bursting of the 1990s stock market boom, the aftershocks from the 2001 terrorist attacks, a brief economic downturn, a series of corporate scandals and growing evidence of deepening divide between rich and poor.

While the economy has been strong by most statistical measures for the past several years, its benefits have not translated into improvements in the standard of living for many people. The small uptick in median household income reported Tuesday — 1.1 percent — was not nearly enough to offset a longer-term drop in median household income — the annual income at which half of the country’s households make more and half make less.

That figure fell 5.9 percent between the 2000 census and 2005, to $46,242 from $49,133, according to an analysis of the data conducted for The New York Times by the sociology department of Queens College. The difference was so sharp, in part, because the 2000 census measured 1999 income, which was at the height of the dot-com bubble.

Still, census officials were upbeat at a news conference while announcing the new data, also pointing out that the number and percentage of those living below the poverty line held steady in 2005 after four consecutive annual increases.

The White House seized on the positive numbers, which had been in short supply in previous recent census reports.

“Unemployment is low, wages are rising and there are more jobs in America today than at any other time in history,” said Rob Portman, director of the Office of Management and Budget. “While we still have challenges ahead, our ability to bounce back is a testament to the strong work ethic of the American people, the resiliency of our economy and pro-growth economic policies, including tax relief.”

The new census data also showed continuing erosion in the percentage of Americans covered by health insurance. In 2005, an estimated 46.6 million people had no health coverage, up 1.3 million since 2004 and increasing the percentage of Americans without health coverage from 15.6 percent of the population to 15.9 percent.

After recent decreases in the numbers of children without health insurance, this year’s data found that their numbers grew between 2004 and 2005, rising from 10.8 percent of those under 18 to 11.2 percent.

The 5.9 percent drop in median household income since 1999 was not shared equally around the country. In Michigan, median household income fell 11.9 percent between 1999 and 2005. In North Carolina, it was 11.2 percent, in Utah 10.4 percent and in Indiana 9.5 percent.