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PRESS BRIEFING ON
MEASURING 50 YEARS OF ECONOMIC CHANGE
Dr. Daniel H. Weinberg
Chief, Housing and Household Economic Statistics Division
U.S. Census Bureau
September 29, 1998
Welcome to a special occasion. We are pleased to mark the fiftieth anniversary of income statistics from the Current Population Survey (CPS) by releasing a special chartbook commemorating the event, and by having a panel of distinguished experts present their perspectives on changes in the United States economy over the past fifty years.
My role will be brief. I will discuss a few of the key trends highlighted in the report, drawing from the four sections -- income of people, income of families, income of households, and poverty.
I first want to thank the people who worked on this report -- Edward Welniak (Chief of the Income Statistics Branch), and the primary authors, Arthur Jones and Shirley Smith. I also want to thank the Graphics people at the Census Bureau, under the direction of Dave Coontz, for the superb job they did on the report.
The CPS is a nationwide sample survey, currently consisting of approximately 50,000 households, conducted each month by the Census Bureau for the Bureau of Labor Statistics. It is designed primarily to obtain employment and unemployment statistics, but contains frequent supplements to collect information on a host of other subjects important to understanding our economy and our society. Data from the March supplement are the basis for the measurement of economic well-being.
As in all surveys, the estimates in this report are subject to sampling variability and response errors. All statements made in the report and in this briefing have been tested statistically. All historical income data are expressed in 1997 dollars and were adjusted using the Consumer Price Index.
Income of People
One important trend is the increasing participation of women in the labor force. Figure 1.8 shows that the number of women receiving wage and salary income - as a percent of all wage and salary recipients - increased from 32 percent in 1947 to 48 percent in 1997 ( the proportion of women who are full-time year-round workers has risen from 29 percent in 1967 to 41 percent in 1997). Thought their income still lags behind men's, in 1997, their median earnings, relative to men's, for full-time, year-round workers, was at an all time high at 0.74 .
A second important trend is known as "increasing returns to education." By that, economists mean that the growth in earnings for college graduates has exceeded the growth in earnings for those with lesser education. Figures 1.10 and 1.11 illustrate this phenomenon. The real median income of college-educated men grew by 22 percent between 1963 and 1997, while the median income for all other education groups actually fell. The real median income for women grew for all groups, with the growth for college-educated women (53 percent) being one of the largest.
A third trend has been the change in expectations of income growth, as demonstrated in Figures 1.12 and 1.13. The hopes of each new generation is to do at least as well, economically, as their parents. This has been the case until recently. For example, men aged 25-34 in1967 had more total money income than did their fathers' generation (men aged 25-34 in 1947). In 1977, men 25-34 still fared better than their fathers did in 1957. In 1987, however, men aged 25-34 were the first to experience a lower median income than their fathers' generation; this trend continued into 1997. In contrast, women still make more than their mothers did 20 years earlier -- a consequence of continued increases in female labor force participation and the growth in women's earnings.
Income of Families
Income growth has been a fact of life for families, though it has slowed in the past 20 years. Figure 2.1 illustrates that median family income more than doubled between 1947 and 1977. Between 1977 and 1997, however, median family income grew by only 10 percent. Married-couple families showed the most growth in income over this period, with an increase of 150 percent since 1947. Their income growth was due, in large part, to the increasing participation of wives in the labor force.
Income of Households
While families are defined as people living together who are related by blood, marriage, or adoption, households consist of all people living together (or alone) in one housing unit. As such, examination of the income of households provides a more comprehensive picture than families, and for that reason, the Census Bureau has focused on households since 1967.
Median household income grew 17 percent since 1967, but exhibited a strong cyclical pattern, related to recessions. Figure 3.2 illustrates the varied fortunes of race and ethnic groups in the United States. Asians and Pacific Islanders have the highest median household income of any race group. Black households, which had the lowest median income in 1967, had the highest growth in income over the period, increasing 31 percent, versus an increase for White households over the 1967-1997 period of 18 percent. In contrast, the change for Hispanic households (who may be of any race) over the 1972-1997 period has been negative -- a decline of 4 percent in their median household income.
The year 1968 marked the lowest level of income inequality the Census Bureau has measured for both families and households. Figure 3.5 illustrates the change in one measure of income inequality since 1967 for households. Overall household income inequality increased roughly 9 percent between 1967 and 1992, with a great deal of that change occurring in the 1980s. Inequality was unchanged between 1993 and 1997.(1)
Poverty
The final subject I want to discuss today is poverty. The Census Bureau has poverty statistics that date back to 1959. Supplemental Figure 4.2 illustrates the changes in poverty by age. There are two stories here. First is the tremendous decline in poverty for the elderly -- from 35.2 percent in 1959, to 10.5 percent in 1997. By contrast, poverty for children shows a different trend. The poverty rate in 1959 for children was 27.3 percent. This declined to a low of 14.0 percent in 1969, but has been at or above 20 percent since 1981.
Poverty measurement is now undergoing a thorough review by an interagency group. The Census Bureau will be issuing a special report with some new experimental measures in the Spring.
1. Data for 1992 and 1993 are not strictly comparable.
