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Wednesday, September 18, 2013

Were You Better Off in 2012 Than in 2011? Probably Not.

The Census Bureau has released its latest poverty and income numbers from the American Community Survey and the news is not necessarily bad, but it isn't good, either. The "good" news: the poverty level held steady at about 15 percent of the population, but that works out to be 46 million people, which really isn't good news. In terms of household income, the numbers were as follows:
Median household income in the United States in 2012 was $51,017, not statistically different in real terms from the 2011 median of $51,100. This followed two consecutive annual declines.
A comparison of real household income over the past five years shows an 8.3 percent decline since 2007, the year before the nation entered an economic recession.
So, maybe the best news out of this is that we have hit bottom in terms of sliding income. That is small comfort to most people, especially when the news was alive with the figures that I mentioned a few days ago, that the top 1 percent of earners scarfed up 95 percent of all income growth in that same period of time when most people were just hanging on to where they were the year before.

The release of poverty data came, coincidentally, just as the latest round of the Forbes 400 richest Americans hit the "newstands." The rich have gotten so rich that even a net worth of $1 billion won't cut it. This year's list required $1.3 billion for admission, and there are 400 Americans who have that much. To put that in perspective, if you had $1.3 billion in the bank, and it was only earning 1.18% per year, the current yield on new US government bonds, your annual income would be $15,340,000, and you wouldn't have had to lift a finger for that. That is the equivalent of 300 families bringing in the US median household income of $51,017, and almost certainly lifting a lot of fingers to do that.


  1. Does this support the idea that the American middle class is in decline? There seems to be a lot of anecdotal evidence for this, but I'd be curious to know if there is any solid evidence for this.

    1. I would have to say, yes, at least for now. Things could change...