Family income breakdown

The annual income, poverty, and health insurance report comes out.

At the beginning of the week, the news was that the poverty rate would jump to a record “about 15%” for 2009. The Associated Press had polled experts too antsy to wait for the actual report, which came out today, showing a jump to only 14.3%, up from 13.2% in 2008.

The full report, with trends, allows a breakdown of family income-to-needs ratios. (That’s better than just income, because family composition is bouncing around during the recession, so you need to take into account how many people are in each family.) That income-need ratio is, by definition, 1.0 at the poverty line, and numbers above that are multiples of needs, so 3.0 is income of 3-times the poverty line.

By race/ethnicity for the last 8 years, this is how it looks:

Source: My chart from this spreadsheet.

This view allows us to see the size of the White advantage, the income breakdowns within each group, and the changes within each group.

So, for example, the richest 5th of Whites are above 11-times the poverty line, while the poorest 5th of Whites are (on average) just above the poverty line. In contrast, the richest 5th of Blacks and Latinos are around 7-times the poverty line, and 40% of both groups average below 1.5-times the poverty line.

Canadian inequality squashed

In Canada, like in the U.S., there has been an increase in inequality over the last few decades, as those with better jobs have pulled ahead of those with worse jobs — partly because the value of education has increased, increasingly separating those with more from those with less. This all according to a recent article in the Review of Economic Dynamics by Brzozowski and colleagues.
As a result, the Gini index for family earnings, which measures inequality on a scale of 0 to 1, increased from about .31 to about .38 over the last 30 years.

Some of the trend in Canada, like in the U.S., is from higher-earning people increasingly marrying each other, too. However, more than in the U.S., the tax and transfer policies of the Canadian government have squashed that run-up in inequality. In this figure, the top line is the amount of family inequality in pre-government income, and the bottom line shows the inequality in disposable income.

The authors describe it like this:

Not only does disposable income exhibit much less inequality than pre-government income, but the degree of inequality is also much less variable than that of pre-government income. This suggests both that Canadian policy has been and remains redistributive, and that it smooths cyclical shocks to pre-tax income inequality.

Gini estimates differ. The CIA World Factbook has a list for all countries that puts Canada at .32, with the U.S. at .45. I don’t have a directly comparable estimate of what policy does to inequality in the U.S., but the Census Bureau came close with a report on 2005 inequality, which found that government transfers and taxes reduced the household Gini from .450 to .418. So that’s something of a comparison.

Asthma unequal

A new report from George Washington University public health researchers shows the prevalence of asthma, its concentration among poor children and African Americans, and the cost of failing to take the relatively inexpensive steps necessary to prevent it.

Children with asthma are almost twice as likely as all children to be below the poverty line, and less than half as likely to live at 4-times the poverty line or higher.

My chart from data in the report.

The report estimates that having asthma increases the medical costs for a child by 50%. And the more than 1 million asthma-afflicted children who don’t have health insurance are especially costly to care for – accounting for a large portion of emergency room visits.

Who’s online?

This just in from the Census Bureau, from the November 2009 Current Population Survey.

My chart from Census data.

Householders with less education are less likely to use Internet at home, as are Latinos and Blacks, compared with Whites and Asians. For their children, this represents unequal access to a valuable resource. If it also meant they got more fresh air and sunshine instead, that would be one thing, but I don’t think that’s the case — instead, “Most young children who spend time at home on computer-based activities spend no less time on activities such as reading, sports or outside play than children without home computers.” But kids who aren’t on the computer are more likely to be watching TV.

Inheriting inequality in the UK

Who knew? In the UK, where there is something called the “Government Equalities Office” dedicated to “Putting equality at the heart of government,” they have a new report on the state of their inequality. It’s even introduced by someone called the Minister for Women and Equality, the Right Honorable Harriet Harman. And you thought we were overrun with Bolsheviks.

Somehow, though, despite all this equality infrastructure, the UK still has a lot of inequality.

For example:

  • Almost exactly as in the U.S., the percentage of wives earning more than their husbands has increased from 4% at the end of the 1960s to 19% in 2006-7. (And just like here, it’s pitched as a tipping point. The Sunday Times combined the 19% of wives who earn “more” with the 25% who earn “the same” to conclude, “Breadwinner wives reign in 44% of homes.”)
  • The UK’s overall income inequality is pretty high – 7th among OECD countries with a Gini coefficient about 33  (the U.S. is 4th, at about 38).
  • Their income inequality has been rising, and is now the highest it’s been in the past 50 years.

But I was struck by the family transmission of inequality pattern, which shows dramatic differences in measures of school readiness at very early ages according to family income:

According to the report, these social class education gaps widen through childhood rather than narrowing – an indictment of the leveling capacity of the school system:

The evidence we examine confirms that social background really matters. There are significant differences in ‘school readiness’ before and when children reach school by parental income and mother’s education. Children entering primary school in 2005-2006 whose mothers had degrees were assessed 6 months ahead of those who had no qualifications above Grade D at GCSE. In addition, every extra £100 per month in income when children were small was associated with a difference equivalent to a month’s development. Rather than being fixed at birth, these differences widen through childhood. … Children with a higher social class background who start with a low assessment of relative cognitive ability when young eventually overtake those with a lower social class background who were initially assessed as having high ability.

In contrast to social class, educational gaps associated with ethnicity or national origin appear to close as children age through the school system. Someone who knows more about what’s going on over there than I do will have to explain that.