U.S. Incomes Fall, Poverty Rises

ven though the economy grew larger in absolute numbers, American incomes declined last year while the poverty rate rose, according to a report from the U.S. Census Bureau. It was the first time on record that the median household income failed to increase in five straight years.

The median pre-tax income of $44,389 was at its lowest point since 1997 after accounting for inflation, bureau reported.

Overall, the proportion of Americans living in poverty increased to 12.7 percent, up from 12.5 percent in 2003. A family of two parents and two children is considered poor if it makes less than $19,157 a year.

But the economic doldrums were not evenly spread. Immigrants fared better while the native-born suffered the brunt of the bad news.

According to an analysis of the data by Edwin S. Rubenstein of Economic Research Consultants in Indianapolis, poverty declined one-tenth of one percent for the foreign-born, while poverty rose three-tenths of one percent for the native-born. At the same time, growth in real median income for the foreign-born rose 2.4 percent while household income for the native-born dropped .5 percent.

"This pattern is exactly what one would expect if U.S. employers preferred the newest immigrants" to native workers, said Rubenstein. "Although recent immigrants may be poorly educated, lacking even the limited skills of earlier immigrant groups, they are willing to work for far less, lowering incomes of unskilled natives as well as [earlier] immigrants."

The proportion of immigrants in the labor force grew to record 15 percent in 2004, up from 14.4 percent in 2003. Back in 1990, less than 10 percent of the labor force was foreign-born.

The median pay of full-time male workers declined by more than 2 percent in 2004, and the median pay for women dropped 1 percent.

The bad economic news for the native-born was accompanied by an increase in the proportion of native-born without health insurance, while the rate of immigrants with health insurance increased, the Census Bureau reported.