The Maryland Public Policy Institute
MPPI IN THE NEWS
SEPTEMBER 16, 2011
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The “middle of the middle class” is sinking, according to U.S. census figures released this week. The median household income is at its lowest level since 1997. “This is the middle of the middle class ... and the middle class is barely treading water,” said Neil L. Bergsman, director of the nonpartisan Maryland Budget and Tax Policy Institute and former executive director of budget analysis for the Maryland Office of Budget and Management. In Maryland, the median household income dropped 3.2 percent to $64,635 in the 2009-10 period, from a $66,766 two-year average in 2007-08, said Mark Goldstein, principal planner for the Maryland Department of Planning's Strategic Development Office. The census figures provide a snapshot of the state and nation's economic picture, Goldstein said. Planners use the Census Bureau's two-year state averages because they provide a more statistically reliable picture than a single year, he said. In 2006-07, the median family income was $68,932 in Maryland. The median income has fallen each year since the Great Recession began in November 2007; it ended in June 2009. “Some are calling it the lost decade for the middle class, but really the middle class has not done well for the past two decades,” Bergsman said. “Growing up we expected our kids would do better than us, but it is not going to happen for our kids.” The Census Bureau report, “Income, Poverty, and Health Insurance Coverage in the United States: 2010,” did show Maryland households with income higher than the national average. Nationally, median household income was $49,445 in 2010, down 2.3 percent from 2009 and 7.1 percent from 1999. But Montgomery County Department of Economic Development Director Steven A. Silverman said comparing Maryland to the nation does not help those feeling the pinch in the state. “Our 5.6 [percent] unemployment rate is double what it used to be,” Silverman said. “You can say, ‘Thank God, we're not Flint, Michigan, but that's still thousands of people unemployed.” To revive the middle class, jobs must be created, and the best way to do that immediately is through construction of new schools and other infrastructure, he said, adding that getting people working again would help the private sector. “Maryland is a high cost of living state so when someone's real income goes down, it's a struggle,” said Thomas Firey, a senior fellow at the think tank Maryland Public Policy Institute. “We've been told Maryland weathered the economic storm better than everybody else, but you see the effects in other ways.” “When median income is shrinking it really hurts. You can't even stay even,” Firey said. The gap between what men and women earn narrowed in 2010, but remained significant nationally. Women were paid 77 percent of what men were paid in 2010. Men earned an average of $47,715 to $36,931 for women. The nation's poverty rate was 15.1 percent, or 46.2 million people, up from 14.3 percent in 2009, when 43.6 million Americans lived in poverty. The poverty rate has risen for four consecutive years and is at the Census Bureau's highest level in 52 years. Meanwhile, the number of uninsured nationally rose to 49.9 million, or 16.3 percent of the population. Nearly one in 10 children younger than 18 were without insurance in the U.S. With the number of uninsured rising, the 2009 Patient Protection and Affordable Care Act's creation of medical insurance exchanges in 2014 will help the uninsured obtain coverage, said Vincent DeMarco, president of the health care activist group Maryland Citizens' Health Initiative. “It came at an absolutely necessary time when so many people are without heath care,” he said.
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