Another Look at the 2007 Census Bureau Statistics

John's picture

Following up on post I made last week on the new Census Bureau Stats on income, poverty and health insurance, I read this WaPo Op-ed by Robert Samuelson.

Firstly, my quibbles:

rising health spending is eroding take-home pay, and immigrants are boosting both poverty and the lack of health insurance. Unless we control health spending and immigration, the economic report card will continue to disappoint. Unfortunately, neither Obama nor McCain seriously addresses these problems.

OK, controlling health care spending is needed. And I agree, neither candidate (surprise, surprise!) is dealing with it in an effective manner. So far so good. However, the fact that immigration are boosting poverty and the lack of health insurance, whether it's true or not, doesn't mean much to me. If he means that immigrants come here and are generally in poverty and lack health insurance and that this is making stats on poverty and health insurance look bad, well, that's an explanation of the stats. Treat it as an asterisk, if you will, that taints the numbers. It is NOT a reason, IMO, to control immigration.

I didn't realize we were working so faithfully to improve stats so that they look better upon cursory examination. That misses the point. It's about people. If new arrivals from poor countries are bringing down our precious stats, then so be it. As Samuelson says elsewhere:

For most Americans, living standards are increasing...

Not the top 1% or top 2 or even 10%....no: MOST. "Most" means "all but some". Like I said, if that "all but some" is skewed higher by more poor immigrants, then so be it. That means we let them in from illegal margins of the black market. Period.

Many immigrants don't have health insurance for several reasons. One reason is that most are not here legally and couldn't really buy even if they wanted to or could afford to. And they are here illegally, quite frankly, because we make it so with our laws. It's also why many don't have driver's licenses and car insurance. When they can't mesh into the system because the law says they shouldn't be here, well, we have found the problem: Make them legal and let them go through the same motions that legal residents go through.

And immigrants are generally poorer because they come here with nothing and take low end jobs. That is unavoidable. But it is not a bad thing. Let them work. It's all that most of them wanted to do anyway. They won't be so poor for long.

But again, controlling health insurance costs...one way or another...is a key to removing some lead from people's economic feet. I agree. But that can be done with immigrants entering the country. They are not mutually exclusive.

Further along, Samuelson does bring about some very good points in the form of caveats about the ensuing disappointment from analyzing and comparing the stats without considering some basic factors:

First, comparisons are made to an artificially high benchmark -- the late 1990s "tech bubble."

Yes. This matters. Comparing everything to a pinnacle always makes everything that follows look bad.

Says Samuelson:

Remember the dot-com binge. Wages rose sharply; bonuses and cash incentives mushroomed. Unemployment and poverty dropped. In 2000, the jobless rate among white men 20 and over was 2.8 percent. But all these gains reflected a boom that, though pleasurable, was temporary and unsustainable. Stocks are now trading below their 2000 highs....Picking 1997 -- the last pre-boom year -- is more realistic. From 1997 to 2007, median household income rose $2,600, roughly 5 percent. Though hardly spectacular, that's not stagnation. The poverty rate in 2007 was slightly lower than in 1997.

So, when we compare non-boom years to non-boom years, the numbers don't look quite as bleak. Even poverty is lower now.

On the immigration issue, he come back and make a very sensible second caveat:

Second, immigration distorts commonly cited statistics.

Yes. But like I said earlier: accept it. Don't make it an excuse to control immigration.

On this note, he makes some good observations when we control for immigration groups:

Consider non-Hispanic white families. From 1997 to 2007, their median incomes rose about $6,000, to $69,937, a gain of about 9 percent. For black families, the increase was also about 9 percent, though only to $40,222. Again, not stagnation.

So, when looking at non-immigration-intensive groups from a pre-boom '97 to 2007, the numbers uncover much more progress than would have otherwise been seen by an opaque scan that doesn't account for unique realities within the population. And I say again, I'll bet Hispanic wages would rise faster if we simply matriculated more of them into the system.

On health insurance, the immigration issue is even more startling:

Since 1990, Hispanics numerically account for all the increase in the number of officially poor. Similarly, immigrants represented 55 percent of the increase of the uninsured from 1994 to 2006

Yikes! On a personal and political note, I find it irritating that some political factions would use the unrefined numbers to condition your average American Tom, Dick and Harry into thinking his own life sucks and is getting worse. Again, when we consider the effects of immigration and control them out of the picture, we see more clearly what our priorities should be...and shouldn't be.

And finally, we see a similar point that I and others have made in the past with regard to wages:

Third, the census figures understate income gains by not counting fringe benefits.

This is common error of exclusion. Benefits are part of compensation. To not include them is to miss the whole picture. Hypothetically, if John Doe starts working at a job at age 18 in 1997 with no benefits and a pay $29,000 and is then making the average increase in 2007 at age 28 of 9%, or $31,610 and has full health insurance as well as 2 weeks paid vacation, his increase in compensation is far more than 9%. If he is married now and his insurance is worth, say, $800 per month, that paid premium plus two weeks paid vacation is worth another $10,816 per year in compensation ($42,426) that is not reflected in the Census numbers. His "full pay" didn't simply increase the 9% figure of $2610. It was much, much more.

Granted, this a special case where we look only at a young, below average earner during a period where he goes up dramatically in pay.

More mundanely but no less noteworthy, says Samuelson:

Census counts only money income -- wages, salaries, dividends, interest payments. But compensation growth is increasingly channeled into fringes. From 2000 to 2007, only 53 percent of the increase in average compensation came from wages and salaries, says economist Gary Burtless of the Brookings Institution. The rest went to health insurance (21 percent), pension contributions (19 percent) and payroll taxes (6 percent). Americans understandably feel they're on a treadmill. They don't see fringe benefits in their paychecks, and small year-to-year cash gains barely register.

Overall, a good, lucid account of the economic state of America free of the all sensationalism and panic. It's far from perfect but not nearly as bleak as some would like to believe so they can get you on board for massive top down changes.

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The Trouble Isn't the "Stats"

(#115712)

I don't see a link to the article you're referring to by Robert Samuelson, but I would agree with the points he made.

You say: "If new arrivals from poor countries are bringing down our precious stats, then so be it." I don't quite understand why you think the problem is only with "stats".

I'd say that the problem is with illegal immigrants and their employers shifting the true and total cost of so-called cheap labor onto the rest of us -- and the rest of the economy. The statistics are only a reflection of the problem.

I think our willingness to more or less accept whoever comes here to live is a terrible mistake.

Couple things JCJ,

(#115808)
John's picture

First, I fixed the link. Thanks for pointing it out.

I'm not saying the problem is only with "stats". I'm saying that perhaps the stats...especially the general, total population stats...don't matter so much and we shouldn't be overly concerned with responding to them. I didn't agree with Samuelson using the immigrant "dead weight" factor on income, poverty and health insurance numbers as a reason to control immigration and make it harder to enter. I took it as an encouragement that when you take immigrants out of the picture, the numbers for natives look much better and the real problems...if they are problems at all...become clearer.

To me, we need to make immigration easier so they can matriculate themselves into society easier....not harder.

Employers aren't the ones shifting the cost. How exactly are they doing that, anyway? Employers need help and hire them. So what? If they could be out and out legal workers, things would change.

You can't stop immigration. The only things shifting costs are bad laws that keep immigrants marginalized and on the black market.

Now that I welcomed you

(#115790)

I get to disagree with you. The problem isn't high or low immigration, it's having an unofficial policy that is in direct opposition to the official policy. I personally favor higher immigration levels, but not the way it's been done in contravention of the laws on the books.

I blame it all on the Internet

Are you volunteering to go back to your ancestors' lands? :)

(#115773)

I keep trying

(#116024)

but Manchester, Vienna, Moscow, the Taos Nation, and Nantes refuse to restore my ancestral property to me. Maybe you can fix that in the World Court for me, dude.

I wasn't arguing for reparations or restoring ancestral property

(#116102)

Hence my support for immigration. You don't need your ancestral property to move -- just a plane ticket and access to craigslist.

Well, our willingness to extend free health coverage to them,

(#115736)

anyway.

As an aside to John: how on earth did you manage to originally link your entire diary, including the comments section, to the Post article? Impressive ;)

Illegal Immigration & Universal U.S. Healthcare

(#116510)

Covering healthcare costs for illegal immigrants is becoming more expensive and controversial with each passing year.

With each passing year, I find myself more convinced of the necessity and desirability of universal healthcare coverage i the U.S. At this point, I cannot see how we can fix or rescue the system that we have, which costs too much, accomplishes too little and covers too few.

So my operating assumption is that universal healthcare is coming. The transition to universal coverage will be a lengthy, complicated process that will require more resources and goodwill than anything else we've attempted since World War II.

It's going to be hard enough to accomplish with about 300 million of us.

How can we do it if we continue to add millions of additional illegals and their descendants to the list of people covered?

Universal coverage and unchecked illegal immigration (or permanent, legal immigration of millions of low-skilled foreign workers) just don't mix.

That's one of the reasons I want the federal government to crack down on employers and turn the deluge into a trickle. I also believe that it's absolutely necessary to end birthright citizenship, the sooner, the better.

End birthright citizenship

(#116568)

Well that's true. We should end free citizenship grants to everyone: both people merely born here and people merely born to American parents. Everyone should go through the citizenship process at the DHS.

Also, what was your economic contribution to the nation this year? And how much taxes did you pay to support our government and the coming universal health care?

The Chickenhawk Meme. . .

(#116572)
M Scott Eiland's picture

. . .looks as idiotic when relocated to the immigration debate as it does in discussions of the war. Also, as applied to a fellow commenter it is uncivil and therefore a rules violation. Knock it off.

The universe may well have been created without a point--that doesn't imply that we can't give it one.

jerseycityjoan is making the case

(#116592)

that we shut our doors to immigration because immigrants -- "low-skilled foreign workers" -- are too expensive. As John pointed out, just let them work outside the shadows and they won't be poor for long. And as Bernard would probably agree, a whole lot of people in this country are too expensive as well.

My personal point to jerseycityjoan is that the people for whom health care is too expensive and who would benefit most from Obama's proposal of large statewide or federal insurance pools sound hypocritical when trying to exclude others.

What About Your Fellow Americans?

(#116665)

I wonder where your fellow Americans fit into the scheme of things for you?

There are millions of low income Americans with little or no prospect of a job with health care or decent wages.

What about them?

I am all for helping others, but if we are going to open up the country's borders to all who wish to enter, where will we be?

And by the way, I have healthcare coverage -- although practically speaking, like just about everybody in America, only as long as I have a job.

Wouldn't it be nice to have coverage, period? I think so and I don't see anything wrong in hoping to make economic and political conditions possible for that to happen.

I became your "fellow american" less than 3 months ago.

(#116718)

So after living here for about 15 years, paying taxes without the benefits of citizenship, not being eligible for most scholarships when I was in school, not being allowed to take yearlong foreign scholarships like some colleagues, dealing with all of the current anti-immigrant legislation, it stings to hear more anti-immigrant proposals.

Legal Immigrants Affected by Illegals

(#117130)

Everything I've said is about illegal immigrants.

I expect legal immigrants will continue to be adversely affected by illegal immigration, however. It makes no sense to focus on carefully guarding the front door when the back door is wide open, but that's a typical response when the government gives conflicting directives to bureaucrats.

When the American public finally realizes the implications of ignoring illegal immigration for so many years, I believe all immigration will be curtailed. That's one of the reasons I want to us take action now against illegal immigration, especially the granting of birthright citizenship to the children of illegal immigrants.

Based on what we've done in the past, though, I'm afraid that all the doors will end up almost shut. What a shame.

Didn't you also mention

(#117151)

"permanent, legal immigration of millions of low-skilled foreign workers"?

Was I skilled when I entered this country as an 11-year-old?

Anyway, as John pointed out, the problem is not that people come here through the back door. The problem is that there is no front door for them. Create one and they'll start following the other regulations as well. This applies to people who have visas as well -- you think foreign students (a class of foreigners who is not allowed to work) don't work under the table too?

Welcome back JCJ nt

(#115726)

I blame it all on the Internet

Thanks, Hank

(#115734)

I never left, though, just haven't been commenting.

I see that the election is bring all kinds of people back, it's been good to see over the past month or so.