The Economic News Is Good . . . but Not That Good : Gains are tempered by less welcome developments

The Census Bureau, in its regular survey of about 50,000 households across the country, reports some moderately good news. Last year, for the first time since 1989, Americans’ real income increased, rising 2.7% from the year before. At the same time the number of those living in poverty fell by 1.6 million, to 36.4 million. For the first time, older Americans had a lower rate of poverty than those in the 18-to-64 age group. And for the first time, the poverty rate for African Americans dipped below 30%, to 29.3%.

As any of his predecessors given a similar chance would have done, President Clinton hailed these numbers as evidence that his policies were working. Well, maybe, though it might be hard to show a convincing link between things the administration has done and the slight improvements cited above.

While the policies of any administration can of course affect the economy to greater or lesser degree, the business cycle, interest rates set by the Federal Reserve Board and the market and uncontrollable external events like revolutions in major oil-exporting countries are more likely to have a greater impact. But fair is fair. Presidents take the heat when the economy falters, and they’re going to claim credit when things seem to be better.

A closer look at some of the numbers coming from the Census Bureau, however, might tend to dampen any celebration. That 2.7% national increase in family earnings, for example, was disproportionately concentrated, with the Midwest registering a 7.2% rise. The figure in the West was a much less impressive 1.6%.

Incomes, though improving, still aren’t where they were before the 1989 recession. The 40% of the labor force that is engaged in full-time, year-round work actually saw their earnings slide last year. What probably boosted median family income by nearly $900 from 1994, to $34,076, was more family members working, rather than rises in earnings. While black and white incomes rose, Latino incomes fell sharply, by 5.1%, for reasons that aren’t clear.

For the most part, economic conditions plainly are better than they were in the first half of this decade. But the poverty rate is still higher than it was in 1989, the income gap between the best-off 5% of Americans and the poorest 20% remains disturbingly wide and more than one child in five still lives in poverty. How such things as major changes in the welfare laws will affect those and other economic signposts is a big and perhaps ominous question.