Wednesday, September 16, 2015

Wisconsin boomed in 2014? Guess you missed it

Today featured the Census Bureau's annual release of figures on incomes, poverty, and health insurance. The big headline is the drop in the uninisured nationwide, in the first year that Obamacare exchanges and expanded Medicaid were in full effect, and feel free to click on that report to break down the numbers further.
The uninsured rate decreased between 2013 and 2014 by 2.9 percentage points.4 In 2014, the percentage of people without health insurance coverage for the entire calendar year was 10.4 percent, or 33.0 million, lower than the rate and number of uninsured in 2013 (13.3 percent or 41.8 million).
In addition, you also can look at the state-by-state data to see how Wisconsin measured up, as well as all the other states. We had the smallest drop in uninsured in 2014 in the Midwest (1.8 percentage points), but our uninsured rate is still 7th lowest in the U.S., at 7.3%. We'll see if that comes up at tonight's GOP debate.

But I want to look at the income part of that report, because those numbers were intriguing, especially in Wisconsin's case. First of all, the country's real median household income continued to stagnate, showing that while more people are working in the U.S. compared to the start of the decade, it doesn't mean they're making all that much more.
Median household income was $53,657 in 2014, not statistically different in real terms from the 2013 median of $54,462 (Figure 1 and Table 1). This is the third consecutive year that the annual change was not statistically significant, following two consecutive years of annual declines in median household income.
Interestingly, this official figure was bumped up in 2013 as part of a new survey that the Census Bureau created, as shown in the footnotes.
The 2014 CPS ASEC included redesigned questions for income and health insurance coverage . All of the approximately 98,000 addresses were eligible to receive the redesigned set of health insurance coverage questions . The redesigned income questions were implemented to a subsample of these 98,000 addresses using a probability split panel design . Approximately 68,000 addresses were eligible to receive a set of income questions similar to those used in the 2013 CPS ASEC and the remaining 30,000 addresses were eligible to receive the redesigned income questions . The source of data for this table is the portion of the CPS ASEC sample which received the redesigned income questions, approximately 30,000 addresses.
This resulted in 2013's median household income rising in 2013 of $52,789 for those who answered the old survey, compared to $54,462 in the new one (with a higher margin of error, due to the lower amount of people surveyed). But this is the higher base that 2014 was compared to, hence the small drop in income.

This change in survey resulted in some wide differences in incomes among the states in 2013, and Wisconsin was no different, looking much poorer than previously thought.

Wisconsin 2013 real median household income
2013 old survey $56,162
2013 new survey $52,572

But by the same token, this means that Wisconsin had one of the largest increases in median household incomes in 2014, because last year's number is compared to the "new survey" in 2013.

Wisconsin '13 vs '14 real median household income
2013 new survey $52,572
2014 survey $58,080 (+10.5%)

10.5% increase in median income! Holy crap! Scott Walker and his spokespeople on AM radio must be right! It's really working!

Or not. I'm more than a bit skeptical of that figure (it is a sample, after all), and while the increase of more than $5,500 is enough to be statistically significant, it's not translating into most other economic measures, including Wisconsin ranking 38th in the nation for private sector job growth in 2014, and overall tax revenue having a massive shortfall in Fiscal Year 2014, and income tax revenues continuing to lag in Fiscal Year 2015. If we were really having increases in income of more than 10%, we'd likely see that reflected in strong job growth and robust income tax revenue growth- neither of which happened in Wisconsin in 2014.

And if Scott Walker tries to talk up these allegedly great numbers on Wisconsin income growth in 2014 at tonight's debate, he also should be forced to answer why Wisconsin was by far the worst in the Midwest in the same statistic in the first 3 years of his tenure in office. Especially in contrast to who was Number 1.

Change in real median household income, 2010-2013
Minn +15.07%
Iowa +14.87%
Mich +14.47%
Ohio +3.52%
U.S. +1.78%
Ind. +0.33%
Ill. -0.48%
Wis. -3.66%

Take a look at how Wisconsin (in red) shoots up in stark contrast to everyone else in 2014. That leads me to think this number is an outlier that won't hold up. Also, I've put the old and new surveys for 2013 incomes, so you can see how those changed (and in many cases, it changed quite a bit).

So why were we so badly beaten by our two neighbors to the west in the previous 3 years when it came to income growth? This especially should be asked in the case of Iowa, since Scott Walker is trying to convince voters in that state to follow the Wisconsin Way (and failing miserably).

Seems like something that might be worth investigating even more, but I'm betting Mr. Unintimidated won't want to talk about it. Like a lot of issues that he can't give a good answer for, come to think of it.

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