Below is an excerpt from a new Demography Unplugged research note written by Demography analyst Neil Howe. Click here to learn more about it and get a special deal.

Income Inequality Highest In 50 Years? Not So Fast - money 1273908 960 720

Income inequality in America has grown to its highest level in 50 years, according to new Census data. The gap between the rich and the poor continues to expand, even as median household income has climbed to a new high in the midst of the nation’s longest economic expansion. (The Washington Post)

I always like to keep an open mind. But the tendentious slant of this story so reeks of negative headline-picking--I guess because it seems to reflect poorly on our current president--that I have to protest.

Let's start with the basics.

Yes, as a general proposition, it is true that household inequality by income and wealth has indeed been increasing in the United States since (at least) the late-1970s. And it's unlikely that the structural drift has changed much during the Trump years. But we also know that, superimposed of this long-term trend, inequality tends to worsen early in the business cycle (when low-skilled employment and wages sag) and tends to improve late in the business cycle (when low-skilled labor markets tighten).

According to the Census Bureau, in its annual CPS publication intended to best summarize changes in U.S. household living standards, that is exactly what we have been seeing over the last couple of years. For those who missed it, please refer to Income and Poverty in the United States: 2018, released just two weeks ago.

In that report, the Census researchers look at the annual equivalence-adjusted Gini coefficient.  (Gini coefficient is a standard measure of inequality; "equivalence-adjusted" means adjusted to household family size, as is done with the poverty line.) The researchers found that, by this measure, inequality has declined over the past two years: from 2016 to 2017 and from 2017 to 2018.

They also find, last year, that the income share of the lower three quintiles gained and that of the highest two quintiles lost. All of these changes were statistically significant.I reported on all this last week: See "Trendspotting: 9/23/19." I also remarked with amazement on how the major media failed to report this news.

Only now we do get major inequality headlines. This WP headline reads: "Income inequality in America is the highest it’s been since Census Bureau started tracking it, data shows." Whence this news? From an occasional note from the ACS (American Community Survey), another Census survey designed or calibrated not to measure national trends but rather to report on changes in individual states and communities. ACS reported a one-year growth in the Gini coefficient that was only barely statistically significant and was not adjusted for household size. Nonetheless, this was the news that the WP decided to grab and run with.

If the WP reporters have some well-reasoned justification to prefer the ACS report over the annual CPS publication, they should tell the rest of us. They should also be consistent. Last week I pointed out, simply for comparison, that yearly ACS figures show no rise in the percent of uninsured Americans in 2018. But--and I note this with amusement--the WP said not a word about the ACS figures in their uninsured Americans story. Here they preferred the annual CPS report, which showed a significant rise!

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Neil Howe is a renowned authority on generations and social change in America. An acclaimed bestselling author and speaker, he is the nation's leading thinker on today's generations—who they are, what motivates them, and how they will shape America's future.

A historian, economist, and demographer, Howe is also a recognized authority on global aging, long-term fiscal policy, and migration. He is a senior associate to the Center for Strategic and International Studies (CSIS) in Washington, D.C., where he helps direct the CSIS Global Aging Initiative.

Howe has written over a dozen books on generations, demographic change, and fiscal policy, many of them with William Strauss. Howe and Strauss' first book, Generations is a history of America told as a sequence of generational biographies. Vice President Al Gore called it "the most stimulating book on American history that I have ever read" and sent a copy to every member of Congress. Newt Gingrich called it "an intellectual tour de force." Of their book, The Fourth Turning, The Boston Globe wrote, "If Howe and Strauss are right, they will take their place among the great American prophets."

Howe and Strauss originally coined the term "Millennial Generation" in 1991, and wrote the pioneering book on this generation, Millennials Rising. His work has been featured frequently in the media, including USA Today, CNN, the New York Times, and CBS' 60 Minutes.

Previously, with Peter G. Peterson, Howe co-authored On Borrowed Time, a pioneering call for budgetary reform and The Graying of the Great Powers with Richard Jackson.

Howe received his B.A. at U.C. Berkeley and later earned graduate degrees in economics and history from Yale University.