Census Report on Income and Poverty Portends a Major Socioeconomic Shift

• Posted by ppearlman
• on September 14th, 2011

Amazing to me that the recently released Census Bureau report entitled Income, Poverty and Health Coverage: 2010 (see below for the Bureau’s power point presentation) has not garnered much more attention. For those with an extended time perspective, the report demands close attention as these trends begin to take shape around higher poverty levels and an increasingly bifurcated wealth dispersion.

Some highlights from the New York Times piece summarizing the report:

- Median household incomes fell last year to levels last seen in 1997.

- Americans living below the poverty line last year, 15.1 percent, was the highest level since 1993.

- Median household income for the bottom tenth of the income spectrum fell by 12 percent from a peak in 1999, while the top 90th percentile dropped by just 1.5 percent.

- Blacks experienced the highest poverty rate, at 27 percent, up from 25 percent in 2009.

- Last year, about 48 million people ages 18 to 64 did not work even one week out of the year, up from 45 million in 2009

I could go on and on with the ugly data but you can read the full article here.

I am thinking about this from a top down perspective and what these metrics could look like 3-5 years out with particular focus on what they might portend socioculturally as well as for the market.

One hypothesis is that the income and poverty profile is in a secular trend in which household wealth and standard of living continues to decrease dramatically over time for the middle and lower classes. Such a disparity will come to a head at some point (not close yet) as class based tension and conflict increases over time.

From an investment point of view, I am open to ideas in the comments regarding 2-5 year opportunities.

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