The Sunday Register’s extensive report on income trends of Iowa families was interesting and accurate. (See “Iowans lose ground on income” 8/12/2012) But, the report was incomplete and misleading because it did not discuss income mobility. Income mobility is the movement of families up and down within the various levels of income. For example, one key statistic was reported this way:, “Iowa’s low-income earners, the bottom 30 percent, saw their median income fall 18 percent to $15,377 over the decade.” This incorrectly implies that families who were in the lowest 30% in 2000 were the same families earning less money ten years later. It is true that whichever families were in the lowest 30% in 2010 were doing worse than whichever families were in the lowest 30% ten years earlier. It is also likely that many families who were in the lowest 30% in 2000 moved up to the middle 40% or highest 30% by 2010. Similarly, it is likely that a large portion of the the lowest 30% in 2010 were not even in the workforce 10 years earlier because they were too young.
It is correct to say that families with incomes in the lowest 30% in 2010 are doing worse than families who were in the lowest 30% 10 years earlier, so there is reason for concern. As reported, “There was real wage growth during the middle of the decade in Iowa, but we lost it in the recession, and it’s slowly coming back.” Whatever government can stop doing to help speed up our recovery would be a good thing.