Census figures belie true level of poverty

THE ISSUE A new Census Bureau report shows a decline in the number of poor in Hawaii.

CENSUS figures on Americans living in poverty illustrate how numbers don't give a true picture of economic conditions, particularly in Hawaii. A report this week that fewer island residents in 2005 had incomes below what the government calls the poverty rate do not take into account a cost of living that ranks among the highest in the country.

In addition, a straight comparison of Hawaii's median income that shows an increase of 8.5 percent presents a distorted view. When figures are adjusted for inflation, the state's median income of $58,112 last year -- touted as the fourth highest in the nation -- actually fell below the median of $58,402 in 1999.

Moreover, though working Americans have increased productivity by 16.6 percent during the past five years, their total compensation, including wages and benefits, has lagged at 7.2 percent. As economists at Goldman Sachs reported earlier this year, the most important contributor to higher profit margins "has been a decline in labor's share of the national income."

The best face that can be placed on the Census Bureau's nationwide poverty count is that it didn't grow last year for the first time since 2000, when it dropped to 11.3 percent.

At 12.6 percent, the bureau reports that 37 million people lived below the poverty level in 2005, meaning an individual earned less than $9,973 a year or a family of four $19,971 annually. Of those, 43 percent fell far below the cutoff, earning $7,800 for a family of three.

In Hawaii, about 110,000 people or 9.8 percent of the population were poor, a slight improvement from 10.7 percent in 2000. However, at the poverty level, a family of four would have income of only $1,664 a month, which would not come close to covering the cost of food, clothing and transportation, much less housing.

The Census Bureau's figures recently have been attacked for lack of accuracy. They do not seem to present a true description of economic hardship in Hawaii.