The Catch-Up Economy

Jared Bernstein

August 22, 2006

Jared Bernstein is senior economist at the Economic Policy Institute, a nonprofit and nonpartisan research group in Washington, D.C. and author of the book, All Together Now: Common Sense for a Fair Economy.

As summer draws to a close, the mind inevitably turns to … benchmarks.

A benchmark is a number you use to help put another number in context. It answers the economist’s pesky question: Compared to what? Now is the time to be thinking about benchmarks because on August 29 the government will release findings on household income and poverty for 2005.

In a world where most of our economic information is about broad averages, like gross domestic product, industrial production and so on, these statistics offer important insights into how families of different income classes fared last year. Every five minutes, we’re updated on the latest squiggle in the stock market, but only once a year the Census Bureau tells us how many children are poor in America.